Citigroup Inc. boosted Chief Executive Officer Vikram Pandit’s base salary to $1.75 million from $1 after the bank reported the first profit for a year under his watch.
The raise is effective immediately, the bank said today. Pandit, 54, has led the New York-based lender since December 2007 and oversaw its $45 billion bailout by taxpayers the next year. In February 2009, he told lawmakers his salary would be capped at $1 until the firm returned to profitability, and this week it reported a $10.6 billion profit for 2010.
“He’s accomplished what he set out to do a couple of years ago,” said Gary Townsend, president of Hill-Townsend Capital LLC in Chevy Chase, Maryland. “This boosts him back up to something that is at least respectable.”
Shares of Citigroup, the third-largest U.S. bank by assets, climbed 43 percent in 2010, and the U.S. Treasury Department sold the last of its 27 percent stake in December, making a profit for taxpayers. Under Pandit, the bank had losses of $29.3 billion for 2008 and 2009 combined, driving down its stock 89 percent during that period.
The company yesterday announced 2010 bonuses of almost $50 million for 15 other senior executives. Six of them, including newly promoted Chief Operating Officer John Havens, also shared “stock salary” last year worth more than $37 million on an annualized basis, according to a Sep. 24 filing. Pandit declined a bonus for the year.
“Vikram has worked tirelessly to put Citi back on the right track, spearheading a restructuring that has returned the company to profitability and positioning the company for future growth,” Chairman Richard Parsons said in today’s statement.
Pandit joined Citigroup when it bought the hedge fund he co-founded with Havens and the bank’s Chief Risk Officer Brian Leach. Pandit received $165 million, or $100 million after taxes, from the sale. He will receive the final payment from the sale in July, according to regulatory filings. He received a salary package in 2008 then valued at over $38 million, much of which was in stock and stock options.
He held about 2.2 million Citigroup shares as of Dec. 11, data compiled by Bloomberg shows. The stake has a value of $10.8 million based on today’s closing price.