Citigroup bows to shareholder pressure, overhauls pay plan

The company also said it will pay new chief executive Mike Corbat $11.5 million for his work in 2012, in line with remuneration for his peers at other major banks.

The new plan was crafted after board chairman Michael O’Neill and other directors met with “nearly 20” shareholders representing more than 30% of Citigroup stock, Citi said in a filing.

“At first blush, the package appears to be responsive to a number of the issues we raised,” said Michael Garland, an assistant comptroller overseeing corporate governance matters for the City of New York. New York City’s pension funds, which own about 7.4 million shares of the bank, met O’Neill in August to discuss senior executive pay, Garland said.

Citigroup’s previous pay plan was rejected by shareholders in a non-binding vote at the company’s annual meeting in April last year, in what was seen as a stinging rebuke to the bank’s management and directors, and helped hasten departure of then-chief executive Vikram Pandit.

Compensation analysts had criticised the plan for giving directors too much discretion to set pay, and for setting the bar too low for bank executives to receive high payouts.

Under the previous profit-sharing plan, Citigroup would pay millions to executives if Citigroup earned more than $12 billion before taxes over two years, a figure the company easily topped in 2010 and

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