How do banks compete under a salary czar?

The Obama administration’s pay czar, Kenneth Feinberg, must approve compensation for 25 top earners of each bank that receives Federal aid. Banks not subject to the pay czar are trying to lure top talent away from rivals.

In the United States, banks like Citigroup and Bank of America have offered guarantees, arguing that they are necessary to attract new employees and keep existing ones. Indeed, foreign banks like Nomura Securities of Japan, Credit Suisse of Switzerland and Barclays Capital of Britain are making guarantees in hopes of poaching talent.

Stronger banks that have repaid their bailout money and are not subject to Mr. Feinberg’s restrictions — like Goldman Sachs, JPMorgan Chase and Morgan Stanley — have also begun offering guarantees to star prospects.