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Citigroup's Pandit To Employees: I'm Fighting Congress For Your Bonuses

This is an e-mail sent from Citigroup chief executive Vikram Pandit to his employees this afternoon:

"Our industry has recently seen a tide of negative sentiment rising in Washington, D.C. regarding compensation. Of course, some of it is warranted. But I take exception when there is a discussion about spreading the blame to each and every employee in the financial services industry. At our company, we removed the people responsible for Citi's financial distress and acted fast to strengthen and streamline the business, and install new risk processes and new risk personnel. You have been invaluable in our collective efforts to put the company on solid footing.

The work we have all done to try to stabilize the financial system and to get this economy moving again would be significantly set back if we lose our talented people because Congress imposes a special tax on financial services employees. It would affect countless number of
people who will find it difficult, if not impossible, to pay back the bonuses that they earned.

I want you to know that we are working in every appropriate way with policymakers in Washington, and with other financial institutions and industry associations, to come to agreement on a constructive industry compensation system that is good for the company, the financial system and the country. We will continue to do everything we can to ensure that we can pay our employees fairly, reflecting their market value and hard work, especially during these challenging times.

I know it is difficult, but no matter what happens in Washington our prospects will be best served if we all continue to work hard helping clients and customers around the world and improving the performance of the business and speeding our return to profitability.

So while you continue to focus on our clients and quality execution, please rest assured that senior management and experts in Washington are focused on these developments and trying to address issues raised in the debate with clarity about the real facts.

Thank you for your unwavering commitment and dedication."

-- Frank Ahrens
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By Frank Ahrens  |  March 20, 2009; 4:52 PM ET
Categories:  The Ticker  | Tags: Citigroup, Vikarm Pandit, bonuses  
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send pandit back to india.

Posted by: smart_sha | March 20, 2009 5:23 PM | Report abuse

I've got a bonus for Citigroup Executives: You're fired.

Posted by: lindalovejones | March 20, 2009 5:33 PM | Report abuse

Millionaire bank executives are the biggest cry babies on the planet.

Boo hooo hooo, give me back my millions to add to my millions...

Why don't they move to China and feel first hand how China deals with corruption - can you say bullet to the head?

Posted by: beenthere3 | March 20, 2009 5:34 PM | Report abuse

Why is it so offensive for people who work hard to be compensated? I understand the concept of lavish bonuses or outrageous salaries; however, some of these people are regular folks who count on these bonuses to take the kids to Disney or get repairs done around the house. And when did we (Americans) all of a sudden start looking down our noses at getting ahead? While I'm no fan of what our fellow Americans have done on Wall St. I think stricter regulation is the watchword and not restrictions on regular people earning a living.

Posted by: am1968 | March 20, 2009 5:35 PM | Report abuse

What market are we competing with? Mars?

What if Wall Street did the "right thing" and forewent the ridiculous bonuses, at least while they're on the public doll.

Seems like to me Wall Street is still out of touch.

Posted by: postfan1 | March 20, 2009 5:38 PM | Report abuse

Remember the tax would be on executives, not all employees. This is most likely only a very small portion of the company overall. So, they need to stop crying and suck it up since so many Americans are losing their jobs, thanks ***in part*** to these knuckleheads.

Posted by: SoapboxDave | March 20, 2009 5:42 PM | Report abuse

Most of Citigroup's people who have dealt with mortgage holders are criminals and should be fined and jailed not bonused out. Mr. Pandit seems either not to know what is going on and has gone on for years, stealing from mortgage holders, or doesn't want to know and is hoping the truth doesn't show up. I'm happy to testify at a Congressional hearing. Revoke/take back/rescind the bailout on grounds it was fraudulently requested and give the money to the mortgage holders so they can stay in their homes.

Posted by: MiriyamGevirtz | March 20, 2009 5:52 PM | Report abuse

These guys are all clueless!!!!!!!

Posted by: Jimbo77 | March 20, 2009 5:56 PM | Report abuse

Citigroup has the bonus concept backwards. Have the employees get the bank's mess straightened THEN offer bonuses for good work. To give bonuses now is to reward bad behavior over the prior period. Wrong headed.

