Citigroup Agrees To Limit Exec. Pay

[RamboLiberal]

Source: CBS News/AP

The recipient of a $45 billion infusion from the federal government, Citigroup Inc. on Wednesday said it would place strict limits on management's compensation, including no severance for its top five executives.

Under pressure from lawmakers, Citigroup Chief Executive Vikram Pandit and Chairman Win Bischoff opted to forego their 2008 bonuses. The company's new executive pay limits also feature a clawback provision in which Citigroup can recoup executive pay "that over time proves to be based on inaccurate financial or other information."

The compensation restrictions come as the New York-based bank signed an agreement with the federal government to receive an additional $20 billion on top of the $25 billion it received in October. Restrictions on expenses, including the use of corporate aircraft and costs related to entertainment or holiday parties, also will be put in place.

Part of the $700 billion bailout program authorized by Congress, the capital infusions to Citigroup and dozens of other banks are the government's main tool for attempting to stabilize the financial services sector and spur lending between financial institutions and to customers.

Citi said it will issue $20 billion in preferred shares to the Treasury Department, and warrants to buy about 188.5 million shares of common stock at a strike price of $10.61 a share, according to a filing with the Securities and Exchange Commission.


Read more: http://www.cbsnews.com/stories/2008/12/31/business/main4694763.shtml?tag=topHome;topStories

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How special of you Citigroup. You're on my sh*t list. Jerks sent me a letter a couple of weeks ago saying they were ratejacking me from 7.99% to 14.99%, but they had increased my credit limit. How nice. I decided to pay them off. When I went out to their website to check if they had gotten my payments I had nearly a -2000 balance and they had a near $2500 payment to my account I hadn't made.

I spent 20 minutes on the friggin' phone with them trying to convince them they had made an error. Seems they posted someone else's payment to my account.

They better not friggin' mess my account up trying to fix their mistake.

I've been fuming that I paid on time and with more than the minimum payment while they screwed themselves in to a financial mess, got a bailout from taxpayers like myself and then rate jack us meanwhile paying their execs like bandits!

[aquart]

1. Citi is an organization of thieves.

I wouldn't trust them with a piggy bank.

[lonestarnot]

2. Fuckwads! Where's the money? Last I heard Korea.

[SOS]

13. Much of it is tied up in drug trafficking and laundering

Many criminal Citigroup operations are conducted in their "private banking" division and is off-the-books.
Hidden offshore to conceal the source and to avoid tax....

"Drug Trafficking and Money Laundering"

http://www.fpif.org/briefs/vol3/v3n16lau.html

[machI]

3. Any Government money going to these corporations should have the requirement of limiting CEO pay

The CEO's are the ones who ran the company into the ground, they only deserve minimum pay (or no pay at all), until the company repays the bailout money and shows a profit.

It is pitiful that a big corporation can lose money, put the burden of the loss on the hourly wage workers, while the Executives get big bonuses and stock options. Any loss should be felt at the top first.

[JerseygirlCT]

4. They rate-jacked me, too

and I pay in full each month - have for more than 25 years!

[eilen]

5. I heard on the radio that there is no mechanism

to track credit card holder's payments that are over the minimum or even paying in full-- that it is merely on-time or late payments that are tracked.

I have used our Chase card for purchases for the "rewards points" that I could have easily just gotten a bank check for. I think I may cash in our rewards points and retire the card from my wallet. My husband uses it for travel/work. But I can pay off the current balance and not miss it.

[Telly Savalas]

9. Credit reporting agencies may not track this data

but I find it hard to believe that the bank that issues a credit card doesn't maintain a data warehouse containing the details of its cardholders' payments.

[SOS]

14. Re: rate jacking

Call them and ask why you were rate jacked.
We did and got an incredible result...
Interest lowered from 27% to 7% and an $800 credit for previous usury.

They are counting on most people not calling and challenging them.
It's worth a shot.

[exboyfil]

6. The compnaies should have been bankrupted

and the debt holders become the equity holders (Plan B). All executive compensations should have been renegotiated at that point as part of the bankruptcy filing (and many of the executives fired in my opinion). The former equity holders should have looked to the courts to sue for mismanagement and try to get some of the ridiculous bonuses back.

Any other way the executives have to agree to the compensation changes otherwise it would be viewed as a termination and the golden parachute they negotiated before kicks in. You just can't unilaterally change contracts.

The problem is with the compensation system and the compensation committees.

I would like to see several rules instituted for compensation:

1. All options taxed when they are awarded (value set by an equivalent pool auctioned in the open market).
2. The exercise of options and buying/selling stocks by the top 20% of the organization be disclosed at least one week prior to the actual order/exercise/etc to allow the market to react to the event prior to the event actually happening.

One thing we should not have done was open the Treasury to these thieves.

I think the large mutual fund companies (Vanguard, Fidelity, etc) need to get aggressive in the compensation negotiation moving forward. Not just U.S. companies should be benchmarked, but also Asian countries for setting compensations. Bonus structures need to be established for more long term considerations.

Business reporters need to be get more aggressive and those publications need to stop idolizing these CEOs about who is getting the largest salary. It would be as simple as to show how many cars need to be sold to pay the compensation for one of these individuals for example. That puts the compensation in real terms.

[Robbien]

7. Instead of limiting their pay, the execs are crooks and should be fired

All this nonsense about giving them bonuses in order to stop them from leaving is just laughable.

If they left their jobs, no one else wants them and the last thing anyone would do is give them a job.

[sendero]

8. I think...

... that was AIG, not Citi.

But they are all cut from the same cloth for sure.

[RUMMYisFROSTED]

10. For how long?

They gave up their 2008 bonuses...will it be made up at the end of this year?

Computer says "Yes."

[gratuitous]

11. Limiting compensation! It's socialism!

How will Citi be able to attract top-flight talent if they don't pay industry competitive salaries?! Those darn libruls are messing with our financial system. It will be the ruination of the free markets!

Anyone else want to chime in with a sub-moronic right-wing talking point that will surely come out soon?

[MasonJar]

12. Let's see....hhmmm....the Congress passed laws which made it harder

to escape credit card debt with bankruptcy, but the banks instead of going into bankruptcy got bailed out by the taxpayers they spent millions lobbying against and are now doubling the rates of those very taxpayers. May I say typical?

[depakid]

15. Actually, they screwed themselves royally with the bankruptcy bill

in sevral ways, the worst of which was the surge in forclosures that devalued many of their mortgage based securities.

The New York Fed has issued a scathing report on that back in November:

http://www.newyorkfed.org/research/staff_reports/sr358.pdf