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What Did Citigroup CEO Michael Corbat Do to Get a $5 Million Pay Cut?

Courtesy of Pam Martens

Michael Corbat, CEO of Citigroup Since 2012

Michael Corbat, CEO of Citigroup Since 2012

Rewarding bad behavior with obscene pay is the sine qua non of Wall Street. Thus it’s a remarkable event to see a CEO of a mega Wall Street bank get punished with a 21 percent pay cut. 

Michael Corbat is slated to retire this month as Citigroup’s CEO and be replaced by Jane Fraser, the first woman CEO of any major Wall Street bank. (The news would be more welcome if the areas that Fraser previously supervised at the bank did not have all those fines and sanctions.)

The Board delivered an unusual kick in the pants to Corbat on his way out the door. It cut his compensation for 2020 by $5 million from what he had been awarded for 2019. Corbat’s total compensation went from $24 million in 2019 to $19 million for 2020. The announcement was made in Citigroup’s 8-K filing with the Securities and Exchange Commission on Friday evening. The Board explained its action as follows:

“In determining executive incentive compensation awards, the Compensation Committee reduced Mr. Corbat’s incentive compensation award based on its assessment of his performance in respect of risk and control concerns that underlie Consent Orders that were entered into during 2020 between Citi and the Federal Reserve Board and the Office of the Comptroller of the Currency, and to reflect a one-time shared responsibility adjustment which impacted the Executive Management Team for such concerns.”

The long and short of it is that Citigroup’s federally-insured bank, Citibank, was fined last year for doing something so egregious that its federal regulators didn’t even dare to define it in print. On October 7, when all eyes were on the vice-presidential debate that evening between Kamala Harris and Mike Pence, the Federal Reserve and Office of the Comptroller of the Currency (OCC) announced consent decrees with Citigroup’s Citibank, and slapped it with a $400 million fine.



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