Even though it's still on life support from the federal government, Citigroup (C) paid close to $9 million each to five top executives in 2009, according to a report in The Wall Street Journal on Wednesday. The pay packages were approved by the Obama administration's pay czar, Kenneth Feinberg, because the compensation was primarily in shares of stock that can't be sold immediately.%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%% The big winner at Citigroup is investment banking chief John Havens, whose total compensation last year was more than $9 million. His pay package primarily consisted of 2.7 million Citigroup shares worth $8.97 million as of Dec. 30, when shares sold for $3.32. As of close on Tuesday, Citigroup traded at $3.53, up 23 cents per share, putting the value of those shares at over $9.5 million. The cash portion of his salary was reportedly less than $500,000.
Feinberg approved the structure of the pay and bonus package, but did not review its amount because Havens wasn't one of the company's top-20 highest-paid executives last year, according to the Journal.
Does this mean Citigroup will play round robin with its top-20 executives each year so they can avoid Feinberg's scrutiny? Will 20 others be the top 20 next year?
Havens, of course, isn't the only one who got a big bonus. Citigroup's second-highest-paid employee appears to have been Manuel Medina Mora, who runs the Latin American operations. His pay package included 2.55 million shares worth $8.5 million on Dec. 30 and about $9 million as of market close Tuesday. He also received a cash salary that was reportedly less than $500,000. As with Havens, Feinberg reviewed only Mora's pay structure.
How can a bank that has the U.S. government as its biggest shareholder allow bonus packages of this size? Though Citigroup has repaid $20 billion of the TARP money it received, the government still holds a 27% stake in the bank.
The Journal revealed it had a document that identified three other Citigroup executives who were due to receive about $9 million in total compensation in 2009. Wonder how these pay packages compare to the 20 highest-paid executives that Feinberg did review?
Citigroup's lowest-paid executive was CEO Vikram Pandit: He has agreed to accept total compensation of $1 a year until the financial giant returns to sustained profitability, which hasn't happened yet.
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