Citigroup overhauls exec pay plan after shareholder vote

Thu Feb 21, 2013 6:20pm EST
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By David Henry

NEW YORK (Reuters) - Citigroup Inc (C.N: Quote) said on Thursday it has overhauled the executive pay plan that shareholders rejected last year as overly generous, revising it to tie bonus payments more closely to stock performance and profitability.

The company also said in a filing that it is paying new Chief Executive Mike Corbat $11.5 million for his work in 2012.

The new plan was crafted after board Chairman Michael O'Neill and other directors met with "nearly 20" shareholders representing more than 30 percent of Citigroup stock, according to the filing.

Under the plan, 30 percent 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 percent will be a simple cash bonus and the final 30 percent will be deferred stock.

Citigroup's previous pay plan failed to win endorsement of shareholders in a vote at the company's annual meeting in April.

"When our shareholders spoke last year about Citi's compensation structure, we listened," O'Neill said in the filing.

The 2012 pay for Corbat, who was named CEO in October, was based partly on the new pay plan which was being developed last year.

Compensation analysts had criticized the previous plan for giving directors too much discretion to set pay. Investors and firms that advise shareholders on proxy votes had blasted the bank's past profit-sharing plan for the low bar that bank executives had to clear to receive high payouts.   Continued...

A man walks past a Citibank branch in lower Manhattan, New York October 16, 2012. REUTERS/Carlo Allegri