In our new “Open Letter Series,” we’re reaching out to influential figures with our concerns, starting with Vikram Pandit, the CEO of Citigroup. This initiative was sparked by a friend who recently lost her job at Citigroup despite her excellent performance. She’s landed on her feet with a new job at a private bank—congratulations to her!—and we wish all her former colleagues the same good fortune.
Dear Vikram Pandit,
After Citigroup received over $45 billion in government support last year, the company has come to symbolize the resilience of American banking. Yet, as stakeholders who own 34% of Citigroup, we were quite taken aback by the decision to double our credit card interest rates from 7% to 14% earlier this year, despite our flawless payment record and the historically low Fed Funds and 10-year Treasury yields.
Moreover, it was disheartening to hear about the dismissal of a beloved bank teller from our local branch, where she had served diligently for five years. While it’s heartening to hear you acknowledge that $100 million in bonus money for a single employee is excessive, the assertion that public concern will subside simply by “executing your strategy” seems out of touch. As long as our rates remain exorbitantly high and we maintain a significant stake in Citigroup, rest assured, the discontent will persist.
We propose a couple of straightforward actions: First, consider settling Andrew Hall’s $100 million bonus in stock that vests over ten years. This restructuring could soften public criticism, as it appears more as $10 million annually rather than a lump sum. Second, we suggest a candid discussion with Timothy Geithner, Head of the US Treasury, over dinner—without expensing it, of course—about accelerating the syndication process to divest America’s 34% stake in Citigroup. With the stock market’s appetite for risk, offloading this stake could quell critical voices and demonstrate a commitment to moving forward without government crutches.
As you prepare to enhance pay packages for 2009 and beyond, perhaps consider rehiring those who were let go through no fault of their own, like our dependable friend, although she may be hesitant to return.
If we can revisit the executive compensation strategy and address the steep credit card rates, perhaps we can avoid further public backlash and help you steer Citigroup back to its pre-2007 glory days responsibly.
Could you at least direct your team to reduce our interest rates back to 7%? Many of us are on fixed incomes, and the rate hike has significantly impacted our financial well-being. An adjustment here would not only aid your customers financially but would also go a long way in restoring faith in your leadership.
Lastly, a general reprieve for the readers of Financial Samurai would also be greatly appreciated. As you accept aid from the public, it’s only fair to protect those within your company who aren’t at the executive level but are equally important.
We believe in a thriving, fair, and just America where big and small voices alike are heard. Thank you, Vikram Pandit, for considering our perspectives.
Sincerely,
The Financial Samurai Community
“Slicing Through Money’s Mysteries”
Let’s all hope for continued improvements and a brighter future as we progress through 2021!
