At a time when bailed out firms are trying hard to come to terms with government-imposed pay restrictions, Citigroup is seeking US Treasury's permission to shell out special bonuses to several key employees.
The 'Wall Street Journal' quoting people familiar with the matter said, "Citigroup Inc, soon to be one-third owned by the US government, is asking the Treasury for permission to pay special bonuses to many key employees."
The daily noted that the request comes as Citi is grappling with broad government pay restrictions that could break apart its legendary energy-trading unit.
"People at that unit, Phibro, are threatening to leave because of pay caps tied to the US bailout of Citigroup. Phibro has been the source of hundreds of millions of dollars in profits for the bank, and has paid out hefty compensation, including a roughly $100 million windfall last year for the unit's leader, Andrew Hall," the publication said.
Attributing to people familiar with the matter, the WSJ pointed out that Citi is looking for ways to free Phibro from the federal restrictions, including a spinoff of the unit.
Noting that Citi is tyring to get US approval for special bonuses for many of its employees, the report said that in a meeting earlier this month with Treasury Secretary Timothy Geithner, Citi CEO Vikram Pandit made the case for stock-based bonuses.
