Citigroup, one of the biggest beneficiaries of the American Government's banking bailout, was condemned yesterday over its plans to spend $10 million (£6.8 million) refurbishing the offices of its top bosses.

The controversy comes after the bank, which received $45 billion of taxpayers' money, was attacked by President Obama in January over its intention to spend $50 million on a new corporate jet.

Filings with New York's Department of Buildings revealed that the planned refurbishments at Citigroup's headquarters on Park Avenue included renovation of the office used by Vikram Pandit, the chief executive.

Corporate governance experts immediately accused the bank of insensitivity, given America's outrage over AIG's $165 million bonus payments. A Citigroup spokesman defended the plan, however, saying that offices on two floors will be squeezed into one. The work, he added, was part of the bank's efforts to make savings and senior executives would be in smaller, simpler offices.

“We expect to generate savings in the next few years well in excess of the project costs compared to our current utilisation of the headquarters executive space,” the spokesman said. Citigroup is cutting its global office space by more than 10 million sq ft over the next few years to save $15 billion.

Sources defended the bank against more detailed criticism in reports about the purchase of a new refrigerator and icemaker for the floor. One insider said: “We're moving our older [refrigerators] downstairs. Not new purchases.”

After criticisms of the bank last month, Mr Pandit told Congress: “I get the new reality and I'll make sure Citi gets it as well.”

This followed an outcry in Washington in January after the bank insisted that it would go ahead with the purchase of a new corporate jet, arguing that to drop the order would leave it with substantial cancellation fees.

Mr Pandit did not receive a bonus last year and is working for a $1 salary this year.

The bank said yesterday that it may launch a reverse stock split as part of its deal to give the Government a stake of up to 36 per cent.

As part of last month's agreement with the US Treasury, Citigroup has offered to exchange common stock for up to $27.5billion worth of preference shares issued to investors at $3.25 per share. The Government has agreed to use its Citigroup preference shares to match up to 25 per cent of the conversions, giving it up to 36 per cent of the company.

These transactions will increase the number of Citigroup shares in issuance. A reverse split, however, would reduce the number of shares that a company has outstanding.

Such splits, which do not change the value of investors' stakes, may be used to push up a low share price.

Citigroup's shares closed down 15.5 per cent at $2.60.

Splashing out

— John Thain's $1.2 million office renovation when he joined Merrill Lynch, the US bank, in 2007 included the purchase of a $35,000 commode.

— President Barack Obama declined to change the Oval Office after succeeding George W. Bush this year. Apart from removing some Texan paintings and a Winston Churchill bust, the room is as the previous President left it.

— When elected Mayor of Wasilla, Alaska, Sarah Palin, last year's US vice-presidential candidate, spent $50,000 on decorating, including covering the walls of the mayoral office in red flock wallpaper.

— After Lord Irvine of Lairg was appointed Lord Chancellor by Tony Blair in 1998, £59,000 of taxpayers' cash was spent on wallpaper for his official residence, provoking outrage.

— New South Wales's premier, Nathan Rees, last month defended a A$500,000 (£236,000) office refit by its Corrective Services Minister, John Robertson, arguing that Mr Robertson “may be entertaining prison ministers from interstate or overseas”.

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