Vikram Pandit, CEO of Citigroup (NYSE: C), and his top managers may give up their 2008 bonuses as a show that they are willing to make sacrifices after the federal government saved the bank with a huge bailout package. Board member Robert Rubin may have been the first to suggest the move.
According to the FT, "People close to the situation said last week's government rescue made it almost impossible for Citi's board to award cash bonuses to other senior executives, led by chief executive Vikram Pandit."
For anyone not paying attention to the Citi mess, its stock has been down as much as 90% this year. The federal government is pouring money into the bank like water, and the company is still losing money due to consumer credit losses, bad LBO loans, and mortgage derivatives.
To put a point on it, why would the Citi board even consider bonuses in the first place without the risk of being tarred and feathered by shareholders and the government?
"Giving up" bonuses is a meaningless gesture for executives who do not deserve them and would likely get nothing in the first place. Maybe it is nice PR.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
12-04-2008 @ 10:43AM
nick said...
All these people, the top 1,000 should get no bonus, they should give that money to the stockholders. This company should fire the whole board. The main guy who screwed this company is Rubin.
12-04-2008 @ 11:10AM
Beltway Greg said...
Pandit already received his bonus. Citi bought his hedge fund (Old Lane) and then had to "unwind it" which is a euphemism or happy speak for the thing wasn't worth a flying .......... And Bob "See no evil, hear no evil, make no decisions," Rubin suggested it? At least he'll finally take credit for something. Way to step-up to the plate.