So now you can do crappy work and still get your "bonus" money as part of your regular salary instead of having to earn it via performance. GREAT!

Nice. The intent of the bonus caps was clear - to nix rewarding the people who drove the company into insolvency and the economy into the porcelain bowl. But hey, look, here's this enormous loophole! So let's just drive the fail bus through that, and moon the taxpayers from the windows as we pass.

Wow it seems like irresponsible companies that needed Govt bailouts still will not cut employee pay or cut any expenses. Though employers such as mine who chose not to except bailouts took measures and cut expenses, PAY, and everything else...

The only winners here are the upper management whom are already filthy rich off of the bad decisions they made through out the years... The losers are the middle class and the poor...

While I think hopefully people should be working up to par of their pay, i think this is a good thing.

At least now people can't say, "Oh, poor me, I was working for crappy pay because they promised me a multimillion dollar bonus as my real paycheck."

If I were in Congress I'd be yanking the carpet out from under them on this one. Everybody knows what the intent was of the bonus caps for TARP banks. Everybody knows this is a blatant tactic to circumvent that rule.

You guys want to play that game? Fine...just return the TARP money, now. Oh, you need the TARP money? Don't play games.

The morons who got us into this mess never deserved their bonuses in the first place, and they certainly don't deserve a pay increase to offset the caps. Frankly, they no longer deserve to be employed at all...nor do the bank execs that are pushing through these kinds of weasely actions.

@JaideepG2002: I've often wondered what the legalities are in cutting employee pay.

"Hey Jim, you are going to keep your same job, have the same responsibilities but we're going to pay you 15% less from here on out."

You know I just can't see that going over very well. I also assume most of these salaried employees signed employment contracts that dictates their compensation, therefore any move by the company to reduce their pay would breach said contract and result in a legal battle.

Eyebrows can you shed any light on this?

Yeah guys, Citi is doing this so they can piss away the rest of the government's money and then close up shop.

OR maybe they're doing it because they need to pay competitive salaries to get and keep the kind of employees who make money for the company.

[money.cnn.com]

Sounds good to me. Structure the salary appropriately and stop the stupid bonus stuff.

Sorry but this is what happens when the government gets involved. Loopholes will always be found and instead of letting these crappy banks go bust our tax money will be milked away.

But hey I think CITI is making a good move, word is they were starting hemorrhage brain power overseas and had to stop the bleeding by offering better pay. What is so wrong with that?

Or are some of you readers saying we can't pay employees to remain competitive with other companies in the world market?

This is really a blatant way to circumvent the bonus caps b/c they took bailout money.

You jerks get BONUSES and 50% income increases when I've been working an entry-level job for 2 years (after going into debt w/ student loans so I can get my Masters) and have YET to get a raise b/c they've been put on HOLD until further notice???

Every one of you bank execs can SUCK IT.

@YouDidWhatNow?: You can't do that. Well, it would be difficult.

First option is to simply try and get a Bill of Attainder through countering these raises and keep it valid in the courts - but good luck, as it is explicitly prohibited by the Constitution.

Second option is to pass a law allowing for governmental override on any employment contract at any firm that has taken bailout loans/cash (as opposed to loans to encourage green technologies, etc). However, how many firms do you think would ever take the money? And those which had, I imagine would find the money to pay it back VERY quickly.

And, if you like the second option, how would you like some bureaucrat coming in and deciding if you are overpaid?

@PLATTWORX: Why do you say that they were doing crappy work?

That really didn't help anyone for they just got jacked up a notch on the tax bracket, not to mention paying more directly out of their paycheck to the gov't.

Can I recast my vote for Wost Company in America???

how do you expect Citi to recruit/retain the talent that can make them profitable again? you have to incentivize somehow! no one works for free, especially in this environment.

now factor in that every tax payer is a pseudo owner of the company due to bailouts. do you really want Citi to fail? the government doesn't and neither do you. so you let them be competitive by allowing an increase in salary. the bonus caps were a behavioral stop-guard to keep the market from running on the bank. we should keep politics separate from capitalism.

we should be more focused on regulation so that we have the transparancy to see these troubled trends brewing (read as MBS and CDO) before waiting until the system break from the weight of those trends.

finally, don't let the faults of a few punish the many who were just following orders. remember that concept of moving up the corporate ladder? there are some good people who got burned by their boss (or their boss's boss, etc). they have the talent and now the foresight to be profitable and to do it the right way. it would be irresponsible to assume everyone in that large organization bares responsibility for the necessity of TARP.

@YouDidWhatNow?:
Your righteous anger would drive the company out of business, costing the government its entire investment. Personally, I'd like to see the company do what needs to be done to turn around and make the government's investment profitable.

Congress didn't realize that Citibank could do this?

Let the populist righteous indignation by the politicians begin (again).

