The New York Times and Financial Times both report that Citigroup is raising salaries by up to half to avoid strictures on bonuses.

Citigroup, of course, is a government ward so enfeebled as to have needed tens of billions of dollars in multiple taxpayer bailouts. It’s amazing how much money is still floating around this industry, which is non-productive at best, destructive at worst.

The idea of making compensation packages less dependent on annual bonuses is fine. Skewed, short-term incentive pay was a big reason companies took the nutty risks they did during the bubble. Pay reform is at the top of the list of fixes needed.

The NYT is good on this:

Outsize pay on Wall Street, particularly the industry’s bonus culture, is widely seen as having encouraged the risk-taking that led to the gravest financial crisis since the Depression. But industrywide, total compensation is expected to rise 20 to 30 percent this year, approximately to the levels of 2005, before the crisis, according to Johnson Associates, a compensation consulting firm. Total industry pay would still be below the record levels of 2007, but only a bit.

You’d think that a company as troubled as Citigroup would realize it can’t and shouldn’t pay people what they made in 2007 at the peak of the bubble. Not only that, but both papers report that the company is going to dole out new stock options because others are underwater. They’re bailing out their employees. It’s heads they win, tails they don’t lose all over again. What a racket.

Now, taxpayers are about to own more than a third of this company (should have the whole thing) and it’s subject to the new “pay czar,” advisement, which I’m sure Citi will take to heart, since as the NYT says:

While Mr. Feinberg can request information on the pay polices at financial companies that have received two federal bailouts, the companies can reject his guidance.

Or maybe Citi will take it to heart, since the FT reports:

Citi’s pay structure is particularly sensitive because, as a recipient of billions of dollars in US government aid, its compensation plan has to be approved by Kenneth Feinberg, the Obama administration’s new “pay Tsar” .

One of the papers is wrong here. Either the pay czar’s diktats have to be obeyed or they don’t. Which is it?

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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 rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.