Citigroup said on Wednesday its top two executives would forego bonuses and others would get “substantially reduced” bonuses in light of the troubles facing the ailing banking giant.
A memo to employees from Citigroup chief executive officer Vikram Pandit said the actions were part of a major overhaul of executive compensation to confront the problems for the company and banking sector.
The new plan may also include “clawbacks” to “recoup executive compensation that over time proves to be based on inaccurate financial or other information,” the memo said.
Pandit said Citi had finalized an agreement for the US government’s investment of US$20 billion in the banking firm announced last month that required limits on executive compensation.
Citigroup, which in October reported a quarterly loss of US$2.8 billion — its fourth straight quarter in the red — said Pandit and chairman Win Bischoff would forego bonuses for last year.
“The most senior leaders should be affected the most,” Pandit said.
“Win and I believe this is fair, in light of the challenges of the year and the need for compensation elsewhere in the organization.”
Pandit said the principles to guide the company’s executive pay would include “pay for performance” and “meritocracy,” adding that “compensation will vary based on each person’s performance — again, relative to the overall performance of the company.”