Vikram Pandit, the CEO of Citigroup, has agreed not to receive bonus for the fiscal year 2008 as the company is struggling to cope with the financial downturn in the past 12 months.
Apart from him, a number of top executives and senior bankers in the company will face the same fate and will probably have to forget their plan on buying that new yachts or private jets.
The Citi folks join a growing list of other top banking executives in Wall Street who have taken similar step as a sign of respect to the ailing economy.
Other executives from other banks and financial institutions who would not be receiving bonus include Jamie Dimon (JPMorgan & Chase) and Llyod Blankfein (Goldman Sachs), John Thain (Merrill Lynch).
Citi’s anchor bank, Citibank suffered its worst financial hiccups in 30 years which began with the US credit crunch and the subprime mortgage early in 2007. It held its status as the world’s largest bank for many years before overtaken by other banks from China, America and Europe and as of mid 2007, it was ranked at number 7th. To avoid going bankrupt, the US government recently rescued Citibank with an aid in excess of $50 billion.
More than 20,000 people in a number of divisions in Citibank have also lost their jobs in the past few months.
Vikram was appointed chief executive in 2007. Prior to joining Citibank, he worked with Morgan Stanley before setting up a hedge fund, which was subsequently bought by Citi, in an effort to bring him aboard.