Citigroup Inc. (C) will pay five of its top executives almost $33 million in stock compensation this year and plans to increase its CEO's salary above his $1 a year figure in 2011, marking the financial institution's effort to reward executives for turning a profit so far this year after two years of losses.
The company, which is partially owned by the federal government after receiving billions in bailout funding, will pay John Havens, who runs the company's institutional clients group, $9 million in stock this year, while Manuel Medina-Mora, CEO, consumer banking for the Americas and chairman of the Global Consumer Council, will be paid about $7.45 billion in Citigroup shares, the company said in a document filed with the Securities & Exchange Commission today. CFO John C. Gerspach, Vice Chairman Edward J. Kelly III and Alberto J. Verme, Citigroup's CEO of Europe, Middle East and Africa, will each be paid more than $4 million in stock by the company.
The compensation reflects Citigroup's board's effort to reward executives for turning around a company that narrowed its annual loss to $1.61 billion last year from $27.7 billion in 2008. Citigroup's net income for the first two quarters of this year was $7.1 billion, though second-quarter profit declined 37% from a year earlier as revenue fell 33%.
"The Board is very pleased with the progress that the management team is making in restoring Citi to profitability," Citigroup Chairman Richard D. Parsons said in a statement today. While the salary of Citigroup CEO Vikram Pandit remains at $1 a year, Parsons said the board will increase that salary next year to a level "commensurate with the job."
Citigroup shares rose 2.7% to $3.90 a share in New York Stock Exchange trading today, and have increased 18% this year, outpacing this year's 4.1% advance for the Dow Jones Industrial Average.