As some financial institutions are still within the indentured servitude of the federal government, while others are not, we can see the free market consequences of federal intervention in executive pay schemes. Those institutions still under government regulation, such as Citigroup ( C), are finding that some of their top talent is being recruited by competing organizations that no longer have such strictures.

For example, Goldman Sachs ( GS) announced a proposed budget of $20 billion for executive bonuses in 2009 -- an increase to $700,000 a person from $360,000 a person in 2008. Similarly, Morgan Stanley ( MS) has set aside between $11 billion and $14 billion for executive incentives.

At the same time, a great deal of uproar has been heard about Citigroup's decision to raise base salaries by as much as 50% and in some cases offer guaranteed contracts in order to offer competitive compensation packages. The complaint has been that employees of Citigroup will in many cases make as much, if not more, than they did prior to the bailout and that the executives at Citigroup are speaking out of both sides of their mouth. On the one hand, they greatly reduce bonuses; on the other hand, they greatly increase salaries.

I had a member of the press ask me last week if I thought we had any right to feel that the financial institutions were gaming the system. For example, now that Goldman has paid back federal money, she asked, do we have a reason to even comment on their compensation practices? If Citigroup wants to raise salaries to offset bonus compensation, is it even our business? My question in return was, "Did we not learn anything from the past few months?"

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