Citigroup Stinks Up Wall Street

Citigroup (C - commentary - Trade Now) shouldn't be able to do whatever the heck it wants. It's OK for the banks that paid back TARP -- they have to keep good people and they have a right to. Citi should do it with long-term vesting registered stock units -- that's seems fair, not options struck here, diluting the government. I certainly don't think Citi should be allowed to reprice options, which should be illegal.

Citi has been the most problematic situation of the banks -- you could argue that it should be a General Motors situation if it comes back for more money. Given that the government owns 34% of the company yet doesn't have a seat at the board, you can expect Citi to do silly things like sneak through pay-package raises that we have to read about in The New York Times.

Perhaps the pay packages should have been worked out with Treasury so that those who take the most risk are incentivized long term and not short term, because what got us in trouble is short-term rewards for long-term risks (a la Red Roof in today's papers). The idea that pay should be upped for the people who got the firm into the mess or that they need to be guaranteed upfront just makes for more recklessness.

No matter what, that the government is the biggest owner but had no knowledge of this new pay-package plan, which may give people as much as they were getting before the breakdown, just plain smells bad and Wall Street can't afford any odors right now. It is simply a time for low-key pay -- if low-pay and long-term incentives pay off and the bank pays back the money.

The idea that there's no correlation between that payback and these salary increases is just going to start a whole new round of acrimony and cause us to wonder if Vikram Pandit or the board -- particularly the compensation committee run by Alan Belda, who ran Alcoa (AA - commentary - Trade Now) into the ground -- have a clue?

I had been thinking yes of late. I had been thinking they had a plan.

Now I am back to wondering and judging, and the wonder and judgment aren't positive.

Random musings: Florida Trend reports a ninth straight up month for Florida home sales coupled with the first up month for pricing. Again -- bottom is in... Rep. Darrell Issa (R., Calif.), apologize right now -- Bernanke did nothing wrong. What an insult - absolutely baseless.

At the time of publication, Cramer had no positions in the stocks mentioned.

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