Cuts in 2009 pay and bonuses for Citigroup's top 100 executives ordered by the Obama administration's pay czar will remain in place despite the bank's deal to exit the government's bailout program, a Treasury official said on Monday.
Citi agreed as part of the payback of $20 billion in trust preferred securities, the official said, that for services rendered in 2009, rulings by Treasury Special Master Kenneth Feinberg will remain in place. Citi would not be subject to Feinberg's 2010 pay rulings if it completes the transactions.
Thus, they cannot pay a bonus amount in 2010 for 2009 services to make up for amounts not paid due to Feinberg in 2009, the official said, on condition of anonymity.
Feinberg in October ordered cash compensation cut 96 percent for Citigroup's top 25 earners and total direct compensation cut by 70 percent. Last week, he ordered that remaining 2009 cash salaries for the next 75 executives at Citi and other firms be capped at an annual rate of $500,000, while bonuses for the year would come from a fixed pool.
More than half of incentive compensation would need to be made in long-term stock awards, untouchable for three years.
(Reporting by David Lawder; Editing by Dan Grebler)