Citigroup new CEO to slash 11,000 jobs After Paying Former Executives $14 Million
Citigroup announced that it will cut 11,000 jobs, or 4 percent of its workforce, in an effort to trim expenses.
The moves comes one month after Citigroup paid out nearly $14 million to two former executives, CEO Vikram Pandit and Chief Operating Officer John Havens, who were ousted for poor management. The Citigroup board forced Pandit out, “after a series of missteps this year left some directors feeling that the company wasn’t being managed effectively and that the board wasn’t kept adequately informed.”
Under Pandit and Havens, Citigroup lost 88 percent of its stock value. Still, the executives walked away with generous pay packages:
Vikram Pandit, Citigroup Inc. (C)’s ousted chief executive officer, will get about $6.7 million in 2012 compensation and will forfeit some awards tied to a $40 million retention package granted last year.
John Havens, who resigned last month as Citigroup’s chief operating officer on the same day as Pandit, will get about $6.8 million for 2012 and also forfeit some awards, the New York- based lender said yesterday in a regulatory filing. Citigroup is the third-largest U.S. bank by assets.
“Based on the progress this year through the date of separation, the board determined that an incentive award for their work in 2012 was appropriate and equitable,” Chairman Michael E. O’Neill said in the filing.
It is something of a trend for corporations to pay top executives high salaries, while employees feel the consequences of a struggling company. After failed Twinkie-maker Hostess declared bankruptcy, it cut workers’ pay 8 percent, but left the CEO’s $1.5 million salary untouched.
Citi’s New York City layoffs amount to nearly 8% of the area’s employees, and most will be operations and technology support staffers.
The cuts will save it about $900 million in 2013 and $1.1 billion annually in expenses beginning in 2014, the bank said. They will also mean a related fourth-quarter charge of about $1 billion.
Citi will slash about 1,900 jobs from its Institutional Clients Group, which includes trading and investment banking, and about 6,200 positions in its consumer banking business.
About 2,600 layoffs will come from its operations and technology group. It plans to eliminate 44 branches in the U.S. and 40 overseas.
Read more: http://thinkprogress.org/economy/2012/12/05/1285501/citigroup-jobs-bonuses/?mobile=nc
2012-12-06 20:01:19
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