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Citi pays ex-CEO US$6.7m bonus this year
Source: Agencies |
November 12, 2012, Monday
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CITIGROUP has paid its former CEO Vikram Pandit, who resigned abruptly last month, a bonus of US$6.7 million for work he did for the bank this year.
The bank, which disclosed the payment in a regulatory filing, also paid its former chief operating officer John Havens, who left the bank at the same time Pandit did, US$6.8 million. Citi characterized the payments as "incentive awards" and said the two executives weren't entitled to any severance payments as a result of their departures.
The executives will get 40 percent of the money right away, and the rest will be paid in installments through 2017.
Citi said Pandit and Havens will continue to vest in deferred stock and deferred cash incentive awards previously granted to them. Those were worth US$8.8 million for Pandit and US$8.7 million for Havens.
Pandit's sudden departure from Citi on October 16 shocked the financial industry. Citi gave no explanation at the time, but it was widely reported that Pandit had fallen out of favor with the company's board. The bank was embarrassed by several missteps including failing a financial checkup this spring with the Federal Reserve, which refused Citi's request to raise its dividend.
Pandit joined Citi in 2007 and steered the bank through the financial crisis. He accepted a token US$1 in compensation in 2010 as the bank righted itself. His pay increased to US$15 million in 2011, roughly in line with most of his counterparts. But Citi's shareholders, unhappy with a 44 percent plunge in the bank's stock price that year, rebuked Citi by rejecting his pay package in a non-binding vote this spring.
In the filing, Citi's chairman, Michael O'Neill, said the two men made vital contributions to Citi that warranted the payments.
"Vikram steered Citi through the financial crisis, realigned its strategy, bolstered its risk management processes and returned it to profitability ...," O'Neill said. "Based on the progress this year through the date of separation, the Board determined an incentive award for their work in 2012 was appropriate and equitable."
The bank, which disclosed the payment in a regulatory filing, also paid its former chief operating officer John Havens, who left the bank at the same time Pandit did, US$6.8 million. Citi characterized the payments as "incentive awards" and said the two executives weren't entitled to any severance payments as a result of their departures.
The executives will get 40 percent of the money right away, and the rest will be paid in installments through 2017.
Citi said Pandit and Havens will continue to vest in deferred stock and deferred cash incentive awards previously granted to them. Those were worth US$8.8 million for Pandit and US$8.7 million for Havens.
Pandit's sudden departure from Citi on October 16 shocked the financial industry. Citi gave no explanation at the time, but it was widely reported that Pandit had fallen out of favor with the company's board. The bank was embarrassed by several missteps including failing a financial checkup this spring with the Federal Reserve, which refused Citi's request to raise its dividend.
Pandit joined Citi in 2007 and steered the bank through the financial crisis. He accepted a token US$1 in compensation in 2010 as the bank righted itself. His pay increased to US$15 million in 2011, roughly in line with most of his counterparts. But Citi's shareholders, unhappy with a 44 percent plunge in the bank's stock price that year, rebuked Citi by rejecting his pay package in a non-binding vote this spring.
In the filing, Citi's chairman, Michael O'Neill, said the two men made vital contributions to Citi that warranted the payments.
"Vikram steered Citi through the financial crisis, realigned its strategy, bolstered its risk management processes and returned it to profitability ...," O'Neill said. "Based on the progress this year through the date of separation, the Board determined an incentive award for their work in 2012 was appropriate and equitable."
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