Citigroup (NYSE: C) is overhauling its rules for executive pay to tie compensation more closely to the company's performance.

It will link pay to specific targets it sets for each executive officer in 2013 and future years, it said in its latest proxy statement, filed Thursday with the Securities and Exchange Commission. The change is a response to concerns by investors that the company's executive pay was too high relative to returns and that the payment metrics needed more clarity and rigor, the filing said.

Each executive's pay will be based 70% on pre-established financial metrics, such as earnings or return on assets, and 30% on pre-established non-financial metrics, such as improvements in internal controls. These metrics will be set at the beginning of each year. Each executive's pay will be weighted based on whether the company outperformed or underperformed its peer companies in each metric. Finally, the board will also be able to adjust an executive's bonus to reflect specific achievements or failures during the year.

Bonuses will be 40% cash, 30% deferred stock and 30% "performance share units," which are awards paid at the end of a three-year period and are based on a comparison of Citigroup's performance with its peers.

Citigroup's current pay system, which it used to determine executives' 2012 pay, involves considering the company's overall performance, each executive's contribution, and pay benchmarks.

It paid out $52.5 million to six non-director executives in 2012, including $8.4 million paid to former chief executive Vikram Pandit, who resigned in October. CEO Michael Corbat earned $11.5 million, a 44% raise from 2011. Chief Executive of Global Consumer Banking Manuel Medina-Mora earned $11 million, head of operations and technology Don Callahan and Citibank Chief Executive Gene McQuade each earned $7.5 million and Chief Financial Officer John Gerspach made $7 million.

In 2011, the six earned $51.5 million.

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