Citi trader’s fight for $100m payout risks regulator’s ire
ONE of Citigroup’s top traders has put the bank on a collision course with US regulators by insisting that his $100m (£61m) pay package is honoured.
Andrew Hall, who heads Citi’s secretive energy trading operation Phibro, is pressing the bank to make good on its commitment to award him the package for 2009, despite having received $45bn in government support.
The case could spark a clash with President Obama’s new pay tsar Kenneth Feinberg, appointed to supervise pay policy at the seven institutions which have received the most state aid.
Hall’s pay package, thought to be worth around $100m, is contractually linked to profits at Phibro, which is thought to have enjoyed a good start to the year.
But with the US government’s stake in Citigroup set to reach 34 per cent, Feinberg may try to use the government’s power as the bank’s largest shareholder to block the payment.
Banks have until the middle of August to submit their pay plans to Feinberg, who will judge them based on the perceived balance between risk and reward.
If the bank is pressured to reduce Hall’s pay package, the trader could leave the company or launch a protracted legal battle to claim the reward.
A spokesman for the bank said: “Citi continues to examine ways to ensure its employee-compensation practices are competitive in this very challenging market environment.”