Citigroup Inc.’s board changed the way the lender calculates performance pay for executives after receiving some complaints.
Executives can now earn more than 100 percent of their annual performance-based compensation only if shareholder returns are positive, the New York-based bank said Wednesday in a regulatory filing. The plan is designed to ensure executives don’t get bonuses that are bigger than those initially awarded if total shareholder returns fall over a three-year period. The changes are reflected in performance share units granted in February.
Citigroup “heard some concerns from other stakeholders regarding Citi’s new performance share unit” program after submitting its proxy last month, according to the filing. The board’s compensation committee “remains fully committed to a robust pay-for-performance executive-compensation program.”
Banks continue to face investor backlash over pay policies blamed for rewarding behavior that helped cause the financial crisis. Citigroup overhauled its 2012 compensation plan after shareholders rejected the bank’s 2011 package amid complaints it allowed then-Chief Executive Officer Vikram Pandit to collect millions of dollars too easily.
CEO Pay
Citigroup increased CEO Mike Corbat’s compensation 27 percent to $16.5 million for 2015 as the lender boosted profit and passed the Federal Reserve’s annual stress test. That compares to the $16 million awarded to Bank of America Corp. CEO Brian T. Moynihan and the $27 million given to JPMorgan Chase & Co.’s Jamie Dimon.
Citigroup shares fell 4.4 percent last year, trailing the 1.6 percent decline for the KBW Bank Index, which tracks 24 of the largest U.S. commercial banks. Citigroup’s shares are among the worst performing in the index this year, declining 20 percent, amid worries about slow global growth and turbulent emerging markets.
(Updates with filing details in third paragraph, CEO's pay in fifth.)
To contact the reporter on this story: Dakin Campbell in New York at dcampbell27@bloomberg.net. To contact the editors responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net, Steven Crabill
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