Citigroup Execs Forgo ’08 Bonuses

There’s no joy in Mudville, aka Wall Street, where almost every CEO has said he’ll take no 2008 bonus. (The CEOs of Bank of America and Wells Fargo still haven’t declared.) Citigroup is the latest Wall Street firm to announce the bad news. (New York Times)

That’s not to say the execs are settling for a pittance. While the big wigs of Wall Street’s surreal world are accustomed to making a hefty portion of their annual comp in bonuses, I’m guessing that Citi’s CEO, Vikram S. Pandit, was paid a decent annual salary, though I’m not sure what. I am sure that when he sold his hedge fund to Citi not that long ago, he was paid $800 million. (Also the Times)

The execs don’t like this, and the bonus forbearance is only for ’08. I remain confused. To hear the Wall Street crowd tell it, there’s not a single firm that could have survived without the government bailout money. For example, Citigroup received $45 billion to help it with its $10 billion loss. Why should these firms’ executives have any say about their compensation? If the taxpayers are paying, shouldn’t the taxpayers set compensation?

The execs will explain to taxpayers like me that we don’t understand. If the big wigs aren’t paid excessively, they’ll leave. So, we run the risk of losing the people who’ve helped turn the economy into an ash heap? Oh no! Not that! And where exactly will they go?

In one of the Times articles, a third-year vice president of one of the banks complained about not getting a bonus, saying his employer’s decision was putting its employees (I guess, that means its executives) in “financial extremis” — in some cases, putting them at risk of not making their mortgage payments. Welcome to the real world.