Posted by: hillkemp | March 20, 2009 5:59 PM | Report abuse

Pandit did some good public relations with his employees by asking that they not be restricted in getting bonuses. Having said that, for the most part, they do not deserve bonuses. Let them straighten out Citicorp first, get the business profitable once again, and get the stock back up to a level which leaves some hope, in the 20's instead of 2. So far, the only reason they are even getting paid is that the US government is giving them money. Without the bail out money, they would be on the street, like their compatriots at Lehman, Bear and Merrill. charles hopfl

Posted by: hopflcd | March 20, 2009 6:22 PM | Report abuse


"however, some of these people are regular folks "

First, there's nothing regular about people who receive $100,000 let alone $1,000,000 bonuses. Second these companies and by extension their employees are basically welfare cases. While I believe in a social safety net I draw the line well before paying for the kids of multimillionaires to go to Disneyland.

"Why is it so offensive for people who work hard to be compensated"

Speaking at least for myself, it's not. I have no problem with a guy like Bill Gates having billions of dollars; he earned it. I am however thoroughly disgusted with the idea that once you hit a certain level in business compensation is no longer linked to performance.

As others have said: You want your bonus? You have a job; there's your bonus. Pull the banking system out of the ditch you drove it into and then come back and talk to me about a bonus.

Posted by: foxn | March 20, 2009 6:28 PM | Report abuse

CitiBank could pay the tax on behalf of its "valued employees". That way, CitiBank would be giving back some of the money it was "loaned". Let's say some executive was awarded $1M bonus; Citibank would only be paying approximately 900,000 back to Congress, I mean the U.S. Treasury. Using creative accounting, The Fed could say it reduced the Federal Debt -- and that always looks good. CitiBank looks good, because they are "bailing out" a valued employee. And the "bonus ready" executive looks good because she can buy a new GM Yukon with her "stimulus check". Sure the Citibank balance sheet looks bad, but they can always go back to the well (congress) and beg for more corporate welfare money. FEED THE GREED!!!

Posted by: rmorris391 | March 20, 2009 6:40 PM | Report abuse

As these companies are being driving into bankrupcy, the executive staff is apparently pre-occupied with ensuring they establish new bonus plans that guarantee their payments no matter how the company if it ever mattered how they performed before, but now they want it OFFICIAL. The want the "WE GET PAYED MASSIVE RIDICULOUS AMOUNTS NO MATTER WHAT HAPPENS" bonus plan.

This is fockin OUTRAGEOUS!!!

Posted by: Impeachbush99 | March 20, 2009 6:46 PM | Report abuse

The Bankers and Wall Streeters are the New Terrorists, creating WMEDs of Weapons of Mass Economic Destruction.

Pay them bonuses, remodel their offices, give them $13,000 trash cans, let them fly in their corporate jets... and the Terrorists WIN!

Posted by: Roofelstoon | March 20, 2009 6:48 PM | Report abuse

Are we Still a Constitutional Republic?

Constitution of the United States, Specifically, Article 1 section 9; " No Bill of Attainder or ex post facto Law shall be passed."

Posted by: dottydo | March 20, 2009 6:54 PM | Report abuse

Anger and rage are justified. However it is not right or American to punish a large group of people based on the actions of a few rotten apples. These are not just $1 million plus earning "executives". The majority earn far less than that and work their tails off. Those that work hard and generate significant value for their firm and shareholders should be compensated in a market manner. We can certainly debate why our society rewards certain professions the way it does - but I for one believe that an honest hard working ambitious person deserves a chance to benefit if they create value.

Posted by: Gauis | March 20, 2009 6:55 PM | Report abuse

Pandit's comments are trite business 101 BS.

We're hip-deep in the sludge and this guy is worried about his execs getting their pants cuffs dirty.

Face it corporate goons, you're not going to get any pity from the masses and you deserve none.

Posted by: dlkimura | March 20, 2009 6:58 PM | Report abuse

Hard work or not - it is customary for any private company to cancel bonuses, when the company is not performing well financially. When a bank is receiving corporate welfare from Uncle Sam in order to survive, I think most of us can well agree that the bank is not performing well. Therefore, no bonus. If AIG executives believe they can get hired into a better position elsewhere with AIG on their resumes, I would suggest that they are let go - good luck !

Posted by: Piitaq | March 20, 2009 7:05 PM | Report abuse

Piltaq - great point! How about banks that are profitable that received funds because they were told by Paulson that it was their 'patriotic duty' to help accelerate credit liquidity? These cases do exist. Look at BB&T - posted a great profit despite the conditions - didn't even cut their dividends - and are using the funds to get money in the hands of growing businesses in need. Why should BB&T employees that exceeded their growth and profit objectives have their annual compensation essentially taken back by the government?

