Citigroup Executive Compensation Controversy Explained

Last year, Citigroup Inc. hired Vis Raghavan from rival JPMorgan Chase & Co. with hopes of improving its banking fortunes. However, Citigroup now faces scrutiny over Raghavan's compensation details, with Glass Lewis advising shareholders to vote against the executive compensation proposal. The firm questioned the transparency of a $52 million make-whole award for Raghavan, prompting Citigroup to provide a breakdown of his compensation. Raghavan also received $22.6 million for his work at Citigroup last year, persuading Glass Lewis to change its recommendation. Marquee hire Raghavan's recruitment at Citigroup was a major move for CEO Jane Fraser, who is leading the bank's significant restructuring efforts. Raghavan's previous role at JPMorgan put him in line for substantial payouts, including a $52 million deferred equity and cash award from Citigroup. The equity portion of the payout will be granted to Raghavan over a seven-year period, complying with UK regulators' deferral requirements. Citigroup defended the provisions as standard practice, without providing further justification in their filing.