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Energy Trader Earns $100 Million For Citigroup

Posted By mike On August 15, 2009 @ 8:59 am In Small Foot Print | No Comments

So, Citigroup, 34% of which is now owned by the tax payers is set to pay an energy trader, Andrew Hall, $98 million for his energy trading, hedging and arbitrage.

I guess that’s ok since he made the company a much bigger chunk of money with his trading, but it is a political problem for the Obama administration and for Citigroup.

Two things jump out at me from this story. The first is that this guy who is apparently head of the class for Citigroup earns money in trading, hedging, and arbitrage. It’s real money that he is making by speculating and spotting profit opportunities on the energy market, but what does Andrew actually create, what does he produce through his work, besides profits?

So much of the US economy these days is in the financial sector, manipulating and handling money, creating profit from trading, but what is the product? This “industry” has given us “innovative products” like credit default options and tronches of toxic assets. Talk about your widgets, these are the ultimate widgets, a trading nomer with no there there.
[1] clipped from [2] www.nytimes.com

WASHINGTON — Senior Obama administration officials were wrestling on Friday with how to handle an explosive executive pay issue involving two traders’ compensation package of nearly $130 million that Citigroup says is exempt from government review.

On Friday, Citigroup, which is facing a government deadline, submitted the pay packages for its 25 senior executives and highest-paid employees. People involved in that process said Citi advised the Treasury that an energy trader named Andrew J. Hall, due $98 million, was exempt from federal review, and so was a second unidentified trader who received more than $30 million.
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[2] www.nytimes.com: http://www.nytimes.com/2009/08/15/business/15pay.html?th&emc=th#
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