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Citigroup Employees to Receive 50% Pay Raise

This article was written by in Career and Work. 26 comments.


After receive bailouts from the government on two separate occasions, Citigroup has announced that it will be increasing its expense for the salaries of the company’s rank-and-file employees, not upper management, by 50 percent. This will be a nice benefit, designed to compensate employees for smaller bonuses and raises last year.

The government’s new “pay czar,” Kenneth Feinberg, has the authority to only oversee the compensation of the top 100 employees of companies on government assistance.

Of all the wackiness involved with Wall Street compensation, this is not a big deal. I don’t see any valid reason to start breaking out the pitch forks and marching on Citigroup headquarters. The rank-and-file employees who stayed with the failing company deserve recognition. The executives who oversaw the bank as it buried itself and made the decision that led to the demise should be thankful these employees stayed with the company (even if the reason for doing so was the lack of a job market).

Unfortunately, it seems the employees will also receive a company stock benefit. There’s a chance that could pay off nicely, but it seems like a risky proposition right now, considering the ambiguity of Citigroup’s future.

How do you feel about Citigroup’s employees, as a group, receiving a 50% pay raise? Some will earn more, some less, but it looks like the bank is investing in their employees here.

Published or updated June 23, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 13 comments… read them below or add one }

avatar Michael Haren

I’m not too thrilled about this. Has Citigroup repaid their bailout money? If so, then power to them.

It’s hard for me to get on board with this when so many regular businesses are struggling. We’re weathering the economy just fine at my company but we’re being careful, too. That means no bonuses, reduced perks, etc. We do it that way because that’s what responsible people do in tough economic times. That makes citigroup’s situation a little irritating.

I’m all for private business doing whatever they want with their money. But it’s not their money.
——————-
OK, I just read an article about this (http://money.cnn.com/2009/06/24/news/companies/citigroup_salaries/) and this post seems quite inflamatory. According to the article, total compensation will remain the same (increased base salaray, reduced bonuses). So…there’s nothing to see here.

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avatar Hana

Can’t agree more with Michael Haren. These kind of irresponsibility spending other people’s (tax payers’) money makes me sick.

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avatar Kitty

This is a non-event to me. I just hope that the employees who are still there are able to maximize Citi’s income so that there is a greater chance that the federal funds lent to it are paid back to the USA.

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avatar Moose

On the face of it, “trickle down” has been a dismal fialure for average working people. The stats on income disparity clearly indicate that income has been “percolating up” in a large way, a massive transfer of wealth to the wealthy over the last 30 years. “Trickle down” is what happens at the comode. This trend needs to be reversed for the health of the nation. If citibank is doing this to be fair to it’s rank-and-file employees, good for them. We do not need a growing economic aristocracy.

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avatar Apex

Unless citigroup had drastically lowered salaries by an amount similar to an impending windfall across the board raise or had been paying way under market, its simply not possible that they could be handing out 50% across the boad pay increases. It would put them at a huge long term competitive disadvantage from a cost structure point of view. Beyond that, what possible business reason could they have for just handing out 50% pay increases to everyone. I guarantee you its not because they just want to be good to people. It’s a business decision.

So it appears this is a plan to change the compensation structure from being heavily weighted on the bonus system to being one of mostly stable base salaries. Which means drastic reductions in bonuses and huge increases in base salary that nets out to no change in total average compensation. I am sure there could be many reasons for such a change but the result is that compensation is basically unchanged.

Any suggestion of any sufficiently large company raising the overall compensation of its entire base workforce by any double digit number in a single year is likely incorrect and 50% is so huge as to be sure it could not be what is actually happening.

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avatar Jim

Its a non event. They’re cutting bonuses and stock benefits and increasing salary. Net pay will not change.

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avatar aa

Will they cut base salary when the company loses money again? If the answer is no, people gotta organize a protest to the headquarters now!

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avatar Tom

Call it a raise or call it a bonus. It is all the same, a reward for ruining a company. If the federal government had not bailed them out with 45 billion dollars there would not be a company. All of the employees should have a payroll freeze until they have paid back the taxpayers money and can show a significant profit. It they don’t like that then let them walk. Good luck finding a job.

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avatar smith

I work for Citi and have not had a raise in over 3 years and I still do not believe that we will get a raise get for real

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avatar Citi13

I’ve been at Citi for 14 years, and let me tell you, I don’t make big bucks. Unless you call 30,000. a year big bucks!! I worked very hard last year to get the highest ranking possibe. I achieved that goal, only to get NO RAISE AND NO BONUS. Meanwhile the prices of Gas, groceries, clothing and everthing else has increased for me. So to those of you who think the little employees don’t deserve raises… give me a break!!

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avatar Citi9years

Citi13 and smith I also work for Citi, i’ve been there for 9 years. I don’t have a problem with people outside the company who are uninformed, I blame the media. The media reports people at citi are collecting these big bonuses however those bonuses are not being paid to regular folks like us. The sad thing about this is that the people who are condemning us are our neighbors and they are only doing it because the media is reporting half truths.

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avatar Citi9years

Apex, the pay raises are NOT 50% across the board. Depending on the individual it could be 3% and up to 50%. I work for citi and this is what I’m hearing. Don’t get me wrong I’d love for it to be 50% across the board, I have daughter that starts daycare in September and I’d love to have that extra nut in my check..

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avatar Hello

Someone needs to realize that there is no pay increase at all. The Citi management is only trying to convert the fat bonuses of over-paid executives to their base salary. Don’t be fooled, I don’t think the low-level average-Joe employees are going to get anything from this. It is only a game played by the top executives to escape the TARP trap.

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