Citigroup is overhauling its compensation plan – increasing base salaries and reducing bonuses – as they try to balance retaining top performers and placating Washington politicians, according to a Financial Times report.
(AP / CBS)
Under the plan, which has been in the works for several months, top bankers would get their annual salaries bumped by up to 50 percent.
The banking giant will also introduce a new stock option program, giving employees a share of common stock for every restricted share they hold – the ultimate goal being to give workers incentive to stay at the company longer.
Citigroup, like other banks bailed out by the U.S. government, faces pressure from Washington to limit executive compensation and must get approval from Kenneth Feinberg, President Obama's "pay czar," before implementing the new system.
The bank claims the new plan will not result in higher total compensation, just shift how much is fixed (salary) and how much is variable (bonuses).
According to the report, other banks like Morgan Stanley and Bank of America have introduced similar plans.