Dark clouds over Citi gone, $16-m 'award' for Pandit

Boston: Citigroup today said it has rewarded CEO Vikram Pandit with an over $16-million “retention award” for his “outstanding job” of steering the financial giant to profitability and executing a strategy for sustainable growth.

[caption id=“attachment_12227” align=“alignleft” width=“380” caption=“Citigroup CEO Vikram Pandit has been taking home a token $1 salary since 2009. Reuters”]  [/caption]

Pandit has been taking home a token $1 salary from Citigroup since 2009. The three-part multi-year retention award will accrue to Pandit if the company meets certain performance goals, New York-based Citigroup said in a filing with to the Securities and Exchange Commission. “Vikram has done an outstanding job since coming on board as the financial crisis began. Under his leadership, the management team has navigated Citi through the crisis, returned Citi to profitability and is executing a strategy for sustainable growth,” the Chairman of Citigroup’s board of directors, Richard Parsons, said.

Parsons said the “long-term, multi-year, performance-based structure of this award is designed to retain Vikram as our CEO and reward him for future performance benefiting the company and our shareholders”. The first part of the retention award is deferred stock valued at $10 million.

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Pandit will receive the stock in three equal installments in December 2013, 2014 and 2015 only if the company determines that he has satisfied objectives in three areas central to Citi’s future success. These areas are meeting regulatory considerations such as maintaining capital levels, harnessing an organisational culture focussed on responsible finance and conducting business with integrity and lastly focusing on talent development such as the quality of succession and development plans across a broad group of senior managers.

The award, approved by the personnel and compensation committee of the board of directors at Citigroup, is designed with an appropriate balance of short, medium and long-term goals with an emphasis on sustainable shareholder value creation and risk management.

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Each component of the retention award has performance conditions and the ultimate value that Pandit will receive will depend on the successful execution of strategies. The second component of the retention award is the ‘Key Employee Profit Sharing Plan’, under which the India-born CEO will get $6.65 million in cash payments.

Pandit will receive the payments in two installments, based on pre-tax income for 2011 and 2012 combined. However, to be entitled to the $6.65 million payment, the combined income of Citigroup for the two years has to be at least $12 billion.

PTI