Citigroup’s Bonus Pool Probably Won’t Get Smaller
Citigroup is aiming to keep its bonus pool as high as 2014, which would be an impressive move given a tough year that’s crimped revenues at investment banks.
The flat bonus allotment, which still depends on December’s market performance, was announced to senior managers Tuesday, reported Bloomberg. Most employees—including bankers and traders—won’t find out their bonus total until after the holidays.
Citigroup (C) and other global banks have faced a year of high volatility as U.S. stock markets faltered and swings in the Chinese markets made investors skittish, affecting revenues across the industry. CEO Michael Corbat predicted in September that Citigroup’s third-quarter trading revenues would be down by about 5%. When its third-quarter results came out in October, Citigroup’s investment banking revenues had declined 25% year over year. Goldman Sachs (GS) and J.P. Morgan Chase (JPM) also fell short of analysts’ revenue expectations for last quarter.
“The quarter had more than its fair share of volatility, and our results speak to the resilience of our franchise globally,” said Corbat in a statement following the bank’s earnings.
Given the tough investment environment, Citigroup’s move to keep bonus levels the same as last year is a boon for bankers and traders—one that may give the bank an edge in recruiting in the midst of tough times for many banks. J.P. Morgan has also said that it plans to keep its bonus pool flat this year, while other banks including Deutsche Bank (DB) are considering cutting their allotment.
A Citigroup representative didn’t immediately respond for comment on its plans.