Citigroup cracks down on defectors
Citigroup has become the latest investment bank to extend notice periods for its senior bankers, with a new 75-day lock-in for managing directors who quit to join a rival. It will also be able to claw back bonuses from those who quit within 75 days of receiving them.
According to an internal document sent to senior staff last week, directors' notice periods have been extended to 50 days. They will forfeit their bonuses if they quit within 50 days of receiving payment.
Sources close to Citigroup confirmed the changes. Citigroup declined to comment.
The rules will not apply to this year's bonus round due to be paid on January 26.
It is unclear how the policy will apply to bonuses paid in shares or restricted stock options.
One New York-based headhunter told Bloomberg the clawback policy was "unusual".
In their notice period, bankers will are banned from soliciting clients for a new employer or trying to entice colleagues to leave.
Bloomberg reports that Citigroup will provide equal notice to managing directors and directors it plans to fire.
In November, US rival Morgan Stanley extended notice periods for its 1,000 managing directors from one month to three. The move came after a series of senior defections at the bank in London and New York.