Receiving Wide Coverage ...
Citi's Executive Pay Plan: Citigroup is revamping its executive pay plan by now linking a portion of an executive's total compensation to the "company's performance relative to other big banks." These so-called "performance share units," payable three years after the firm meets performance goals, are being introduced after investors revolted against a proposed $15 million compensation package for former (and ultimately ousted) CEO Vikram Pandit in April. The new structure "will pay 40% of awards in cash, 30% in deferred stock and 30% in performance share units," the FT says. To get the maximum pay in the new category, CEO Michael Corbat "will have to achieve a return on assets of 0.85% and deliver a total shareholder return above four peers," the FT reports. Executive pay, generally, has remained a point of contention following the financial crisis, but any kudos Citi was set to reap for its revamped bonus plan were dwarfed by the announcement that CEO Corbat, who took over for Pandit in October, was being awarded $11.5 million for 2012. This compensation package puts him on par with B of A CEO Brian Moynihan and JPMorgan Chase CEO Jamie Dimon, despite the fact that, as Shanny Basar tweeted, Corbat's "only been CEO for 2 minutes." As this New York magazine blog post notes, "if Corbat made $11.5 million under the new rules, think about what he could have raked in under the old." Wall Street Journal, Bloomberg
ING Gets a New Executive: Ralph Hamers, the head of ING's Belgian banking business, will take over as chief executive of ING Group, the Netherlands' largest financial services firm by assets, in October. He will succeed Jan Hommen, who, according to the Journal, has said he wants to "spend more time with his children and grandchildren." Hommen's four-year term as CEO was set to expire in May, but he has agreed to have his contract extended to "ensure a smooth leadership transition," Bloomberg reports.
The European Commission has extended its 18-month probe into rate-rigging to include Swiss franc-denominated swaps. Previously, yen and euro interbank rates were the subject of the investigation. Now, a bank "implicated in all three rate-fixing cases could, for example, face fines of up to 30% of total revenues."
Mid-sized, often regionally focused banks are threatening "bulge-bracket" banks' share in the M&A advice and equity capital markets. Per the article, "tougher competition has … been encouraged by onerous new regulatory capital rules that are prompting investment banks to push resources into those business lines that are underpinned with less capital." Smaller groups are also muscling into the corporate debt capital market.