Discover’s magic trick…

Yesterday, there was a lot of outrage over Citigroup’s (C) plans to raise the base salaries of its workers by as much as 50%, given that the government owns about 1/3 of the bank.

What’s interesting is that Citi isn’t the only one. As I wrote on Research Edge on Monday, Discover Financial (DFS), which has received about $1.2 billion from the Treasury Department, disclosed its own hefty salary increase program in this 8-K filed late Friday. According to the filing, three of Discover’s top executives will see their base salaries go up by 50%, while Chief Operating Officer Roger Hochschild will see his base pay go up by 33%. Chairman and CEO David Nelms’ salary will not increase.

What’s particularly interesting about Friday’s filing, however, as I wrote on Research Edge on Monday, is that Discover seemed to go out of its way to throw people off the scent of the hefty salary increases. In the filing, it states that “NEOs’ total compensation for fiscal 2009 is expected to be significantly lower than for fiscal 2008.” It’s only when you compare the new salaries to the proxy statement filed back in February, that you start to see the hefty increases.

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