Citigroup Inc (C.N) has awarded Chief Executive Vikram Pandit over $16.6 million in deferred compensation plus stock options as a retention bonus, a far cry from the $1 salary he took in response to the financial crisis.
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The third largest U.S. bank, which needed $45 billion in U.S. bailouts to survive the financial crisis, said in a regulatory filing on Wednesday the bonus was designed to retain Pandit as CEO.
He took over Citigroup at the end of 2007, as the bank started to recognize massive losses, and barely kept his job.
Pandit vowed in early 2009 to take a token $1 salary until Citigroup returned to sustained profitability.
Now Citigroup will give Pandit $10 million worth of deferred stock if he achieves certain nonfinancial goals, according to the filing. That part of the award will vest in three equal, annual installments starting at the end of 2013.
Pandit will also be eligible for a cash bonus of approximately $6.65 million if the bank earns at least $12 billion before taxes over 2011 and 2012. It earned $10.6 billion after taxes in 2010 alone -- its first full-year profit since 2007.
Citigroup will also give Pandit 500,000 stock options, subject to certain conditions.
All three parts of the retention bonus are subject to clawbacks, meaning that the bank will not pay or vest any remaining portions of the award if Pandit knowingly provides inaccurate information relating to financial statements or violates any of the bank's risk limits.
The $16.65 million retention bonus comes on top of Pandit's $1.75 million base salary for 2011.
And he could receive an even greater payout for the year. The award disclosed on Wednesday is a long-term retention bonus and does not preclude Citigroup's board from granting Pandit additional compensation for 2011, according to spokeswoman Shannon Bell.
The bank posted its fifth straight quarterly profit in April, but is struggling to grow its revenues amid a volatile trading environment and a shrinking loan book.
Citigroup shares closed down 30 cents at $41.24 on Wednesday.