With the AIG bonus scandal still fresh on everyone’s mind, bonuses are still quite a sensitive issue in corporate America. Embattled financial Citigroup is now asking the Treasury Department if Citi will be allowed to hand out bonuses to boost organizational moral.
Citigroup is concerned about losing employees and bonuses are seen as a way of retaining employees. Seems like struggling companies are looking into keeping employees instead of looking into hiring new people. Citi is also looking into freeing up Phibro, its energy-trading unit, from compensation caps set by the government. No clear word on how much
A Treasury Department spokesman would not comment on the matter, and Citigroup said in a statement that it has not presented the Treasury Department “with a specific plan for retaining our people. We have also not discussed any specific plan or program designed to give people additional cash bonus payouts.”
Citigroup has received $45 billion from the government as part of the bailout plan. The government will soon get 36% of the bank. With the AIG bonus scandal getting the ire of taxpayers, the federal government has instituted new rulings on compensation to prevent corporate greed from taking a piece of the bailout money.
Source: ABC News
