Make us your home page
Instagram

Citigroup plans cash, stock raises for top executives

NEW YORK — Citigroup, still 17 percent owned by the government after a rescue during the financial meltdown, is giving raises to top executives that could amount to millions of dollars and using stock to get around a cap on cash pay at bailed-out banks.

CEO Vikram Pandit, who is drawing a salary of $1 for the second year in a row, did not get a raise, but the chairman of the bank hinted it plans a big payout for him next year.

The announcement Friday by Citi, which remains one of the weakest large American banks two years after the meltdown, raised questions among experts on corporate governance.

By paying the raises in company stock, not cash, Citi circumvents a rule limiting salaries to $500,000 for the top 25 executives at financial institutions still receiving large amounts of federal help.

Under an amendment to the bank bailout law of 2008, Citi is still subject to the compensation restrictions as long as the government remains a shareholder. That means the top 25 executives cannot receive bonuses exceeding 50 percent of their salaries and cannot receive more than $500,000 of their salary in cash.

"The question is, do they deserve higher salaries, and are they evading rules to avoid losing talent?" asked Charles Elson, director of the Weinberg Center for corporate governance at the University of Delaware.

Citi is fighting to keep talented bankers from jumping ship to any of its rivals on Wall Street, all of whom have repaid their federal bailout money.

Edward Skyler, a spokesman for the bank, said the compensation levels "correspond with similarly situated executives in the industry."

Citi was the hardest-hit U.S. bank during the credit crisis of 2008, and received $45 billion in government bailout money under the Troubled Asset Relief Program, part of which was converted to stock last year. Citi continues to be weighed down by large amounts of bad loans and investments it made in the run-up to the crisis. The bank posted a loss in the third quarter after two straight quarters of profits.

The biggest raise disclosed in Citi's regulatory filing will go to John Havens, head of the bank's institutional clients group. He will get a cash salary of $500,000 this year, the maximum under the cap, and $9 million of salary paid in stock.

That compares with a salary of $975,000 last year for Havens, also in a blend of cash and stock. Including other awards of stock and options last year, Havens' total compensation last year came to $11.2 million.

Citibank did not disclose how much Havens might be awarded in other stock grants, but he could be eligible for a bonus this year of up to 50 percent of his salary, or $4.75 million.

Settlement likely

U.S. District Court Judge Ellen Segal Huvelle says she plans to approve the government's $75 million settlement with Citigroup over charges it misled investors about billions

in potential losses from subprime mortgages. Huvelle said she first wants assurances

that Citigroup will maintain new policies

it adopted to ensure it will avoid such violations in the future. The Securities and Exchange Commission had accused Citibank of making misleading statements about its holdings

tied to high-risk mortgages. Citigroup

had said it was $13 billion or less; the SEC

said it exceeded $50 billion.

Citigroup plans cash, stock raises for top executives 09/24/10 [Last modified: Friday, September 24, 2010 10:16pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Trump shuts down CEO advisory councils as main group acts to disband

    Business

    President Donald Trump's main council of top corporate leaders disbanded on Wednesday following the president's controversial remarks in which he equated white nationalist hate groups with the protesters opposing them. Soon after, the president announced on Twitter that he would end his executive councils, "rather than …

    President Donald Trump meets with Merck's chief executive, Kenneth Frazier, second from left, and other leaders of the pharmaceutical industry in the Roosevelt Room of the White House last January. On Wednesday, Trump's main council of top corporate leaders disbanded following the president's controversial remarks in which he equated white nationalist hate groups with the protesters opposing them.
[New York Times file photo]
  2. A long-awaited vision for Tampa's Westshore Marina District

    Real Estate

    TAMPA —Eleven years after plans to develop a waterfront tract on the Tampa side of the Gandy Bridge were first announced, a new rendering gives a hint of what Westshore Marina District ultimately will look like.

    Rendering of Marina Pointe, a condo project overlooking Tampa Bay as part of the Westshore Marina District. [Courtesy of Masterfile Corp.}
  3. Buddy Brew Coffee to open downtown Tampa location

    Business

    TAMPA — Buddy Brew Coffee plans to open a new location in downtown Tampa at Park Tower in early 2018. The specialty coffee craft roaster, which was founded in 2010, has five other locations throughout Tampa including the Oxford Exchange, Sarasota, Hyde Park Village and Terminal F inside the Tampa International …

    A cappuccino is displayed at Buddy Brew in Tampa in January 2017. [CHARLIE KAIJO | Times]
  4. Where to pig out for National Bacon Lovers Day

    Food & Dining

    That's right: Sunday is the national day devoted to all things bacon, National Bacon Lovers Day. Which, really, isn't too different from the other 364 days of the year. But here's a little roundup of some special places to celebrate everyone's favorite meat snack (seriously, even vegans have a grudging respect …

    A creme-filled doughnut topped with maple frosting and bacon at Dough on MacDill Avenue in Tampa.
  5. The Penny Hoarder tops 79 fastest growing Tampa Bay companies on Inc. 5000

    Business

    ST. PETERSBURG — The Penny Hoarder on Wednesday further cemented its reputation as one of the country's fastest growing companies. The personal finance web site business ranks 25th nationwide and tops in the Tampa Bay market for growth on the 2017 Inc. 5000 list of fastest growing businesses.

    Vishal Mahtani (left), vice president of business development, Alexis Grant (center), executive editor, and Kyle Taylor, CEO and founder of The Penny Hoarder, celebrate the news with their staff  Wednesday of making the new Inc. 5000 ranking of fastest growing companies in the country. They enjoyed champagne during a catered lunch at their office in downtown St. Petersburg after ranking 25th nationwide and tops in the Tampa Bay market for growth on the just released 2017 Inc. 5000. [DIRK SHADD   |   Times ]