By Christian Berthelsen and Brett Philbin
Citigroup will pay $31 million to ex-chief executive Vikram
Pandit and a top deputy as they leave the bank after a corporate
shake-up last month, and bar the two executives from going to work
for 13 top competitors for a year, according to a securities filing
late Friday.
The pay constitutes incentive awards earned during 2012 and
deferred cash and stock during 2011. Each man will receive about
$15.5 million.
Mr. Pandit will receive $6.7 million, and former chief operating
officer John Havens will receive $6.8 million in 2012 incentive
pay. Both awards will be paid out with 40% up front and 60%
deferred in equal annual installments through 2017. The securities
filing said the payments are incentive awards "for their
significant contributions to Citigroup during 2012," and asserted
they are not severance payments.
The 2011 compensation includes $8.8 million for Pandit and $8.7
million for Havens in cash and stock that was deferred from
2011.
However, Mr. Pandit won't be eligible to earn the
profit-sharing, unvested stock options, or deferred compensation
portions of a retention award that Citi granted to him in May last
year, the company said. The award was tied to the company achieving
certain financial milestones.
For a 12-month period dating from their departures Nov. 30, both
executives are barred from going to work for 13 named competitors,
including Bank of America Corp. (BAC) , Goldman Sachs Group Inc.
(GS), J.P. Morgan Chase & Co (JPM) and Morgan Stanley (MS),
among others.
Mr. Pandit abruptly stepped down as CEO last month following a
clash with the company's board over the bank's strategy and
performance, The Wall Street Journal previously reported, citing
people familiar with the situation.
In a prepared statement included in the filing, Citi board
chairman Michael O'Neill called the payments "appropriate and
equitable," and said: "There are no severance payments. Awards to
which they are not legally entitled have been forfeited. We remain
grateful for their contributions and wish them well."
Pandit's departure came after Citi suffered several high profile
setbacks this year including shareholders' scathing rejection of a
board approved compensation plan for senior executives, a rejection
by the Federal Reserve of the bank's plan to buy back more stock
and an arbitration ruling over the value of the company's brokerage
joint venture with Morgan Stanley (MS) that forced Citigroup this
week to take a $2.9 billion write-down.
Write to Christian Berthelsen at
christian.berthelsen@dowjones.com
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