WASHINGTON/NEW YORK: Citigroup Inc. is talking with the US government about paying back its bailout money, but it is not clear whether a deal is imminent, a person familiar with the matter said on Thursday.
The bank is hopeful, though, and is planning a $15 billion common stock offering, people briefed on the matter said.
The US Treasury is more open to Citigroup’s plans than the Federal Deposit Insurance Corp., one of the sources said.
Citigroup is eager to repay the government so it can avoid the executive pay restrictions that come along with the three rounds of US assistance it received. The Obama administration’s pay czar will soon announce a new wave of pay restrictions for companies that have received extraordinary help from the US. Pay restrictions make it more difficult for Citigroup to keep its most talented employees and attract new ones, compensation experts said. “We have a backlog of people that TARP banks want to hire and can’t because of pay restrictions,” said Robert Sedgwick, partner in executive compensation and benefits at law firm Morrison Cohen, referring to the government’s Troubled Asset Relief Program.
“If you have an unconditional offer from one bank and another offer that’s contingent on regulatory approval, most people will take the unconditional offer,” Sedgwick said.
