Back when Congress passed executive pay limits on companies receiving TARP money, experts warned that the restrictions could have the perverse effect of boosting executive salaries. Since Wall Street execs get their millions through bonuses, the limits focused on the size and nature of bonuses that they could pocket, but put no cap on salaries.
So last week's move by Morgan Stanley, which received $10 billion in bailout money, shouldn't surprise. The bank's senior officers will now get a base salary in the neighborhood of $750,000, up from $300,000, the bank disclosed in an SEC filing. "Politicians have chastised Wall Street executives for paying themselves handsome bonuses, even as their industry failed, which has spurred banks to look for ways to cut bonuses," Reuters observes. But Morgan Stanley execs' overall compensation for 2009 isn't likely to change, the bank said, since it raised base pay as it cut bonuses.
Other links:
Interview with Brooksley Born, Credit Crisis Cassandra (WaPo)
Lawmakers Blast GM Restructuring (WaPo)
Mortgage Modifying Fails to Halt Defaults (WSJ)
Big Banks to Pay Larger Share of FDIC Levy (WaPo)
Fed's Next Task: Reeling In Lifelines (WaPo)
From Faltering Fannie to Treasury's Bailout, Allison Answers the Call of Crisis (WaPo)
