Citigroup staff to receive 50 per cent pay rises to beat bonus cuts

By DAILY MAIL REPORTER
Updated: 05:56 EST, 24 June 2009

Banking giant Citigroup intends to raise employees' base salaries by as much as 50 per cent this year to compensate for the sharp reduction in annual bonuses.

With an eye on retaining employees and neutralizing a drop in the value of their stock holdings, Citi is understood to be planning to award millions of new stock options to employees.

The Wall Street firm, which has hundreds of thousands of staff worldwide including almost 10,000 in canary Wharf in London, was ordered to curb its bonus payments after a $45 billion bailout by the US government.

High hopes: Citigroup plans to retain their best staff with pay rises

A host of other US banks were also told to abandon bonuses after taking money from the troubled Asset Relief Programme but many, including Goldman Sachs and JPMorgan, have repaid the funds and are now free to make lavish payouts.

It has left Citi and other apparently weak banks fighting to retain their best staff.

The biggest pay rises at citi will go to investment bankers and traders while workers in consumer banking, credit cards, legal and risk management will see smaller increases.

In a statement Citigroup said it is continuing to examine ways to ensure its employee compensation practices are competitive.

'Retaining and attracting the best talent is very important to the success of Citi and all its stakeholders,' Citigroup said.

'Any salary adjustments are not intended to increase total annual compensation, rather to adjust the balance between fixed and variable compensation,' Citigroup said in the statement.