Not to defend Citi or anything but there are people that work there who had/still have nothing to do with loans/bad decisions etc...people like the IT staff. Who I might add got no bonuses and no raises etc... The big question is will this "pay increase" actually trickle down that far on the ladder to the people who actually work and NEED the money? or is it going to stay at the top to line the fire places of those who already have too much?

@Nighthawke:
You don't understand how federal income taxes work.

Start by googling "marginal tax rate."

As long as these guys getting the pay increase are part of the solution and not part of the problem, fine. But if they were part of the problem... FIRE THEM.

@HiPwr: If they were doing everything right, they wouldn't be taking bailout money.

@dragonfire81: Depends on the employee, but the vast majority of these guys are "at will," meaning they can be fired at any time for any reason. Pay cuts or pay increases are all allowed.

The problem is that a 15% pay cut means that good earners quit and go elsewhere because they're in demand, and the borderline guys stay put because they're just happy to have a job. Congratulations, you just saved a couple million in compensation and lost many more millions in marginal earnings that the top performers would have brought in. The whole reason salaries are being increased is that no one with any talent would work for Citibank otherwise.

@K-Bo: So absolutely every employee of Citibank is responsible for its troubles?

Workers in finance get paid in a different structure than those in other industries. The nation's violent reaction towards the word "bonus" despite the fact that for them it is nothing extra, instead just part of their regular salary is the only reason why this is happening.

@Greg []: Yeah, but that's the problem. The salaries were already kind of insane but the bonuses for not delivering on good business practices? Even MORE insane. Why should you be rewarded for this?

The people getting these 50% increases aren't everyday people who are struggling, trying to get by, and doing the everyday business stuff for Citibank. They're people at the TOP of the food chain who are probably already rich and not worrying how they're gonna put gas in the car this week AND make sure the kids have new clothes and shoes for the upcoming school year.

Does anyone else see this triggering a "Let 'em fail" movement the next time they screw up?

I say let the Fed cut them off. Any money they want to loan out from now on comes out of their own pockets (and before you all post that this is idiocy, of course, you're right. This will never happen. It'd cause the economy to completely collapse, drive more people out of work, to the soup line, into poverty, etc., etc., blah blah ad infinitum. I'm just venting).

Not to rain on anyone's hate parade, because I'm just as offended as you are, but the entire problem with bonuses to begin with was that not only were they rewarding bad behavior, they weren't getting taxed at the same rate. This is why many CEOs make 80% of their income in bonuses. Forcing a bank to pay their employees a salary instead of a bonus insures that they'll make their fair contribution to paying back their loan in tax generation, and up their income into a higher tax bracket, thus increasing their taxes further.

Citibank makes a good point, I am sure there are some very solid people there who are fully capable of helping the company though it's turnaround, and plenty of freelance professionals out there looking for a company to work at. If they have the choice between a bailout crippled bank who can't pay them a competitive wage or a foreign bank in dubai who will pay them more, they'll pick the foreign bank. People don't get degrees in these fields with altrusim in mind.

I think this is a compromise I can live with. It's not particularly fair or pleasing, but it's a comrpomise I can live with. I would rather see banks that we paid bailout money survive and live to pay back the debts - with interest. The faster we get the bailout money back from these banks, the faster we can direct that money to something meaningful like health care.

So let's see... Citibank needed billions in bailout money to continue operating so, OUR representatives in D.C. OK-ed to give them OUR money to 'save' their business. That cost them bonus-money (they deserved bonus money for NOT being able to stay afloat without our bail-out?) so, they raise certain exec's pay 50% with OUR money? Have I got that right? hmmmm ... We should have let them go under and given US the money ... we'd have spent it, thereby injecting it into the economy, saving jobs, homes, cars, and people! That sounds like a better investment to me.

Think about your office. Look around. What if the CEO told you that no one was getting a raise, bonuses are gone, and some are taking a rollback in salary.

Now what happens? Everyone complains. People want to find a new job. But the top employees are the only ones who can find a different job.

This is why we should've never given these loans in the first place.

@redclear55:

Redclear asked: "how do you expect Citi to recruit/retain the talent that can make them profitable again? you have to incentivize somehow! no one works for free, especially in this environment."

Answer:
I don't want Citibank to be profitable; I want it to shut down. It is a scummy company that has for years, been a financial predator on the weak in our economic culture. Citibank is broken, except that we taxpayers propped it up supposedly just enough to keep it from hurting our economy beyond repair. Now it's time for Citibank to disappear. Another company--hopefully a more ethical one--will emerge to fill the void.

@redclear55: Exactly. Contrary to popular belief most of these people are highly educated professionals who deal with a good deal of stress and job related BS. They have to be compensated for the role they play.

@HiPwr: Exactly. We need to get some people in there who are ready to do some clear thinking. Both parties have jammed their heads way to far up their asses to think logically.

But of course, they'll do their dog & pony show stating how horrible the company is, and that they are the saviors to clean this mess up.

