Citi (C) CEO Pandit Getting One Sweet Compensation Package
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Citigroup (NYSE: C) CEO Vikram Pandit will be all smiles should the bank continue on its route to becoming profitable for 2011 and 2012.
According to a regulatory filing Wednesday night, Pandit could receive millions in bonus compensation if Citi records $12 billion or more in pretax income for each of the FY11 and FY12.
Pandit's retention includes a mix of stock options, deferred stock, and a portion of Citi's pretax income
The CEO is expected to receive 0.05543 percent of Citi's pretax income in FY11 and FY12. With one analyst estimating Citi could post $46.9 billion in income over the two years, that option may be worth as much as $26 million.
The plan also includes $10 million in deferred stock, which is to be paid in annual installments at the end of 2013, 2014, and 2015, "but only if the Committee determines that Mr. Pandit has satisfied objectives in three areas that the Committee believes are central to Citi’s future success." The areas of success were detailed in the filing: 1) regulatory considerations, 2) an organizational culture focused on responsible finance, conducting business with integrity and serving Citi’s customers, and 3) talent development.
Stock options awarded to Pandit have a value of $6 - $6.5 million, according to one source. Specifically, "300,000 options have an exercise price of $41.54, which was the market price on the date of grant; 100,000 options have an above-market exercise price of $52.50; and 100,000 options have an above-market exercise price of $60.00, for a total of 500,000 stock options."
Pandit only collects a salary of $1.75 million, which was increased this year.
When everything is said and done, the awards could amount to about $42 million. We'd be smiling, too.
Pandit's bonus structure would put him near the top of all CEO's of publicly traded companies, with only Viacom's (NYSE: VIA-B) Dauman, Occidental Petroleum's (NYSE: OXY) Irani, and Oracle's (Nasdaq: ORCL) Ellison receiving more, according to the latest rankings.
According to a regulatory filing Wednesday night, Pandit could receive millions in bonus compensation if Citi records $12 billion or more in pretax income for each of the FY11 and FY12.
Pandit's retention includes a mix of stock options, deferred stock, and a portion of Citi's pretax income
The CEO is expected to receive 0.05543 percent of Citi's pretax income in FY11 and FY12. With one analyst estimating Citi could post $46.9 billion in income over the two years, that option may be worth as much as $26 million.
The plan also includes $10 million in deferred stock, which is to be paid in annual installments at the end of 2013, 2014, and 2015, "but only if the Committee determines that Mr. Pandit has satisfied objectives in three areas that the Committee believes are central to Citi’s future success." The areas of success were detailed in the filing: 1) regulatory considerations, 2) an organizational culture focused on responsible finance, conducting business with integrity and serving Citi’s customers, and 3) talent development.
Stock options awarded to Pandit have a value of $6 - $6.5 million, according to one source. Specifically, "300,000 options have an exercise price of $41.54, which was the market price on the date of grant; 100,000 options have an above-market exercise price of $52.50; and 100,000 options have an above-market exercise price of $60.00, for a total of 500,000 stock options."
Pandit only collects a salary of $1.75 million, which was increased this year.
When everything is said and done, the awards could amount to about $42 million. We'd be smiling, too.
Pandit's bonus structure would put him near the top of all CEO's of publicly traded companies, with only Viacom's (NYSE: VIA-B) Dauman, Occidental Petroleum's (NYSE: OXY) Irani, and Oracle's (Nasdaq: ORCL) Ellison receiving more, according to the latest rankings.
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