Citigroup wants to pay big bonuses
Filed under: Company News, People
Citigroup (C) wants to pay some "key" employees big bonuses and it is seeking government approval to do so.
Most of the people Citi wants to compensate are heavy hitters with a history of creating big profits for the bank. Top traders and bankers have been leaving large U.S. financial institutions because of compensation restrictions. Citi is making the case that its most critical talent will walk out the door.
According to The Wall Street Journal, "The request comes as Citigroup is grappling with broad government pay restrictions that could break apart its legendary energy-trading unit."
Even though Congress and the public will howl their disapproval, the government needs to help Citi retain its key profit makers. It they are allowed to leave over compensation issues, especially ones where the very best people should be paid for their performances, it sets a bad precedent for all of the major banks.
The government can turn the departure of the best traders and bankers into an exodus, but that will only make it harder for big American financial firms to make money.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 6)
4-29-2009 @ 11:20AM
michael oertel said...
When Citi Group starts to show profits for the year....then bonus monies should be considered...but not until that time.
I have taken a 55% cut in pay with no bonus this past year and will not get increase or bonus until my company turns a profit for the year.........shame on any person or bank to do such a thing......if these indidviduals are so good, that are being consiedered for bonus....why have they not shown profits for this year to date from the last bonus they received.
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4-29-2009 @ 11:42AM
RT Harmon said...
I agree, but in this case I believe it would be more appropriate for the company to retire their debt to the government before bonuses are paid. Otherwise, they will just cook the books to show profits by spreading debt service over a long period of years. They should be willing to do what you are doing, that IS the American way.
4-29-2009 @ 9:50PM
Tom said...
Let me get this straight - we want to over pay these guys that got us in to this mess? Are we just plain stupid? Yes, I get it 'they will leave'. Well the job they were doing wasn't that great for US anyway was it?
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4-29-2009 @ 8:58AM
Donovan said...
Now lets see. Citi Bank has already received a few billion in tax payer bail out funds. Citi Bank has already raised APR interest rates on their credit card accounts, to as high as 17.99% Citi Bank has cut lines of credit to business's, as well as personal lines of credit. Citi is requesting additional Government (tax payer) bail out funding. And now Citi Bank wants to give out millions in bonus's. That will be paid for with our tax dollars. Yep my CC interest rate went from 9.5% to 17.99% When I inquired as to why. I was politely told by the CSR (because we can) And if I don't agree with the interest rate hike. Citi Bank will be more then happy to close the account.
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4-29-2009 @ 9:04AM
Larry said...
Let me see if I have this straight now. These people are so called BIG HITTERS for the bank and have created BIG PROFITS for the bank. So why in the HELL did the bank need any taxpayer bailout money in the first place ???
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4-29-2009 @ 5:53PM
mickey said...
I agree, let them walk. Let them work for less pay somewhere else. STOP ALL BONUSES.
4-29-2009 @ 9:21AM
Sheldon L said...
Here is the simplest solution to the problem...
take the money for bonuses from the board of directors and the underperforming managers and redistribute it dollar for dollar!
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4-29-2009 @ 9:10AM
Chuck Howlett said...
Let them leave. The attitude that only these few people have the knowledge and brains to make Citi money is just plain wrong. It all follows "the system" that only people with certain experience can run certain types of companies. That "wrong thinking" allowed K-Mart to hire a CEO that took his previous two companies into bankrupcy and that only "airline" men can run an airline - every major airline but one has been in chapter 11 in the last 20 years.No one is worth what they want and no one is irreplaceable.
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4-29-2009 @ 9:20AM
Rob said...
How big of a profit are we talking about? What amount separates a Big Hitter from a Mid Size Hitter? If the Big Hitter leaves, we now have new Big Hitters left to pick up the slack ...and at much less the cost!
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4-29-2009 @ 9:31AM
Wily said...
Between credit card default, foreclosures and toxic derivatives, the banks are in a heap of trouble. It's not ANY banking exec that has helped them. It's: One, bailouts by the American taxpayer. Two, the treasury helping them out with toxic assets. Taxpayers being the treasury. Three, new accounting rules stating the banks no longer had to worry about mark to market. They could just estimate their assets. In other words they could just lie about their assets.
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4-29-2009 @ 9:39AM
joey said...
"heavy hitters" creating BIG profits for the bank...WTF did they need a government bail out for??? Afraid they will leave??? LET THEM GO!!!! I would love to know what knid of template Citi is using if they think they are that "valuable"...Maybe they should try promoting some of the employees they think suck...they might turn a profit...LMAO
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4-29-2009 @ 9:44AM
Scott said...
Our society should delivery equal opportunity for all, without the expectation of equal results. Those that deliver superior results should be rewarded. This government will have no idea how to address the issue of bonuses because the very essence of what drives our economy is foreign to them.
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4-29-2009 @ 11:59AM
Ken said...
Scott, the point most posts are are making is that if Citi is in such trouble that they need billions in government funds, how can they say must pay bonus to pay their big producers? A bit of a contradiction, don't you think?
4-29-2009 @ 12:19PM
Ken said...
Scott, the point most posts are are making is that if Citi is in such trouble that they need billions in government funds, how can they say must pay bonus to pay their big producers? A bit of a contradiction, don't you think?
4-29-2009 @ 12:46PM
scott said...
Ken,
I agree with your comments...but isn't it a bigger contradiction for the federal government to try to manipulate the activities of businesses using money that the federal government does not even have? The market should be allowed to punish inefficient companies.
4-29-2009 @ 9:45AM
jim said...
if these people are the key profit makers and the company is in the toilet let them go they do not deserve bonuses.Give the bailout money back to the people then see how much money you have for bonuses take the money from the profits they are making
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4-29-2009 @ 9:55AM
Mac McCoy said...
Retention bonuses? The only reason they still have jobs is because we "lowly" taxpayers have pumped billions into the bank's coffers. Those incompetent idiots should be darned glad they even have jobs. Based on their disgusting performance, they should all be fired.
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4-29-2009 @ 9:50AM
Ed Pfaff said...
I think Its time to have a citi bank tea Party, Stand up america and say enough is enough.
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4-29-2009 @ 9:55AM
Reta said...
bonus, they do not need a bonus, if they want to leave the company then let them. Citi can do with out them. Look at this way, if one of the Hitters were to die, or something happen where they can not perform their job, I am quite sure that Citi would find someone else to replace them.
So they should look at that way. They can find someone else for less money, and no bonus. There are to many people out of work now who would love to replace the ones that want to much.
Better yet take the bonus and pay off all the credit cards that people owe them. That would bail out all over due credit.
Our government needs to give us the tax payers a bail out, not a little amount like last year that touched nothing yet they think that they did us a favor. WRONG. How about giving each Americian a nice lump sum to pay off our bills. I am quite sure we all could use about 200,000 thousand each.
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4-29-2009 @ 10:04AM
Don said...
Let the sleezy bastards walk ! NO BONUSES They are getting way too much for what they do, and what they did, if they get 2 cents ! I cannot believe it. Their mordacity is beyond belief. They need to be investigated for criminal activity and imprisoned. These guys need to walk down a dark street ! Obama needs to fire who ever asked for this slap in the face.
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