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Citigroup to Cut Bonuses for Top Executives After U.S. Reprimand

Bloomberg logoBloomberg 1/20/2021 Jenny Surane

(Bloomberg) -- Citigroup Inc. will reduce bonuses for dozens of its top executives after the bank was reprimanded by regulators last year.

The reductions may vary widely, depending on the size and structure of each executive’s pay package, a person with knowledge of the matter said. Executives who report directly to the management committee are being told this month of the decisions. Citigroup’s board is still weighing final compensation decisions for the 15-member executive management team, including Chief Executive Officer Michael Corbat.

A spokeswoman for Citigroup declined to comment.

Michael Corbat wearing a suit and tie: House Financial Services Committee Hearing On Holding Megabanks Accountable © Bloomberg House Financial Services Committee Hearing On Holding Megabanks Accountable

Michael Corbat

Photographer: Andrew Harrer/Bloomberg

The move is another sign of the efforts Citigroup is making to appease the Office of the Comptroller of the Currency and the Federal Reserve after both regulators dinged the bank for failing to properly maintain risk-management systems and other internal systems. The bank has repeatedly vowed to fix those problems after spending more than $1 billion on infrastructure and controls in 2020.

Citigroup has crafted so-called work streams around improving its risk and controls as well as data and compliance, with plans to next month deliver an initial analysis of the efforts required to resolve regulators’ issues. In May, it will present a more detailed implementation plan.

“We also have work streams on creating a culture of excellence and accountability, and on strengthening all critical business processes,” Jane Fraser, who takes over as CEO next month, said on a conference call with investors and analysts last week. “You have my commitment that we will invest your capital wisely, and that you, our clients and our regulators will also see and benefit from the result.”

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