Citibank to Hand Out 100 Million Dollar Paycheck

[Lorax]

Citibank, the taxpayer funded non-nationalized bank is insistent it will pay it's hedge fund manager a 100 million dollar bonus.

Should the taxpayers allow this? Or should Citibank return it's bailout money first?

Does anyone out there see this as insane? Will the greed never end?

Let's see the outrage from the Republican right. Or will we hear only crickets?

http://articles.moneycentral.msn.com...check-now.aspx

[Sstashmoo]

Maybe they earned that hundred million dollars.

[Lorax]

Just like you to stick up for your own kind.

Does anyone "earn" 100 million bucks? I think not.

How about the 1.1 billion "earned" as a golden parachute by the last CEO of United Health Scare? And that was after he resigned in a scandal.

I suppose you'd find any reason to be an apologist for your fellow elite.

[Sstashmoo]

Quote: "Does anyone "earn" 100 million bucks?"

If they earn you a Billion they do. Sounds like a good deal to me. But, then again I understand simple math and own a calculator.

I know, I know you could get someone cheaper. [[And they'd lose a Billion)

[Mikeg]

Here is some additional information from a WSJ article on this subject:

Andrew J. Hall, heads Citigroup's energy-trading unit, Phibro LLC.....

Mr. Hall is contractually obligated to receive pay based on Phibro's profits....

Phibro, with a small core group of traders, has generated hundreds of millions of dollars in profit for Citigroup over the years......

Mr. Hall's pay contract has multiple parts. He has long had a profit-sharing contract with Citigroup and its predecessor banks entitling him to a large percentage of Phibro's gains. The percentage he and his small team of traders get under the contract terms currently stands below 30%.....

Philbro operates under a pay-for-performance contract, with compensation determined at the end of the year as a percentage of the profits the business earns for Citi. If they have earned around $330 million dollars for Citi this year, then Citi is contractually bound to pay them about $100 million.

If Citi and their Board of Directors are dumb enough to enter into a contract like that then they deserve to have to write the check. Their stockholders and/or minority Board members can try and fight it in court, but there would be big legal bills and at best a judgment or out of court settlement with a reduced payment and little or no financial gains for the stockholders. However, if the Federal Government decides they have the power outside of the judicial system to simply change the terms of a compensation contract after the services are already performed, then the whole foundation of trust in the rule of law that gives our our legal system the stability it needs will be forever changed. If Kenneth Feinberg, the Wall Street Pay Czar wants to change the terms of Philbro's contract, he should have to use the courts just like everyone else.

And if you think a 30% cut is excessive, just ask Geoffrey Fieger what percentage his clients contractually agree to give his P.C. out of their compensation awards. Then ask him what he would say if the Federal Government decided he only deserved to collect 30%.

[gazhekwe]

There is a difference between this exec compensation and legal fees. The law firm has to foot the cost of the trial, which is not small. The exec is not expending money from his own pocket to do whatever he does, he is compensated all along for doing what he does.

[Mikeg]

The exec is not expending money from his own pocket to do whatever he does, he is compensated all along for doing what he does.

Not so, based on their contract with Citi, Phlbro and its executive are compensated at the end of the year based on the size of the profit they have already earned for Citi. [source]

I would be interested to find out what the contract says Philbro earns if they fail to generate a profit for Citi, that would tell us how much of their pay-for-performance is really at risk.

[elganned]

I hate to say it, Lorax, but I have to side with Citi on this one. If the guy accomplished what his employment contract required, then the company has to uphold their part of the contract and pay him the agreed-upon amount.

In the end, it's a labor contract issue. If I go to work for a company under certain conditions, and I fulfill those conditions, then I expect the company to pay me what was promised.

[Lorax]

I can see you point, contractually speaking, however, the added wrinkle is the fact that Citi took TARP monies, and is subject to the fiscal scalpel of the government auditor. As I understand it, even pre-existing contracts are subject to review and alteration. We'll see.

