Last June, Citi was supposed to pay five former senior executives millions in severance payouts, but what the bank decided to do, instead, was not make those payment. The ex-employees were owed about $100 million (half of which had been paid out) but not wanting to be compared to AIG which, at the time, was in the midst of receiving death threats over bonuses, Citi chose to inform the group that it shouldn't count on the remainder of the cash. The Big C was apparently counting on everyone just forgetting about the whole thing but surprise! At least one of the stiffed guys, Kevin Kessinger, would still in fact like his money. Here's what he's doing about it:
People familiar with the matter said Mr Kessinger had decided to take Citi to arbitration, a form of out-of-court dispute resolution. It is understood that his severance package had been frozen for more than six months. Citi declined to comment. Mr Kessinger, who is now chief information officer at Canada's TD Bank, did not respond to requests for comment.
Legal experts had said Citi was vulnerable to legal action from the former executives because severance packages are binding agreements between the two sides. However, officials at Citi - which has been repeatedly bailed out by the US government - had replied that former executives understood the reason behind the move and in discussions had said that they were unlikely to take legal action. People familiar with the bank had suggested Citi would resume payments once the political furore over compensation had died down.