B2B sfyh.comNEW YORK – Citigroup, still partly owned by the government after a rescue during the financial meltdown, is giving raises to top executives that could amount to millions of dollars.
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 weaker than most of the large American banks two years after the meltdown, raised questions among experts on corporate governance.
“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 and are not under the same kind of compensation restrictions.
Edward Skyler, a spokesman for the bank, said the compensation levels “correspond with similarly situated executives in the industry.
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.
Manuel Medina-Mora, head of consumer banking for the Americas, will also get a cash salary of $500,000 and $7.45 million of salary in stock, making him eligible for a bonus of up to $4 million. Last year, Medina-Mora’s base salary was $972,000, and his total compensation including other awards of stock and options was $9.8 million.
Chief Financial Officer John Gerspach’s salary will be $500,000 in cash and $4.17 million in stock, making him eligible for a bonus of up to $2.3 million. Last year, his cash and stock salary was $3.3 million, and his total compensation including other stock awards was $5 million.
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. In deciding to give their salary raises in stock, Citi chose to abide by a previous rule that governed the bailout, under which top executives could not receive more than $500,000 of their salary in cash.
The calculations don’t include changes in the present value of pension benefits, and they sometimes differ from the totals companies list with federal regulators.
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