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NEW YORK (Reuters) – Citigroup (C.N) Chief Executive Vikram Pandit said on Thursday that $100 million is too much for an employee to earn given the bank's circumstances. In an interview before an audience in New York, when asked if $100 million was too much money for a Citigroup employee to earn given the government support the bank has received, Pandit said, "Yes." Andrew Hall, a trader at a Citigroup unit, is contractually entitled to a 2009 pay package that could be worth $100 million. Prior Citigroup management signed the agreement that compels the bank to pay Hall so much, Pandit said. Hall's massive pay package is a serious challenge for Kenneth Feinberg, the man U.S. President Barack Obama appointed to review executive pay at banks that accepted government bailouts. If the "pay czar" is seen as soft on Hall's pay, the public outcry could be strong. Hall's potential $100 million payday is equal to about 2,000 times median household income in the United States in 2008. But it is not clear if Feinberg has authority to limit Hall's pay, given that the trader's contract was put in place well before February 11, 2009, the cut-off date for the pay czar's authority over compensation agreements. Hall works at Citigroup energy trading unit Phibro, a business that Pandit said he is working to turn into an asset manager that invests money from outside investors, instead of a unit that trades Citigroup's money. Citigroup has received more government support than other major U.S. banks after suffering big losses from bad assets linked to consumer debt. It has collected more than $45 billion of government capital in two separate transactions last year. A third deal that closed this month converted about $25 billion of that capital into common stock, with the rest being turned into securities known as trust preferred shares. That transaction stabilized a measure of the bank's capital strength. But the bank is still offering hefty multi-million dollar guaranteed bonuses to some new employees, sources told Reuters earlier this year. DISAPPEARING NOISE? The government now owns about 34 percent of Citigroup, but according to Pandit, is not involved in the bank's daily affairs. News reports have said that some regulators have pushed for Pandit's ouster, but the CEO said on Thursday that as long as the company still executes on its strategy, "all the noise will disappear." Citigroup, like other major banks, submitted information on its top employees' pay packages to Kenneth Feinberg over the summer. Feinberg is reviewing those contracts now. Citigroup has suffered during the credit crisis, but some investors are increasingly optimistic about its outlook. The assets widely perceived as being likely to suffer next, such as commercial real estate loans, are not a large part of the bank's balance sheet. Pandit noted that the bank's shares trade at about their tangible book value, or accounting value, while most banks' shares trade above their book value. On that basis, "We feel there's some upside" to the bank's shares, Pandit added.
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