CEO of bailed-out bank, however, will continue to collect salary of $1 per year
Citigroup Inc. C-N said its chief financial officer and co-head of global markets are getting raises, while chief executive officer Vikram Pandit will continue to collect a salary of $1 per year.
Citigroup, based in New York, faces restrictions on executive compensation because it received $45-billion in government bailout money after the peak of the credit crisis last fall. Salary caps for top executives were recently set by the Obama administration’s pay czar, Kenneth Feinberg, for Citi and six other companies that received big bailouts.
The new compensation packages at Citigroup fall within the guidelines set last month by Mr. Feinberg, Citi said in a regulatory filing submitted to the Securities and Exchange Commission.
CFO John Gerspach’s salary was increased to $500,000 from $400,000, according to the filing late Tuesday. James Forese, co-head of global markets, will now make $475,000, more than double the $225,000 he previously earned.
The pair will also receive “stock salary” for 2009. Mr. Gerspach will receive stock valued at $2.9-million as part of his compensation for 2009. Mr. Forese will receive stock valued at $5.4-million.
Stephen Volk, a vice-chairman at the bank, will continue to receive a base salary of $500,000. He will receive stock worth $3.4-million.
Mr. Pandit did not receive any stock compensation.
The stock portion of the pay will be awarded on Nov. 30. The number of shares given to each employee will be based on Citi’s closing price that day.
Shares of Citigroup closed Tuesday at $4.24.
The shares awarded can only be sold or transferred in three equal instalments beginning Jan. 20, 2011, and only if Citigroup repays its bailout money.
In late October, the Treasury Department released the compensation plan that restricts cash salaries for the top 25 highest-paid executives at the seven companies, in most cases, to $500,000. Perks are capped at $25,000.
Part of the change in pay was to more closely tie top employees’ compensation to the long-term health of the company so workers would not take similar risks to those seen as leading to the credit crisis and leading the government to bail out major financial firms.
Citigroup was among the hardest hit banks by the credit crisis, losing billions of dollars on risky investments and failing consumer loans. The government provided Citi with $45-billion to help it stabilize its operations. A majority of that investment was recently swapped for a 34-per-cent stake in the banking giant.
The remaining stake has yet to be repaid.
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