Citigroup Won't Pay Severance To Some Former Execs

Hey, hey: The Wall Street Journal reports, "Citigroup Inc. has told about five former top executives that it won't pay them tens of millions of dollars in promised severance payouts, according to people familiar with the matter." While Citi has already paid "more than half of the roughly $100 million it promised to the former executives..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." The U.S. government has aided Citigroup with $50 billion. While the former employees' contracts with Citi require the company to pay out the severances, the WSJ explains, "bank officials essentially are wagering that the former executives will conclude that it would be publicly embarrassing for them to file lawsuits against the struggling, taxpayer-backed company seeking the money."

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By Jen Chung in News on June 2, 2009 10:20 AM

Comments [rss]

Mr Mel

I still cannot believe that people get bonuses from bankrupt companies. What did they do to prevent the company from going under? Even if they had a reasonable answer, the company shouldn't be forced to pay. Citi's money is the public's money and it should not be used for this purpose. Let them collect Unemployment Benefits like any other guy out of work. Many of them earned fortunes in previous years and they are better off than the other 13 Million out of work and the many more people underemployed.

Brooklynbobby

"bank officials essentially are wagering that the former executives will conclude that it would be publicly embarrassing for them to file lawsuits against the struggling, taxpayer-backed company seeking the money."

Not so. Bankers (most of whom are members of a certain religion) are never embarrassed about accepting money under any terms ever.

NannyState

Yeah, the same characters that devised subentities to finance payday and title loan scams are not going to sue? Are not going to grab at whatever they think is theirs?

drewo

So what if they were offered and signed contracts? Why let a legally binding contract get in the way? I'm sure everyone here would feel the same way even if they took a job, and signed contracts, because of financial incentives. It's not like people actually work because of money.

While the former employees' contracts with Citi require the company to pay out the severances

hotstepper

correction:

"The U.S. government (by way of the Chinese government) has aided Citigroup with $50 billion."

get it right next time. thank you.

r1b2

Clearly, no one wins here.

abcohen

never under estimate scum (in either direction in this case)... The bank using the no payout card (is a joke when they needed to honor bonus payout because of contracts) and the people will sue - because hey who cares about 400,000-1,200,000 random strangers thinks about you against the security(and support) of my family (I'll take family any day!)