March 13 (Bloomberg) -- Vikram Pandit received $165.2 million last year when Citigroup Inc. bought Old Lane LP, the hedge fund he co-founded and led.

Pandit, who became Citigroup's chief executive officer in December, reinvested $100.3 million of after-tax proceeds in the fund under the terms of the sale agreement, the New York-based company said today in a filing with the U.S. Securities and Exchange Commission. He's required to forfeit ``a substantial portion'' of the investment if he quits or is fired within four years, the bank said.

Citigroup's pay practices were subjected to scrutiny last week when Charles O. ``Chuck'' Prince, Pandit's predecessor as CEO, was called before a congressional panel to defend his compensation. Prince, 58, kept $30 million in stock and options after he resigned in November as the collapse of the subprime mortgage market eroded the firm's earnings. Citigroup, the biggest U.S. bank by assets, went on to report a $9.83 billion fourth-quarter loss. The stock has fallen more than 60 percent since the end of 2006.

Pandit, 51, received 1 million shares from Citigroup as part of a previously disclosed ``sign-on'' bonus in January, in addition to a $2.5 million ``retention equity award,'' the company said today. He was paid $250,000 in salary last year, according to the filing.

The bank announced in January that it halved cash bonuses for most senior executives last year. Robert Rubin, the former U.S. Treasury secretary who serves as chairman of Citigroup's executive committee, decided to forgo a stock bonus for 2007.

Rubin's Reward

The bank didn't disclose Rubin's total compensation for 2007, indicating he wasn't one of the seven highest-paid senior executives.

In 2006, Rubin was the second-highest-paid executive after Prince, earning $17.3 million in salary and bonus. Prince was paid about $26 million in salary, bonus and other pay in 2006, according to regulatory filings.

The two highest-paid executives in 2007 after Pandit were Michael Klein, Citigroup's head of investment banking, and Gary Crittenden, chief financial officer.

Klein got $19.3 million in ``deferred cash retention awards'' and ``retention equity awards,'' on top of a $212,500 salary, the bank said.

Crittenden received an $11.18 million cash bonus when he joined the company from American Express Co. in March 2007. He got another $12.8 million in cash and stock bonuses for his performance last year, in addition to $403,410 of salary.

Krawcheck, Bischoff

Sallie Krawcheck, who served as chief financial officer until March 2007, when she became head of Citigroup's wealth- management division, received a $500,000 salary and $12 million in cash bonus and stock. She collected $9.9 million in 2006.

Win Bischoff, a senior bank executive in London who was named chairman following Prince's ouster, got $6.99 million in cash bonus and stock and $373,734 in salary.

Prince agreed to buy Old Lane in April 2007 for about $800 million. Pandit, an investment banker and executive at Morgan Stanley from 1983 to 2005, had co-founded the fund in 2006 with fellow Morgan Stanley veterans John Havens, Guru Ramakrishnan and Brian Leach.

In July, when Citigroup completed the Old Lane transaction, Pandit joined Citigroup's alternative investments division, along with Havens, Ramakrishnan and Leach. In December, the board promoted Pandit to CEO.

To contact the reporter on this story: Bradley Keoun in New York at bkeoun@bloomberg.net.

Last Updated: March 13, 2008 19:00 EDT