|
 |
Mar-19-2009Citigroup May Spend $10 Million for Executive Suite(topic overview)
CONTENTS:
SOURCES
FIND OUT MORE ON THIS SUBJECT
Citigroup, which has received $45 billion in taxpayer bailout money, plans to spend $10 million on new offices at its Park Avenue headquarters for CEO Vikram Pandit and his deputies. Citigroup plans to spend $10 million on new offices at its New York headquarters, shown here, for CEO Vikram Pandit and his deputies, according to Bloomberg News. [1] Citigroup, which has gotten $45 billion in bailout money, plans to drop around $10 million on constructing new offices for CEO Vikram Pandit and other execs, Bloomberg reports, after examining documents filed with the New York City Department of Buildings.[2]
Citigroup Inc. (NYSE:C) plans to spend about $10 million on new offices for CEO Vikram Pandit and the bank's senior executives. Pandit's new office will be located one floor down from the one he inherited from "Chuck" Prince in December 2007 at 399 Park Ave. The second floor, which contains offices, boardrooms and executive-dining quarters, will be completely renovated to make way for 17 private offices with sub-zero refrigerators, icemakers, "Safety Shield 800" blast-proof window film, "soft seating," space for administrative assistants and two conference rooms, according to a report by Bloomberg.[3] The bank says it plans to reduce office space by more than 10 million square feet. They believe the move will help save $15 billion over the next few year. The new executive suite will be located on the second floor of Citigroup'''s office on 399 Park Avenue, a floor below the one Pandit, 52, inherited when he took over as CEO from Charles '''Chuck''' Prince in December 2007. The second floor previously contained offices, which are being demolished, as well as boardrooms and executive-dining quarters.[4]
"In addition, based on estimates made when the project was initiated, we expect to generate savings in the next few years well in excess of the project costs compared to our current utilization of headquarters executive space." Bloomberg reported that the company plans to spend at least $3.2 million for basic construction, such as wall removal, plumbing and fire safety, but that the overall cost would be at least three times as high. Earlier this year CNBC reported that then Merrill Lynch CEO John Thain spent more than $1 million to redecorate his office.[1] The project encompasses 17 private offices, each with space for administrative assistants, as well as two conference rooms and open areas with "soft seating," according to the plans. Former Merrill CEO John Thain has been widely slammed for last year spending $1.2 million on a redecoration of his office suite - the same year his company suffered massive losses and needed to be rescued by Bank of America.[2]
"Based on estimates made when the project was initiated, we expect to generate savings in the next few years well in excess of the project costs." Taxpayers and lawmakers have been fuming this week over $165 million in retention bonuses recently paid to employees of the American International Group unit whose bad bets forced a government bailout of the entire company. In January, John A. Thain was publicly lambasted for the $1.2 million renovation of his office suite after he become the chief executive of Merrill Lynch.[5] According to a Bloomberg report, Pandit and his lieutenants are being treated to office renovations at the bank's midtown headquarters that will tally that sum before the last endtable is installed. Shades of John Thain at Merrill Lynch, where his pricey bathroom became a hotbutton of controversy amid the taxpayer-funded bailout of the financial services system. (Note: Mr. Thain's representatives pointed out that the renovation of his office was completed in December 2007, well before Merrill accepted any bailout money, and that the controversy only erupted after Bank of America leaked the story of the renovation to the press after firing Thain.) The only takeaway is that these executives don't seem to understand how unseemly this conduct looks in an era where the taxpayers who are keeping them afloat are too afraid to buy new floormats for their cars because it seems like a discretionary purchase - a no-no for anybody worried they or a family member could be unemployed at any time.[6]
"And I'll make sure Citi gets it as well." Pandit will enjoy a primo spot from which to assay all that new reality being installed at the bank: his own personal chunk of the $10 million office renovation being conducted at Citi.[6] Did you hear about that little scandal over at AIG? Yea, well, someone's been stealing Vikram Pandit's copy of the Journal from his doorstep the past few mornings because Bloomberg just dropped the bombshell that Citigroup plans to spend "about $10 million" building out new offices for Pandit and his top lieutenants.[7] Bloomberg is reporting that Citigroup is planning to spend about $10 million on new offices for CEO Vikram Pandit.[4]
Months after the government forked over $45 billion to save Citigroup's hide, the bank is now spending $10 million on a new suite for CEO Vikram Pandit.[8] Just over a month ago, Vikram Pandit, the chief executive of Citigroup (C) was being raked over the coals by legislators criticizing the bank's decision to spend $50 million on a new corporate jet in the wake of begging for - and accepting - bailout funds totalling $45 billion.[6]
In a move bound to feed public furor over perks at bailed-out banks, Citigroup plans to spend about $10 million to create new offices for its chief executive and his lieutenants, a project that calls for premium millwork and at least one Sub-Zero refrigerator.[5]
When you account for the architect's fees--and add in the cost of furniture--"the tally for the offices at the bank's Park Avenue headquarters will be at least three times as high." It sure sounds like it will be lovely: The plans "specify the installation of at least one Sub-Zero refrigerator and icemaker in the renovated space, along with 'premium grade' millwork and Madico Inc. 'Safety Shield 800' blast-proof window film."[7] By the time architect's fees and expenses are added up, the tally for the offices at the bank's Park Avenue headquarters will be at least triple that amount.[4]
