Citi Oks $102M for CEO Pandit

Citigroup Inc.'s new chief executive Vikram Pandit received $3.16 million in total compensation during 2007 - the year that started with him running his own hedge fund and ended with him at the top of the largest U.S. bank by assets.

And to convince Pandit to stay with the troubled bank while he works to extricate it from losing bets on mortgages and the now-frozen credit markets, Citigroup's board in January signed off on awards valued at about $102 million. That includes a $2.5 million retention equity award; nearly $27 million worth of stock, and 3 million options that in January were worth around $73 million.

For his six months at Citigroup last year, Pandit received a salary of $250,000, according to a Thursday regulatory filing. He received no cash bonus and no perks, but got stock and option awards in July worth $2.91 million.

After working for most of his career at the investment bank Morgan Stanley (MS, Fortune 500) and then starting up his own hedge fund, Old Lane, Pandit arrived at Citigroup in July 2007 when Citi bought Old Lane. At the time, Pandit received $165.2 million in payment for the sale of his partnership interest in Old Lane. He invested $100 million back into an Old Lane fund, where it will remain invested until July 2011, Thursday's filing said.

By mid-December, Citi's board named Pandit chief executive, about a month after then-CEO Charles Prince was ousted amid huge mortgage-related losses at the bank.

Citi ended up paying Prince more than it did Pandit during 2007. Prince received a $40 million payout from stock awards, a bonus and other benefits, according to regulatory filings. That amount does not include the 1.61 million Citi shares he already owned, his $1 million salary for 2007, or his perks for the year - which included nearly $171,000 in aircraft use.

The AP's total pay calculations include executives' salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission.

In the fourth quarter of 2007, Citigroup posted a loss of nearly $10 billion, its biggest ever, after its investments in bad debt lost $18.1 billion in value. When Pandit took the CEO spot in December, he said he would conduct a "dispassionate review" of Citi's many operations around the globe. The review, still under way, has so far included streamlining and paring back Citi's mortgage business.

Pandit was not the only executive at Citi to earn big incentive awards in January.

The filing said that in January 2008, Citigroup approved a $1.95 million cash bonus, $3.09 million in stock awards under the company's Capital Accumulation Program (CAP) and $1.95 million in retention equity awards for Win Bischoff - the Citi veteran who was named chairman of the company in December.

For Gary Crittenden - who was named CFO last February - Citi in January approved a cash bonus of $2.85 million, $4.59 million in stock awards under CAP, and $5.35 million in retention equity awards.

Meanwhile, Citigroup (C, Fortune 500) approved in January total incentive and retention awards of $19.3 million for Citi's Global Banking CEO Michael Klein; $12 million in total awards for Citi's Global Wealth Management CEO Sallie Krawcheck; $8.3 million in total awards for Vice Chairman Lewis Kaden; and $10.25 million in total awards for Vice Chairman Stephen Volk.