[Mikeg]

I can see you point, contractually speaking, however, the added wrinkle is the fact that Citi took TARP monies, and is subject to the fiscal scalpel of the government auditor. As I understand it, even pre-existing contracts are subject to review and alteration.

Where did the executive branch and its Wall St. Pay Czar get their power to to review and alter pre-existing contracts? What gives the legislative and executive branches of our government the right to usurp the powers of the judicial branch? Sure, this "wrinkle" may be only affecting a few highly compensated execs in some overly risk-tolerant companies that took TARP money, but can we be sure it will begin and end there?

Whatever happened to our Federal Government's system of checks and balances?

[Lorax]

Where did the executive branch and its Wall St. Pay Czar get their power to to review and alter pre-existing contracts? What gives the legislative and executive branches of our government the right to usurp the powers of the judicial branch? Sure, this "wrinkle" may be only affecting a few highly compensated execs in some overly risk-tolerant companies that took TARP money, but can we be sure it will begin and end there?

Whatever happened to our Federal Government's system of checks and balances?

Hopefully you're looking at it.

The point is if you take bailout money from the people, you need oversight and accountability.

The SEC under Bush dropped the oversight ball, since it wasn't in their worldview that banks should be accountable for anything. It was greed run amok.

I would be less concerned about the rights of corporations at this point in time, considering what they have put the rest of us through.

[Mikeg]

.....Whatever happened to our Federal Government's system of checks and balances?

Hopefully you're looking at it.

The checks and balances I am referring to are those that are necessary to maintain the separation of powers between the Executive, Legislative and Judicial branches of our federal government. The Executive branch, with the passive assistance of the Legislative Branch, will have taken on an extra-judicial role for itself if they invalidate Philbro's current year contract.

I have no problem with oversight and accountability, as long as it is not retroactive and that it is administered by the branch of government that has the lawful responsibility to do so - and in the case of Fed and/or SEC regulation of Wall St., I believe that is Congress' job, not the Executive Branch's role.

[oladub]

Hopefully you're looking at it.

The point is if you take bailout money from the people, you need oversight and accountability.

The SEC under Bush dropped the oversight ball, since it wasn't in their worldview that banks should be accountable for anything. It was greed run amok.

I would be less concerned about the rights of corporations at this point in time, considering what they have put the rest of us through.

Mikeg was making the point that the rule of law should prevail. Once again, your inner Reich is showing. If you don't like the way things are, change the given law or amend the Constitution before suggesting the use of dictatorial powers. Maybe you can get around that pesty Constitution and the rule of law by just getting an enabling act passed. Then the President could fire auto executives, ignore bond holders and others' contractual rights, print money, whatever...

For what it's worth, Bush's Wall Steet bailout passed the House with 172 Democrat and 91 Republican votes. In the Senate "Thirty-three Republicans joined 40 Democrats and Sen. Joseph Lieberman, a Connecticut Independent in favor of the package. “This is not a Democratic bill. It’s not a Republican bill,� said Senate Majority Leader Harry Reid [[D-Nev.) later. “It’s our bill.�" Candidates McCain and Obama both left the campaign trail to lobby their collegues to support Bush's bill. The SEC has been under the control of the Obama administration for three times as long as it was under the Bush admistration. Take some responsibility. It's your bill.

[elganned]

The SEC has been under the control of the Obama administration for three times as long as it was under the Bush admistration. Take some responsibility. It's your bill.

I beg to differ with this statement. The SEC was under the Bush administration for eight years; it has only been under the Obama administration for six months.

As for the rest...carry on.

[oladub]

I beg to differ with this statement. The SEC was under the Bush administration for eight years; it has only been under the Obama administration for six months.

As for the rest...carry on.

Lorax had referenced SEC actions in regard to Bush's Wall Street bailout which passed in October, 2008. The administration of the bailout by the Bush administration's SEC continued until early January [[2.5 months). Since then, it has been Obama's SEC that has been in charge [[7.5 months). We are both right.