Posted by: Gauis | March 20, 2009 7:08 PM | Report abuse

Pandit, or Bandit?

Posted by: gnpszul | March 20, 2009 7:15 PM | Report abuse

Ummm, without public money, your company would swiftly be BANKRUPT. And your employees would be making the market rate of...nothing. Citi employees have no leg to stand on here.

Sorry, as long as the taxpayers are propping up your firm from extinction, you have to pay the price. And the price is: don't annoy the American public. No bonuses until you pay back the American people.

Posted by: cstallone | March 20, 2009 7:22 PM | Report abuse

I second the suggestion "Send Pandit back to India!" or some place where he can learn or open his eyes and come to a realization that the time's changed, drastically! Millions and millions of us are suffering, losing jobs, losing homes, losing retirement savings because of your totally moronic irresponsible acts. After placing the entire country if not the world in the brink of collapse, Pandit expects his employees to be unscathed? Have some integrity and sensitivity, and share the pain and burden, which I know would be too much to expect from these criminals. These corporate swines are already trying to work around the rule capping the bonus by raising their base salaries anyhow.

If the employees want to leave, let them. There are millions of us out here wanting those jobs!

Posted by: pelohoki | March 20, 2009 7:47 PM | Report abuse

Let forget all of these money lenders. Let them all go down and I hope it is in flames too. These are nothing more than extortion by bankers who caused this mess to begin with and now they want rewards for failures too? As far as I'm concerned we've already done too much for them.

Posted by: npsilver | March 20, 2009 7:52 PM | Report abuse

One more thing. Pandit says he's fighting the congress? That means he is fighting ALL OF US just so his employees would receive bonuses. Contemptuous to say the least. Words fail me.

Posted by: pelohoki | March 20, 2009 7:52 PM | Report abuse

If our "representatives" thought that the fury over the AIG bonuses was worrisome, they haven't seen anything yet! No, no, hell no! No bonuses for the jerks that caused this mess.

Posted by: mibrooks27 | March 20, 2009 7:55 PM | Report abuse

What a crock! The reason that the banking/mortgage mess exists is that the enormous pressure to GET that end of year bonus rewards stupid decisions and short term thinking. When 70 to 80% of your compensation comes from that year end bonus, executives will do anything that they can to bring that number up. Especially when that bonus isn't tied to the company actually making money. Bonuses are fine, in theory, when they reward prudent management that protects the shareholders AND represents a % of the profit that the company earned. Simple formula: no profit, no bonuses.

Posted by: fezini | March 20, 2009 7:58 PM | Report abuse

Oh, Pandit.

Posted by: gnpszul | March 20, 2009 8:13 PM | Report abuse

Mr Pandit, you and Citicorp want bailouts? Fine, I suggest all of us bailout, close all of our Citibank accounts. We'll give you a bailout you won't forget!

Posted by: d-seid | March 20, 2009 8:43 PM | Report abuse

I think “bonuses” might sound like a hand-out to hourly workers or someone who’s never worked in sales or management, and that's part of the rationale driving all the disbelief and media hysteria.
To bring it down to a more fundamental equation and give it perspective, let's suppose the going market price for your employment services is $20.00 per hour. The company makes you an offer of $15.00 per hour but says if you meet this list of targets or goals that they have, we will give you the added $5.00 per hour that you would have made at years end in the form of a bonus... it simply ties your compensation to your effort; isn’t that a good thing? Why else would business do it; just so they can feel great about giving? Cmon…
Sure, these execs aren’t pumping gas and many of their job descriptions called for decision making; but those decisions had to fall under their ‘bonus’ agreement, otherwise the company would have a way out.
The company decides the goals that the employee must achieve, and if they're intelligent, it’s tied to overall fiscal health in addition to other performance goals. If it isn’t, it’s the firms fault… or the government leadership, for not paying attention to companies that wield clout capable of capsizing a global economy.
The salary range may be subjective and established by a number of free-market factors; I'm not saying some of these individuals might not be overpaid; but I do know that these career people often constitute a different breed of employee who work many more hours, nights and weekends away from their families doing many things that most workers won't… just for the opportunity to operate in these pay ranges. I may be off a little, but I don't think the average hourly employee can even relate to a working environment like that; much less want to suffer the years of academic training and experience just to get the chance to sink or swim in positions of such weighty responsibility with sharks at your back at every turn.
So, if you haven't been there, maybe you shouldn't throw stones until you have an informed point of reference. It would also probably help to read up on AIG's changes & progress at:
Lastly, the money promised and paid to these employees really pales in comparison to the funds many of these politicians received in contributions for their wildly expensive campaigns, and have now doled back out with interest (using your money) to the same BBB companies (Big Beautiful Business).
Washington is only too happy to hop on the ‘media-op’ and try to appease the majority of mostly uninformed lynch-mobbers (because they vote); at the same time it provides a media circus event to draw attention away from this legal but corrupting relationship between politics and business... which is what really needs to change.

