Citigroup to pay former executives $15.5 million each

Fri Nov 9, 2012 9:47pm EST
 

By David Henry

(Reuters) - Citigroup said it will pay $15.5 million to Vikram Pandit, its former chief executive who resigned from company last month, as well as to his top deputy.

The bank said on Friday the payments to Pandit and former Chief Operating Officer John Havens reflect the progress the bank made in 2012 and work they did in some earlier years.

The statement came less than a month after board members led by Chairman Michael O'Neill told Pandit privately that his work was not satisfactory, sources said at the time.

Michael Corbat, head of Europe, Middle East, and Africa for Citigroup, was named the new chief executive.

The payments are the final chapter in the reign of Pandit, who was named chief executive just as the financial crisis started and shepherded the bank through three government rescues and a series of subsequent miscues.

O'Neill lost confidence in Pandit after missteps that included the bank's failure to win regulatory approval to return capital to shareholders this year, sources had said.

Payments to departing officers are a thorny matter for corporate boards because investors question the benefit the company gets from handing money over to executives that no longer work there.

Citigroup said it was paying the men what it had to. "While Citi will also honor all past awards that they are legally entitled to, there are no severance payments. Awards to which they are not legally entitled have been forfeited," O'Neill said in the statement from the company.   Continued...

 
Citigroup's CEO Vikram Pandit gives an interview on the floor of the New York Stock Exchange June 18, 2012. REUTERS/Brendan McDermid