Citigroup Inc. has asked the Treasury Department for permission to pay special bonuses to key employees.
According to the Wall Street Journal, Citigroup Chief Executive Vikram Pandit told Treasury Secretary Timothy F. Geithner that the company faces an exodus of top-level talent if it is unable to meet their compensation expectations.
The payment of large bonuses to executives of companies that needed taxpayer money to survive has been a major source of controversy since the bailout began last year.
Under its proposed exception, Citigroup, which received $50 billion under the Troubled Asset Relief Program, would distribute retention bonuses in the form of stock rather than cash.
Although the company hasn't settled on a formal bonus plan, insiders say the general outline could involve stock awards that vest over three or more years. The bonuses "likely would be worth the equivalent of at least 50 percent of an employees cumulative pay over the past three years," the Journal reported.
In addition, Citigroup is looking at the possibility of spinning off a major subsidiary in order to avoid compensation limits on its personnel. Executives said that the company's main energy trading group, Phibro LLC, is under severe strain because of the pay restrictions, with employees threatening to join other firms.
Phibro, which was not involved in the securities derivatives trading that marred Citigroup's balance sheet starting last year, is widely considered one of Citigroup's best and most profitable units.
According to the Wall Street Journal, Citigroup Chief Executive Vikram Pandit told Treasury Secretary Timothy F. Geithner that the company faces an exodus of top-level talent if it is unable to meet their compensation expectations.
The payment of large bonuses to executives of companies that needed taxpayer money to survive has been a major source of controversy since the bailout began last year.
Under its proposed exception, Citigroup, which received $50 billion under the Troubled Asset Relief Program, would distribute retention bonuses in the form of stock rather than cash.
Although the company hasn't settled on a formal bonus plan, insiders say the general outline could involve stock awards that vest over three or more years. The bonuses "likely would be worth the equivalent of at least 50 percent of an employees cumulative pay over the past three years," the Journal reported.
In addition, Citigroup is looking at the possibility of spinning off a major subsidiary in order to avoid compensation limits on its personnel. Executives said that the company's main energy trading group, Phibro LLC, is under severe strain because of the pay restrictions, with employees threatening to join other firms.
Phibro, which was not involved in the securities derivatives trading that marred Citigroup's balance sheet starting last year, is widely considered one of Citigroup's best and most profitable units.
published April 29, 2009, 0 Comments
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