Annual meeting: April 26, 2016 Rarely is a CEO pay plan so poorly received that after the proxy statement comes out the compensation committee agrees to change the package. That’s what happened with Citigroup this month, however, when the response to its proxy was a collective: WHAT?!?!

In the proxy released on March 16 the company disclosed that performance shares could pay out at 150% of target EVEN if the stock price fell. This on top of a discretionary bonus of $6 million for CEO Michael Corbat, who received total compensation of $14.6 million in a year when stock price has fallen.

Someone must have gotten some phone calls: Citi says it “heard some concerns” and made revisions to the plan and released a revised plan on April 6.

One change: “The modified PSU design limits the value of the award if Citi’s absolute total shareholder return is negative over the three-year performance period.”

Well that sounds better, they limited how much these performance shares would award executives if the stock goes down. Good call. But wait, to what extent was it limited? Read the next sentence:

“In these circumstances, executives may earn no more than 100% of the target PSUs regardless of the extent to which Citi outperforms peer firms.”


So even if the stock price is down three years from now the executives can get 100% of target assuming peers also struggled. The target we are talking about here is several million dollars.

And if returns are positive, even just by a tiny bit, then Citi executives’ performance shares will pay off at more than 100% of value (as long as others in industry are performing worse).

Last week, after both Glass Lewis and ISS recommended votes against pay, despite the changes, the Citigroup Personnel and Compensation Committee wrote a letter to investors making their case. Among other things they noted “the difficult socio-economic environment that has existed for the past eight year,” and that Citi faced “uncertainties related to still evolving regulatory regimes.” To translate that: people seem to be mad at banks, and we don’t know what rules may ultimately be adopted.

Yes, Citi, people are angry about overpaid bankers. And with pay packages like this, don’t expect the anger to fade anytime soon.