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For senior investment professionals, a significant portion of their compensation is based on overall performance of the firm.

Citadel has a comprehensive personal trading policy covering all employees which restricts employees transacting in securities included in Citadel account portfolios. All employee trades must be preapproved, says Griffin.

COORDINATOR, STRATEGIST ROLE

Griffin's role has changed over the years. In the early days, he did it all. Now, he is more of a coordinator and a strategist. He plays a role in developing new risk management techniques and capital allocation. "My technology and quantitative research people are better than I am. I coordinate. There are a lot of 'moving parts' at Citadel, and I spend a significant amount of my time making sure the firm is moving in the same direction."

One of Griffin's key focuses is how to manage the rate of growth correctly. "Alpha drives the capacity." His issue is where to get capacity in the future and how to get more capacity out of every strategy. The more alpha produced is spread over a larger asset base, and alpha is associated with more risk. Risk is also spread over a larger asset base. "How fast I can grow my business is a function of how fast I build alpha base and manage the risk that comes with an increase in alpha product."

Griffin is always working on new initiatives. The most recent addition was fixed income in 1999. The dislocation in fixed income in 1998 due to well-publicized problems in that sector resulting from the Long-Term Capital Management crisis helped free up a lot of talent, which made it possible to hire excellent people.

"I help build the team. We hired a very talented group of professionals from Salomon Brothers. I discuss the risks and transactions that appear attractive. I help them fit into the culture of our firm." Griffin describes the culture at Citadel as one where change is accepted. The firm is always assessing new strategies and implements those that are promising. But adding new strategies also adds new risks. "We can't rest on our laurels."

While Citadel may have a market leadership in several markets, its culture doesn't accept this thinking. "We go home every day and ask