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Dealbreaker’s favorite banking analyst, Mike Mayo, has been watching Citigroup like a hawk for years, and boy oh boy has familiarity ever bred some serious contempt here. Now, Mike has been ferreting through Citi’s regulatory filings, as is his wont, and wouldn’t you guess what he’s found: A new bonus structure that promises three of Citi’s top execs—and eventually many others—as much as $5 million if the bank’s stock hits certain targets, presumably as a result of its ongoing overhaul of internal controls and risk management. One thing that the filing fails to set out are what, exactly, those targets are.

That’s not the sort of thing that’s going to fly with Mayo, who is helpfully immune to the irony of a Wells Fargo analyst criticizing another bank’s difficulties with internal controls, especially given just how low a baseline CFO Mark Mason, institutional clients chief Paco Ybarra and tech czar Mike Whitaker are starting from.

“That’s like charging us for dinner before we know if we’re getting hot dogs or caviar,” Mayo said in the note to clients. The awards may amount to “extra pay to execs for just doing their job….”

“Finance is a feast or famine business,” Mayo wrote. “Compensation can be great in good years, and not so good (or worse) in tough times. There’s little justification for Citi’s board to offset 2020’s down year with extra pay ahead unless Citi improves its worst-in-class returns.”

Citi’s Bonuses for Fraser’s Deputies Irk Longtime Critic Mayo [Bloomberg]



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