Citigroup's (NYSE:C) Bonus Pay an End-Run Around Public Opinion?

Citigroup (C) this month instituted a handy new compensation plan that will enrich CEO Vikram Pandit's top four lieutenants. Under the so-called Key Employee Profit Sharing Plan, Citi execs can earn between $1.7 million and $5.2 million -- assuming the bank and its top leaders can hit performance and conduct targets that are roughly as big as the side of a barn.

Citi said in a Securities and Exchange Commission filing last week that the plan is "intended to preserve and incent the company's management team," via a revenue-sharing plan. This sounds like a fine idea, linking pay to performance for the sake of aligning management's interests with those of shareholders and that sort of thing.

But in the proud tradition of rivals like Goldman Sachs (GS), what Citi is actually doing here is moving the goalposts in so that executives can collect on their incentive pay even if they boot things rather badly in the next couple years. Not that that ever happens at Citi.

Citi operating chief John Havens, finance chief John Gerspach, consumer banking head Manuel Medina-Mora and top overseas exec Alberto Verme can get their payouts if Citi makes $12 billion in pretax income over the next two years.





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