Vikram Pandit's improbable career
The former Citigroup CEO was always in the right place at the right time -- until now.
Five months after Pandit sold Old Lane Partners LP, a hedge fund, to Citigroup in July 2007 for $800 million, he was named CEO of the bank. Citigroup shut down Old Lane and took a $202 million write-down. In 2008, Citigroup received a $45 billion bailout from the federal government as the world faced the worst economic slowdown since the Great Depression.
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.
No one should shed a tear for Pandit. As Bloomberg News noted, he will have earned about $261 million during his five-year tenure as CEO, if no changes are made to his pay package. There are no golden parachutes since Pandit and other senior executives don't have special severance or change in control agreements, according to a proxy filing.
Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter@jdberr.
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