Give me an f'n break. No one's reimbursing me for any vacation I can't take.
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Citigroup Said to Pay $13 Million for Scrapped Trips
By Joshua Fineman
March 9 (Bloomberg) --
Citigroup Inc., the recipient of $45 billion in government rescue funds, doled out $13 million as compensation to employees whose trips to resorts the company was forced to scrap, two people familiar with the matter said.
Citigroup paid 1,900 agents of its Primerica Financial Services Inc. unit $5,000 each for missing a three-day stay at a Bahamas resort, the people said, speaking anonymously because the amounts aren’t public. Some 2,000 Smith Barney brokerage advisers got debit cards valued at $1,000, $2,000 and $3,000 for various canceled getaways.
President Barack Obama warned last month that companies receiving government bailout money “can’t go take a trip to Las Vegas or go down to the Super Bowl on the taxpayers’ dime.” Bank of America Corp., which like Citigroup has accepted $45 billion from the government, last month moved a health-care conference to New York from Las Vegas.
Primerica paid the agents, who are independent contractors, because they won a seven-month-long sales contest, the company said. “We were legally obligated to do so,” Susan Thomson, a Citi Holdings spokeswoman said. Primerica and Smith Barney, both profitable businesses, are part of Citi Holdings, a new unit of Citigroup.
Smith Barney paid the brokers because “in the most aggressive recruiting environments in the history of our industry, we need to reward, retain and develop the best employees of these profitable Citi businesses,” Thomson said.
‘Deeply Cut’
“During this difficult environment, we have deeply cut recognition-based costs, in some instances by 80 percent,” she said.
Primerica spokesman Mark Supic declined to comment on cancellation fees for the trip.
The Primerica agents and Smith Barney advisers were compensated through the operating revenue of the units. In Smith Barney’s case, the payment is for a small percentage of advisers who drive more than half of the brokerage’s revenue, Thomson said.
In January, Citigroup announced plans to separate into two companies as it pares business unrelated to branch banking, trading, and investment banking. The bank eventually plans to sell or wind down the Citi Holdings unit.
Primerica was founded in 1977 by Arthur L. Williams, who assembled part-time staff to sell term life insurance policies.
Primerica has 100,000 mostly part-time salespeople and 6 million customers, and it sells mutual funds, loans and other investment products as well as life insurance. The unit had revenue of $2.3 billion in 2007 and net income of $544 million.
The New York Post earlier today reported the Smith Barney payouts.
To contact the reporters on this story: Joshua Fineman in New York at
jfineman@bloomberg.net;
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