The financial giants Citicorp and Travelers Group celebrated when they joined hands last spring. But last year was not an impressive one for the new company, reports CBS News Correspondent Anthony Mason.
Citigroup, as it's now called, laid off 10,400 employees, or six percent of its workforce, as a result of the merger. In a disclosure filed Monday, the company reported disappointed earnings, and acknowledged that "1998 was not a good year."
But did the co-CEOs, Sandy Weill and John Reed suffer? No.
Weill and Reed were each awarded $9.5 million in salary and bonuses. As founders of the new company, each was also given $17 million in stock options, and Mr. Weill cashed in other options to the tune of an additional $157 million.
In Judith Fisher's opinion, it's "total excess. It's beyond the pale." An executive compensation consultant, she says this kind of corporate pay is out of control. "Too many corporations are paying too much compensation with just a callous disregard for shareholder value."
In fact, some angry Citigroup shareholders have already proposed establishing a cap on CEO compensation. The company is opposed, of course.
So, what is reasonable pay for a CEO? "Reasonable pay," says Fisher, "is when you don't wince when you hear the numbers."
Well, how about $230 million? That's what Mr. Weill took home in 1997, when Business Week ranked him among the country's most overpaid executives. Looks like he's a candidate for the list again.