Posted by: TerrifiedAmerican | March 20, 2009 9:14 PM | Report abuse

Mr Pandit can start taking care of his employees and company by returning all of the money that's been ripped off and establishing policies that prevent it in the future.

I'm glad to see that some of these guys are willing to step up and express their disdain. It helps the common folk understand why we are in the mess we are in. These guys are not intelligent per se, but rather arrogant and greedy and living in some dillusional world where they honestly believe they are worth the money they rip off. They don't seem to understand that being a responsible employee requires that they as well as their underlings work to make the company, stockholders, and customers successful. Not themselves at the cost of the latter.

Posted by: inewsmaster | March 20, 2009 9:33 PM | Report abuse

Hey you CitiGroup nitwits! I bought your stock for my IRA. I paid $53.33 for those shares. They are worth $2.62 as of today. That's a decrease of 95.09%. I say pay your employees the same "market value" of my stock. The government should have just let you go out of business, you arrogant pieces of ****.

Posted by: FactChecker1 | March 20, 2009 9:57 PM | Report abuse

Since I think it is an exercise in futility to go against the madding herd (and I emphasize herd) mentality on these boards, where rational discussion is rarely the norm, I am simply throwing my support to TerrifiedAmerican. If there was ever an argument that reflects the actual reality of the situation in a rational way, his is it.

Posted by: fwillyhess | March 20, 2009 10:24 PM | Report abuse

Quote by Roofelstoon

“Are we Still a Constitutional Republic?

Constitution of the United States, Specifically, Article 1 section 9; ‘No Bill of Attainder or ex post facto Law shall be passed.’”

I just love it when some fool quotes the Constitution with such authority. If Congress changes the tax code any time during 2009 for the tax period beginning January 1, 2009, it is NOT an ex post facto law. Congress has set new tax rates many times that go into effect at the beginning of the current year. Taxes are not due until after the end of the year so it is not and never has been an ex post facto law.

And it is obviously not a bill of attainder. If in doubt, just look up the definition.

Just to drive the point home, a bill of attainder or an ex post facto law refer to criminal law. Requiring the payment of taxes is not criminal law.

Posted by: mtrobt | March 20, 2009 11:27 PM | Report abuse

If all the CEO of large banks and large investment firms gave themselves and others large bonuses by looting the assets of the shareholders, why should they not do the same when the Federal government is replacing the looted assets with billions of dollars?

This is the result of the previous administration's approach of pouring billions into worthless corporations on the pretext that the world would end if we did not do this.

We have finally come to the low point where we require legislation stating that no firm can give bonuses until they repay any federal funds that were accepted by the firm.

This is the result of the poor policy of the previous administration.

Posted by: bsallamack | March 20, 2009 11:39 PM | Report abuse

For all of you who are so adamant… Is there fairness and justice to throwing out the baby with the bathwater?

Consider this…

An IT engineer works for one of these financials; his wife works for non-financial and is also an engineer. Both work hard and did all the right things that we all want of them, went to school, made the write choices in life(or so they thought). Now because their total income fits the parameter of “the bill” they get hit with Pay Cut! And just so we are clear… they are not making millions but just 10k past the number in “the bill”.

So now the husband is thinking…. maybe I should not have stayed in the office to fix that problem with the system that allows the ATM machines to dispense cash or the credit card to be accepted at a retailer. “Why should I? I’m not being paid for the extra effort… it can wait till tomorrow!”

Posted by: ax11 | March 21, 2009 12:00 AM | Report abuse

I was shocked to find out that our house of representatives were proposing legislation to undo the tax legislation and appalled when the house actually passed the legislation.

