Bank of America (NYSE:BAC)
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3 Years : From Oct 2012 to Oct 2015
By Christian Berthelsen and Brett Philbin
Citigroup will pay $31 million to ex-chief executive Vikram Pandit and a top deputy as they leave the bank after a corporate shake-up last month, and bar the two executives from going to work for 13 top competitors for a year, according to a securities filing late Friday.
The pay constitutes incentive awards earned during 2012 and deferred cash and stock during 2011. Each man will receive about $15.5 million.
Mr. Pandit will receive $6.7 million, and former chief operating officer John Havens will receive $6.8 million in 2012 incentive pay. Both awards will be paid out with 40% up front and 60% deferred in equal annual installments through 2017. The securities filing said the payments are incentive awards "for their significant contributions to Citigroup during 2012," and asserted they are not severance payments.
The 2011 compensation includes $8.8 million for Pandit and $8.7 million for Havens in cash and stock that was deferred from 2011.
However, Mr. Pandit won't be eligible to earn the profit-sharing, unvested stock options, or deferred compensation portions of a retention award that Citi granted to him in May last year, the company said. The award was tied to the company achieving certain financial milestones.
For a 12-month period dating from their departures Nov. 30, both executives are barred from going to work for 13 named competitors, including Bank of America Corp. (BAC) , Goldman Sachs Group Inc. (GS), J.P. Morgan Chase & Co (JPM) and Morgan Stanley (MS), among others.
Mr. Pandit abruptly stepped down as CEO last month following a clash with the company's board over the bank's strategy and performance, The Wall Street Journal previously reported, citing people familiar with the situation.
In a prepared statement included in the filing, Citi board chairman Michael O'Neill called the payments "appropriate and equitable," and said: "There are no severance payments. Awards to which they are not legally entitled have been forfeited. We remain grateful for their contributions and wish them well."
Pandit's departure came after Citi suffered several high profile setbacks this year including shareholders' scathing rejection of a board approved compensation plan for senior executives, a rejection by the Federal Reserve of the bank's plan to buy back more stock and an arbitration ruling over the value of the company's brokerage joint venture with Morgan Stanley (MS) that forced Citigroup this week to take a $2.9 billion write-down.
Write to Christian Berthelsen at firstname.lastname@example.org
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