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The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By Robert Barone, Ph.D. and Matt Marcewicz



) --

Vikram Pandit

was named CEO of



in December 2007. Most people have forgotten that he pocketed at least $165 million when he sold his hedge fund,

Old Lane Partners

, to Citi. His hedge fund was shut down in the middle of 2008 due to investor redemptions, forcing Citi to write down the value of the poor investment.

Citigroup CEO Vikram Pandit

As per the

Wall Street Journal

, by February 2009, taxpayers gave Citi $50 billion dollars in capital, and guaranteed $301 billion of bad debt. The excuse given for taxpayer bailouts of the mega banks was that "credit is the lifeblood of the economy. If the credit system isn't working, then firms cannot finance themselves, people cannot borrow to buy a car, to send a student to college, to buy a house." (Bernanke, Sept. 25, 2008).

So, let's take a look at the "credit flow" Citi has done since its taxpayer bailout, and since Mr. Pandit gained control.

It doesn't appear that Citi, under Pandit, has lived up to the lending mandate that was accepted along with TARP funding.

>>Counterpoint: Citigroup Gets Off Cheaply

It is also important to remember what Citi's achievements have been during a period when rates paid on deposits and other borrowings have been essentially zero. It is easy to make money when you borrow for next to zero, and buy treasury bonds. This subsidy has come directly out of the incomes of retirees, savers, pension funds and municipal cash accounts. Yet, for its size, Citi has barely been profitable. Imagine what its performance would have been if the Fed hadn't repressed interest rates for the past three years.

At the end of 2007, Citi had 4,905.8 million fully diluted shares outstanding (10Q). By March 31, 2011, there were 29,965.8 million shares, a dilution greater than six-fold. Since the dilution, Citi has done a 1-10 reverse split. Usually, reverse splits occur because a company's stock price is languishing. Citi's split is no exception. Since that split, the stock has fallen an additional 10%.

So, why reward a manager -- who has already been paid hundreds of millions of dollars by the company for a fund that had to be shut down at a huge loss to the shareholders -- with a four-year, no-cut contract worth many more millions, with the only criterion being that the company simply survives? We don't think that Pandit, who was responsible for diluting shareholders and shrinking business -- all while being coddled with

Federal Reserve subsidies

-- deserves a massive pay raise.

"This time, CEOs won't be able to use taxpayer money to pad their paychecks or buy fancy drapes or disappear on a private jet," Obama said. "Those days are over." (Feb. 24, 2009) Apparently, those days have now returned.

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>>Citigroup Getting Off Cheap

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.