Faced with opposition to bonuses after receiving taxpayer bailout funds, Citigroup ( C) and Morgan Stanley ( MS) want to raise the base pay for executives and top-producing staff instead, according to the Wall Street Journal. So let me get this straight. Since bonuses are taboo now that taxpayers are in a huff over lavish payouts despite horrible corporate performances, the banks want to change the system so they pay regardless of performance. How is that better? The banks seem to be missing the entire point. If a company doesn't deliver for shareholders then it shouldn't deliver for executives and top employees either. The very definition of bonus implies a reward for outperformance. Yet our financial institutions seem to think of bonuses as entitlements. That's what taxpayers are outraged about. Getting a bonus or higher salary despite the clear underperfomance of the company is a slap in the face to the hard-working Americans who are footing the bill. So let's take a look at these wretched salaries. Citi CEO Vikram Pandit is entitled to a base salary of $958,333, although he has nobly agreed to accept only $1and no bonus until the bank returns to profitability. Of course, he recently stated that the bank has been profitable in the first months of 2009, so let's not discount that pay too quickly. Other top executives at Citi receive base pay of $500,000, including Vice Chairman Stephen Volk, CFO Gary Crittenden and the CEO for Asia Ajay Banga, according to SEC filings. And it's worth noting that those folks all got nice bumps from 2007, with Volk more than doubling his base pay and Crittenden getting about $100,000 more.
Company filings show a similarly glum scene over at Morgan Stanley, with CEO John Mack earning a paltry base salary of $800,000, CFO Thomas Kelleher getting about $340,000 in base pay and other officers earning about $300,000. Granted, Citi and Morgan Stanley may be trying to look out for top traders and other folks who are key to growing their businesses. But in this environment even those who may deserve a little more will have a hard time making their case. And the Journal notes that a managing director typically pulls down a base salary of $200,000. All in all, those sound like livable wages to me, especially compared with average household income of $50,233 for the rest of America. So my advice to banking executives everywhere is to suck it up, focus on getting the financial system back in order and don't mention salaries or bonuses again until we've forgotten all about this nasty economic mess you helped get us in. That goes for folks at Goldman Sachs ( GS), Bank of America ( BAC), Wells Fargo ( WFC) and AIG ( AIG) as well. As long as taxpayers are bailing out this financial mess, you'll have to live with some consequences of your actions. And don't tell us you had nothing to do with this mess.