Citigroup Inc., the bank 18-percent owned by U.S. taxpayers, awarded more than $37 million in shares to six top executives and said it plans to raise Chief Executive Officer Vikram Pandit’s $1-a-year pay.
Pandit, 53, declined more compensation for 2010 as other executives received millions of dollars in “stock salary,” or shares that can be quickly sold, according to a statement today. Next year, “the board intends to compensate Vikram commensurate with the job of CEO,” the bank said in a statement.
Pandit all but eliminated his pay in 2009 following billions of dollars of losses tied to subprime mortgages at the New York-based bank under former CEO Charles O. “Chuck” Prince, and a $45 billion bailout from U.S. taxpayers. Citigroup has reported two successive profitable quarters this year, and Pandit offered 20 units for sale to shrink the bank.
“The board is very pleased with the progress that the management team is making in restoring Citi to profitability,” said Richard Parsons, the bank’s chairman. “Although we respect Vikram’s decision again to decline salary or an incentive award for 2010, we believe that his performance would merit a different outcome.”
List of Recipients
John Havens, head of the bank’s institutional clients group, would receive shares valued at $9 million on an annualized basis, according to a regulatory filing today. Manuel Medina-Mora, head of consumer operations for the U.S., will receive $7.45 million.
Vice Chairman Edward J.Kelly and Alberto Verme, co-head of the bank’s operations in Europe, the Middle East and Africa, will both receive $6 million annualized, according to the filing. John Gerspach, Citigroup’s chief financial officer, will receive $4.17 million. William Mills, who is Verme’s counterpart, received $4.86 million, according to Ed Skyler, a bank spokesman.
Pandit told a February 2009 congressional hearing that he would cut his own salary to $1 a year until the bank returned to profitability. The New York-based bank reported a net profit of $7.1 billion for the first half of 2010, compared with a $7.6 billion net loss in 2008.
The lender is giving shares that can be quickly sold, or “stock salary,” to its 25 highest-compensated employees before deciding how much they get in bonuses at the end of the year, according to the statement. Citigroup’s bailout subjected it to pay curbs developed by Kenneth Feinberg, who capped bonuses at one-third of the overall compensation.
The executives can begin selling the shares in monthly installments from January next year, according to today’s filing.
Pandit’s total compensation for 2009 was $125,001. His total package was $38 million in 2008, during which Citigroup reported a net loss of $27.7 billion.
To contact the reporters on this story: Donal Griffin in New York at Dgriffin10@bloomberg.net; To contact the editor responsible for this story: Alec McCabe at firstname.lastname@example.org.