Google+ Consumer Psyche: Citi plans to overhaul bonus system

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Tuesday, July 1, 2008

Citi plans to overhaul bonus system

Citi, which has incurred losses of about $15 billion in the past two quarters, is expected to witness further billions of dollars of write-downs, related to the subprime crisis.

Recent media reports said that Citi would slash 10 per cent of its 65,000-strong investment banking workforce globally. Currently, bonuses at Citi are largely dependent on the results of a manager's division and individual performance.
"People familiar with the matter said the ultimate goal was to link bonuses of senior managers and junior employees to Citis over all performance. However, they added that the first stage was likely to involve skewing bonuses to take into account how much shared business each manager generated," the Financial Times said in an article published in its online edition on Sunday.

Citi employees already get paid for referrals, when, for example, a wealth management adviser helps a client open a credit card or a checking account. However, Citi insiders say those sums are modest, the report said.

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