By RTT News, February 21, 2013, 10:45:00 PM EDT
(RTTNews.com) - Financial services giant Citigroup, Inc. ( C ) said in a regulatory filing that it has adopted a new executive compensation program for 2013 that will be based on pre-defined performance goals established at the beginning of the year for each executive. The new plan was adopted based on shareholder preference.
"Since last spring, we have stepped up our efforts to solicit feedback from investors to better understand their concerns. As a result of this process, we are introducing a new compensation structure that more strongly connects compensation with performance, emphasizes strong risk management, and is both competitive and in line with regulatory standards," Chairman Michael O'Neill stated in the filing.
The new executive pay structure will constitute 40 percent cash, 30 percent in deferred stock and 30 percent in performance share units or PSU, which is a new introduction.
The company noted that the PSUs will be earned at the end of 2015 based on relative total shareholder return compared to peers and return on assets, each as measured over a three-year period covering 2013 through 2015.
According to the new plan, the company also announced that CEO Michael Corbat will receive total compensation for 2012 of $11.50 million, including $1.05 million as salary, $4.18 million as cash bonus, $3.14 million in deferred stock and $3.14 million worth of PSUs.
The company said Corbat's 2012 pay was based on the substantial contributions he made as CEO of the Europe, Middle East and Africa region, his impact as a senior executive on Citi's overall performance and the immediate contributions he made upon assuming the Citi CEO role in October.
Corbat has been proactive since he was named CEO in October. He finalized a budget for 2013, which included a repositioning effort by cutting over 11,000 jobs that will result in annual savings of $1.2 billion starting in 2014 and $900 million in 2013. He also formed a management team and realigned certain functions to make the organization more responsive to clients and more efficient.
Corbat has served at Citi and its predecessor companies since his graduation in 1983. He grew through the ranks and held several executive positions with a 29-year record of achievement and leadership, including being CEO of Citi Holdings and also the CEO of Citi's Global Wealth Management unit.
Among other executive officers, CFO John Gerspach received a target PSU award of $1.95 million, and Manuel Medina-Mora, Co-President, Citi, Chief Executive Officer, Global Consumer Banking, and Chairman, Mexico, received a target PSU award of $3.14 million.
Meanwhile, ousted CEO Vikram Pandit had asked for a $15 million pay package for 2011, which was voted out by more than 50 percent of the shareholders. Pandit had received a salary of $1 for each of the past two years. The company's stock is down more than 90 percent in the five-year period with Pandit at the helm.
C closed Thursday's regular trading session at $42.35, down $0.87 or 2.01% on a volume of 37.62 million shares.
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