No bonuses for bank workers, just raises

Last week, Morgan Stanley (MS) announced that it is going to raise base salaries for its senior investment bankers to $800,000. The move had been expected, as the financial giant looks for ways to circumvent the new limits on annual bonuses for firms receiving government bailout money. And it's not just Morgan. Citigroup and Bank of America are expected to follow suit soon. In fact, in response to the announcement, and perhaps as a signal to its own employees who might have been enticed by the news out of Morgan, a spokeswoman for Bank of America (BAC) noted that, "pressures in the investment-banking and capital markets businesses continue to be intense," adding that her company will "take the steps necessary to retain key employees."

"Key employees"? Let me guess, these are the same key employees that helped these banks swirl around the veritable toilet bowl drain of the economic downturn, only to be saved by the government? Perhaps I'm jaded, but I don't think shareholders (or taxpayers, for that matter) should be supporting any move to bend over backwards to "retain" the investment bankers at banks that got us all into this mess. If these banks want to reward their employees for the pressures they're under, they should be required to first completely pay back the TARP funds they've received.


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