Citi former exec files legal action against firm

LONDON: A former senior executive of the Citigroup has filed a legal action to force the financial services firm to resume paying his multi-million dollar severance package which was frozen last year, a media report says.

"Citigroup is embroiled in a legal row with a former senior executive whose multi-million dollar severance package was frozen last year at the height of the political storm over bankers' pay," the Financial Times said, quoting people close to the situation.

Citigroup former head of technology Kevin Kessinger has taken legal action to force the firm to resume paying his severance package, which is understood to have been frozen for more than six months, the daily said.

Kessinger's decision is likely to fuel the debate over the Wall Street's compensation just as banks are set to announce 2009 bonuses.

Citing people familiar with the matter, FT said that Kessinger had decided to take Citi to arbitration, a form of out-of-court dispute resolution.

In June last year, Citi suspended payments to a number of departed senior executives, including Kessinger and Michael Klein, its former top deal maker, in a bid to defusing the political row over financial sector pay.

Legal experts had said that Citi was vulnerable to legal action from the former executives because severance packages are binding agreements between the two sides.