After much speculation over Vikram Pandit’s sudden departure from Citigroup, it appears – technically speaking – that Mr. Pandit will not receive a “severance package” after all. Instead, the ex-CEO will receive $6.7 million in immediate and deferred cash, which the Company characterizes as an “incentive award.” According to the Company’s 8-K filing on November 9th, 2012, the incentive award was granted for “his significant contributions to Citigroup during 2012.”
As noted in our previous blog post, Mr. Pandit will continue to vest in deferred stock and deferred cash incentive awards that were awarded as part of his regular annual incentive awards for performance in 2011, subject to the applicable performance conditions and standard company clawback provisions. Currently, the company values his 2011 deferred awards at approximately $8.7 million.
Although the Company never provided any explanation for Mr. Pandit’s resignation, it was widely suspected that Mr. Pandit clashed with the Company’s board over the bank’s strategy and performance. As such, shareholders may be skeptical if the former CEO truly deserves his 2012 incentive award. To the defense of Mr. Pandit, Michael O’Neill, Chairman of the Board, states that “based on the progress this year through the date of separation, the Board has determined that an incentive award for