(Updated to add comments from Bank of America, Bank of New York and Wells Fargo beginning in the 15th paragraph.)
By Chad Bray Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- New York Attorney General Andrew Cuomo on Monday urged Citigroup Inc.'s (C) top executives to forgo their bonuses this year, saying the banking giant's plan to slash some 50,000 jobs is a "sad and disturbing" development.
In a statement Monday, Cuomo said Citigroup's stated intention to wait until next year to make a decision on bonuses is "a mistake."
"After four consecutive quarterly losses, it seems only fair that top executives should shoulder their fair share of these difficult economic times," Cuomo said. "It would send exactly the wrong message for Citigroup's top brass to collect bonuses while investors, taxpayers, and now Citigroup's own employees suffer."
At a "town hall" meeting Monday, Vikram Pandit, Citi's chief executive, said the banking giant plans to reduce its total work force to about 300,000 employees from 352,000 in the third quarter.
About half of the planned reductions would come from previously announced divestitures and other cost-cutting measures. The rest of the cuts would be layoffs.
Cuomo said the banking giant should, at a minimum, follow the example of Goldman Sachs Group Inc. (GS). Seven top executives at that company, including Chief Executive Lloyd Blankfein, have decided to forgo their 2008 bonuses.
In a statement Monday, Citigroup said its board of directors will make decisions about the structure and level of compensation after the end of the year.
"The factors that the Board takes into account in making its decisions are set out in our Senior Executive Compensation Guidelines, which emphasize pay for performance," the company said. "As previously announced, we will not use TARP funding for compensation."
Last month, Cuomo asked nine banks receiving federal funds as part of the government's financial rescue plan, including Citigroup, to provide his office with information about expected bonuses and compensation to be paid to their top executives.
The banks are: Bank of America Corp. (BAC), Bank of New York Mellon Corp. (BK), Citigroup, Goldman Sachs, JPMorgan Chase & Co. (JPM), Merrill Lynch & Co. (MER), Morgan Stanley Inc. (MS), State Street Corp. (STT) and Wells Fargo & Co. (WFC).
"Citigroup is, of course, not the only company in this situation," Cuomo said. "Other companies like AIG, who have received billions [of dollars] in rescue financing from taxpayers, also need to take a hard look in the mirror when determining the right thing to do on executive bonuses during these very difficult economic times."
Last month, Deutsche Bank AG (DB) announced its executives, including its chairman and business heads, weren't receiving bonuses.
UBS AB (UBS) on Monday said it would reform its executive-pay practices after accepting financial help from the Swiss government. The Zurich bank said its Chairman Peter Kurer and its 12-person top management team will forgo bonuses for 2008.
"UBS has made a wise choice not to give bonuses to its top executives this year," Cuomo said in a separate statement Monday. "We are moving into a new era of corporate belt-tightening and the path forward is clear."
Last week, Anne Finucane, a Bank of America executive, told a Senate committee that the bank doesn't intend to use federal funds to pay for executive compensation and its board will determine compensation based on the company's financial performance. Finucane noted the company's earnings are reduced compared with previous year and the bonus compensation pools for the bank's senior managers is expected to be reduced by more than 50%.
"While final decisions on our compensation have not been completed by the board, executive compensation levels are not impacted, nor will they be enhanced, by last week's capital infusion from the Treasury," she said.
A State Street spokeswoman said its 2008 compensation, including executive-incentive pay, will be determined in the first quarter of 2009 and TARP funding won't be used for employee compensation.
"As with every year, incentive compensation in 2008 has been set aside from annual earnings - not capital - and will follow pay-for-performance principles," said Carolyn Cichon, a State Street spokeswoman. "In determining compensation, the board will take into consideration a number of performance factors including State Street's financial performance in 2008."
Wells Fargo said it won't use federal funds for executive compensation. Its annual bonuses will be decided by its board of directors and those decisions are typically made in February, the bank said.
A Morgan Stanley spokesman said Monday that the investment bank is expected to make decisions regarding bonuses in the next two weeks, while Merrill Lynch and Bank of New York said no decisions on bonuses has been made yet. Top executives at Merrill Lynch didn't receive bonuses last year.
-By Chad Bray, Dow Jones Newswires; 212-227-2017; chad.bray@dowjones.com
(Jessica Papini, Katharina Bart and David Enrich contributed to this report.)
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(END) Dow Jones Newswires
November 17, 2008 17:06 ET (22:06 GMT)

Publié le 17 novembre 2008 Copyright © 2008 Dowjones