Citi boosts salaries as bonus caps take hold
WASHINGTON - Citigroup Inc. is increasing the base salaries of many employees - reportedly by as much as 50 percent - as it restructures their compensation amid government restrictions on bonuses.
The Obama administration reacted by pledging to aggressively implement a new law governing compensation at companies that have received taxpayer-funded bailouts. Citi, which is examining “ways to ensure its employee compensation practices are competitive,’’ has received $45 billion.
Administration officials refused to say whether Citigroup informed the government in advance of its decision.
Higher salaries at Citigroup are not the equivalent of annual raises, because bonuses are being lowered, said a person familiar with the matter. The person said the changes would not affect the amount of an employee’s compensation. By shifting the mix of compensation, the change could allow Citi to pay most employees as much as they received in 2008, while adhering to bonus caps.
The person said the employees include traders, who tend to be compensated more heavily with bonuses, and middle- and lower-level managers, whose compensation is more heavily weighted toward salaries.
Only those who get base salary and bonus could see an adjustment.
Before the financial crisis, top traders and investment bankers typically earned $125,000 to $250,000 in base salary and $1 million to $5 million in bonus.
The New York Times reported that some Citigroup salaries will rise as much as 50 percent.
