Westport Firm at Center of Latest Wall Street Pay Controversy

Westport once again is gaining notoriety for a financier and firm involved in a Wall Street bailout and pay-for-performance controversy.
The Nyala Farm office complex on Greens Farms Road houses Phibro LLC. File photo

This time it is Andrew Hall, the British-born trader behind Phibro LLC, the energy trading arm of bleaguered bank Citigroup. Phibro is housed in the sprawling Nyala Farm office complex on Greens Farms Road, which some reports have simply called a “former dairy farm.”

According to some accounts, Hall is in line for a $100 million payout tied to oil trading profits he made for his firm.

Back in March, there was a similar controversy surrounding Westporter Joseph J. Cassano.(See WestportNow March 18, 2009) He headed the money-losing financial unit of American International Group, the insurance company which paid millions in bonuses after a $170 billion government bailout.

The New York Times reported Sunday that Hall, who lives in the Southport section of Fairfield, is quietly pushing for a “quiet divorce” from his parent company and has had preliminary talks with one possible suitor.

Citigroup said in a statement, “We are evaluating the best way forward for our stakeholders.” A company spokeswoman declined to comment specifically on the talks referred to in the Times’ story.

Phibro has been in the spotlight after the White House criticized a reported $100 million pay plan for Hall as “out of whack.”

Citigroup said in its statement that the Phibro unit operates under a pay-for-performance contract, with compensation determined at the end of the year as a percentage of the profits the business earns for Citi.

“We’re confident in the value these types of profit-sharing arrangements bring to the company and its shareholders as they directly align compensation with performance and include appropriate clawback and risk-sharing provisions,” Citigroup said.

It has previously been reported that Hall, a trader known for huge long-term bets in the oil market, has been pressing Citi to honor the 2009 pay package.

The Phibro unit can sometimes provide the bulk of revenues for its parent company, which has taken a $45 billion federal bailout and is expected this week to give the government a 34 percent equity stake.

Citigroup, which has seen many of its star traders defect to rival banks, is keen to maintain Hall as he provides one of its most profitable revenue streams.