This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Citigroup Talent Follows Money

Stocks in this article: C

Citigroup's (C - Get Report) sale of Phibro to Occidental (OXY - Get Report) is an important sign of the times and a stark reminder of how much things have changed in the past year.

Wall Street will always find a way, and Andrew Hall's transfer takes the heat off Citigroup, which exchanged government funding for the door to its dressing room. Kenneth Feinberg has been gazing inward intently, and Vikram Pandit is eager to get one more issue off the table.

Last month, in a public discussion in New York City, Pandit admitted that Hall's agreed-upon salary was too high for a bank employee. Hall's Phibro group averaged $371 million in pretax earnings during the five years ending in 2008. The superior performance of this oil-and-gas trading group had garnered $100 million in annual compensation for Hall.

By moving Hall to OXY, and releasing Phibro from banking-sector scrutiny and coming commodities regulation, Citi has been able to keep the issue quiet. The transfer of Phibro was said to occur at "net asset value," or reportedly $250 million.

The coming commodities regulation has affected more than one area of the financial marketplace. "Safety position limits" have caused ETFs like PowerShares DB Commodity (DBC) to restructure on the run, or in the case of United States Natural Gas (UNG), sell to-be-curtailed futures contracts for swaps. As regulatory and public pressure bear down on Wall Street, it is shifting perceptibly to meet its ultimate goal: payday.

Coverage of executive compensation, and subsequent public anger, has ranged from insightful to absurd over the past year. From the rage over AIG (AIG - Get Report) bonuses to tabloid coverage of Northern Trust (NTRS - Get Report) events, a shell-shocked public has put wealthy CEOs on trial. Seeing the NTRS annual golf event alongside Britney Spears on a celebrity gossip Web site seemed like the saturation point.

The "other side" has emerged tactfully at times in the lathered coverage of executive bonuses. Who could forget Jake DeSantis' editorial in The New York Times as busloads of tourists picketed the lawns of AIG's executives?

More often, the talent simply, quietly, moves on. Andrew Hall's new job at OXY will give him the breathing room to generate hundreds of millions in profits and get paid instead of pilloried. In the universe of capitalism, people get paid for exceptional results. Talent will emerge and re-emerge as the tide of public scrutiny washes over Wall Street.

Don Dion is president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.

Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,678.70 +6.10 0.03%
S&P 500 2,057.09 +5.27 0.26%
NASDAQ 4,771.7630 +13.8840 0.29%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs