New York: Troubled financial major Citigroup will increase the base salary of its rank-and-file employees by as much as 50% this year to compensate for smaller bonuses, said a media report.
“Citigroup intends to raise workers’ base salaries by as much as 50% this year to offset smaller annual bonuses,” the The New York Times reported quoting people with direct knowledge of the plan.
The report further said that most Citigroup employees would make as much money as they did in 2008, although some might earn more and others less.
The company, which has received three bailouts from the government, also plans to award millions of new stock options to employees in an effort to retain workers and neutralise a precipitous drop in the value of their stock holdings, it added.
Other financial majors-- Morgan Stanley and Bank of America-- have made similar changes to their compensation system to try to shift attention away from bonuses and curb excessive risk-taking.
The Citigroup proposals, discussed internally this week, present a crucial test for the Obama administration, which has vowed to rein in runaway compensation at companies that have received large taxpayer-financed bailouts.