Kenneth Feinberg, the Obama administration’s pay czar, has started reviewing the comp proposals of the seven firms that received “exceptional assistance” from the government.
So how’s that going? The discussions with the TARP firms are reportedly very “amicable.”
Except with Citi.
Reuters reports today that Feinberg said that Vikram’s firm has some “concerns about pay restrictions causing its top employees to leave.”
Andrew Hall, a Citigroup energy trader on pace to make about $100 million this year, has recently become a target for accusations of excessive pay at bailed-out companies.
Feinberg told Reuters that Citigroup included Hall’s contract when it submitted its pay plans earlier this month.
Ah Citi. Never missing a beat. With the government’s 34% stake in the zombie bank, you would think that they might want to lay low and just not make a fuss about such a hot-button issue as compensation. But America’s top rogue bank just won’t keep quiet.
Here’s the thing. Citi will lose talented traders and bankers if it cannot pay competitive wages. But that’s just what happens to failed companies–the best people leave. And Citi failed. It is only appropriate for market processes to deprive it of top people. In fact, keeping them inside the zombie bank will only produce sub-optimal results. This will mean that Citi’s profits will likely shrink. But that, again, is just a cost of failure.