SSDD:
After all those losses and bailouts, rank-and-file employees of Citigroup are getting some good news: their salaries are going up.
The troubled banking giant, which to many symbolizes the troubles in the nation’s financial industry, intends to raise workers’ base salaries by as much as 50 percent this year to offset smaller annual bonuses, according to people with direct knowledge of the plan.
The shift means that most Citigroup employees will make as much money as they did in 2008, although some might earn more and others less. The company also plans to award millions of new stock options to employees in an effort to retain workers and neutralize a precipitous drop in the value of their stock holdings.
Like Citigroup, financial companies, like Bank of America and Morgan Stanley, are raising employees’ base salaries to try to shift attention away from bonuses and curb excessive risk-taking. So are banks like UBS and other European competitors.
BTW- Did Jake DeSantis quit AIG yet?
ALso, some good news and some ammo for those of you who think the economy has bottomed out and is starting to recover, as durable goods orders improved.
gbear
Apologies to Pammy, but isn’t it time for a new group called PETB?
(People Eating Tasty Bankers)
Stooleo
I canz haz TARPz monys bak plz ? kthxbi
scav
Can’t resist slight editorial comment, also no doubt falling on the side of class warfare.
Zifnab
@scav: Yeah, I’m sure the guy scrubbing the halls after closing time got a generous increase in his take home pay. It’s not like all of this money could have gone directly into the pockets of C-levels. That would be ridiculous.
scav
@Zifnab: lots of assumptions on all sides, but I’m still holding out for the short on trust but verify the hell of anything these brightest guys in the room assert. We don’t know for a fact that the geeks with brooms get anything.
IndieTarheel
I hope this means they figured out that they won’t wind up in a position to need help again, because I wouldn’t give them another dime.
Napoleon
OT, but TPM is reporting that there is evidence Sanford may have been in Arg. with the/a other woman and that the press plans to ask about it at the 2pm press conference.
I am firing the popcorn maker up now.
Death By Mosquito Truck
@Napoleon:
It’s possible he rotates Fathers Day with his other kids.
scav
At this point, if it’s only another human of the reputedly sapiens sort, I’d be somewhat let down. Give me penguins!
Zifnab
@Napoleon: I wouldn’t hold my breath. I’m sure it’ll be a FAUX News exclusive.
Cris
That’s a hell of an annual bonus. Do investment bankers and traders really get one-third of their annual income from bonuses?
anonevent
I’m not going to argue about the stock options thing – I still agree with Warren Buffet about that – but the one good thing about making the increases salary is that they get taxed normally, not under the bonuses-are-different rule.
Bootlegger
Well, I’m please to see that Citi raising my interest rate had a positive effect for somebody. It also explains the “rising costs” they cited when I asked them why my interest rate was going up.
Matt
Not according to his LinkedIn profile.
JGabriel
This isn’t necessarily as ludicrous as it looks at first glance. The whole bonus culture in NYC has rankled many people for years, decades even. It’s basically another mechanism to over-reward the upper managerial tiers, and control the people below that level with threats and false hopes – like working on spec.
Any future regulation of compensation in the finance industry is going to require rules on bonuses. If Citi wants to get ahead of that by raising salaries and reducing bonuses, I’m fine with that. The amounts might be a little eyebrow raising at the moment, but that serves just as much to show how over-reliant the industry had become on abusing the bonus system as it does to show corporate insensitivity during a borderline depression.
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Napoleon
@Matt:
I am so tempted to link my profile to him and give him a BS recommendation (or whatever they call it).
Indylib
Somewhat OT Elderly German couple kidnaps and abuses the financial advisor that lost their savings.
C.Revere
Wait, so the people who broke the economy are getting their wages reinstated? Why do they get their wages and bonuses back before I do?
Balconesfault
@Napoleon:
See- that’s why I figure that that other prominent Republican from South Carolina, Lindsey Graham, never got married.
You’ll never catch him with “another woman”.
Dork
/checks watch, subtracts from 2pm
Just how long does it take you to make popcorn?
JGabriel
Napoleon:
Or, Sanford has simply been dying to go to Buenos Aires ever since seeing Kiss of the Spider-Woman.
The torture, the prison, the gay – it sounds like a Republican thing.
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Ash Can
OT, but in this day and age of abject scarcity of real investigative journalists, we’ve sadly lost another — John Callaway has passed away.
Comrade Dread
That was what immediately crossed my mind after he said he had been in Argentina a few times in the past. A “youthful indiscretion” resulted in a little hombre Sandford and some hush money.
Granted, he could have just needed to get away. But it was the first thought that crossed my mind.
Punchy
Those baby goats must be proud…
PurpleGirl
I wouldn’t be surprised if the cleaning crews are contract workers so they aren’t getting raises.
IndieTarheel
@scav: No way, it was coyotes.
PeopleAreNoDamnGood
YCSTA
Matt
This is one way to deal with people who fuck up your investments. If NPR or the New York Times were reporting this, would they call it torture?
renegademom
UGH. I work for State government, and:
1. Our pension contributions are going UP.
2. Our health insurance contributions are going up.
3. NO raises.
4. NO training/travel/education
And, I felt lucky to have a stable job, until I read about these dickbrains.
