Market Overview

Citigroup CEO Rakes in $14.9 Million


Citi (NYSE: C) CEO Vikram Pandit was paid $14.9 million in 2011, following pay the previous year of $1 and no bonus, according to a filing with the Securities and Exchange Committee. Pandit had earned next to nothing in 2010 as Citigroup, the third biggest U.S. bank, had been bailed out by the government. He has finally gotten his payday now though. It is spilt into salary of $1.7 million, a cash bonus of $5.3 million, and options valued at $7.8 million.

According to Reuters, Pandit's total pay package in 2009 was $128.751, so last year's pay represents generous reward, even taking the previous year's sacrifice into account.

Still, many will say that he deserves, having taken the company from the brink of disaster to profitability following the 2008 bailout. Citi's net income rose 6% last year to $11.1 billion, and the bank has now had eight quarters of profitability in a row. That's a remarkable success, considering where the bank was four years ago. Still, while profit rose 6% in two years, shares plummeted 44%.

"The committee awarded annual incentive compensation, in addition to salary, to Mr. Pandit for the first time in four years in a manner commensurate with his responsibilities and the success of his implementation of Citi's long term strategies," the proxy statement said.

On March 7, International Strategy & Investment Group (ISI) released a research report stating that insights from Pandit include ongoing wind down of C Holdings, which should ultimately unlock $24bn of capital, utilization of C's $51bn DTA - only $11bn of which is included in Tier 1 common equity, an ongoing focus on risk management and credit quality improvement, which should unlock more loan loss reserves, mgmt. expects $2.5-3bn of cost reductions in 2012 vs. 2011, and Mr. Pandit expects C to return capital this year while achieving a B-3 Tier 1 common equity ratio of 8% or more by the end of 2012 (and significantly stronger return of capital in 2013 and 2014); he would like to buy back stock at current price.

At the March 7 Citi Financial Conference, Pandit said that, for the full year 2011, revenues were over $78 billion. “Operating expenses were $50.9 billion. Credit costs were $12.8 billion.They were down over 50% from the prior year. And while revenues were down last year, the decline in credit costs drove earnings up to over $11 billion.”

Posted-In: ISIEarnings News Management Analyst Ratings Best of Benzinga


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