Citigroup Plans to Raise Salaries by as Much as 50% to Offset Bonus Reduction

June 24, 2009 by · Leave a Comment
Filed under: Industry News 

Even though it sound appalling, the U.S. taxpayer vis-a-vi the U.S.  government is now a major stakeholder in Citigroup.  If you take the line of thinking, then we should do what it takes to make this bank profitable so it will be worth the money we have used collectively to provide a bailout and backstop for this bank.  What I would like to see is Citigroup get into some sort of retail banking activities.  That is one thing about CitigroupThat is just me and honestly I have not studied Citigroup’s that is frustrating, we keep bailing this bank out and for its size it should have some retail presence or become a pure investment bank.  You would think banks these days would do normal operations as well as their “other” services.   assets enough to know if that is a realistic suggestion.  Now that I have said this, I will be reviewing it to see just how it makes or loses all its money.

News (Bloomberg):

Citigroup Inc., the U.S. bank that got $45 billion of government funds, will raise base salaries by as much as 50 percent to help compensate for a reduction in annual bonuses, a person familiar with the plan said.

The biggest increases will go to investment bankers and traders, said the person, who declined to be identified. Workers in consumer banking, credit cards, legal and risk management will see smaller salary adjustments. The New York-based company also plans to award stock options to try to keep employees after Citigroup’s market value plummeted 84 percent in the past year.

Citigroup joins Morgan Stanley and UBS AG in boosting salaries for executives and employees. Morgan Stanley said last month it will increase base pay for many of the New York-based firm’s top executives and double the pay of Chief Financial Officer Colm Kelleher.

“Citi continues to examine ways to ensure its employee compensation practices are competitive in this very challenging market environment,” Citigroup spokesman Stephen Cohen said yesterday. “Any salary adjustments are not intended to increase total annual compensation, rather to adjust the balance between fixed and variable compensation.”

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