Time for a third party people.

@Cant_stop_the_rock: Yeah, as much as this disgusts me, it's important to look at the bigger picture. Citibank is hardly the only bank who grossly overcompensates its bigwigs. If it isn't in salaries, it's cash bonuses. If it isn't cash bonuses, it's vacations, art, or other luxuries.

Show me a bank who doesn't do this. You can't find one! If they can't attract top talent with lavish perk then they're going to be ruined through mismanagement. (Not that mismanagement isn't an issue even with top talent on board, but mismanagement through incompetence rather than unethical greed is not something any business in its right mind would facilitate.)

@HiPwr: No kidding - they are going to cry about how govt. money is going to be used to pay hard working professionals in one breath and vote to give billions in welfare to lazy do-nothings in the next.

@HiPwr: Of course not. Just the one's that are most likely getting these raises.

My company didn't give out raises this year, and because of the bad economy, our bonuses are shot too. 401k matching was discontinued and people are grateful to keep their jobs.

If Banker A wants to go move to Germany and make more money, then let him do it. But raising salaries at a bank that tax payers are supporting is wrong.

Bankers make too much anyway... 80-300k as a base BEFORE bonus. When you control the flow of money, though, I guess it's easy to take a big cut and claim that your pay is just the market rate.

I think it really stinks that someone who works their butt off in HS to get into a good university, then works there butt off at university to get into a good grad school, then works there butt off to get an advanced degree, then goes to work at a place like Citi and works their butt off to climb the ladder would get one cent of government money! I mean those executives only work like 10 hour days doing things that the average person has little or no grasp of. They don't deserve anything from the Govt! Also I'm really pissed because my welfare check was late this month - I was counting on that money to pay fines for my latest felony convictions - I'm entitled to that money! How else is a HS drop out multpile felon with 16 kids supposed to make ends meet? OH - and get this - medicaid is making me pay a $5 co-pay for doctor visits now! This is totally unfair!

@gtrgod01: I'm in IT and never got a bonus. Should have went into finance.

@HiPwr: nope, but if my company is barely scraping by, having to take gov loans, I know there it's money for a raise/bonus. It's a basic fact of life/math. If there is no money, you don't get more money.

I've got a real problem with any third party trying to tell two people what they can or cannot do with respect to entering into a contract together to exchange services for money. Obviously, these companies do too.

People are hating on this because Citi used a loophole. I'd be mad at the politicians for leaving a loophole. Citi is going to do what's best to hire and retain talent. Otherwise, they might as well go bankrupt and we'll never get our TARP money back.

I guarantee if this loophole was closed, they'd find some other way to pay their executives and subject matter experts. It seems like if Citi spends any money to gain business or retain talent, the majority of Americans are going to spit on them.

@JaideepG2002: That's fine! I'll only see you 4 days a week now, though.

@dragonfire81: It may not go over very well, but it goes over all the same - Many of my friends have been taking pay cuts recently to help stave off layoffs - it's better to be making 10% less than to be making 100% less.

@lhutz34: "The problem is that a 15% pay cut means that good earners quit and go elsewhere because they're in demand" - you'd think that, but in this economy even the good earners have very few options when it comes to moving on to new employment.

That's definitely what goes on in a non-turbulent economy, however.

@Scuba Steve: What evidence do you have showing that these employees had anything to do with the bank's problems?

@K-Bo: Then perhaps they should have accross-the-board pay cuts. You don't see how that hurts a company when the employees are lured away by better pay?

@YouDidWhatNow?: I'm afraid we're stuck. They know they can do whatever the f*ck they want because of their value to the banking system/economy. Otherwise, we could just demand the money back and let them fail.

Of course if we try to impose any salary caps/raises, the Dittoheads will go crazy with Islamosocialfascism complaints.

In my mind, the answer is to bite our tongues, get our money back, and set up better regulations on banks, to prevent this problem AND so if they do fail, they will have less impact on our economy.

@Robobot: But my problem with this it that they are NOT top talent. They suck. They contributed to the mess we're in. Why do we want to attract/maintain them? It's a self-preserving system. The Street demands we keep hiring theses same jerks or share prices suffer, even though they wouldn't do any better than someone else.

@tailstoo: As wrong as you might think it is, you will find that in certain businesses, such as banking, people doing certain jobs just don't want to work there. Supply (low) and demand (high) makes it necessary to provide greater compensation. They can't get experienced qualified people without it. Bonuses were the usual way of doing this to be sure people stayed for longer periods. Now with just boosted salaries, the turnover rate could still be higher.

@dreamsneverend: The problem isn't that government didn't get involved, its that we got involved too late when they were too big to fail.

@HiPwr: LOL I have friends on the street, and there's enough people out there right now by GOOD people (i.e. good prospects for hire, with experience!) that you don't have to hire away anyone other than for name recognition.

Your argument fails in this economy.