Contract Renege? Say it Ain't so!

AUG 03, 2009
Andrew Hall is a Trader at Phibro, a division of Citicorp. Apparently, he is an extraordinarily successful trader who is reportedly owed $100 million for his performance. I have yet to see anything written that says that this is some mistake or loophole in his contract. I have also yet to see anything written about how much in profits he generated for his company in order for this $100 million to be paid. Presumably, it is some very large multiple of this bonus. In other words, he EARNED this $100 million. Yes, I know that Citicorp received taxpayer money to survive the financial crisis. However, are we not a country of laws? Aren't written contracts the basis for a strong, capitalistic society? In capitalism, either as a vendor, or as an employee, a contract is written such that if the employee, or vendor, produces X, then that employee or vendor gets paid Y. The fact that there is even discussion of not honoring Mr. Hall's contract is outrageous. Yes, it's a lot of money. But he earned it and it's in his contract. If you don't want to pay this much, then don't put it in the next contract. However, since it is likely that Mr. Hall earned some multiple of his compensation for his company, it is also likely that someone else will then agree to pay him this much for the same performance, if not more. Then, the shareholders of Citicorp (all of us, since it Is a taxpayer supported company) are the losers, because an extraordinarily profitable employee will be driven away. If the best performers are afraid to work for TARP supported companies, how can these TARP supported companies thrive, or even survive? Readers out there, from the janitor to CEO, would you like it if your employer reneged on your legally binding employment agreement?

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