Citigroup Inc., under pressure from the Obama administration to reduce executive compensation, may try to persuade energy trader Andrew Hall to accept stock instead of cash in 2010 after paying him about $100 million last year, people familiar with the matter said.
Hall is unlikely to accept such an offer, because his pay is based on the performance of the Phibro LLC unit he heads, not the company's, making the sale of the business more likely as a way of placing him outside the government restrictions, the people said, declining to be identified because talks are still under way. Citigroup, which lost $27.7 billion in 2008, booked $667 million in profits from commodities trading that same year, primarily from Phibro.
Giving Hall and his traders Citigroup stock instead of cash would fail to reward them specifically for their own performance and could have the effect of alienating them if the lender's shares continue to lag or have the unintended consequence of boosting his pay even higher should Citigroup's share price rebound, said Frank Glassner, managing partner at Veritas Executive Compensation Consultants LLC in San Francisco.
