Sheila Bair, who was then the head of the Federal Deposit Insurance Corporation, wanted to get rid of Pandit but was rebuffed by Treasury Secretary Tim Geithner and Democratic Party stalwart Robert Rubin. "Vikram had gotten his job with Bob Rubin's support," she told Bloomberg Television. "There was a close working relationship there that troubled me." 

Pandit, though, soldiered on and the bank began to recover. In 2010, the federal government sold the last of its holdings in the New York bank at a $12 billion profit. Pandit made headlines when he took a $1 salary in 2009 and 2010. His vow of poverty, though, didn't last long. A year later, Pandit's compensation hit $15 million, even though Citigroup's revenue slumped. He could have earned $53 million from a multi-year retention package announced in May.

Investors continued to be rewarded by their faith in Pandit as shares in the company surged more than 40% this year. Earlier this week, Citigroup reported better-than-expected​ results, which were nonetheless pretty dismal. Though some saw this is a triumph for Pandit, others had been displeased with his performance for quite some time. It's unclear why the board only decided to act now.