Aniket Pujari(Bloomberg) — Citigroup Inc. cut payouts to hundreds of top executives in the final round of a three-year special bonus program that tied their compensation to the bank’s progress on risk and regulatory matters.
In the third annual installment, the “Transformation Bonus Program” paid out 68% of the target for 2024 to about 250 senior employees, according to a proxy filing Tuesday. That compares with 94% for 2022 and 80% the following year.
The payouts were designed to tie top managers’ compensation to Citigroup’s progress on improving risk and controls. The program was intended to link pay with the execution of remediation plans, milestones reviewed by internal auditors and “culture change” as determined by an employee survey.
The final tranche, unlike the first two, included a boost from the performance of Citigroup shares.
Citigroup’s back office has long been considered a weakness for the Wall Street bank, which has invested heavily to fix its problems as part of a larger revamp initiated by Chief Executive Officer Jane Fraser.
In July, regulators fined the bank $136 million because of its slow improvement on data-quality management. Recent reports of botched account transfers renewed scrutiny of the bank’s back-office controls. The bank remains subject to consent orders from the Federal Reserve and Office of the Comptroller of the Currency.
“Citi has acknowledged that, despite making important progress in advancing the transformation, including remediating the consent orders, there were areas where we have not made progress quickly enough, such as in our data quality management related to governance and regulatory reporting,” the bank said in the filing.
An anonymous group of former employees criticized the bonus program last year in a letter to Citi’s board. The bank disputed the accuracy and framing of the letter at the time and said it was “making the tough decisions” for further progress.
The bonuses follow a 33% increase in pay for Fraser — the biggest bump among the CEOs of the six largest US banks. Fraser, who was paid $34.5 million for 2024, wasn’t eligible for the transformation bonus.
More stories like this are available on bloomberg.com
