With bailout money putting restrictions on what it can pay out in bonuses, Citigroup Inc. (NYSE:C) is reportedly poised to raise salaries as much as 50%.
An unnamed source familiar with the plan tells
Bloomberg that the bank will offset the reduction in annual bonuses with the increases in base pay. Investment bankers and traders will command the largest raises, while employees in consumer banking, credit cards, legal and risk management will see smaller salary adjustments. The bank will also award stock options to help retain employees.
Still being propped up by $45 billion in capital from the Troubled Asset Relief Program, Citi finds itself getting creative as it deals with caps on what it can dole out to employees in bonus money. The restrictions puts it at a distinct disadvantage to competitors like Goldman Sachs Group Inc. (NYSE:GS) or J.P. Morgan Chase & Co. (NYSE:JPM) who have repaid government money. Goldman in fact has seen profits surge so much over the first two quarters that it is positioned to pay out the
largest bonus pool in the firm's 140-year history.
Morgan Stanley (NYSE:MS) and UBS (NYSE:UBS) have taken a similar approach, raising salaries for executives and employees in recent weeks. Bank of America Corp. (NYSE:BAC) also improved salaries after it took over Merrill Lynch & Co. -
George White See Bloomberg storySee Dealscape post on Goldman's bonus pool
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With cutbacks and layoffs everywhere, what gall? The Federal Government should definitely step in, and demand immediate payment on our loans to these arrogant idiots. Let's see if they would like to see unemployment rather than bonuses?