Listening to Vikram Pandit, you wouldn't necessarily believe it, but Citigroup may be emerging as one of this year's (selectively) biggest payers.
Pandit is seeking distance himself from the $100m pay package that Andrew Hall at Phibro is legally entitled to this year, but it would appear that he is all for rewarding the smaller man.
At BarCap's banking conference this week, Vikram made it clear that the emphasis is now on retaining and recruiting talent. Despite US government threats to make public the packages and possibly even the names of the bank's 25 highest earners, Pandit also emphasized the fact that the bank is free to pay what it pleases to its remaining 278,975 employees.
An article in today's Wall Street Journal suggests it's doing just that. The paper reports that when BarCap and Citi competed to hire the same equities salesman, BarCap lost - despite offering a 1.8m package.
Equities headhunters confirm that Citi's emerged as a big payer. "They have put some substantial guarantees in front of people, often at above market rates," says one.
Citi was said to give generous guarantees to two hires in equities and equity derivatives in June. Headhunters say the figures it paid in that case were higher than those reported.
The bank is also said to have paid substantial packages to the equity research team it hired in August.
Citigroup's problem appears to be that it cut too deeply. Between the first and second quarters of 2009, 30,000 staff were removed, leaving headcount down 90,000 from its peak. Equity research is a case in point: according to Financial News, Citigroup has hired at least 20 equity researchers in Europe this year. However, it was pruning the equity research function as recently as 2008.
"They got rid of too many people and have now realized that in order to stay competitive they need to hire the best people they can," says one headhunter. "And (as a TARP bank) to do that they need to pay well and they need to offer guarantees."