Vikram Pandit, Citigroup's chief executive, and the troubled bank's chairman Win Bischoff will forgo their bonuses for 2008.

In a memo sent to staff yesterday, Mr Pandit said that Bob Rubin, director and senior counsel to the bank, would also give up his bonus for the second consecutive year.

The bank's chief executive cited the need to set the right tone and also reflect the bank's performance, in a year in which it has accessed $65 billion in US Government aid.

"The most senior leaders should be affected the most. That is why Win Bischoff and I will receive no bonus for 2008. Win and I believe this is fair, in light of the challenges of the year and the need for compensation elsewhere in the organization" Mr Pandit said in his memo.

He also unveiled a new policy that allowed the bank to claw back compensation awarded to employees that overtime proved to be based on inaccurate information.

Executives at Goldman Sachs and Merrill Lynch have already said that they would forgo their bonuses after taking Government cash to help them through the financial crisis.

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