Citigroup intends to revamp its compensatory system in order to persuade top performers to stay with it, reported financial times.
Citi’s move, to raise the salaries of some senior bankers up to 50%, comes at a time when most of the other banks are striving hard to strike a balance between retaining their businesses and government’s demand to cut short exorbitant pay packages.
As per the new plan, which will be initially rolled out in Citi’s investment bank and then to the rest of its divisions, employees will get increased pay in exchange for a reduction in their bonuses, depending on their role and contribution to the banks’ overall profitability.
The bank will also begin a new stock option program, providing employees one stock option for every share of restricted stock they have accrued, thus giving employees an incentive to stay.
The bank stated: “Citi continues to examine ways to ensure its employee compensation practices are competitive in this very challenging market environment. Any salary adjustments are not intended to increase total annual compensation, rather to adjust the balance between fixed and variable compensation,” reported Associated Press.
