Bloomberg has a good story this morning looking at the executive perks still being paid for by taxpayer-bailed-out Citigroup.
It found that ex-execs Chuck Prince, John Reed, and Michael Klein—one of whom hasn’t worked for the bank in going on a decade—still get offices and secretaries, paid for by Citi. I’m betting these offices aren’t exactly gray-walled cubicles, either.
They’re flying under the radar a bit because their exit perks aren’t as egregious as Sandy Weill’s:
Sanford I. “Sandy” Weill, who retired as chairman in 2006, is ending a 10-year consulting contract with the bank in April after just three years. The agreement gave him millions of dollars in perks, including an office, car and driver and use of company aircraft, which he gave up in February.
It’s not as if these guys can’t afford to pay their own way. They made tens of millions of dollars at Citi and didn’t exactly build a winner. Note the second sentence here:
Lenders continue to dole out benefits, including the longstanding practice of free offices and secretarial help, to former chiefs. Some of the recipients are blamed for abetting the financial crisis.
And Citi, of course, isn’t alone.
Merrill Lynch & Co., which had to sell itself last year to Bank of America Corp., provides an office and assistant to former CEO Stan O’Neal for the three years from his October 2007 resignation, according to a Securities and Exchange Commission filing. Merrill still maintains offices for ex-CEOs David Komansky, Daniel Tully and William Schreyer, two people familiar with the matter said.
Those costs are absorbed by Bank of America, which took $45 billion of rescue funds and $118 billion of asset guarantees.
I love the juxtaposition of the perks with the government bailout numbers here. Very nice.
Here’s more on Citi’s Prince:
Prince, 59, retired in November 2007, as the bank’s subprime losses approached a record $9.83 billion in the fourth quarter of that year. After paying him a total of $66.8 million in the three previous years, Citigroup gave Prince a $10.4 million bonus for his last 10 months in the job, according to a filing.
He also got perks worth about $1.5 million a year, including an office, assistant, car and driver and any resulting income taxes, according to the filing. Those benefits last for five years or until he gets another full-time job, according to the filing.
And a predecessor, Reed:
He also received financial-planning services for up to five years, a car and driver, an office and secretarial support “for as long as you deem useful,” according to the company.
Bloomberg seems to really get it.Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at email@example.com. Follow him on Twitter at @ryanchittum.