Citigroup raised salary of CEO Michael Corbat to $16.5 million in 2015. The bank awarded the 27% raise of salary for his success in leading the bank operation to be more efficient.
Under Corbat leadership, Citigroup has successfully booked a $17.2 billion in 2015, the highest since before 2006 financial crisis. Therefore, in its regulatory filing, as quoted by USA Today, Citigroup wrote, "Citi has continued to become a simpler, smaller, safer, and stronger bank under Mr. Corbat's leadership."
According to Financial Times, as well as base salary of $1.5 million, Mr. Corbat received a cash bonus of $6 million. He will also receive additional $9 million for the next three years, depending on shareholder returns. While he has a $3.5 million higher in potential package than previous year.
Citigroup had successfully trimmed its negative image in Citi Holdings, which holds many of Citigroup's unwanted assets. The bank also sold one of its unit, OneMain, which operating subprime lending business and sold other consumer units around the globe. New York Times reported the litmus test for Corbat's leadership is determined by his success in leading Citigroup to pass 2015 stress test.
Stress test is a mandatory test for banks conducted by Federal Reserve Bank to test the resilience of banking under crisis. The Fed used the stress test as a supervisory method to see how banks perform under a crisis scenario The test was mandated by Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010.
The year 2015 was a very tough year for banking industry, and for Citigroup to pass the regular stress test is an achievement, especially the bank is in the midst of recovery following its crisis. Moreover, from the beginning of 2015, Citigroup shares are dropped close to 24%. Since investors worried about bank's exposure to economic slowdown and crash of oil price.
Under that stressful year, Citigroup managed to book a profit. In fact, the profit was a record high since the 2006 financial meltdown. The bank acknowledge its CEO effort for that success.
Michael Corbat has been the latest Wall Street executives to receive a pay rise. Other CEO who receive raise are Bank of America CEO Bryan Moynihan with 23% raise earning total compensation package of $16 million, and 35% increase salary for JPMorgan CEO Jamie Dimon who earned $27 million. While Goldman Sachs CEO Lloyd Blankfein and Morgan Stanley CEO James Gorman receives a pay cut.
Citigroup CEO Michael Corbat, who successfully steered Citigroup to pass the turbulence year of 2015, receives a 27% increase of salary. The bank awarded the raise for his leadership to bring bank operation becoming more efficient.
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