Citigroup and others plan pay raises

NEW YORK, June 24 (UPI) -- Pay packages at U.S. financial firms are expected to rise up to 30 percent in 2009 in spite of the financial crisis, a compensation consulting firm said.

"You can say it is outrageous," said Alan Johnson, president of the consulting firm Johnson Associates. "But maybe it's a little like the canary in the mine, and you say that things are getting better."

Whether a sign of progress or not, financial firms still holding onto federal bailout funds are among those preparing to raise pay for rank and file employees, The New York Times reported Wednesday.

Citigroup, twice bailed out by the government, may raise pay as much as 50 percent for many employees despite the huge losses and taxpayer assistance that will soon make the government owner of 34 percent of the company.

Banks are raising basic pay in part to divert attention from the bonus pay structure that provokes headlines and public outrage.

At the Treasury Department, Kenneth Feinberg, the so-called "pay czar" can only regulate pay of the top 100 employees at bailed out firms.

At Citigroup, that leaves about 300,000 employees whose pay is controlled by the bank's board.