It makes no sense from a profit and loss point of view but, Citigroup is looking to spin off its oil trading unit, Phibro. Largely because it is one of the few clearly profitable operations of Citi, which is resulting in Citi contractually owing the units head, Andrew Hall, $100 million.
Paying someone sizable money is politically incorrect these days. Even if the person earns it by bringing in the dollars. There is a big difference between a Goldman Sachs crony pulling down a multi-million dollar bonus, even when he needed to be bailed out, and a trader who pulls down a huge bonus because of his trading skills.
But deep thinkers and trailer trash, alike, are thinking the same on this one, "big bonus bad".
Companies in industries where large payouts are warranted will more and more take the form of private entities, where politically correct prying eyes will be barred at the door. It will be a loss for small investors who now won't be able to ride the coattails of these kinds of companies.
As a worker, these are part of Andrew Hall's wages and just compensation for labor expended for Citi's good.
ReplyDeleteWhere are all the unions workers' rights advocates and why aren't they standing up for Mr. Hall? Would they prefer to see him be exploited?