Bloomberg reports that the payout includes a $4.18m cash bonus and $3.14m of so-called performance share units, or PSUs, according to a regulatory filing yesterday. Citigroup introduced the PSUs as executive compensation after discussions with almost 20 shareholders, the New York-based lender said.
Shareholders rejected former CEO Vikram Pandit’s 2011 pay plan last year amid complaints it was too easy for him to collect his $15m package plus long-term incentives that could have been worth about $40m. After promising to reconsider, the board ousted Pandit, 56, in October and promoted Corbat, 52.
'When our shareholders spoke last year about Citi’s compensation structure, we listened', Chairman Michael O’Neill, who also heads Citigroup’s compensation committee, said in the filing. 'As a result of this process, we are introducing a new compensation structure that more strongly connects compensation with performance, emphasizes strong risk management and is both competitive and in line with regulatory standards'.
In the meantime, Reuters reports that under the new executive compensation plan, 30% of the bonus for top executives will be paid in cash based on how much the company earns on assets and on total shareholder return compared with peers over three years through 2015. Another 40% will be a simple cash bonus and the final 30% will be deferred stock.