Citi trader's $100M payday exempt from TARP rules

Kenneth Feinberg is expected to begin reviewing pay at bailed-out companies, but Andrew Hall's contract is not in the pay czar's purview because of cut-off date.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

Photos
10 biggest CEO paychecks
Including salary, bonuses, stock and options, these public company CEOs took home pay packages last year worth up to $104 million.
When do you think the economy will improve?
  • In the next few months
  • In six months to a year
  • In a year or more
  • It's already on the mend

NEW YORK (Reuters) -- Citigroup Inc.'s contract with energy trader Andrew Hall, which reportedly could pay him up to $100 million this year, will not be subject to rulings by the Obama administration's pay czar, a source close to the bank said Wednesday.

Pay czar Kenneth Feinberg on Friday is expected to begin reviewing compensation structures at several companies that received bailouts, including Citi (C, Fortune 500), which has taken $45 billion from the U.S. Treasury's Troubled Asset Relief Program, known as TARP.

While Feinberg has authority over the top 100 employees' pay -- and Hall surely ranks among those -- the source said Hall's contract will be exempt from review by the pay czar because it was signed before a cut-off date of Feb. 11, 2009.

TARP recipients are permitted to make bonus payments required under written contracts executed before February 11, according to compensation rules announced in June. It was not immediately clear why Feb. 11 was the cut-off date.

Hall is the top trader at Phibro LLC, the Connecticut-based energy trading arm of Citi, which has become famous for outsized profits in the oil markets.

Citigroup declined to comment about its submission to the pay czar, but said in a statement that Phibro operates under a "pay-for-performance" contract, with compensation determined by year-end profits produced by the unit.

Last month, White House spokesman Robert Gibbs responded to questions about Hall's possible pay package, saying "one could easily come to the conclusion that that's probably a bit out of whack on any pay scale."

Feinberg has been consulting with seven companies, including Citigroup, American International Group Inc. (AIG, Fortune 500) , Bank of America Corp. (BAC, Fortune 500) , Chrysler Financial, Chrysler LLC, General Motors (GM, Fortune 500) and GMAC Inc., a Treasury spokesman has said.

Treasury officials, who did not comment on Hall specifically, have said Feinberg will have "broad authority" to ensure appropriate compensation, although he cannot force companies to break contractual obligations not covered by rules that govern pay restrictions. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Sponsors
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Copyright 2009 Reuters All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.