Sat, Sep 19, 2009 - Page 1 News List

US$100m salary is far too much: Citigroup CEO

AGENCIES , NEW YORK

Citigroup chief executive Vikram Pandit said on Thursday that US$100 million is too much for an employee to earn given the bank’s circumstances.

In an interview before an audience in New York, when asked if US$100 million was too much money for a Citigroup employee to earn given the government support the bank has received, Pandit said, “Yes.”

Andrew Hall, a trader at a Citigroup unit, is contractually entitled to a pay package this year that could be worth US$100 million. Pandit noted that the business Hall works at, an energy trading unit known as Phibro, had contracts in place that predate Pandit’s tenure.

Pandit said Citigroup is working to turn the Phibro business from an operation that trades the bank’s money into a unit that manages other investors’ capital. Hall’s payout will be determined at the end of this year based on Phibro’s profits and may raise concern among lawmakers and regulators who are scrutinizing Citigroup’s compensation practices after a US$45 billion government bailout last year.

Citigroup, based in New York, is among seven bailed-out companies that last month had to submit compensation plans for top executives to Kenneth Feinberg, the Obama administration’s special master on pay. Pandit cut his pay to US$1 this year after getting a total of US$10.8 million last year.

The US Federal Reserve would be required to approve salaries for thousands of US bank workers as part of a plan to curb risk-taking, the Wall Street Journal reported yesterday.

“The Fed’s plan would, for the first time, inject government regulators deep into compensation decisions traditionally reserved for the banks’ corporate boards and executives,” the report said.

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