Citigroup cut CEO Michael Corbat’s compensation 6.1% for 2016 to $15.5 million after the firm’s profit declined.
Corbat, 56, got a $4.2 million cash award and $9.8 million in shares that vest and pay out over a number of years depending on the bank’s performance, according to a regulatory filing Friday. He also received a $1.5 million salary.
Corbat is getting a pay cut for a year when profit fell 14% and return on assets failed to meet his 2016 target. CLSA’s Mike Mayo criticized the CEO in January for repeatedly missing targets and failing to set clear 2017 goals that investors could use to hold management accountable.
Following Donald Trump’s victory in the U.S. presidential election on Nov. 8, the bank’s stock reversed a 3.6% decline and surged to a yearend gain as investors bet the new administration would spark higher interest rates, lighter regulation and corporate tax cuts. The 2016 performance still trailed the 26% gain in the 24-company KBW Bank Index.
Citigroup boosted Corbat’s pay for 2015 by 27% to $16.5 million, at that point his biggest package since becoming CEO, even after shares fell 4.4%. That prompted proxy advisers Institutional Shareholder Services and Glass Lewis & Co. to recommend investors vote against the bank’s compensation plan.
In response, Citigroup’s board in April imposed a payout cap on the part of Corbat’s equity award that’s linked to the New York-based lender’s stock return relative to eight other banks. The CEO won’t receive more than the target number of shares if the bank’s shareholder return is negative, regardless of how it performs relative to other firms.
Still, more than one third of investors voted against the program. It was the bank’s worst result since 2012, when a majority of shareholders rejected then-CEO Vikram Pandit’s pay package.
Earlier Friday, Bank of America awarded CEO Brian T. Moynihan $20 million for his work last year, raising his compensation 25%. Moynihan received $18.5 million in stock grants for 2016, and the board left his salary unchanged at $1.5 million, according to a regulatory filing.
Executives at other major Wall Street banks also saw their compensation rise in 2016. JPMorgan Chase boosted CEO Jamie Dimon’s target pay by 3.7% to $28 million, and Morgan Stanley’s James Gorman was awarded $22.5 million, a 7.1 % increase.
Goldman Sachs Group has not disclosed pay details for Lloyd Blankfein, but the CEO’s package for 2016 could be about $22 million, not counting his long-term incentive, according to a Bloomberg estimate. Assuming Blankfein receives a long-term incentive award similar to past years, his pay package would exceed Dimon’s.
