Lots of tinkering with bonus models on Wall Street

A lot of top Wall Street firms are rethinking how they dole out bonuses, whether to cut risk or somehow reward other behavior. One company is taking an interesting approach. The Financial Times report that Citigroup CEO Vikram Pandit is bent on making some significant changes that may not go over so well with rank-and-file managers; he would like bonuses to be linked, in part, to cooperation across different divisions and the performance of the entire company as a whole, rather than individual and unit performance. Good luck! The danger here is that you run the risk of appearing to limit the upside of compensation. Such a change could easily be seen as a disincentive, especially at the trader level. But Pandit really wants to unlock the universal synergies he has discerned. Indeed, he has bet his future on it. This certainly sends a powerful message, though we may see different models for different business segments. 

For more:
- here's the Financial Times article

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