The high and the mighty at Citigroup (NYSE: C) will not take bonuses for 2008. That includes CEO Vikram Pandit, Chairman Win Bischoff, and board member extraordinaire Robert Rubin.
It may save Citi shareholders a few million dollars, but it is hardly much of a penalty for an awful year in which the bank's stock fell 77%. The management at Goldman Sachs (NYSE: GS) skipped bonuses and their shares were only down 58%.
The bonus cuts are just window dressing. Rubin has made millions of dollars serving on the Citi board. According to Bloomberg, "Pandit got $165 million from Citigroup in 2007 when he sold Old Lane Partners LP, the hedge fund he co-founded and ran."
Put another way, the loss of bonus money probably means very little to these people. The humiliation is a greater pain than the financial sacrifice.
That really leaves no penalty other than to fire the three. So far, the Citi board has shown it does not have the guts to do that.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
1-02-2009 @ 10:45AM
Beltway Greg said...
Old Lane turned out to be more of a toxic waste dump than a hedge fund. Now why would a quasi financial organization like Citi keep an individual as it CEO that can't even set up a fund that has adequate measures to guard against financial calamities? Why? Because it's your money. Just pick your random Schwab investor and let him/her run Citi. Trust me they'd never do it as poorly as Pandit & Rubin.
1-02-2009 @ 12:11PM
Lela said...
One of the prerequisites for receiving federal taxpayers money should be no bonuses until all funds are repaid including interest on the loans. It is a new year and a good time to reevaluate how we in America have let corporate CEO's and top executives from our financial companies rob us while managing their institutions into the ground because of their own greed.