Citigroup Board Cuts 2016 Pay for CEO Michael Corbat
February 17 2017 - 6:24PM
Dow Jones News
By Telis Demos and Christina Rexrode
Citigroup Inc. CEO Michael Corbat is getting a pay cut.
Mr. Corbat is expected to receive total compensation of $15.5
million for 2016, according to a regulatory filing from the bank
Friday. That is a 6% decrease from the previous year, when he
received $16.5 million.
The bank's board said that while it is pleased with the progress
Citigroup is making, Mr. Corbat's compensation reflected the firm's
performance relative to financial targets.
Under his 2016 compensation, Mr. Corbat will receive a salary of
$1.5 million and a cash bonus of $4.2 million. The rest of the
package comprises $9.8 million in stock that is dependent on the
bank's performance. This is also deferred, meaning it will be paid
out over coming years. That structure is meant to tie Mr. Corbat's
compensation to the bank's longer-term performance.
Like other banks, Citigroup has benefited of late from a
bustling trading environment that boosted results for the last
three quarters. Like other banks, its stock price has jumped since
the surprise election of President Donald Trump in November, which
has fueled investors' hopes for looser regulation and economic
growth.
For Citigroup in particular, 2016 represented a year in which
the bank, often plagued by scandals, was able to stay under the
radar and pass key regulatory tests.
But Mr. Corbat still needs to improve key measures of
shareholder returns. Some analysts also have questioned how the
bank, with operations around the world, will fare under a
presidential administration that has expressed skepticism of free
trade and globalization. Citigroup executives have maintained they
have the right business plan in place.
The bank's 2016 profit was down 14% for the year, and revenue
was down 8%.
Citigroup's compensation committee credited Mr. Corbat for the
bank's biggest capital return to shareholders since the financial
crisis, investment in key businesses and positive feedback from
regulators. But the board committee also "felt it was appropriate
to reflect the firm's performance relative to its financial
targets," according to the filing.
By contrast, Morgan Stanley, J.P. Morgan Chase & Co. and
Bank of America Corp. gave pay raises to their CEOs for 2016.
Morgan Stanley gave James Gorman a 7% raise to $22.5 million, and
J.P. Morgan gave CEO James Dimon a 4% pay raise to $28 million.
Bank of America's Brian Moynihan received a 25% raise to $20
million.
Goldman Sachs Group Inc. hasn't yet disclosed its pay package
for CEO Lloyd Blankfein, though it has cut stock bonuses for other
top executives. Wells Fargo & Co., which is struggling with the
fallout from its sales-practices scandal, may withhold bonuses from
CEO Timothy Sloan and other top executives, The Wall Street Journal
has reported.
Write to Telis Demos at telis.demos@wsj.com and Christina
Rexrode at christina.rexrode@wsj.com
(END) Dow Jones Newswires
February 17, 2017 18:09 ET (23:09 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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