Citi is a company in turmoil. The firm has suffered billions in asset writedowns which has resulted in multi-billion dollar losses in each of its last three quarters. Its share price is down another 36% this year, and thousands of staff are being laid-off as part of CEO Vikram Pandit's massive restructuring plan. And yet the Chairman of the investment bank, the very unit that is responsible for many of Citi's problems, Michael Klein, is being paid an incredible $28.8m just to keep him from working for a competitor for the next 15 months (Klein announced his resignation from Citi last week). This is utter madness.

Klein, who didn't receive a bonus in 2007 due to Citi's parlous financial position, will receive $21.3m in March next year and a further $7.5m 7 months later, provided he doesn't go work for any of the following rival firms through October 2009: Barclays, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Lazard, Lehman  Brothers, Merrill Lynch, Morgan Stanley, Royal Bank of Scotland and UBS. Under the terms of the agreement, Klein also cannot solicit Citi clients or poach employees for the next 15 months.

The banker will also walk off with $5.5m in connection with a previous retention plan, and will receive a further $8.3m in March for previously awarded stock and options. Klein's $42.6m exit package is thought to be the highest paid to a US company executive who was not a CEO, and makes former Citi CEO Chuck Prince's 2007 exit package of around $28m look like chicken-feed.

And, in a further irony, insiders say that Klein was unlikely in any case to have gone to work for any of the 12 firms detailed above, as he sees his future either in a hedge fund, a private equity firm or undertaking government service of some kind - all of which he is entitled to do under the terms of his exit agreement.

One market professional told Here Is The City: 'This just goes to show that firms like Citi have completely lost touch with reality. To pay this man $28m to keep him working for firms he probably had no intention of going to work for (and who probably wouldn't have hired him in today's climate anyway) is ridiculous. Citi employees, many of whom are in fear for their jobs, and shareholders, who are feeling the pain because of Citi's heinous last 12 months, have a right to feel very angry. This may also prove to be the last straw for our lawmakers too. It would be no surprise now if they moved to stop this kind of nonsense. It might not be a crime, but there will be many out there wondering why it is not.

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