Stung by criticism about use of billions of dollars in government aid, Citigroup's Indian American CEO, Vikram Pandit has vowed to take a token salary of $1 and no bonus until the ailing banking giant returns to profitability.
"I get the new reality and I will make sure Citi gets it as well," Pandit said Wednesday as lawmakers grilled top executives from eight of America's largest financial institutions about their apparent lack of willingness to lend despite collectively receiving $165 billion in capital.
"We will hold ourselves accountable for what we do, and that starts with me," said Pandit, who collected a salary of $1 million last year. Citigroup has lost more than $20 billion in the last five quarters.
Appearing before the US House Financial Services Committee Pandit, 52, said taxpayers were right to expect a return for their investment, adding that the bank will pay $3.4 billion in annual dividends on the debt.
"There is a great deal of anger in the country, much of it justified, about past practices," committee chairman Barney Frank noted in his opening remarks.
The banks have come under fire from lawmakers who criticised bonus payments and corporate expenses such as new executive jets at a time when people across the country are struggling to stay in their homes or losing their jobs. President Barack Obama last month called the bonuses "shameful" and the "height of irresponsibility."
Citigroup, which has accepted $45 billion in government bailout money, last month reversed a decision to buy a $50 million corporate jet under pressure from the government. Last week the bank cancelled a convention in Atlanta for its Primerica Financial Services Inc. unit.
The CEOs were asked to disclose their salaries and bonuses for 2008 and 2009 at the hearing. The highest paid CEO for the year was Bank of America's Ken Lewis with a salary of $1.5 million, while the lowest was Goldman Sachs Group Inc.'s Lloyd Blankfein with a $600,000 salary. None of the executives took a bonus for 2008 or will have a salary increase in 2009.
Many of the CEOs at Wednesday's hearing defended their actions, noting that while credit standards have tightened, they were continuing to issue loans. Several of the CEOs added that without government assistance, credit would be even harder to obtain.
"We are still lending, and we are lending far more because of the TARP (Troubled Asset Relief Programme)," Bank of America Chairman and CEO Lewis said.