Teenagers, You Give Them An Inch

...They swim all over you."

--Sebastian The Crab, The Little Mermaid

Anticipating restrictions on bonuses, officials at Citigroup Inc and Morgan Stanley are exploring ways to sidestep tough new federal caps on compensation, the Wall Street Journal said.

Executives at these banks and other financial institutions that received government aid are discussing increasing base salaries for some executives and other top-producing employees, the paper said, citing people familiar with the situation.

The discussions are at an early stage, partly because the government has not yet issued specific rules on the bonus payments that will be allowed at companies that received aid under the government's Troubled Asset Relief Program, the paper said.

The report comes on the heels of widespread outrage that insurer AIG, kept alive on a government bailout of up to $180 billion, was paying its employees bonuses of $165 million.

In February, President Barack Obama set a $500,000 annual cap on pay for top executives at companies receiving taxpayer funds.

Can't blame Citi and Morgan Stanley for trying, eh?

Oh wait. Yes we can, especially Citigroup. I think this is one fight these guys don't want to pick, but like I've said, more shenanigans were inevitable, and all this does is push Obama more and more towards Plan N.