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November 9, 2012 11:03 pm
Vikram Pandit, the former chief executive of Citigroup, will walk away from the bank with more than $15m and a ban on working for 13 companies – from Barclays to Goldman Sachs – in a settlement filed with regulators on Friday.
Citi announced on October 15 that Mr Pandit and chief operating officer John Havens were resigning. Several senior executives and others close to the situation say the two men had been asked to leave after disagreements over strategy and execution.
In a regulatory filing on Friday, Citi said Mr Pandit would be paid a bonus of $6.7m for 2012 on top of an $8.8m award for last year.
Mr Havens will receive $6.8m as a bonus for 2012.
The payments will be in cash, with 40 per cent paid immediately and the remainder vesting each January between 2014 and 2017.
Mr Pandit leaves without most of the retention award that was the subject of intense shareholder criticism and led to a majority of investors opposing his pay at an advisory vote during this year’s annual meeting.
But the substantial payouts could inflame shareholder antipathy. Citi’s board is yet to amend the pay scheme that was the source of the discontent, although Mike O’Neill, chairman, has pledged that there will be change next year.
“Vikram and John made significant contributions to Citi during their five years of service,” Mr O’Neill said in a statement. “Vikram steered Citi through the financial crisis, realigned its strategy, bolstered its risk management processes and returned it to profitability. John’s focus on our institutional businesses increased our capabilities and helped steer our clients through volatile times.”
He added: “Based on the progress this year through the date of separation, the board determined that an incentive award for their work in 2012 was appropriate and equitable.” While Citi will also honour all past awards that they are legally entitled to, there are no severance payments.
Although the chairman wished them well, he did not wish them to work at competitors. In a letter to Mr Pandit and to Mr Havens, the bank said they could not work at 13 different companies for 12 months: Bank of America, Barclays, Credit Suisse, Deutsche Bank, Goldman, HSBC, JPMorgan Chase, Lazard, Morgan Stanley, Royal Bank of Scotland, UBS, Citi Capital Advisors and Wells Fargo.
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