Monday, November 24, 2008

Into the Lifeboat, Citigroup Bonuses!

Around the middle of last week, as traders joked about Citigroup and the Titanic, New York City went into a deep freeze. This was fortunate, since it's harder to fling oneself over the windowsill once you've installed storm windows.

I applaud the folks who wrote the 818-word term sheet for Citi's asset guarantee. This is an amazingly brief document, considering that yesterday I signed a 5-page agreement just to download a free software upgrade. Rounding the Citigroup deal to $300 billion, it works out to $366,748,166 per word.

Still, they made room for this paragraph about compensation for Citigroup executives:

"An executive compensation plan, including bonuses, that rewards longterm performance and profitability, with appropriate limitations, must be submitted to, and approved by, the U.S. Government."

Please excuse the italics on "including bonuses." I couldn't help myself.

But, really, this wasn't surprising. Conservation of Bonuses is one of the natural laws of Proxyland. And just think - those two words cost us only $733,496,332.

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