NEW YORK (
shares traded sideways on Thursday despite comments from a top executive saying that the financial institution is not at a disadvantage when it comes to employee pay.
Chief Financial Officer John Gerspach said during an investor presentation hosted by Credit Suisse on Thursday that Citigroup paid its employees competitively last year, according to
"We're not fighting with any hands behind our back," Gerspach said, according to the report.
Gerspach's comments come as observers worry about the government's continued influence over Citigroup and conflicts the bank may face in attracting and retaining top talent while still in the government's grasp.
In addition, Wall Street has stepped up scrutiny over bonus payments at the large banks. Last month,
sent letters to eight large banks including Citigroup,
Bank of America
Bank of New York Mellon
requesting detailed information on their bonus structures.
Citigroup repaid $20 billion to the U.S. Treasury and canceled a $300 billion loss-sharing agreement in December. But the government still owns 7.7 billion shares of the company's common stock, slightly less than one-third of the bank's shares, worth about $24.5 billion at Citigroup's current share price. The government has previously said that it won't begin selling its equity stake before the spring.
But the U.S. Treasury Department is now considering selling $2.2 billion worth of Citigroup's junior debt in the form of trust preferred securities it still holds related to the loss-sharing agreement, according to a
report on Thursday.
Citigroup issued more than $7 billion in preferred shares to the Treasury and the
Federal Deposit Insurance Corp.
last year in association with the loss-sharing agreement. The preferred shares were later upgraded to trust preferred securities, or so-called Trups, which is a higher-ranking class of securities. The Treasury agreed to refund $1.8 billion of the Trups, leaving it with $2.2 billion,
In December, Citigroup said it would issue $1.7 billion worth of common stock to employees in lieu of cash as part of their compensation. The transaction was to occur in January.
The stock was off a penny to $3.19 in recent trades.
In corporate news, Citigroup announced the launch of a pilot Foreclosures Alternatives program. The company said the program calls for allowing distressed borrowers to avoid foreclosure and remain in their homes for six months if they agree to sign over their property deeds to Citigroup. The borrowers would also receive a minimum of $1,000 toward relocation assistance as part of the program, which will initially launch in Texas, Florida, Illinois, Michigan, New Jersey, and Ohio.
--Written by Laurie Kulikowski in New York.