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"They just don't get it," Senate Banking Committee Chairman Christopher Dodd, D-Conn., said of Citi, which has received $45 billion in TARP funds. TARP recipients face restrictions on bonuses and executive compensation, and financial firms that can afford to pay back TARP are escaping the program. Citigroup announced it will raise base salaries of its employees, although it is not planning to increase their total compensation because it will cut year-end bonuses. "Retaining and attracting the best talent is very important to the success of Citi and all its stakeholders," said Citigroup, in a statement explaining the base pay hikes. Dodd noted that the timing couldn't be worse for a company under the microscope for receiving enormous amounts of taxpayer largess. Dodd noted that Tuesday the Bureau of Labor and Statistics announced that there were 2,933 mass layoffs in May that affected 312,880 workers. Also, the national unemployment rate is 9.4%, Dodd noted. The Service Employees International Union, which is trying to organize workers in the financial services industry, predicted the raise would proportionately benefit the highest paid workers, whose annual compensation is greatly skewed toward bonuses. "Citigroup needs to commit to give any new raises to front-line bank employees, who struggle just to make ends meet while dealing with the rising costs of healthcare, not top executives who have contributed to this mess," said SEIU Secretary-Treasurer Anna Burger. SEIU called on Congress to pass the Employee Free Choice Act, which would make it easier for workers to establish a union shop. The bill would allow workers to vote for union representation by checking a postcard box rather than by secret ballot. - Bill McConnell See earlier story from Dealscape
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Citigroup Inc. (NYSE:C) CEO Vikram Pandit at the moment is probably more envious than usual of counterparts at J.P. Morgan Chase & Co. (NYSE:JPM) and Goldman Sachs Group Inc. (NYSE:GS) for exiting the Treasury's Troubled Asset Relief Program. Citi received a barrage of political flak Wednesday after announcing base pay hikes for its employees. 
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