Michael Corbat, the chief executive officer of Citigroup Inc (NYSE:C) received a 25% increase in compensation last year as reported by Bloomberg based on the regulatory filing submitted by the bank to the Securities and Exchange Commission (SEC).
Under the executive pay structure of Citigroup Inc (NYSE:C), Corbat received approximately $14.4 million last year, his first year serving the bank as CEO. He replaced Vikram Pandit in 2012. Prior to his appointment as CEO, Corbat was the head of the bank’s European operations. He received $11.5 million compensation for that year when Citigroup’s stock climbed 50%.
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Citigroup Inc (NYSE:C) awarded Corbat with 78,528 deferred shares worth around $3.88 million based on the closing price to the stock on February 18. The bank also gave him $5.17 million in cash bonus, $3.88 million in performance share units and $1.5 million salary.
Corbat succeeded in increasing the revenue of Citigroup Inc (NYSE:C) by cutting costs during his first year as CEO. As a result, the bank’s profit increased by 84% to $13.9 billion last year.
His compensation package is similar to Brian T. Moynihan, the chief executive officer of Bank of America Corp (NYSE:BAC), whose compensation was $14 million based on a filing released on Wednesday. The compensation of Jamie Dimon, CEO of JP Morgan Chase & Co (NYSE:JPM) is higher at $20 million and Lloyd C. Blankfein, CEO of Goldman Sachs Group Inc (NYSE:GS) at $23 million.
New compensation plan
Last year, the compensation committee of the board of Citigroup Inc (NYSE:C) approved a new compensation plan after the shareholders of the bank rejected the 2011 pay structure. Shareholders argued that the previous pay structure allowed former CEO Pandit to collect millions of dollars easily.
Under the new plan, Corbat’s cash incentive award will be 40% and the remaining will be in the form of deferred stock and performance shares units (PSUs). His compensation will be based on performance targets (70% tied to financial metrics & 30% strategic goals).
According to Bloomberg, Citigroup Inc (NYSE:C) might report a different value for Corbat’s compensation in its shareholder proxy depending on how it prices the stock awards. The bank will pay the PSUs after three years after meeting certain performance goals, according to its filing last year. The executives of the bank will receive all the PSUs if Citigroup achieves 0.85% return on assets and obtains a total shareholder return equal to or greater than the 50th percentile for eight banks including Bank of America Corp (NYSE:BAC), JPMorgan Chase & Co. (NYSE:JPM) etc.