Citigroup is set to pay most of its investment bankers in Europe at least half of their bonuses in cash, as US banks push ahead with moves to hand star employees the most generous pay deals in the industry.
The news is likely to provide more evidence in what is becoming a fascinating case study, which may help settle a long-running debate about whether bankers really do defect to rivals purely for more money. European banks fear they are losing competitiveness after being hit by stricter rules on pay than their US counterparts.
At Citi's Europe, Middle East and Africa unit, bankers awarded bonuses of $5m (£3m) or more will receive 40% in cash for 2013, according to an internal document obtained by the Financial Times. Bankers in line for up to $3.999m will be paid 60% upfront and 75% of bonuses up to $499,000 will be paid in cash, the paper reported. Bonuses up to $100,000 will be cash only.
US banks such as Goldman Sachs and JP Morgan tend to pay large proportions of bonuses in cash, while European banks are increasingly deferring or capping cash bonuses. Citi did not return phone calls.
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