Citigroup cuts CEO Corbat's pay after missing financial targets
Citigroup Inc`s board of directors cut Chief Executive Officer Michael Corbat`s compensation by 6% last year after the bank missed financial targets and one-third of its voting shareholders disapproved of his prior pay package.
Corbat received $15.5 million in total compensation, including a base salary of $1.5 million, a $4.2 million cash award and $9.8 million of stock-related incentives, according to a securities filing on Friday.
Directors said they considered some of the 56-year-old CEO`s successes when setting his pay.
Last year, Citigroup`s capital plan won approval from the Federal Reserve, and it received positive feedback from regulators on its resolution plan. Corbat also continued to wind down troubled assets left from the financial crisis.
However, directors said Corbat`s compensation should reflect performance against financial targets.
Citigroup, the fourth-largest U.S. bank, fell short of goals Corbat set in 2013, shortly after taking the helm, for return on assets, return on tangible common equity and operating efficiency.
Overall, the bank`s profit fell 13% last year. Its shares rose 15% amid a broader rally in financial stocks following the U.S. elections that sent competitors` stock soaring much higher.
At Citigroup`s annual meeting last April, 36% of shareholders who cast votes disapproved of what top executives were paid, partly because of changes the board had made to incentive structures. Directors promised to rework the formula again.
Last month, Corbat asked investors for patience in improving results, arguing Citigroup had fallen short because of unexpectedly high capital requirements and unexpectedly low interest rates.
Other Wall Street CEOs got raises for their work last year, and were paid more in dollar terms.
JPMorgan Chase & Co awarded CEO Jamie Dimon $28 million for his work last year, up 3.7%. Morgan Stanley CEO James Gorman received $22.5 million, a 7% raise, while Bank of America Corp CEO Brian Moynihan got $20 million, a 25% bump.
Citigroup made additional disclosures on Friday indicating other senior executives received approximately these amounts of compensation for 2016:
James Forese, Citigroup president and chief executive of Citi`s Institutional Clients Group: $15.3 million, a 4% decline.
John Gerspach, chief financial officer, $9 million, the same as in 2015.
Stephen Bird, chief executive of global consumer banking, $9 million, up 6%.
Don Callahan, head of operations and technology, $7.3 million, the same as in 2015.