Severance Watch '09: Citigroup Daring/Asking Former Executives To Sue Citigroup

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So: Citi is under contract to pay five former senior executives millions in severance payouts, but what it's decided to do instead is not make those payments. Despite promising Michael Klein, who was the co-head of IB, Kevin Kessinger, who manned operations and technology, and a bunch of other most likely now irate boys $100 million or so (half of which has already been paid out), the Big C has chosen to inform the group that it shouldn't count on the remainder of the cash money. Supposedly it's out of fear of AIG-style backlash, which, sure, we buy. Nobody wants to be compared to AIG, on either side (Citi preferring to not be the ones throwing money out the window during these troubled times, and the execs hoping to avoid being on the receiving end of death threats for taking the cash).
What we're not falling for is the notion that the bank doesn't want to dole out the bonuses, and isn't in fact encouraging the former employees to put baby Vikram in a corner via lawsuit. This is the best scenario for Pandidto and Friends-- they come off as responsible stewards of shareholder value, as people who put their foot down and say "enough is enough" (and not as people who would even consider spending millions on a Zen garden), but still get to reward the former Citi dwellers handsomely, if/when they're backed against a wall. It's actually the sort of genius we wouldn't have expected from the upper echelons of Citi management but are extremely pleased to see. They're learning (or have a GS-consultant on staff).

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