Citigroup Paid Pandit $165 Million in Old Lane Sale
By Bradley Keoun
March 13 (Bloomberg) — Vikram Pandit received $165.2
million last year when Citigroup Inc. bought Old Lane LP, the
hedge fund he co-founded and led.
Pandit, who became Citigroups chief executive officer in
December, reinvested $100.3 million of after-tax proceeds in the
fund under the terms of the sale agreement, the New York-based
company said today in a filing with the U.S. Securities and
Exchange Commission. Hes required to forfeit “a substantial
portion of the investment if he quits or is fired within four
years, the bank said.
Citigroups pay practices were subjected to scrutiny last
week when Charles O. “Chuck Prince, Pandits predecessor as
CEO, was called before a congressional panel to defend his
compensation. Prince, 58, kept $30 million in stock and options
after he resigned in November as the collapse of the subprime
mortgage market eroded the firms earnings. Citigroup, the
biggest U.S. bank by assets, went on to report a $9.83 billion
fourth-quarter loss. The stock has fallen more than 60 percent
since the end of 2006.
Pandit, 51, received 1 million shares from Citigroup as
part of a previously disclosed “sign-on bonus in January, in
addition to a $2.5 million “retention equity award, the
company said today. He was paid $250,000 in salary last year,
according to the filing.
The bank announced in January that it halved cash bonuses
for most senior executives last year. Robert Rubin, the former
U.S. Treasury secretary who serves as chairman of Citigroups
executive committee, decided to forgo a stock bonus for 2007.
Rubins Reward
The bank didnt disclose Rubins total compensation for
2007, indicating he wasnt one of the seven highest-paid senior
executives.
In 2006, Rubin was the second-highest-paid executive after
Prince, earning $17.3 million in salary and bonus. Prince was
paid about $26 million in salary, bonus and other pay in 2006,
according to regulatory filings.
The two highest-paid executives in 2007 after Pandit were
Michael Klein, Citigroups head of investment banking, and Gary
Crittenden, chief financial officer.
Klein got $19.3 million in “deferred cash retention
awards and “retention equity awards, on top of a $212,500
salary, the bank said.
Crittenden received an $11.18 million cash bonus when he
joined the company from American Express Co. in March 2007. He
got another $12.8 million in cash and stock bonuses for his
performance last year, in addition to $403,410 of salary.
Krawcheck, Bischoff
Sallie Krawcheck, who served as chief financial officer
until March 2007, when she became head of Citigroups wealth-
management division, received a $500,000 salary and $12 million
in cash bonus and stock. She collected $9.9 million in 2006.
Win Bischoff, a senior bank executive in London who was
named chairman following Princes ouster, got $6.99 million in
cash bonus and stock and $373,734 in salary.
Prince agreed to buy Old Lane in April 2007 for about $800
million. Pandit, an investment banker and executive at Morgan
Stanley from 1983 to 2005, had co-founded the fund in 2006 with
fellow Morgan Stanley veterans John Havens, Guru Ramakrishnan
and Brian Leach.
In July, when Citigroup completed the Old Lane transaction,
Pandit joined Citigroups alternative investments division,
along with Havens, Ramakrishnan and Leach. In December, the
board promoted Pandit to CEO.
To contact the reporter on this story:
Bradley Keoun in New York at
bkeoun@bloomberg.net.
