The last time Citigroup tried to pay its CEO, shareholders freaked out, albeit in a ceremonial way. This time around, Citi has made some changes to the way it pays its CEO. Antony Currie thinks the “broad structure [of the plan] looks good”. The problem is that structure is basically a compilation of cosmetic changes that won’t do much to prevent the exact kind of decisions that got shareholders so enraged last year. Despite that, they’re probably probably just enough to discourage the intense criticism the bank faced last year.
Here’s Nathaniel Popper and Jessica Silver-Greenberg’s succinct characterization of the new status quo:
[Citigroup] announced on Thursday that part of the $11.5 million in compensation awarded to the new chief executive, Michael L. Corbat, would be closely tied to performance.
Is this an indication that Citi’s new “hands on” chairman is responding to shareholders? Citi’s regulatory filing addresses two big aspects of any comp plan — how much you get paid and how you get paid. On the question of the overall sum, Citi’s previous plan was remarkable in its honesty:
Look at how the committee decided in 2011: its only metric was its own discretion. That’s potentially the canonical example of why disclosure and transparency aren’t synonymous — we know technically how the committee decided, but the actual considerations involved in the decision-making process are opaque.