The same people that you are penalizing for carrying out one of the U.S.'s founding philosophies (capitalism) are the ones that have watched their equity portfolios and employee stock compensation evaporate over the last 18 months and are also the ones that pay a majority of the federal, state and local taxes in this country. The money being taxed isn't "the peoples money" but rather the hard-working men and women's money that work for a living. It is evident that the same people that congress is pandering to are the people that do not support our economy and country as a working citizen wouldn't have the time to show up at congress testimony with signs and shirts or have the time to parade through nyc as they would be busy working at their jobs.

By changing the terms of a deal months after it was entered into, Congress has showed the government to be an unreliable partner, further draining confidence from the financial system and endangering long-term recovery.

If a cap on compensation is placed on employees of the financial sector you will see an erosion of the US governments investment in the financial and insurance sector as employees will either leave the organization in size as the stipulations to work aren't worth the compensation. If the employees don't leave the companies they will shut down their work productivity as there is no incentive to work for every penny within a deal or extra hours in a evening or weekend.

The federal government has turned their back and completed a 180 as then-Treasury Secretary Henry M. Paulson Jr. pressed many of those firms to take the funds last fall, government interference in their compensation systems was not part of the deal.

But elected officials have a responsibility to lead, not just to pander; to weigh what makes sense for the country, not just what feels good. This legislation will lengthen the recession and potential cause a financial collapse we have not seen before as people will not be able to spend their hard-earned money buying products or paying for services.

The government needs financial institutions -- including relatively healthy ones -- to take public funds that will then be lent to responsible businesses and consumers.

The absence of backbone on either end of Pennsylvania Avenue this week could cause further destruction and pain to the american people that the media, congress and the general population is not factoring into their position.

Posted by: dawg1 | March 21, 2009 12:11 AM | Report abuse

The only legitimacy for talents' rewards and bonuses is when they turn the company around to profitability and when taxpayers' funds are returned. Then they can reward their top talents whatever they deem fit. I can unequivocably state that Pandit's attempted intervention to lawmakers' tax proposals for illegitimate, unconscionable, dishonorable, despicable bonuses at taxpayers' horrendous expense, was just a cover-up for his own self interest, self-aggrandizement and greed in high places. Where would his top talents go at this juncture of financial upheavals and collapse? They should be mightily thankful they still have their jobs secure. Let them roam the globe to save their rice bowls. I'm positive they would crawl back the moment they left the shores of the brave and free. I wonder how CitiGroup could have engaged such a self-seeking and greedy CEO. The demise of CG is on the horizon with such a person at its helm. Get rid of him now before it's too late and becomes another AIG. There'll be lots of takers of Fed's bailout money to set up new banks and other financial institutions to get the economy moving at lightning speed for sure. It's time for common good and prosperity to prevail to get the economy out of its gutters. The gurus on Wall Street are no more relevant. Let the people on Main Street take over Wall Street and inject a greater and nobler sense of honesty, integrity, responsibility and accountability of doing business here and around the globe.

Posted by: ronlim1 | March 21, 2009 12:43 AM | Report abuse

I am the manager of a bunch of translators and regulatory supervisors in equity research in Japan. A key focus of my job in recent times has been translating research reports and implementing NASD Rule 472 and the terms of the Spitzer research settlement. My work is about limiting risk in an inherently non-risky part of the financial business.

I am paid well since I speak and read Japanese, have obtained the necessary licenses, understand the regulations and the products, know a number of programming languages, and manage a couple dozen people on three continents. I am not paid lavishly and I am not a millionaire. My savings have taken a pummeling as my company's share price has fallen (my last few bonuses are already nearly zeroed out, net of tax), and my base salary has been radically reduced.

Happily for the indignant hordes, America is alone in the world in taxing its overseas citizens, so if this knee-jerk bill passes the IRS will get my bonus from me, too, which will be ruinous for my family.

The base pay scale for jobs like mine is determined by the freelance market rate for Japanese-English translation, which extends beyond the financial industry and is not under the control of the US government. I am no better placed to turn my company around than I was to wreck it in the first place, and I need to be paid for the work I do. In defiance of the will of the world's barristas and theater education majors, I will not be content simply to have my job if I can't be remunerated for doing it.

Luckily, my employer can just hire a Brit, Canadian, Australian or Japanese to replace me since it can effectively pay bonuses to those people if they are not on American soil. Meanwhile, I'll just have to pound the pavement with all the other Americans Congress has effectively fired and get a job at a non-US firm that competes with TARP recipients.

Posted by: keef66 | March 22, 2009 7:43 PM | Report abuse

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