DealBook: Citigroup Awards $6.65 Million to Pandit

Mark Lennihan/Associated PressVikram Pandit, the former chief of Citigroup.

The board of Citigroup has awarded $6.65 million to Vikram S. Pandit after unexpectedly ousting the chief executive last month.

Mr. Pandit will receive the money as part of an “incentive” package for his work during 2012. He will also continue to collect his deferred cash and stock awards from the previous year, compensation that the bank currently valued at more than $8.8 million.

In a surprise move, Mr. Pandit resigned in October, a departure that was orchestrated for months by the bank’s board. Its powerful chairman, Michael E. O’Neill, maneuvered behind the scenes to curry support with other directors and replace Mr. Pandit. Michael L. Corbat was named the new chief executive.

As part of the shake-up, the board also forced out John Havens, the chief operating officer. Mr. Havens will receive $6.8 million in incentive pay for 2012, with previous deferred stock and cash awards valued at $8.725 million.

Since Mr. Pandit and Mr. Havens abruptly left the company, they will both forfeit the remainder of their retention packages, which were outlined last year. For Mr. Pandit, the lost compensation amounts to roughly $24 million, according to a person with knowledge of the matter who could not speak publicly.

Mr. Pandit led the bank during a turbulent chapter in its history. After taking over in 2007, he navigated the bank through the financial crisis, securing a $45 billion lifeline from the federal government. The bank’s health was so dire that Mr. Pandit opted to take a token $1 annual salary.

While the bank has returned to profitability, Citigroup has struggled with a stagnant stock price and lackluster earnings. It suffered an especially tough blow in March when the Federal Reserve rejected the bank’s plans to raise its dividend.

Since Mr. Pandit resigned, the mood among some senior executives has been grim, according to several people close to the bank. The executives felt that the board’s actions last month were particularly brutal and humiliating to Mr. Pandit, considering his role in reviving the bank.

A version of this article appeared in print on 11/10/2012, on page B3 of the NewYork edition with the headline: Ousted Citi Chief to Receive $6 Million in ‘Incentive’ Pay.

Article source: http://dealbook.nytimes.com/2012/11/09/citigroup-awards-6-65-million-to-pandit/?partner=rss&emc=rss