Report details bank bonuses

NEW YORK - Citigroup Inc., one of the biggest recipients of government bailout money, gave employees $5.33 billion in bonuses for 2008, New York's attorney general said yesterday in a report detailing the payouts by nine big banks.

The report from Attorney General Andrew Cuomo's office focused on bonuses paid to the initial nine banks that received loans under the government's Troubled Asset Relief Program last fall. Cuomo has joined other government officials in criticizing the banks for paying out big bonuses while accepting taxpayer money.

In all, the nine banks paid bonuses totaling $32.6 billion last year, after receiving a combined $175 billion in federal funds, the report found.

Citigroup, which is now one-third owned by the government as a result of the bailout, gave 738 of its employees bonuses of at least $1 million each, even after it lost $18.7 billion during the year, Cuomo's office said.

The New York bank received $45 billion in government money and guarantees to protect it against hundreds of billions of dollars on potential losses from risky investments.

"There is no clear rhyme or reason to the way banks compensate and reward their employees," Cuomo said in the report, noting that banks have not in recent years actually tied pay to performance as they claim when describing their compensation programs.

Bank of America Corp., which also received $45 billion in TARP money, paid $3.3 billion in bonuses, with 172 employees receiving at least $1 million. Merrill Lynch & Co. Inc., which Bank of America acquired during the credit crisis, paid out $3.6 billion.

Bank of America earned $2.56 billion in 2008, while Merrill Lynch lost $30.48 billion. Cuomo's office said Merrill Lynch doled out 696 bonuses of at least $1 million each for 2008.

Bank of America has been sharply criticized for its acquisition of Merrill Lynch because of mounting losses at the Wall Street bank and the size of bonuses Merrill Lynch paid its employees.

A Bank of America spokesman declined to comment on the report. A spokesman for Citigroup did not return repeated calls for comment.

Banks have said they need to pay their top-performing employees to prevent them from defecting to competitors. Companies that accepted TARP money have faced intense government scrutiny and must now comply with restrictions on compensation, including bonuses.

Because of those restrictions, some banks began shifting how they pay their workers. In June, Citigroup said it would rebalance how it paid employees, by reducing bonuses for some and instead giving them larger salaries. The change does not affect total pay, just the mix in compensation.