Citigroup Cut Corbat’s Pay Over Currency Rigging, Chairman SaysDakin Campbell
Citigroup Inc. cut Chief Executive Officer Michael Corbat’s 2014 compensation in part because he failed to stop traders from rigging the foreign-exchange markets, Chairman Michael O’Neill said.
While the currency matter started prior to Corbat’s tenure as CEO, it continued on his watch, O’Neill said Tuesday at the annual shareholders’ meeting in New York. Citigroup is in discussions with the Department of Justice over allegations it was among banks that tried to manipulate currency markets.
Citigroup’s compensation committee previously said it cut Corbat’s 2014 pay by 10 percent to $13 million, citing fraud allegations in Mexico and the Federal Reserve’s rejection of the New York-based company’s 2014 capital plan. The sale of mortgage-backed securities in the run-up to the financial crisis, which led to a $7 billion settlement in July, came before the 54-year-old CEO took over, the chairman said.
The committee also considered the actions Corbat took to remedy the shortcomings, such as firing more than a dozen executives in Mexico and improving the firm’s capital-planning process. The Fed subsequently approved Citigroup’s proposal to return capital to investors. Those decisions helped limit the depth of his pay cut, O’Neill said.
Separately, shareholders voted against a proposal that would have deferred a portion of top executives’ pay for 10 years and used the money to cover fines if the bank is found to have broken laws. About 4.9 percent of investors voted in favor, the company said.