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.