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C » Topics » Objectives of Citis executive compensation programs

This excerpt taken from the C DEF 14A filed Mar 20, 2009.
Objectives of Citi’s executive compensation programs
Citi’s compensation programs are designed to support:
 
•  Competitive pay: Citi aims to deliver compensation at levels that are competitive to the financial services market. Citi collected market data on both the direction and level of compensation in financial services and the size and structure of the awards are reflective of that market data.
 
•  Alignment: Compensation should align the long-term interests of management with stockholders.
 
 
•  Performance: Incentive awards should be based on financial measures that best reflect the state of ongoing operations and that reflect the impact of recognized and unrecognized gains and losses. Performance also must balance financial and non-financial measures.
 
•  Past and future performance: Performance-based compensation should incorporate both past performance as well as forward looking performance. Compensation should also be subject to a clawback in the event that it is based on results that at a later date prove to be incorrect.
 
•  Risk management: Compensation should encourage prudent decisions around both taking risks to improve Citi’s performance and avoiding unnecessary and excessive risk that can harm the franchise.
 
•  Meritocracy: Individual compensation decisions should be differentiated according to financial and non-financial performance. Compensation amounts should vary significantly up or down based on business and individual performance.
 
•  Partnership: Strong partnership across businesses and regions is critical to our success.
 
This excerpt taken from the C DEF 14A filed Mar 13, 2008.

Objectives of Citi’s executive compensation programs

 

Citi pays its senior executives according to its longstanding philosophy of compensating senior executives for objectively demonstrable performance, and senior executive incentive awards were reduced for 2007 as a reflection of Citi’s disappointing financial performance. Senior management compensation programs at Citi are intended to align the interests of management with those of stockholders in the creation of long-term stockholder value by providing pay for performance. The programs are designed to attract and retain the best talent, and to motivate executives to perform by linking incentive


 

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compensation to demonstrable performance-based criteria.

 

Citi seeks to attract and retain a highly qualified global workforce to deliver superior short-term and long-term performance to stockholders. Compensation for management is based on pay for performance, so that individual compensation awards reflect the performance of Citi overall, the particular business unit and individual performance. Performance goals for management are designed to balance short-term and long-term financial and strategic objectives that build stockholder value.

 

Senior management compensation programs are also designed to deliver compensation at levels that are consistent with the competitive marketplace. In order to attract and retain the best talent, Citi must compensate at a level that reflects the demand for talented executives, especially in a challenging economic environment. In view of these exceptional circumstances, the committee must balance pay for performance with the compelling need to attract and retain senior executives. Human capital is a critical asset and Citi believes that compensation practices should be designed with this truth in mind.

 

Citi compensates its executives based not only on how well its businesses perform from a financial standpoint, but on how Citi does business. Superior performance encompasses achievement of financial goals, as well as objective excellence in other key areas, such as exemplifying Citi’s Shared Responsibilities, including the maintenance of sound regulatory relationships around the world.

 

When an executive achieves superior results, the executive is rewarded. Conversely, inferior performance by an executive leads to a reduction in, or elimination of, incentive compensation for the subject period, as occurred in 2007. Inferior performance is also evaluated to determine the underlying causes and the executive, as well as his or her staff, will be incentivized to address the issues and will be rewarded for improved performance, or, where appropriate, replaced.

 

EXCERPTS ON THIS PAGE:

DEF 14A
Mar 20, 2009
DEF 14A
Mar 13, 2008

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