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Stricken banking giant Citigroup was today planning to raise base salaries for employees by 50% to compensate for the sharp reduction in annual bonuses.
The Wall Street firm, which has hundreds of thousands of staff worldwide including almost 10,000 in Canary Wharf in London, was ordered to curb its bonus payments after a $45 billion bailout by the US government.
A host of other US banks were also told to abandon bonuses after taking money from the Troubled Asset Relief Programme but many, including Goldman Sachs and JPMorgan, have repaid the funds and are now free to make lavish payouts.
It has left Citi and other apparently weak banks fighting to retain their best staff.
The biggest pay rises at Citi will go to investment bankers and traders while workers in consumer banking, credit cards, legal and risk management will see smaller increases.
"Citi continues to examine ways to ensure its employees compensation practices are competitive in this very challenging market environment," said Citi spokesman Stephen Cohen.
"Any salary adjustments are not intended to increase total annual compensation, rather to adjust the balance between fixed and variable compensation."
Reader views (12)
Ed Whitechapel and Dave. I may be bitter knowing that normal people doing normal jobs are out of work because of this elitist mob. All people who work in the banking sector are devils spawn. Yes I may have a chip on shoulder but arrogant comments just sum you all up (take it your in the same industry).FYI im self employed and currently get approx 45%-50% taken off me in tax and deductions, im really happy knowing its being gambled by banking idiots who by the law of averages will win money just like any muppet could. Old boys network through and through....
- Dc, Ealing, London
To Ed in Whitechapel. I disagree with you, of course it is of concern what these bankers are paid, have you not read the papers? bankers have been earning huge amounts by taking unnecessary risk and booking unrealised profits for short term incentives putting the economy at risk. I would say that you are pleasing your immediate shareholders at the expense of your wider stakeholders. Bankers need to get real jobs and do something which really adds to GBP rather than continually creaming off the froth.
- Matt K, Ware
Dc, Ealing, London - Your bitterness must be driven by jealousy.
- Dave Davies, Basingstoke, Hants
"Dc, Ealing"
With all due respect, what Citigroup pays its staff is actually none of your business. Sounds like you've got a nasty little chip on your shoulder there. You clearly feel threatened by successful people. Why don't you just grow up?
- Ed, Whitechapel
"Any salary adjustments are not intended to increase total annual compensation, rather to adjust the balance between fixed and variable compensation." - What kind of statement is that? that's obvious, still continuing to treat non bankers as stupid then!
- Matthew, Ware, Herts
" If you believe they work these hours Ed, you will believe anything." - T, Southend
I happen to be working close to those kind of hours (c. 100 hours /week) since markets started to pick up from about March and many good deals have been done. I expect to be well rewarded (I am an investment banker. I do not work for Citigroup and contrary to the public's stereotype of a "rich" banker, I do not have a car and live in a small flat in the Docklands...but I expect to be rewarded well if I make profits to the firm!)
Some people on this board need to know the difference between investment banking (e.g. banking for the largest corporates) and retail banking (e.g. your normal high street banks) before saying that it's the increasing bank's charges on joe public's money that lead to investment bankers' pay (in fact, there is almost no relationship)! And people need to know the difference between investment bankers and traders - very different job functions!
- Ed, London
"What do you think will motivate investment bankers (the profitable ones) to work 18-hour day each day (and also giving up their weekends to sum up with more than 110 hours per week)" If you believe they work these hours Ed, you will believe anything.
- T, Southend UK
Citibank should have died, but Geithner's links with the powers that be or shouldn't have been-- has kept it going. It's all out of our hands and out of our pockets. It's a classic case of not what you know, but who you know.
Take a look at the incriminating diagram of Geithner's World, NY Times April 27th. More like Wayne's World.
I have pulled out my overtaxed dollars and sterling from both Citi and RBS, not to make a statement but do not want any associations with any old boy's network and undeserving incompetance. Small grassroots worthless impact, but prefer cash and carry, rather than deposit and subsidize incompetance.
- Kathy, London
Where the hell do these pigs who work in this industry get off?, Increasing rates and charges on job public is the only way to pay for all this, money joe public hasnt got and will be soon held over a barrell to borrow. Until taxpayers money is paid back up until then they can all take a run and jump and sell their f'ing porches & ferraris. And when you thought their game was finally up!!! elitetist scum the lot of them.
- Dc, Ealing, London
This is due to happen. What do you think will motivate investment bankers (the profitable ones) to work 18-hour day each day (and also giving up their weekends to sum up with more than 110 hours per week)? Simple, it's the money.
People moan about how hard they work (60 hour week is apparently already hard work to them) and only get paid next to nothing. Do they individually make millions for their company? If bankers make millions for the bank in a year, then they deserve to get something out of it.
As for those who lost money for the banks and the society as a whole, they should be the ones who pay for the loss.
- Ed, London
Any one with money in Citi Group of any form should take it out now as it is no longer safe.
Does no one ask, where they are suddendly making such vast profits from in this economic climate, to have the cash available to pay these monthly increaes? What extorniate charges are they levying against transactions?
Sorry, I will not touch them with a barge pole - my money is safer in a low paying interest bearing account.
When they go down next time, NO BAIL OUT AT ALL. If the staff accept these riduculouos pay rises they are the culprits of their own downfall.
The markets do not justify this stupidity.
R.I.P. Citi Group
- Tm, London
Did you honestly believe this would not happen? I didn't, but I am surprised it has taken so long.
- Dave Davies, Basingstoke, Hants
