UPDATE: A Citigroup spokesman told the Huffington Post that it it did not make a multi-year guarantee to Trauber and that it did not confirm that Trauber would earn at least $9 million for 2010. This story has been updated to reflect the above.
Citigroup, still partially owned by the government, has reportedly agreed to spend up to $30 million on a new hire. Stephen Trauber, lately an energy banker at UBS in Houston, will enjoy that generous pay package at Citi over the span of three years -- but not without a few months of vacation first, the Wall Street Journal reports.
Trauber, who the WSJ says is "regarded as one of the best-connected energy bankers in Houston," will make at least $9 million for 2010, the WSJ says, despite starting his stint at Citigroup at end of the year. The logic of this compensation, the WSJ notes, is that UBS won't be paying Trauber the bonus he would have received there, compelling Citi to make up the difference.
Trauber might have stayed on at UBS if the bank had agreed to grant his compensation requests, which included 150 hours of private plane-access and special bonuses for his closest associates, the WSJ says. But Trauber told Bloomberg, he didn't care about the money. What he really wanted was that his colleagues get paid, and when that didn't happen, the whole gang left for Citi.
Before he starts his new job, Trauber will recharge his batteries during a two- or three-month vacation, beginning in the middle of September according to Bloomberg. He plans to spend part of that break, necessitated by non-compete agreements, playing golf with his team at his vacation house in Cabo San Lucas, Mexico. "The most attractive part of this is a couple months off," he told Bloomberg. "I haven't had a couple months off since college."
The government, meanwhile, owns 17.5 percent of Citigroup, and the WSJ notes that this means the bank is subject to executive compensation rules for the 25 best-paid workers, but it's not clear whether Trauber would qualify. The Financial Times reported yesterday that the government is having trouble selling the 4.2 billion shares it still owns (as of the end of August). The flagging stock market has made the U.S. Treasury slow its gradual sale of Citi shares, meaning the government is set to miss its year-end deadline for giving up its stake in the company. The FT says the government might be considering drastic alternatives, like selling its shares all at once.
For his first year at Citi, Trauber will have earned nine million times the salary of CEO Vikram Pandit, whose 2010 salary and bonus combined was just one dollar.