CITIGROUP CHIEF executive Vikram Pandit and chairman Win Bischoff will forgo 2008 bonuses after the bank lost three-quarters of its market value and received a $45 billion US bailout, Mr Pandit said in a memo to employees.
Robert Rubin, the former US Treasury secretary who serves as an adviser to the New York-based bank, declined a bonus for a second consecutive year, the memo said.
"The harsh realities of 2008, primarily our earnings results, mean that our bonus pool is dramatically lower," Mr Pandit said.
Year-end bonuses, which typically account for two-thirds of Wall Street compensation, are being cut for 2008 after banks and brokers racked up more than $1 trillion (€715.42 billion) of losses worldwide since 2007, and the US passed a $700 billion financial-rescue plan. Citigroup employs some 2,200 staff at operations in Dublin and Waterford.
Citigroup, the biggest recipient of US bailout funds, completed an agreement for a $20 billion government investment, Mr Pandit said in the memo. That was on top of an earlier $25 billion and a US guarantee on $306 billion in troubled assets.
Mr Pandit is cutting 52,000 jobs worldwide after four consecutive quarters of losses tied to bad loans and failed investments. Citigroup expects "major challenges" to continue into 2009, he said. The bank would institute a "clawback" policy to recoup executive compensation based on financial reporting that is later shown to be inaccurate.
Exit pay would be restricted, he added, and "the five senior executives whose compensation is listed in our proxy statement no longer can receive severance".
