So, do TARP rules mean no one at a US bank can receive more than $750k?

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Given several weeks have passed since the most recent pronouncements from the US authorities on TARP-related pay restrictions, we thought we'd check where things stand.

A recent ruling states that the top 5 executives and the top 20 highest earners at banks receiving more than $500m in US government cash can only receive a third of their total comp as a bonus. However, earlier proposals capped cash bonuses for executives at TARP firms at $500k.

Does this mean that bankers at firms receiving US government money can receive no more than $500k in base salary, and no more than $250k in deferred stock bonuses?

Alan Johnson, a pay consultant for Wall Street, says this may be the case and that both he and most people in the industry are mystified by the new pay rules.

"I spoke at an event this morning and asked people to put up their hands if they understood them. No one did," he says.

Johnson says the confusion relates to whether the two rulings will be applied in parallel or whether the $500k cap has been quietly forgotten.

There's also confusion as to whether the restrictions apply only to executives, or to all employees at the banks concerned.

"Every rule gets a little more punitive until you end up with a big mess. But until we get a firm acknowledgement from the Treasury, no one really knows," says Johnson.

The US Treasury has promised to clarify matters 'soon.'

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