Terrible news about Citigroup bonuses

15 January 2010

1 minute read

If it's bad working at RBS, it's starting to look like it may be worse working at Citigroup.

The US government has belatedly started talking dirty about bonuses, and Citigroup, which is still 36% owned by the state appears to have taken it to heart.

Various sources reported last night that Citi plans to cap cash bonuses at $100k (61k).

They also said the bank plans to pay bonuses on a par with 2008, at a time when most other organizations are still expected to unveil bonus pots comparable with 2007.

We have been here before with cash bonus caps. In November, RBS said it wouldn't pay cash bonuses larger than 39k.

However, the Royal Bank appears to have nimbly sidestepped this constraint by instead paying bonuses in paper, 50% of which is immediately convertible into cash and the remainder of which is deferred for only two years.

Yesterday, headhunters told us Citigroup's expected to operate a four year deferral programme, one of the longest.

AUTHORSarah Butcher

Global Editor

cl
clear
16 January 2010
RBS is deferring the 50% for 2 years for one very obvious reason. During that 2 year time-frame the bank will be so hellish to work that people will leave to go to other jobs or just resign with mental health problems and forego their remainder - thereby saving the bank (and us) a large wedge of cash.
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AT
ATRBS
15 January 2010
sarah, on this occasion your sources are accurate.
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Sa
Sarah, Editor, eFinancialCaree
15 January 2010
@Freeeeedom - that came from a senior RBS employee, verified by hhunters. Do you work at RBS?
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Fr
Freeeeeedom
15 January 2010
Royal Bank 50% immediately convertible......No 25% and then some at 2 years and some at 3 years ...perhaps those on lesser bonuses have been given "your" method...but seems surprising...where do you get this info...please dont say "recruiters" again...they rarely know anything
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