Citi asking Treasury for bonus power
A man checks his cell phone as he passes by a branch location of Citibank in Washington, D.C.
TEXT OF STORY
Steve Chiotakis: As if we haven't had enough bonus business to talk about lately, there's more. The Wall Street Journal reports this morning that Citibank is asking the Treasury Department for permission to pay out retention bonuses to certain employees. As Marketplace's Steve Henn tells us, Citi's worried if it doesn't, some of its most profitable businesses could fall apart.
Steve Chiotakis: Phibro isn't a household name, but last year this little division inside CitiGroup made hundreds of millions of dollars trading commodities.
Pete Hahn is a former Citi executive who's now at the Cass School of Business in London:
Pete Hahn: Gold, grain oil, you name it. And this is an area in Citi that's doing quite well.
The head of Phibro, Andrew Hall, took home close to $100 million last year. But now that the feds have a $50 billion stake in Citi, paydays like that are politically unpalatable.
Hahn says it makes sense for Citi to keep Hall happy and keep Phibro intact. But government pay caps are a problem.
Hahn: These individuals are generating large profits, and frankly that's going to help share price and help repay taxpayers.
Citi's reportedly asking to pay top executives like Hall stock bonuses that would vest over the next three years, and in some cases could be worth hundreds of millions of dollars.
In Washington, I'm Steve Henn for Marketplace.