Citigroup Inc. (C) gave CEO Michael Corbat a 48% pay raise last year to $23 million, even as the U.S. bank missed its profitability goal for a third straight year.
His compensation included a $1.5 million salary plus a $21.5 million bonus, the New York-based company disclosed Friday in a regulatory filing.
Corbat got the pay as the bank failed to meet the CEO's own profitability goal for a third straight year, and as it reported a full-year net loss of $6.2 billion due to the write-off of tax credits that management had touted as a competitive advantage.
In 2013, Corbat set a goal of getting Citigroup's tangible return on common equity, or ROTCE -- a key profitability ratio -- to 10% within two years. The bank failed to hit the target in 2015, 2016 and again in 2017, when the ratio climbed to just 9.6%, even excluding the tax-related charge.
Citigroup said earlier this month that its ROTCE could get to 10.5% this year, but that would be mainly due to cuts in its corporate tax rate following passage of President Donald Trump's tax law in December.
The board of directors' compensation committee, led by Duncan Hennes, a former executive of the failed Wall Street firm Bankers Trust, based Corbat's raise partly on the bank's 13% increase in earnings per share, even though most of the gain was due to stock buybacks, which reduced the number of outstanding shares -- rather than outsize growth in ongoing net income.
The board also gave Corbat credit for passing basic regulatory exams after failing in prior years, according to the filing.
The filing made no mention of the 10% goal for return on tangible common equity.
Citigroup's stock surged 25% last year, and the board committee cited the bank's "significantly improved shareholder returns." But those gains came largely as investors anticipated the company would benefit from tax cuts and Trump's push to rollback regulations, which were imposed in the wake of the 2008 financial crisis to make the financial system safer.
Citigroup nearly failed during the crisis due to bad bets on mortgage-related bonds and other money-losing investments, surviving thanks to a $45 billion bailout from the U.S. Treasury Department and tens of billions of dollars more in secret emergency loans from the Federal Reserve.
Corbat's big pay raise got him to the $23 million-a-year level of Brian Moynihan at Bank of America Corp. (BAC) , whose share price rose 34% last year.