[elganned]

I think, actually, he was referencing the lack of SEC action during the preceeding 7.5 years.
But your point is taken.

[ccbatson]

Return the bailout...bonus notwithstanding.

[Lorax]

Thanks Elganned.

I was referring to the lack of oversight by the Tushies- the same SEC that allowed Bernie Madoff to "Madoff" with the money, and decided to look the other way when it came to regulating hedge funds, which is what this thread is about.

The Obama SEC would be correcting the error made by the Bush SEC, with the added wrinkle of Citibank having dipped into the public well for TARP funding in the meantime. So, the rules have changed now.

This has nothing to do with expanded Executive Branch powers, it's the SEC that will be overseeing this with input from the TARP czar.

If Rethuglicans are so concerned about expanded Executive Branch powers, they shouldn't have allowed Bush to have them in the first place, knowing they would be used by the next, likely Democratic president.

But that was never a concern with the Bush Crime Family, since the Rethuglican party was thrown under the bus by them, along with the rest of us. It was all about them, party be damned. You'd think the Reich would realize this now, but, I guess Tush love is truly blind.

[Mikeg]

So, the rules have changed now. This has nothing to do with expanded Executive Branch powers, it's the SEC that will be overseeing this with input from the TARP czar.

The SEC is an independent federal agency headed by a bi-partisan, five member Commission, who are appointed by the President and confirmed by the US Senate. The SEC's oversight and enforcement responsibilities are defined in laws that have been passed by Congress and signed by the President.

Since you so glibly state that "the rules have changed now", please cite the legislation that authorizes the SEC to review and alter pre-existing compensation contracts at firms that are subject to SEC oversight based on input from a member of the Executive Branch [[the TARP Czar).

[Lorax]

The SEC is an independent federal agency headed by a bi-partisan, five member Commission, who are appointed by the President and confirmed by the US Senate. The SEC's oversight and enforcement responsibilities are defined in laws that have been passed by Congress and signed by the President.

Since you so glibly state that "the rules have changed now", please cite the legislation that authorizes the SEC to review and alter pre-existing compensation contracts at firms that are subject to SEC oversight based on input from a member of the Executive Branch [[the TARP Czar).

Thanks for the history lesson, already knew it.

As I so "glibly" stated, the rules have changed because Citibank argeed to take TARP funding, which means there will be oversight, especially as it relates to compensation. I thought that was what this thread was about, but some here want to swerve off track.

Guess you didn't read the link.


What's so hard to understand that Bush politicized the SEC with cronies, as he did the Justice Department, so there was no chance of oversight with fascists in control of the system. That's why the bottom fell out of the economy, because the feds under Bush weren't doing their jobs.

I would be less concerned about corporations taking a hit, as they should after what they did to our economy. The corporations will take it and like it- if Obama had the moxie I though he was going to have, he should have nationalized the banks from the get-go. And while he was at it, nationalized petroleum and pharmaceuticals, strengthened industry and unions, and demanded a single payer health care system. Then pull out of the middle east entirely and let them have at it.

I'm much more of a socialist than Obama will ever be.

[ccbatson]

Yep..sell out to the socialist, and it makes you a second hander...lesson here? Corporate death is preferable to death of liberty.

[Blarf]

Does anyone "earn" 100 million bucks? I think not.

Yes, some do.

Depends on how much income you generate.

[ccbatson]

Absolutely possible...Come up with an idea [[your property), implement it as in get it to market, if it is wanted needed and desired as well as affordable while allowing you a per unit profit, then the sky is, or rather, should be, the limit.

[elganned]

Absolutely possible...Come up with an idea [[your property), implement it as in get it to market, if it is wanted needed and desired as well as affordable while allowing you a per unit profit, then the sky is, or rather, should be, the limit.

Don't forget the all-important step of offshoring production to Sri Lanka and paying your workers $0.25 a day for a 60-hour workweek.

[Lorax]

Oh, but that would make the Reich feel obliged to consider the moral implications of what their corporate gods do.