Everyone, from Mike Corbat on down, had better be on their best behavior this year.
Citigroup’s 2014 proxy report, which was released on Wednesday, has some intriguing disclosures on pay that allow outsiders to partially weigh the degree to which a large institution is using compensation to hold its senior executives accountable….
Under this, pay can be taken back if the company’s compensation committee determines that an employee “exercised materially imprudent judgment that caused harm to any of Citi’s business operations.” The provision also states that the employee’s bosses might also get hit with a clawback if they failed to properly supervise….
Citigroup’s 2014 proxy contains detailed scorecards for a handful of its most senior executives, laying out the metrics used to assess their compensation. Some of them are financial, which drove 70 percent of the assessment of Michael L. Corbat, the bank’s chief executive.
The other 30 percent are driven by nonfinancial metrics. One of them has to do with maintaining good relations with external stakeholders, which include regulators. In theory, then, Mr. Corbat could have some pay docked if relations with regulators deteriorated. The report card suggests that Mr. Corbat performed well on the nonfinancial goals.