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Dem Rep. to Citigroup CEO: Explain How You Didn't Lie to Me
When Rep. Dennis Moore (D-KS) asked Citigroup CEO Vikram Pandit about his 2008 compensation last month, Pandit gave a simple answer: $1 million. Except the truth wasn't so simple.
Pandit actually received $11 million as part of a lavish package of stock awards and retention pay, making his testimony to Moore dangerously close to an outright falsehood. And Moore is calling on Pandit to explain himself in a frustrated letter sent yesterday, a copy of which has been obtained by TPMDC.
Moore writes:
While I was initially pleased to hear you agree to take a salary of $1 per year with no bonus until Citi returns to profitability, I am deeply troubled by this latest news. Should we expect additional, unexpected announcements of bonuses or financial compensation for your work in 2008 or going forward until Citi returns to profitability?
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Josh
Elana
Matt
Eric
Very nice catch. We are assembling a veritable Rogue's Gallery here.
March 18, 2009 1:02 PM | Reply | Permalink
Of course not. That's silly.
If you should expect them, they could hardly be called unexpected.
March 18, 2009 1:12 PM | Reply | Permalink
“That’s silly.”
No, that’s sarcastic.
March 18, 2009 6:30 PM | Reply | Permalink
Did you ever work on Wall Street ?
The business there is to get money and put it in one's pocket.
Now the US Treasury has been opened wide to Wall Street and Connecticut (hedge funds) and London.
This is the biggest money-grabbing opportunity in history. The money-grabbing is barely supervised.
Folks, you have to get used to this situation: more money is going to be stolen, grabbed, disappeared than anyone will be able to count.
Think of some very large numbers ... billions ... will be whisked away.
No one in congress will be able to stop it.
You get to watch.
March 18, 2009 1:17 PM | Reply | Permalink
Now tell us something we don't know.
March 18, 2009 1:40 PM | Reply | Permalink
Pandit, Liddy, Lewis,... Is there an honest man in charge of any financial institution these days? If our deposits weren't backed by government guarantee, there'd be blood in the streets right now!
March 18, 2009 1:19 PM | Reply | Permalink
The balance on his compensation was 1 million, but late fees, finance charges, creditshield premium and ATM charges drove it up to 11 million.
March 18, 2009 1:20 PM | Reply | Permalink
Oh, that explains it! I wonder if he knows that if he uses his own bank's ATM he doesn't get charged a fee for using it. That should help him manage things better for next year.
March 18, 2009 1:51 PM | Reply | Permalink
Oh, bring back the days of lee iaccoca, when taking a dollar meant taking a dollar. These criminals should all be indicted and thrown in the clink. Maybe that will wake up the next wave of financial wizards.
March 18, 2009 1:23 PM | Reply | Permalink
Oh My.
I think the bailout looks more and more decisively like a bad idea every day.
The more you dig the deeper it gets.
I didn't think bailout was as much of an outrage as a few others back in September, but there is a lesson here- either fully nationalize or a let the private firm fully sink.
More than economic this is a moral disaster.
March 18, 2009 1:32 PM | Reply | Permalink
BTW, let me clarify: The bailout may not neccassarily be a bad idea, but it looks that way because media left, right or center have become obsessive in the last few days to make the story as simple and vitriolic as possible.
We as a country have again succeeded in focusing all over attention on problem and none on the solution. Focusing on the symptons rather than the disease.
Is AIG or CITI bonuses or salaries the problem? Or is it we need regulation overhaul?
I wish apart from a quite step to tax AIG 95% on bonuses, Senate hearings would convene for an emergency need to reform our regulations.
March 18, 2009 1:40 PM | Reply | Permalink
"this is moral disaster"....And how. That is becoming painfully clear as we watch this AIG fiasco play out.
March 18, 2009 1:41 PM | Reply | Permalink
If the Rep is going to send such a snarky letter, he should make sure it's error-free. In the first graph, he says the CEO claimed he earned $1 million. In the next, he says it was $1.
Perhaps he's not paying his own secretary and/or proofreader enough money.
