Citigroup gives pay hikes in stock to top executives

NEW YORK — Citigroup, still partly owned by the government after a rescue during the financial meltdown, is giving raises to top executives that could amount to millions of dollars and using stock to get around a cap on cash pay at bailed-out banks.

CEO Vikram Pandit, who is drawing a salary of $1 for the second year in a row, did not get a raise, but the chairman of the bank hinted it plans a big payout for him next year.

The announcement Friday by Citi, which remains weaker than most of the large American banks two years after the meltdown, raised questions among experts on corporate governance.

By paying the raises in company stock, not cash, Citi has decided to follow previously issued guidelines that limited salaries to $500,000 for the top 25 executives at financial institutions still receiving large amounts of federal help.

"The question is do they deserve higher salaries, and are they evading rules to avoid losing talent?" asked Charles Elson, director of the Weinberg Center for corporate governance at the University of Delaware.

Citi is fighting to keep talented bankers from jumping ship to any of its rivals on Wall Street, all of whom have repaid their federal bailout money and are not under the same kind of compensation restrictions.

Edward Skyler, a spokesman for the bank, said the compensation levels "correspond with similarly situated executives in the industry."

Citi was the hardest-hit U.S. bank during the credit crisis of 2008, and received $45 billion in government bailout money under the Troubled Asset Relief Program. The government still owns about 17 percent of the bank.

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