Andrew Hall Trying To Manoeuvre Phibro Away From Citigroup
Last week we looked at Andrew Hall, the guy who made Citigroup a lot of money heading up the oil futures trading arm Phibro; he was expecting to get paid the £60m bonus he earned while doing it, but that wouldn’t look very good for a bank so bailed out it’s a wonder there’s any “in” left. Oil futures is also a market being blamed for rising oil prices, so US citizens wouldn’t take it too well if they found out that the guy who’s helped put their petrol prices up was getting a big bonus from a bank that’s also propped up by their taxes. Plus, Phibro’s bonus culture, with up to a third of what the unit makes going on compensation, was a little self-serving to begin with.
Hall was perhaps a little rattled by the media coverage of all of this when it came out last week, and so now, according to the New York Times, he’s trying to spin off Phibro away from Citigroup and all its attendant taxpayer interest; as the NY Times says, he’s “wary of publicity and worried that he will become the next marquee villain of the financial collapse”, and would have to go and seek refuge with some tax-dodging racing drivers a la Fred Goodwin.
He also obviously wants to go work somewhere where a £60m bonus is perhaps gawped at jealously, but that won’t have people smashing up your house – if Phibro escaped Citigroup it would also escape ruthless public scrutiny, and Hall could go back to quietly making loads of money and spending it on German castles and Julian Schnabels.
Or maybe he’s just letting this news trickle out to scare Citigroup into paying him his bonus and keeping his talent. But a publicity-shy figure like Hall, content to make loads of money as a non-exec rather than head for the prestige of a board position, would surely not be content even if he did get his bonus – he’d still have years of treading on eggshells as Citi sheds its government stake. But how will he persuade Citi to part with Phibro, one of the only revenue-generating parts of their operation at the moment? To get rid of the company to show everyone that it doesn’t agree with paying massive bonuses would be Citigroup cutting off its nose to spite its face, and would be ultimately to the detriment of the very taxpayers it’s trying to appease.
Though if they kept Phibro but lost Hall to a more private one, it’s a moot point as to whether it would carry on continuing to make the kind of successful hedges that Hall has overseen. If he does leave though, Hall will be a high-profile example of a growing type – the guy who doesn’t care about the state finding himself in a structure in thrall to the taxpayer, and who doesn’t like it one bit.
Posted by Ben Beaumont-Thomas in Hot Money | August 3, 2009 1:31PM |
August 4th, 2009 at 2:41 am
Couple of things — Hall has held board positions. He was on the board of Salomon Bros. before Citigroup acquired it. Also, he wasn’t always publicity shy. He was frequently quoted in the financial press throughout the 1990s and was often featured on lists of “highest paid traders.” He only got shy recently when it became apparent that the US taxpayer would have to pay his bonus. Phibro might have made some money but lets face it, the parent company lost $27 billion last quarter. Whether or not he’s owed the money, Citi can only write the check because the US Treasury gave it $45 billion.
October 10th, 2009 at 11:34 pm
Just another example of AMERICA GONE BAD…..
Scum bags like this guy are sucking the money out of our economy, and taking it away from AMERICANS, and our ECONOMY. Please don’t try to justify making $100 million a year, when people are losing their jobs, their homes, their families, and, their dignity and self-respect, because of people like this!