Permits for the renovations were filed in September 2008, according to the source. "This office space consolidation is part of a global effort to create greater operating efficiencies and generate millions of dollars in savings in the years ahead," Citi told ABC News in a statement. "Through this project, senior executives in our corporate headquarters are moving from two floors to smaller, simpler offices on a single floor." "These changes, combined with greater use of shared work spaces and alternative work arrangements, will double the overall occupancy rate on the remaining floor," the company added. [1] The project includes 17 private offices, each with space for administrative assistants, as well as two conference rooms and open areas with "soft seating," according to the plans. Pandit, who has already be criticized by lawmakers over his company's use of bailout money, told Congress on February 11 that "get the new reality and I'''ll make sure Citi gets it as well." The statement came after he canceled an order for a new company jet.[4]
The source added that the renovation is part of an overall effort to cut costs by consolidating offices. Last month, Pandit testified before Congress about the way his company is using taxpayer dollars received through the Troubled Asset Relief Program. "The American people are right to expect that we use TARP funds responsibly, quickly and transparently to help American families, businesses and communities," he said. Earlier this year, Citigroup reversed a decision to buy a $50 million corporate jet under pressure from the government. [1] Merrill was later sold to Bank of America, which needed extra funds from the government to cover Merrill's mushrooming losses. Citi has also come under pressure for its corporate perquisites. Earlier this year, it canceled delivery of a $50 million corporate jet to calm a public uproar.[5]
According to affidavits filed with New York's Department of Buildings, the bank that has collected $45 billion from the U.S. government will spend at least $3.2 million constructing 17 offices.[7] Citing documents filed with New York's Buildings Department, Bloomberg News reported that Citi's project will cost $3.2 million for basic construction alone.[5] Paperwork filed with New York's Department of Buildings show Citi expects to pay at least $3.2 million for basic construction.[4]
The Citi source likened the $10 million in office renovations to refinancing a home: You need to put money down so you can save money over time.[1] Are these bozos daft? Regardless of whether the renovation will save costs over the long run (and I fail to see how moving people from 2 floors to 1 floor makes a significant reduction in operating costs), now is the wrong time to even suggest spending money on non essential tasks. It will ignite a firestorm. Aren't plywood dividers and a Frigidaire good enough for these beggars? Citi's stock is pathetically low, the bank needs my money to survive, but these pinheads still can't ditch their champagne tastes.[5]
Citi, which has taken a financial lifeline from the government three times since last fall, said the project would save money over time.[5]
News of the construction project comes as AIG is being hammered on Capitol Hill for paying bonuses to executives after receiving bailout money from the government.[4]
The renovation plans began in June prior to the government's $45 billion bailout of the bank.[3] Citi has received $45 billion in cash from the U.S. government. United Auto Workers President Ron Gettelfinger says he will retire in 2010.[4] The short squeeze in Citi shares continued unabated in Thursday's trading, pushing the shares up to $3.45 at the session's highs, just two weeks after the stock traded south of $1. Citi has asked shareholders for authorization to expand its common share base to between 40 billion and 60 billion shares in order to execute its conversion of preferred shares so it can absorb another government infusion.[6]
You know, the big one from Obama that says stop spending TARP money on unnecessary or exuberant items. Merrill Lynch & Co. CEO John Thain spent over $1 million to redecorate his office after taking over that bank and was vilified for it when he was ousted. Timing, they say is is everything. [3] '''Senior executives in our corporate headquarters are moving from two floors to smaller, simpler offices on a single floor,''' Citi said in a statement to Bloomberg.[5] Citi began planning the new office for Mr. Pandit in June, Bloomberg said, which is before it took taxpayer funds.[5] Asked about the jet incident at a congressional hearing last month, Vikram Pandit, Citi's chief executive, said, "I get the new reality."[5]
A Citi source confirmed the renovation plans to ABC News, which were first reported by Bloomberg News.[1]
The project, to be built on the second floor of Citi's office at 399 Park Avenue, includes 17 private offices and two conference rooms.[5] Based on estimates made when the project was initiated, we expect to generate savings in the next few years well in excess of the project costs. Now, we're not sure what math they're using, but this project certainly won't win them any friends among the general public. Nor should it.[8]
In addition to getting new plush chairs, Mr. Pandit will reportedly receive a new sub-zero refrigerator and blast-proof windows. [8] Plans and instructions call for the installation of at least one Sub-Zero refrigerator and icemaker in the renovated space, along with "premium grade" millwork and Madico Inc. "Safety Shield 800" blast-proof window film.[4]
SOURCES
1. ABC News: Bailed-Out Citi Plans $10M CEO Office
2. TPMMuckraker | Talking Points Memo | Report: Citi To Spend Around $10 Million On New Office For Pandit, Others
3. Citi execs spend $10M to redecorate office (Dealscape)
4. REPORT: Citibank Planning $10 Million Suite || WXYZ.com | WXYZ-TV / Detroit | Detroit News, Weather, Sports and More
5. Citi Said to Plan $10 Million Executive Suite - DealBook Blog - NYTimes.com
6. Stocks To Watch Today : Citi's $10 Million Office Re-Do Part Of Its Reality Show
7. Cityfile: Vikram Pandit: Dead Man Walking
8. Citigroup Spending $10 Million on New Suites | wowOwow
GENERATE A MULTI-SOURCE SUMMARY ON ANY SUBJECT
Enter your search query below. WAIT 10-20 sec for the new window to open.
Get more info on Citigroup May Spend $10 Million for Executive Suite by using the iResearch Reporter tool from Power Text Solutions.
 |
|  |
|
