Ken Feinberg, the Treasury's special master on compensation, has slashed the overall compensation at Bank of America (BAC) and Citigroup (C) (though base salaries actually rose). And that has reignited the old gripe that the two banks simply can't compete for talent against the big boys of Wall Street.

It's basically a red herring, as Feinberg's pay restrictions apply to very few at the banks--only the top 25 execs. But some of those top 25 at either bank may be thinking about jumping ship. If so, they will not likely be jumping to JPMorgan Chase (JPM); CEO Jaime Dimon has pledged not to recruit from the banks.

"It would be wrong for us to say, 'Let's go hire their best people.' I think that would be a terrible thing to do, so we're not going to do that," he said at a conference covered by the AP. Even if the top 25 execs at Bank of America and Citi are thinking about jumping to another company, the issue of pay still clouds the process. The Fed may ultimately take a harder line on pay. There may be some restrictions that apply to larger set of banks that come to light once it gets into its pay review.

For more:
- here's the AP article

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