The bonuses offered to the top managers of large banks have lately come under great criticism. Still, the managers working for a number of American banks have no need to worry. Why? Because the decrease in bonuses is compensated with an increase in salary.

This new reward system appears to be a response to a bill that was recently passed by the US House of Representatives, which would allow bonuses to be taxed up to 90%. The new law applies to high-level managers working at companies that have received over 5 billion dollars of government support.

Citigroup, Morgan Stanley, Wells Fargo and Bank of America are all willing to greatly increase the salary of high level managers. To give an idea: the annual base pay of managing directors at the Bank of America will go up from about 180,000 dollar to about 300,000 dollar. Managers operating at a lower tier can expect a rise from about 150,000 to about 250,000.

Nearly doubled
According to Alan Johnson of Johnson Associates, a New York based consulting firm specialized in incentive plans, a lot of bankers and brokers can expect their salaries to be nearly doubled. He doesn’t find this unfair. “It’s literally long overdue”, said Johnson in a recent article by Bloomberg. “Salaries haven’t really changed in 15 years. The whole industry had silly low base salaries.”

Smart or sabotage?
Is this new reward system a smart move to bypass new US laws and stay one step ahead of the competition? Is it important for corporations to remain free to follow their own course and run their business as they see fit? Or is this a condemnable course of action, because it goes against the average man’s sense of justice (see our movie) and sabotages policy made by a democratically elected government? After all, the salary increase looks like little more than a bonus in disguise.