Top Citi Trader Still Fighting For His $100 MILLION Payday

citibank atm

The clashes continue at Phibro, the Citigroup’s (C) highly successful commodity trading unit, where compensation has gotten all messed up due to TARP limits.

Citi desperately wants to keep Phibro, but it’s fighting with the unit’s top trader, Andrew J. Hall, who is demanding to be made whole on some $100 million in owed compensation for his performance. Needless to say, Citigroup isn’t in a position to go around writing $100 million checks just like that.

WSJ: It will be an early test for Kenneth Feinberg, the Treasury Department’s pay czar, who was appointed last month to a new position with the power to help set pay for top executives and highly paid employees at seven firms receiving the most government financial aid. Banks and others have a mid-August deadline for submitting pay requests to Mr. Feinberg.

“Companies will need to convince Mr. Feinberg that they have struck the right balance to discourage excessive risk-taking and reward performance for their top executives,” a spokesman for Mr. Feinberg said.

Mr. Hall is contractually obligated to receive pay based on Phibro’s profits, and some observers on Wall Street believe Citigroup has a better chance at repaying the U.S. money with its Phibro unit humming.

True, if Citi can’t pay top Phibro traders, then yes, they’ll leave, go somewhere else and make another bank (maybe a foreign one!) a whole lot of money. But this whole “Repaying the US money” line is just horrible, and we’d really like to call out the “obersvers on Wall Street” who keep using it to justify letting banks do whatever they want.

Let’s start with the fact that Phibro, for however successful it is, won’t come anywhere near to making the billions and billions that have been plowed into Citi. Beyond that, who cares? We don’t want our money back from Citigroup. We want this dysfunctional bandit bank put in a state where it can’t keep doing more damage. And though Phibro didn’t contribute to Citi’s problems, it’s also true that many institutions have suffered from the haywire bets taken by a wayward unit.

We feel for the Phibro traders, because, well, if we were owed $100 million for some service performed, and we were only offered, say, $1 million or $5 million, we’d be livid, too.

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