Morning Coffee: Citi's extra bonuses and alleged demotions spreadsheet. America's hedge funder in chief

People want to work for Citi. The bank came 7th on our list of Ideal Employers this year, but the extent to which you want to work for Citi might depend upon the area of Citi you aspire to join.

Get Morning Coffee ☕ in your inbox. Sign up here.

The bank is not an easy ride. After cutting around 5,000 jobs last year by taking out layers of management, Citi is still in the process of taking 10,000 additional jobs by removing costs in areas like technology and operations, a process that is due to last until 2026. This seems to be causing predictable problems: the Financial Times has spoken to an unnamed insider who says "morale is pretty low" and that recent town halls have "addressed toxicity and stress, even with HR dialled in."

With enthusiasm at this low ebb, Bloomberg's revelation that Citi has been paying retention bonuses to keep people happy in Andy Sieg's troubled wealth division may not be popular. Sieg, who joined from Merrill Lynch in October 2023, has also been cutting costs in an effort to increase the return on tangible equity in his difficult unit from 8.5% in the third quarter to 20% by the end of 2026. He's been simultaneously engaged in a frenzy of 350 client meetings during his brief tenure - 26 a month. But key people have left, and Sieg has been pedalling uphill. So Bloomberg says "dozens" of extra retention bonuses have been dispensed to persuade Sieg's key people to stay. 

It's not clear when these extra retention bonuses were handed out, but as we go into bonus ideation season, there are strong signs that money elsewhere in the bank might be a bit tight. The FT claims that Citi's senior managers have been handed a spreadsheet detailing its 16 standard roles and 'job level categories' so that they can match team members to them. Each category comes with minimum and maximum salaries, and the fear is that people will be demoted into lower paying roles befitting their tasks. At the same time, the FT claims Citi is planning to promote far fewer people "in-role" this year, and will be offering fewer pay rises as a result. 

Citi, however, is disputing both the FT's claims. The bank is planning a townhall in early December, where it will discuss the importance of talent and culture. COO Anand Selva will be leading it. Selva himself is a sometimes controversial figure who received a large additional bonus last year and who has subsequently had elements of his job removed in what the FT suggested was a demotion. He will be able to speak to both sides of today's stories.

Separately, as Scott Bessent eases himself into his new job as US treasury secretary, heavy inferences are being made from his behaviour and statements in the past to his likely behaviour in the future. 

Unlike his treasury secretary predecessors, Bloomberg observes that Bessent has never worked for a bank and that his entire career has been spent in hedge funds, where he specialises in macro investing. The WSJ says Bessent has become treasury secretary because he believes something needs to be done about the US's excessive budget indebtedness, that the dollar needs to be preserved as the global reserve currency, and that "some kind of a grand global economic reordering,” is coming, which he wants to be part of. 

Bessent is an expert on economic history and 'forgotten financial analogues' to current events, says the WSJ. He's good at working in small tight-knit teams, says Bloomberg. He's "ruthlessly pragmatic." He understands markets. It's held that Bessent plans to follow a "three arrow" strategy: cut the budget deficit to 3% of gross domestic product by 2028, spur growth of 3% through deregulation and produce an additional 3 million barrels of oil or its equivalent every day.

Meanwhile...

37,300 students entered WorldQuant's trading competition. There are 13 finalists. “Every week I spent about 50 hours on this. It’s not about the prize money or the internship. I purely wanted to experience the taste of being first.” (Bloomberg) 

Deutsche Bank's acquisition of Numis doesn't seem to have done much yet.  Deutsche has a 3.4% share of UK investment banking fees this year — the same proportion as at this point last year. “The big focus has been on the people coming together and the cultures coming together. We’ve [passed] a lot of milestones — the old Numis US business is now folded into Deutsche, the research teams came together." (Financial News) 

HSBC's chief sustainability officer, Celine Herweijer, has stepped down after being promoted. (Reuters) 

Unicredit's offering for Banco BPM SpA.is an all-share deal that should have limited impact on UniCredit’s ability to fund further buybacks in future, and won’t impair its dividend plans, the bank said. When Unicredit acquires BPM it plans to make €900m in annual cost savings. (Bloomberg) 

BPM is also in talks to buy asset manager Anima, so Andrea Orcel will need to handle that process too. (FT) 

Wells Fargo says its efforts to grow into a formidable Wall Street player are bearing fruit. (Bloomberg) 

BDO's the 335 equity partners who share in its profits took home an average of £681k before tax for the 12 months to early July, 12% more than last year. (Financial Times) 

Morgan Stanley is locating its Middle East HQ in Saudi Arabia. (Bloomberg) 

Forcing ourselves to be grateful when we don’t really feel it can be harmful to our mental well-being and our relationships, psychologists say. (WSJ) 

This is how the Fed's standing repo facility works. (Substack) 

Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, Whatsapp or voicemail). Telegram: @SarahButcher. Click here to fill in our anonymous form, or email editortips@efinancialcareers.com. Signal also available.

Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)