Brick Oven Bill
Rubin has his boat;
And Paulson has his moat;
As Geithner and his Chief of Staff play checkers;
Things will be fine;
As long as Barack stays in line;
Or the Bankers will release the Columbia records.
gex
@IndieTarheel: Nah, it just means that next time we bail them out, the benchmark for the bonuses that taxpayers will be paying will be higher.
Napoleon
@Dork:
I am making an extra big batch.
salacious crumb
speaking of tar and feathering, some Germans have apparently had enough
finally a well fed fattened pig of a banker gets his comeuppance…
dailymail.co.uk/news/worldnews/article-1194891/Pensioners-kidnap-financial-adviser-lost-2m-batter-Zi…
gex
@Indylib: Yikes. You don’t want to be on Germans’ shit list during hard economic times.
Brian J
As far as this might be considered a move to a more sane compensation structure, this is probably a good move. But is it that?
Napoleon
@Balconesfault:
Oh, that’s the reason! ;)
Any more when that clown comes on my TV or radio I need to turn it off. Last night his smug little face and huckleberry hick voice beam out from the PBS newshour and all I could think was “God I wish someone would out him just to keep him off my TV, even if just for a week”.
Perry Como
I like that Sanford is a front runner for the GOP in 2012.
Napoleon
@gex:
Just ask Poland after the Weimar Republic.
parksideq
Paging Gordon Gekko: greed is good again!
PeopleAreNoDamnGood
At least Sanford did not take his wife out to dinner and use the State limousine. That would be scandal.
Balconesfault
@Perry Como:
Up till last week, so was John Ensign…
But even with the most benign explanation that was being given for Sanford’s disappearance – that he likes to take off for awhile after a particularly stressful leg session …
As the POTUS? Really?
Death By Mosquito Truck
@Punchy:
This is why no one likes you Punchy.
The Other Steve
Having been on that roller coaster before, I generally think employees should be paid a salary and not have a gigantic bonus.
I don’t actually like bonuses… I don’t find they incent good behavior.
JGabriel
Class Warfare, the literal kind – German Pensioners Kidnap, Torture Financial Advisor Who Lost Their Savings:
Mr Arnburn, 56, described how two of his kidnappers, identified only as Roland K, 74, and Willy D, 60, hit him with a Zimmer frame outside his home in Speyer, west Germany before binding him with duct tape.
‘They bound me with masking tape until I looked like a mummy. It took them quite a while because they ran out of breath. When they loaded me into the car I thought I was a dead man.
‘I was bleeding from my eyes, nose and my mouth. But the nightmare had only just started.’
During his confinement in an unheated cellar, Mr Amburn claims he was burned with cigarettes, beaten, had two of his ribs broken when he was hit with a chair leg and chained up ‘like an animal.’
He says he was fed only two bowls of watery soup during his four days in the dungeon.
‘I was led into the cellar,’ recalled Mr Amburn, ‘And I saw a folding bed and a WC reserved for me. They immediately went on about their money.
‘I told them what I had told them before, that due to market conditions, unfortunately it was gone.
‘I was struck. Again and again they threatened to kill me. The fear of death was indescribable. I never thought I would make it out alive.
[…]
Forty armed officers rescued Mr Amburn who was naked except for his underwear.
A physician had to be on hand to help his captors into police vans because of their various infirmities.
They now face up to 15 years in jail each for illegal hostage taking, torture and grievous bodily harm.
Chief public prosecutor Volker Ziegler said: ‘They were angry because they invested money in properties in Florida and he lost it all.
‘This was black money – they hadn’t declared it to the revenue authorities in Germany.’
Mr Amburn, who needed hospital treatment for his injuries before being allowed home, added: ‘They threatened me with the Russian mafia too. I am not sure I feel all that safe even though they are behind bars.’
I’m really not sure what to make of this. The alleged torture is, of course, abhorrent, but some of the details, like the pensioners running out of breath while tying him up are pretty comic.
And one can’t help but feel that a little more treatment like this, and fear of such treatment from their investors and/or the rest of us peasants, for America’s financial elite might help keep them in line a little better.
Plus, it would make a GREAT movie!
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JGabriel
The Other Steve:
Been on that roller coaster too, and I’m right there with you.
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Cris
I’d like to note that even though he has yet to receive a response, Brick Oven Bill demonstrates in this thread why he will always be a Most Welcome Troll.
asiangrrlMN
@JGabriel: I agree that a salary is better than outrageous bonuses. However, I would still like to see how much they are actually raising the ‘rank-and-file’ employees’ salaries. i guess at this point, I don’t believe shit they say.
Brachiator
The May 28 issue of the UK business magazine The Ecnonomist mentioned this trend in an article on executive compensation (Attacking the corporate gravy train):
The corporate greedbags are fighting back, despite having brought the financial system to its news. The UK Royal Bank of Scotland, which had to be rescued by the British government, recently decided to reward its leader, according to BBC News:
It just amazes me that these people are being rewarded instead of seeing jail time, because of the dubious rationalization that their financial expertise is still needed.