Why would Citi choose to halt severance payouts?”
Citigroup already has doled out more than half of the roughly $100 million it promised to the former executives. But company officials recently decided not to proceed with the remaining payments, concluding that they wanted to avoid even the possibility of a public backlash over the money, people familiar with the situation said. Fresh in the minds of Citigroup executives was this spring’s ire over American International Group Inc.’s retention bonuses to employees in its financial-products division. Top executives at the giant insurer argued they couldn’t cancel the legally binding payments, even after the U.S. government became the company’s majority owner. Citigroup has received $50 billion in taxpayer-funded capital, and the U.S. government soon will own as much as 34% of the company’s common shares. Company officials have briefed the Treasury Department on their plans to halt the severance-related payments. Government officials didn’t demand that the bank end its payouts, according
Citigroup to halt executive severance payments Christine Seib in New York Citigroup has told several former top executives that they will not continue to receive the multimillion-dollar severance payments they were promised when they left the troubled bank, according to a report. The Wall Street Journal reported that executives whose payments have been cut included Michael Klein, the former co-head of Citigroup’s investment bank, and Kevin Kessinger, the former IT and operations head at the bank. Both men were promised periodic cash payments as part of their severance packages when they left last year, the newspaper wrote, including $42 million in cash and stock to be paid to Mr Klein through 2009 in return for him not working for a rival or poaching Citigroup employees or clients. Citigroup has already paid out about $50 million of the $100 million it promised departing executives but is now hoping that the people affected will not quibble over the halted payments for fear of a public
