Citibank CEO gets big payout for rescuing bank that received $45 bn taxpayer bailout

As you tighten your belts think of poor Vikram Pandit and how hard his life is; a topsy turvy world at the mercy of market forces as he struggles to do good. Vikram came under fire when he became CEO of Citigroup in 2007 as the crash hit and Citi’s stock prices fell 87%. Some regulators even questioned Vikram’s abilities as a banker but a saint like Vikram bounces back, after all, he didn’t create the mess. Citigroup is healthier now and Vikram has been offered a healthy package by Citi to “keep him at the helm for at least four more years” says the Wall Street Journal.

Mr. Pandit will receive a multi-year stock package worth 10 million which he can claim in three years. On top of that he gets another $6.7 million in other options plus a profit sharing plan that would be worth $22 million if the bank duplicates its 2010 performance over the next 18 months.

This makes sense, if you want to keep a good employee you’ve got to give them incentive.

But it has been a rocky road for old Vikram. He received $162 million in 2007, his pre-tax share of his banks’ $800 million acquisition of another firm, Old Lane. In 2008, he received $38.3 million in salary and stock options as part of his new job as CEO that he took in December 2007. Then we see the saintly nature, the heart of this man of the people. In 2009, earning a salary that year of $128,751, Mr Pandit announced that he would accept only $1 a year until Citi returned to profitability.

The kindness, the heroism, the sacrifice these people make for society. If only workers, teachers, factory workers, those farmworkers who are always complaining about the heat, if only they would have the same drive, the same patriotic desire to help our country and humanity as Mr. Pandit, we would be in better economic shape and be able to build more bases around the world in our struggle to share our prosperity with others.

Ford CEO Alan Mullaly, another saint told Congress back in 2008 that he would work for $1 a year in his personal sacrifice to help the country and the American people. Mullally got $28 million for four months on the job in 2006 on top of some $7 million Boeing paid him for eight months work. Part of the pay package at Ford was a $7 million "hiring bonus". He also got to take his family on the company jet and receives housing subsidies. But we shouldn’t fault him for that.

Source: Banksterusa.org

The market is a hard road to hoe though and some of poor old Vikram’s prior compensations have “shriveled” as the Journal puts it. A $26.3 million stock award he received in 2008 is only worth $4.1 million now and the after tax portion of his $162 million from the Old Lane buyout is “locked up” as the deal isn’t yet finalized. My sympathy goes out to Mr. Pandit as there is nothing more depressing than shrinkage of this nature, well, almost nothing.

The main point the Wall Street Journal makes is that Mr. Pandit deserves every penny he gets because after all, “…he helped to restore the ailing bank to profitability”. Heroic patriots like Pandit and Mullally who were willing to work for a year for only $1 in salary are the type of role models our children should aspire to; selfless, hard working, devoted totally to the common good.

The Journal points out that Pandit “helped” restore the bank to profitability. But in fairness, does hint that the taxpayer might deserve a little credit as we handed over $45 billion of our money that enabled the bank to make $12 billion profit. Ford never took any of the bailout money directly but Ford's moneylending department took advantage of a federal program that gave out short term loans from public funds as the owners of capital were, and still are on strike.

Such details cannot be dwelled upon because the idea that the market failed, that public aid not the so-called vibrancy of the private sector saved capitalism from complete collapse is counter to the dominant ideology in society that preaches the opposite.

The corporations never refuse welfare.