Well now that the federal government has totally freaked out about compensation programs that include bonuses, companies will need to adjust compensation strategies to attract and retain talent. Citigroup will be increasing salaries 50 percent for some positions. I’m not surprised one bit…
… and neither should you. You can not tell an employee their compensation is being cut in half and expect them to be happy campers. Those employees will quickly fire up their networking skills and start looking for a new gig.
From Yahoo Finance…
Citigroup Inc. is increasing base salaries for many of its employees — reportedly by as much as 50 percent for some workers — as it restructures its compensation program amid new restrictions on bonus payments.
The increased salaries will offset lower bonuses, according to a person familiar with the matter who requested anonymity because the plans have not been made public. The higher salaries are not the equivalent of annual raises, the person added. …
A New York Times report published Wednesday said some employees salaries will rise by as much as 50 percent because of the change in compensation structure.
The New York-based bank has been among the hardest hit by the credit crisis and ongoing recession. Citi has reported six straight quarterly losses totaling nearly $30 billion. But, it would have posted a profit in the first quarter had it not been for dividend payments on preferred stock. In recent months, the bank has been reducing staff and selling assets in an attempt to streamline operations and return to profitability.
The bank has received $45 billion in loans from the government. A portion of those funds will soon be converted to common stock, giving the government a 34 percent stake in the bank. …
Aside from the boost in salary to offset the lost bonuses, Citi is also planning to award new stock options to employees to help ensure they remain at the bank, according to the Times report.
Update: Limbaugh covering during the first half-hour of today’s show. News outlets and other popular bloggers not quite up to speed on this yet.
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Less performance based pay…..less performance.
Not necessarily. My salary is tied to my performance and the companies performance. Humm… maybe the public school system should try the same thing? Maybe the DMV? Nahhhh.
Steve
I think you agree with me. I LIKE preformance based pay.
ANd not another teacher bashing thing!! BUt, fine, if my wifes and her fellow teachers pay was based on performance, they would ALL be making six figures. Top 15 kids graduating, THREE are going to Yale. Three….to Yale…..in ONE high school class.