Citibank's Vikram Pandit gets $23.2 million as retention bonus

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Neeraj R Krish

19 May, 2011

Citibank CEO Vikram Pandit gave a new lease of life to the financially dwindling bank as the company posted its fifth consecutive quarterly profits amounting to $13.6 billion. As a reward, Pandit will now receive $23.2 million as retention bonus.

CITIBANK’S CEO Vikram Pandit on Wednesday received an unprecedented $23.2 million retention package that can possibly be a perfect launch pad for him to reserve a berth for himself as one of the highest paid executives in the banking as well as financial investment industry.

As per the bank’s terms, the 54-year-old Pandit will earn more than $16 million, which also includes stock options, provided the bank meets its set targets. If the bank achieves its minimum performance target, Pandit will be entitled to $6.65 million on profit sharing basis. However, if the targets are met, Pandit will be paid his share in two instalments starting from 2013. Apart from this, he will also be given an option of 500,000 shares over a period of three years beginning May 2012.

The announcement was made public soon after Citibank released its fifth consecutive quarterly profit statement, which eventually catapulted Citibank’s shares from $4 to $40. The profit earned from the last five quarters has been reported as $13.6 billion.

Appreciating Pandit’s efforts, Citibank Chairman Richard Parsons said in a statement that Vikram has done an outstanding job since coming on board as the financial crisis began. The long-term, multiyear, performance-based structure of this award is designed to retain Vikram as our CEO and reward him for future performance.

Pandit who took over the charge of Citibank in 2007 had earlier in February 2009 said that he would take a plunge in his salary to just $1 per annum until the bank returns to earning profits. Since the day he took charge, Citibank has suffered losses worth a staggering $29 billion over the last two years.