This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Citigroup Getting Off Cheap

Stocks in this article: C BAC JPM WFC

NEW YORK ( TheStreet) -- Citigroup (C) CEO Vikram Pandit's new pay package has translated into media coverage featuring headlines screaming the multi-million dollar total.

But Citigroup investors may be getting a bargain, and the bank's approach to executive pay may also point the way forward in the rest of the banking industry, with many features that will please politicians, regulators and investors.

Pandit essentially donated his time during 2010 while leading Citigroup into the later stages of its resuscitation by using a "good bank/bad bank" strategy to shed non-core assets. The new pay package has the potential to reward Pandit handsomely over the next four years, while also including plenty of safeguards to encourage strong performance, and clawback features, in the event of another calamity.

Citigroup CEO Vikram Pandit

According to data provided by SNL Financial, Pandit in 2010 forwent salary and bonus, with his take-home pay of $1.3 million representing only the value realized on the vesting of stock options.

In comparison, Bank of America (BAC) CEO Brian Moynihan's take-home pay was valued at $2.3 million during 2010 according to SNL, including a base salary of $950,000, $270, 234 in perks and other compensation, and $1,039,287 in value realized when stock options vested.

During 2010, Wells Fargo (WFC) CEO John Stumpf's take-home pay was valued at $6.6 million, including a base salary of 3.2 million, $3.3 million in non-equity incentive plan compensation, and a relatively small amount of perks.

JPMorgan Chase (JPM) CEO James Dimon took home a cool $42 million, including a $1 million base salary, a $5 million bonus, $579,624 in perks, $22.9 million in value for excercised options and $12.5 million in value realized on the vesting of stock options.

Pandit's package addresses investor anger over the general lack of clawbacks from executives of so many failed and bailed-out banks and investment firms over the past few years, while rewarding Pandit for steering the company through its transformation through the crisis, capital raises to repay bailout funds received through the Troubled Assets Relief Program and return to profitability.

All three components of Pandit's new package are all tied to performance thresholds.

The $10 million deferred stock award will vest in three equal installments at the end of 2013, 2014 and 2015, only if the board's compensation committee determines that the CEO has satisfied regulatory criteria, such as maintain strong capital ratios; maintained a "an organizational culture focused on responsible finance, conducting business with integrity and serving Citi's customers, measured through performance metrics; and maintain and develop executive talent, including succession plans across senior management.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs