Citigroup Will Resolve CEO Pay by End of Year, Pandit Says
Citigroup Inc. (C), whose shareholders rejected Chief Executive Officer Vikram Pandit’s compensation plan in April, is committed to resolving the pay dispute and the board will make a decision by the end of the year, he said.
Directors are still consulting with shareholders of the New York-based lender about potential changes, Pandit said today in an interview with Bloomberg Television in St. Petersburg, Russia. The advisory vote last April was non-binding.
Investors rebelled after the board awarded Pandit about $15 million for 2011 along with a retention plan that could be worth about $40 million. Pandit’s compensation has provided the least shareholder value over the past three years, according to a comparison of financial CEO incentive pay against stock returns, Bloomberg has reported.
“The board has this process with them, they’re going through it, and they are committed, as I am, to making sure that they resolve this,” Pandit said. “I want to get paid what the board thinks is right for me, for the job that I’ve done and for the incentives that they think I ought to have.”
Pandit, 55, also received the final $80 million payment last year from New York-based Citigroup’s $165 million purchase of his Old Lane Partners LP hedge fund four years ago, before he was named CEO in December 2007. Shares of Citigroup, ranked third by assets among U.S. banks, fell 44 percent last year.
“There’s one thing that’s true for me and most Americans, I don’t determine my own compensation and my own package,” he said.
Citigroup’s board is led by Chairman Michael O’Neill, the former Bank of Hawaii Corp. CEO who replaced Richard Parsons after the shareholder vote. O’Neill also heads the board’s compensation committee.
Pandit told lawmakers in 2009 that he would take a $1 annual salary until he restored the bank to profitability. Citigroup made a $21.7 billion profit for 2011 and 2010 combined, compared with a $29.3 billion loss for the two preceding years.
“When the company was losing money, I stepped up and said I’ll take a dollar a year and I did, exactly for that reason, exactly the right thing to do,” Pandit said.
New York City Comptroller John Liu, whose office controls about 9 million Citigroup shares, has not been consulted, according to Matthew Sweeney, a spokesman. The comptroller’s office voted against Pandit’s compensation plan. Shannon Bell, a Citigroup spokeswoman, declined to say who had been contacted. O’Neill didn’t immediately respond to e-mailed requests for comment.
“We can accept a months-long process to revamp executive compensation if the board truly consults shareowners and ultimately restores the link between pay and long-term performance,” Liu said in an e-mailed statement. “We have yet to see evidence of either.”
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