New York Sutton Capital-Banks that have taken bailout money from the US government in the form of a TARP loan may find it hard to attract or retain the best employee talent.
Speaking a conference was Citi Group Chairman Richard Parsons. He believes whilst the bank is using federal money, and with the czar monitoring excessive payouts it will be hard to get the best employees.
In total Citi Group has taken around $45 billion in Troubled Asset Relief Program TARP. Being part of the TARP program means the company cannot payout excessive payments to employees.
Parson went on to say at the conference, I do worry we could be competitively disadvantaged if we arent able to find a way to quickly repay TARP.
Its imperative to pay of the TARP loans as soon as possible. The longer Citi Group stay under the rules of the government TARP agreement it will lose its top talent. Explains Sutton Capital senior analyst.
Companies are trying look at ways of bending the rules to see if there are other ways of paying employees. One maybe to offer stock options on top of their pay packet.
But Citi Group is still in a much better position under the TARP agreement that just a few months ago. Without the TARP money the company may not have survived. The process of rebuilding will happen quicker by keeping the top talent. Otherwise it will just be a little longer that preferred, Citi Group now thanks to the TARP loan has a future with the US economy.
