Citigroup to Restore Pandit's Pay
Citigroup Inc.'s Chairman Richard Parsons said Friday that the board intends to revive Chief Executive Vikram Pandit's compensation next year.
The company disclosed in a filing the stock compensation that its top executives will receive for this year. Citi remains restricted in how much it can pay its executives because of the government's continuing investment in it. It is allowed to add a stock salary to the cash salary. The sum of both will determine how much bonus it can pay those executives.
Pandit had pledged last year to accept only $1 in salary and bonus until Citi returns to profitability. Citi reported a profit for the first and second quarter this year, but Pandit still declined compensation above $1 for this year, the company said.
"The board is very pleased with the progress that the management team is making in restoring Citi to profitability," Parsons said in a press release. Pandit's "performance would merit" higher compensation, he said. The CEO's "decision is admirable but, beginning in 2011, the board intends to compensate Vikram commensurate with the job of CEO of Citi."
In a filing with the Securities and Exchange Commission, Citi disclosed stock salaries that its board of directors decided to pay several executives: A stock salary to the investment banking chief John Havens of $9 million; to Manuel Medina-Mora, the consumer banking chief for the Americas, $7.5 million; to Chief Financial Officer John Gerspach, $4.2 million; to the vice chairman Edward Kelly, $6 million; and to Alberto J. Verme and William Mills, the CEOs for operations in Europe, Middle East and Africa, $6 million and $4.9 million, respectively.
The Treasury Department still owns 18% of Citi's stock, and the company remains subject to the executive compensation provisions of the Emergency Economic Stabilization Act of 2008, Citi said in the filing. The act restricts the bonuses for a banking firm's 25 highest-paid executives to no more than one-third of the employee's overall compensation for a given year. Adding stock salary to the cash salary will help Citi's board to determine "the appropriate incentive compensation for 2010," the company said.
Stock salary was originally developed by the former Special Master Kenneth R. Feinberg. Though the company is no longer subject to the Special Master's determinations, the board decided to grant stock salary again this year.