Citigroup (C) Changes Its Pay Structure

Citigroup (NYSE: C) is looking to keep its top performers by overhauling its pay structure. It is raising base salaries and reducing bonuses for Citi's top bankers.

The FT is reporting that some senior bankers salaries could rise by up to 50% this year. Citi is also instituting a new share options program aimed at retaining top talent.

Morgan Stanley (NYSE: MS), Bank of America (NYSE: BAC) and other banks have made similar changes to their compensation structure in an effort to encourage bankers and traders to make decisions that benefit their companies in the long-term versus seeking that short-term bonus.

Citi did say yesterday that the changes in the pay structure would not result in higher total compensation for bankers. It said the change in its compensation system was aimed at adjusting the balance between salaries and bonuses. Historically, bonuses made up the majority of banker's pay.

The FT said Citi's new stock option program will give employees one stock option for every share of restricted stock they have accumulated – giving employees an incentive to stay.
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