Citigroup, one of the biggest recipients of US government bailout money, gave employees $5.3bn (£3.2bn) in bonuses for 2008, with 738 staff getting more than $1m each, an investigation into the bonus culture on Wall Street has found.
The bank paid the bonuses despite losing more than $18bn in 2008 and more than $35bn since the start of the financial crisis, according to a study by Andrew Cuomo, New York's attorney-general.
Goldman Sachs, which reported earnings of $2.3bn, paid out $4.8bn in bonuses while receiving $10bn in rescue funding from the US government. Rival investment bank Morgan Stanley earned $1.7bn, but paid $4.5bn in bonuses. It also received $10bn in rescue funding. The findings were expected to fuel fierce debate in the US and add support to the government's clampdown on bonuses.
Barack Obama's administration has targeted the bonus culture on Wall Street with the appointment of Kenneth Feinberg to oversee compensation given to the highest paid employees at banks and other firms that received the largest government bailouts.
The UK's main City watchdog has shied away from reviewing bonuses. A review of banking practices by Sir David Walker recommended that banks give some details of the pay of their highest paid staff in pay bands by next year, but left it to the banks themselves to judge pay awards.
Cuomo said that JP Morgan Chase and Goldman Sachs paid the most million-dollar bonuses – 1,626 and 953, respectively. Cuomo's office focused on bonuses paid for work in 2008 at the initial nine banks that received loans under the US government's Troubled Asset Relief Programme (Tarp). "There is no clear rhyme or reason to the way banks compensate and reward their employees," Cuomo said in the report, noting banks had not in recent years tied pay to performance as they claimed when describing their compensation programmes.
Cuomo added that when banks' performance deteriorated significantly, "they were bailed out by taxpayers and their employees were still paid well".
Citigroup paid bonuses of at least $3m to 124 of its 778 million-dollar staff, even after it lost $18.7bn during the year, Cuomo's office said.
The New York-based bank received $45bn in government money and guarantees to protect it against hundreds of billions of dollars on potential losses from risky investments.
Bank of America, which also received $45bn in Tarp money, paid $3.3bn in bonuses, with 172 employees receiving at least $1m. Of those, 28 received bonuses of more than $3m. BoA acquired Merrill Lynch during the credit crisis and agreed as part of the takeover to maintain bonus payments.
