India-born Vikram Pandit led world's biggest bank Citigroup is planning to overhaul its bonus system, aimed to increase co-operation and minimise in-fighting among disparate parts of the conglomerate, a media report said.
"Citigroup is planning to overhaul its bonus system for hundreds of top managers in an effort to increase co-operation and minimise in-fighting among the disparate parts of the sprawling financial services conglomerate," the Financial Times reported.
Citi, which has incurred losses of about $15 billion in the past two quarters, is expected to witness further billions of dollars of write-downs, related to the subprime crisis.
Recent media reports said that Citi would slash 10 per cent of its 65,000-strong investment banking workforce globally.
According to the Financial Times, the move is part of Pandit's plan to restore the group's battered fortunes by harnessing synergies between its investment banking, commercial banking and wealth management divisions.
The Financial Times said that Pandit has rebuffed calls to break up Citi and vowed to eliminate barriers between the firm's businesses to fully exploit its universal banking model.
Quoting a Citi executive, the newspaper said, "The new compensation plan is absolutely crucial to put teeth behind Vikram Pandit's strategy," and added, "We have to put a premium on partnership-like behaviour."
Further, quoting people close to the situation, the UK daily noted that Pandit wanted to change the way bonuses were calculated to reward co-operation across different divisions and the performance of the company as a whole.
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