Citigroup gives Vikram Pandit a big raise
Citigroup Inc is giving its CEO a big raise.
The New York-based bank is lifting Vikram Pandit's base salary to $1.75 million from just $1 a year effective immediately, according to a filing with the Securities and Exchange Commission on Friday.
The announcement comes after Citi reported its first full year of profits since Pandit took over the top job in 2007 and the bank exited government ownership.
Citi was one of the hardest-hit US banks during the credit crisis, and received a $45 billion government bailout.
Pandit in 2009 pledged to take a $1 salary until the troubled bank returned to profitability.
The government sold off the last of its stake in the bank in December for a profit of $12 billion.
Richard Parsons, chair of Citigroup Inc's board, said in Friday's filing that the board is "very pleased" with the progress that the bank has made under Pandit's leadership. Parsons said Pandit has "worked tirelessly to put Citi back on the right track."
The raise was not unexpected. In September, when the bank handed down raises to a number of top executives, Parsons had hinted that Pandit was in store for a big payout in 2011.
Citigroup reported its fourth straight quarterly profit on Tuesday, as the bank reached into its reserves for money it no longer needed for loan losses as more customers paid their mortgages and credit card payments on time.
Like others in its industry, the bank saw revenue from trading stocks and bonds fall sharply last quarter. Citi shares also rose 40% last year, making it the best-performing stock among major US banks.
Shares still remain far below the $50-range they traded at pre-crisis, however.
Before agreeing to a $1 salary in 2009, Pandit had already received $125,000 in salary. His only other compensation that year was $3,750 in 401(k) benefits. In 2008, Pandit's compensation package was valued at $38.2 million. But most of that pay was made up of restricted stock and stock options.
Pandit still has plenty of work ahead of him. At the end of the 2010, Citi had set aside $40.7 billion or 6.3% of its total loans, for future losses.
By comparison, its larger rival JP Morgan Chase & Co set aside $32 billion, or 4.5% of its total loans, last year. That means Citi has more troubled loans than some of its peers.