CITIGROUP has paid its former chief executive Vikram Pandit a bonus of $US6.65 million ($6.4 million) after unexpectedly ousting him 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 valued at more than $US8.8 million.
In a surprise move, Mr Pandit resigned last month, a departure that was orchestrated by the board. Its powerful chairman, Michael O'Neill, manoeuvred behind the scenes to gain support with other directors and replace Mr Pandit. Michael Corbat was named the new chief.
As part of the shake-up, the board also forced out John Havens, the chief operating officer. Mr Havens will receive $US6.8 million in incentive pay for 2012, with previous deferred stock and cash awards valued at $US8.725 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 about $US24 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 $US45 billion lifeline from the US government. The bank's health was so dire that Mr Pandit took a $US1 annual salary.
While the bank has returned to profitability, Citigroup has struggled with a stagnant stock price and lacklustre earnings. And in March the US Federal Reserve rejected the bank's plans to raise its dividend.
Since Mr Pandit resigned, the mood among some senior executives has been grim, sources say. The executives felt that the board's actions were particularly brutal and humiliating to Mr Pandit, considering his role in reviving the bank.
The New York Times