Bonus Watch '11: Citigroup

Author:
Bess Levin
Updated:
Jan 14, 2019
Original:
Dec 7, 2011

Thinking you'd be getting a bonus this year? Think again, says the anonymous banker who spent the day bursting innocent financial services employees' bubbles and asking young children "riddle me this" re: why they think anyone other than their parents would not only a) give rat's ass that they went through the normal incidence of aging known as losing one's tooth and b) compensate them for doing so?

People familiar with Citigroup's thinking told Reuters that far more investment bankers were likely to get zero bonuses than before -- something banks concerned about retaining staff have traditionally avoided...One senior Citi insider said that only the key investment bankers with relationships that brought in fees could be sure to get a bonus. More junior staff or even hard workers and veterans who did not directly bring in revenues would at best get much reduced rewards, the person said. "There is still a sense of entitlement among most staff when it comes to bonuses, but any illusion about that is likely to be shattered this year," another banker said.

Just because they unceremoniously threw him out on his ass doesn't mean the board wants to see Vikram go home empty handed. Vikram Pandit, Citigroup' ousted chief executive officer, will get about $6.7 million in 2012 compensation and will forfeit some awards tied to a $40 million retention package granted last year. John Havens, who resigned last month as Citigroup’s chief operating officer on the same day as Pandit, will get about $6.8 million for 2012 and also forfeit some awards, the New York-based lender said today in a regulatory filing. Citigroup is the third-largest U.S. bank by assets. “Based on the progress this year through the date of separation, the board determined that an incentive award for their work in 2012 was appropriate and equitable,” Chairman Michael E. O’Neill said in the filing. “While Citi will also honor all past awards that they are legally entitled to, there are no severance payments. Awards to which they are not legally entitled have been forfeited.” Citigroup's Pandit $6.7 Million Compensation For 2012 [Bloomberg]

Uncle Vik may or may not be getting a little something extra in his stocking, 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. Pandit Could Forgo $33 Million as Exit Voids Retention Plan [Bloomberg]

The littlest members of Team Citi are said to be very disappointed in how Friday's bonus conversations shook out.

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