From the New York Post:
Just weeks after Citigroup averted total collapse with a $45 billion shot in the arm of taxpayer cash, the bank jetted its former CEO and his family on one of its corporate jets to a posh Mexican resort for New Year’s, The Post has learned.
Sandy Weill, 75, hopped aboard the tanking bank’s Bombardier BD 700 Global Express on Dec. 26 with his wife, Joan, daughter Jessica, her husband and their children.
The holiday jaunt came the same week that Citigroup – which lost $28.2 billion over the last five quarters and cut 75,000 jobs globally in 2008 – agreed to curtail runaway corporate expenses as part of a deal to get the massive influx of federal money.
Weill, among the richest men in the country, was Citigroup’s CEO until 2003 and its chairman until 2006. He played a key role in forging the company into the behemoth that toppled under its own weight in the recent credit crisis.
Although he stepped down in 2006, he remains an adviser to the company and was to keep access to corporate jets until 2016 as part of a blockbuster retirement package he worked out with the bank.
But with the recent collapse, Weill agreed last year to give up most of his perks – including access to company planes – as of April 2009.
Hey, Sandy, you’re a billionaire! Buy your own friggin’ plane!
From New York Magazine:
[The estimate of the cost is] $60,000 to $80,000 for the whole trip. Apparently, according to SEC filings, Weill reimbursed the company for a portion of the costs, and he has now, he says, “voluntarily” given up access to the jet, in addition to various other perks that he probably never should have been receiving in the first place. Which brings us to the real villain here, the person who authorized these expenses: CEO Vikram Pandit. Who, the very week Weill was sunning himself in Cabo, made a big public show of forgoing a bonus and cutting down on corporate expenses. We can’t help but wonder if, when Pandit crafted his lines about the necessity of frugality in the face of the “harsh realities of 2008,” he thought, in his mind’s eye, of Weill, oiled up and sunning himself on Los Cabos. Did he hope no one would find out about Weill’s little jaunt? Or was he so arrogant that he never thought anyone would? In the past, this kind of utterly tone-deaf behavior and disregard for the populace has stirred revolutions. Now, of course, we’re all too lazy. But at the very least, it would be nice if it got Vikram Pandit fired.
From Blogging Stocks:
Over the weekend, the New York Post reported that former Citigroup Inc. (NYSE: C) Chief Executive Sandy Weill and his family flew on a company jet for a vacation in Mexico weeks after the New York-based bank received a $45 billion bailout from the federal government and said it would slash 75,000 jobs. Today, the now-disgraced banker said he will give up the perk.
According to the Wall Street Journal, “Weill’s office said in a statement on Monday morning that `in light of the unprecedented circumstances that Citi finds itself in’ he decided to stop using Citi aircraft immediately.” Wow, if you did not know any better you would have thought he had given up his left arm instead of a seat on a luxurious jet.
This whole episode is disgusting.
When Weill was forced out as CEO in 2003, he wasn’t fired. Instead, he stayed on as chairman of the New York-based bank until 2006. Then he was rewarded with a nice golden parachute, which guaranteed access to the firm’s corporate jets until 2016. His personal fortune is estimated at more than $1.3 billion.
The firm, which lost $8.3 billion in the fourth quarter, canceled its order for a new $52 million jet after President Obama got ticked off. Its share price is in ruins and the financial supermarket strategy that Weill championed has been scrapped. Weill is the last person who deserved to be treated like a king by Citigroup.
From The New York Times:
There was none of the old swagger at Citigroup headquarters on Friday. The bonus checks had landed — and some of the bankers were grumbling.
After a year of yawning losses at the company, employees lamented that times were getting lean. The giant bank, the recipient of two multibillion-dollar rescues from Washington, had paid out only about $4 billion in bonuses.
If you’ve never worked on Wall Street, it is hard to wrap your head around the idea that a company that lost nearly $19 billion in a single year, as Citigroup did in 2008, could still pay its employees billions in bonuses. It is probably even harder to believe that some of those employees grumble about it.
To bankers and traders, bonuses, which account for the bulk of their pay, justify those long days and sleepless nights spent crunching numbers or watching bond prices dance across computer screens.
But with everyone from President Obama on down chastising bankers for paying themselves billions in bonuses at a time taxpayer money is propping up the financial industry, once-unthinkable questions are starting to arise. Could bonuses, the stuff of Wall Street dreams, become a thing of the past?
[…] bonus resentment is building. On Friday, Senator Claire McCaskill, Democrat of Missouri, proposed a bill to cap workers’ pay at banks that received bailout money at $400,000, including bonuses. Even now, with Wall Street awash in red ink, stars are pulling down millions.
Even some bankers, at Citigroup and other institutions, said they felt a bit ashamed about getting bonuses in hard times like this. But none of them offered to return the money.