Top bankers worried about populist anger at the damage they’ve done to the economy might help their own case a bit if they stopped acting like eighteenth century royalty. One place to start: stop treating the perks of their jobs as if they were lifetime grants of royal priviledge.
Citigroup might be the worst offender in this category. The bank is on the edge of being taken over by the government and only continues to operate because of a panopoly of bailouts that would make the CEO of General Motors blush. But that hasn’t stopped them from providing perks to former executives. When he retired in 2006, Sandy Weil famously got a a 10-year “consulting” contract that includes an office, staff and use of corporate jets. John Reed, the former co-CEO, hasn’t worked at Citi in this century, but he’s entitled to an office and secretary for life too. Chuck Prince? Yep. He’s got an office, a secretary and a car with a driver for five years.
We’d say “nice work if you can get it” but as far as we can tell there’s no work involved.
Now comes the word from Bloomberg that Citi director Roberto Hernandez Ramirez will get to keep a bunch of pricey perks after he steps down from the board in April. Last year, those perks cost the company $2.61 million. What do you get for that?
- Gets to fly around Mexico City in a company helicopter.
- Gets security for him and his family.
- Use of the company plane, for free of course.
- Fancy office.
- Hot secretary. (OK, we don’t actually know she’s hot, and she’s probably called an assistant. But what are the odds that she’s not a looker?)
Citi’s excuse for keeping RHR in such fine style is that he is going to remain “non- executive chairman” of its subsidiary Banco Nacional de Mexico. That job basically involves shmoozing with other rich folks and government officials while saying you are responsible for “governmental and client relations.” (Editorial note: Maybe this isn’t a bad idea. Is there any more important job at Citi than governmental relations these days?)
Will Ramirez actually get to keep this sweetheart deal? Shares of Citi are at an all time low this morning as the bank continues to hurl itself into pre-privatization ownership by the US government. You might think that this would probably mean Ramirez would stand to lose his perks if Citi winds up in government hands. But Ramirez may have another trick up his sleave: there are rumours–and denials, of course–that Ramirez is manoeuvring to buy the Banco out from under Citi if the government ever swoops in.