Skirting Pay Cap Will Be a Piece of Cake

The squeeze on big paydays for executives of bailed-out banks will probably leave Wall Street plenty of wiggle room. Consultants on executive pay say the caps imposed by President Obama yesterday will probably apply only to a few executives—not star traders, brokers, and salespeople who routinely earn whopping pay packages. Others note Wall Street typically finds ways to exploit loopholes.

The new rules require banks that receive "exceptional assistance" from the government to cap salaries, including cash bonuses, at $500,000 for senior executives. The rules apply only to the future, not to banks that have already received bailout money. Analysts say elite bankers could quit and join foreign banks and hedge funds, or start boutique firms rather than accept big pay cuts. (More financial crisis stories.)