A group of former Citigroup bankers has urged the company's board to cancel bonuses for hundreds of managers, reduce consulting expenses, and take other actions to expedite the firm's turnaround. In a five-page letter sent to the board, they called for the suspension of bonuses tied to reforming systems and reshaping business lines. The board has received the letter and the group seeks a dialogue with the chair of the compensation committee.
The anonymous letter claims to represent ten former managing directors awaiting $12.7 million in deferred compensation linked to company stock. Although one former managing director has not yet joined the group, they have participated in video calls discussing their demands.
Citigroup CEO Jane Fraser announced a plan a year ago to streamline the global bank by cutting 20,000 positions, restructuring business lines, and meeting regulatory requirements for enhanced systems. The group argues that the bonuses reflect internal loyalty to Fraser rather than the independent thinking and strategic adjustments needed at this critical time.
Despite a 25% rise in Citigroup's share price this year, it still lags behind other major U.S. banks. In 2021, Citigroup implemented a transformation bonus plan that linked many executives' compensation to improving risk management, control, and culture. The program set target bonuses for over 250 employees, with payouts based on overall performance—94% in 2022 and 80% in 2023.
According to documents from the company's annual shareholder meeting, in 2023, CFO Mark Mason and COO Anand Selvakesari received $1 million each, in addition to their standard compensation.
