Citigroup’s Vikram Pandit to Take $1 Salary, No Bonus

-- Citigroup Inc. Chief Executive Officer Vikram Pandit said he will take a salary of $1 and no bonus until the bank, which has accepted $45 billion in government bailout money, returns to profitability.

"I get the new reality and I will make sure Citi gets it as well," Pandit said today in testimony before the U.S. House Financial Services Committee. Lawmakers called eight bank CEOs to Washington to explain how they were using their portion of the government's $350 billion of rescue funds to boost credit.

Citigroup and the nation's biggest banks have come under fire from lawmakers who criticized bonus payments and corporate expenses such as new executive jets at a time when the government was giving them billions to revive the economy. President Barack Obama last month called the bonuses "shameful" and the "height of irresponsibility."

JPMorgan Chase & Co's Jamie Dimon, Morgan Stanley's John Mack, and Bank of America Corp.'s Kenneth Lewis were among the other CEOs at today's hearing who won't receive a bonus for 2008.

Lewis was asked at a shareholder meeting in December if he would work for $1 a year for the next three years. He said, "No," and pointed out that Bank of America earned $5.8 billion during the first nine months of 2008. New York-based Citigroup has reported five straight quarters of losses linked to the collapse of the mortgage markets and the global credit contraction.

Keeping Talent

Mack said at the hearing that he was concerned pay restrictions imposed in connection with government money will erode Morgan Stanley's ability to retain executives, especially in Europe.

"At the most senior levels, I'm not as concerned," Mack, 64, said. "The levels below that, we are seeing it already, with some of our European managing directors."

Chief executives at companies outside the finance industry, including Rick Wagoner of General Motors Corp. and Ford Motor Co.'s Alan Mulally, have also agreed to work for $1 a year.

The CEOs were asked to disclose their salaries and bonuses for 2008 and 2009 at the hearing. The highest paid CEO for the year was Bank of America's Lewis with a salary of $1.5 million, while the lowest was Goldman Sachs Group Inc.'s Lloyd Blankfein with a $600,000 salary. None of the executives took a bonus for 2008 or will have a salary increase in 2009.

Pandit, 52, said taxpayers were right to expect a return for their investment, adding that the bank will pay $3.4 billion in annual dividends on the debt. Citigroup last month reversed a decision to buy a $50 million corporate jet under pressure from the government. Last week the bank canceled a convention in Atlanta for its Primerica Financial Services Inc. unit.

Old Lane

Pandit, who took over Citigroup's top job in 2007, sold his hedge fund Old Lane Partners LP to the company for more than $800 million and joined Citigroup in April 2007 as head of the unit. Citigroup closed the fund in June 2008.

Citigroup said in January it would back legislation that would allow bankruptcy judges to modify mortgages, a move that came under fire from some industry groups. When asked about the bill today, the other CEOs said while they supported modifying loans they did not agree with giving the bankruptcy court the leeway to change payments.

Citigroup, which has dropped 47 percent on the New York Stock Exchange this year, gained 19 cents to $3.54 in composite trading at 1:01 p.m.