Uncle Vik may or may not be receiving a little something extra for his trouble, depending on how generous Citi is feeling.
Vikram Pandit, who stepped down yesterday as Citigroup’s chief executive officer, stands to forfeit almost $33 million in cash and stock from a retention package unless the board gives him a payout to ease his exit. Citigroup formulated a plan last year that, based on the firm’s performance so far, would have given Pandit $19 million through a profit-sharing agreement, deferred stock now valued at $9 million and $4.6 million in options, according to the terms of a May 2011 regulatory filing and data compiled by Bloomberg. The plan required Pandit, 55, to be employed at the bank through various payment dates, most of which haven’t been reached.
It’s typical for CEOs who resign to forfeit previously negotiated severance and to work out an alternative payout agreement with the board, said Steven Hall, managing director of Steven Hall & Partners, a New York-based executive compensation consulting firm. Pandit getting nothing would signal that “he stood up and said, ‘I’m resigning,’” Hall said. If he gets a payout, “then the question is, did they give him that in order to smooth the path to his resignation or termination? Or did they look at him and say, ‘You know what, you did a hell of a good job during a very, very rough time, we’d like to do something nice for you,’” Hall said.