March 18, 2009 1:34 PM | Reply | Permalink
There was nothing wrong in the letter. Yes Pundit said he earned $1 mil in 2008 and that he will earn $1 in 2009 until Citi returns to profitability.
That's what Pundit said and that's what the letter recounts.
March 18, 2009 1:44 PM | Reply | Permalink
As I read things --
Last year claimed: $1M
Last year actual: $11M (as if the stock could be valued now)
This year promised: $1
I think Elena could have been a bit clearer in how she presented the story. It's Congresses fault if they don't ask effective questions and follow up. Maybe they are too used to asking stupidly, or to be polite, politely.
March 18, 2009 1:48 PM | Reply | Permalink
What's 10 million between friends?
Maybe its that Congress doesn't get any of this in writing. Like with a contract.
How can they expect the greedy a**holes who got us into it, to get us out?
Fire all of them and send them to Greenland or Antarctica.
March 18, 2009 2:08 PM | Reply | Permalink
Yep, I am having a real hard time getting my arms around the fact that all of these a**holes are in one way or another responsible for the implosion of their companies. Why do they still have jobs? If I did that I would be thrown out the door in two seconds. They should all be canned and bring in new blood to fix the freaking problems.
March 18, 2009 2:11 PM | Reply | Permalink
I vote for Michael A to run Citi and I will run AIG.
March 18, 2009 2:16 PM | Reply | Permalink
You have my vote. I would actually even do it for only $1.00 out of a sense of obligation to serve the american people and help get us out of this mess. I'm willing to bet that we would do a much better job that the fools there now.
March 18, 2009 2:35 PM | Reply | Permalink
Does the word "endemic" ring any bells? AEG is just one of the more blatant examples of a very sick world.
March 18, 2009 2:32 PM | Reply | Permalink
crooks thieves and liers.
why does anyone accept this?
they write the tory and everyone else jsut sorta accepts that is the way it is.
well..they should have been allowed to fail .
no company should ever receive bail outs.
if they are to big to fail then break them up!.
why are companies allowed to get so big if they cant fail??
people are dumb.
everything about this country has always been related to class.
and here you see yet another example of the average person keeping the so called elite class afloat.
why are people allowed to lose their homes why we bail out these thieves?
no one ever answers that an no one in power will ever change it.
everyone who accepts this is part of the problem.
March 18, 2009 2:50 PM | Reply | Permalink
It is all too easy to fuss over symptoms while we blithely ignore the disease. Indeed, that is precisely what our "leaders" in Washington would like us to do. Yell and scream "outrage" and then back to business as usual until the next headline grabber. And on and on and on... until the patient succumbs. What a world!
March 18, 2009 3:06 PM | Reply | Permalink
If Citigroup has any brains, they will respond to Moore ASAP and try to defuse this issue. Dennis is a former prosecuutor and the straightest of straight arrows. The Republicans have been trying to beat him every two years and have done thrown every mean, vicious and nasty trick in their playbook at him. He is a very nice person, but he can be as tough as nails when the occassion calls for it. I am to the left of him on many issues (I am to the left of many Democratic Members), BUT Dennis Moore is precisely the sort of person that makes the House of Representatives a much better place. Mr. Pandit has a much bigger problem than he may believe if he decides Dennis is some obscure Member from Kansas he can ignore or brush off. This "country lawyer" is a tiger. This will be fun to watch--from a safe distance.
March 18, 2009 5:37 PM | Reply | Permalink
Well, your first problem is assuming that there might be a brain cell in that vacuum at the top of Citigroup. I wouldn't expect any action as I am sure that they see that they did nothing wrong, as always.
March 18, 2009 5:44 PM | Reply | Permalink
The $11 million (actually $10.82 million cited in the letter you posted) is not an accurate portrayal of the CEO's compensation for 2008. The number comes from adding all of the columns in the Summary Compensation Table in the proxy. Unfortunately, the stock option and stock award values that are presented in the proxy represent the expense recognized in that year by the company for all outstanding awards. The grant date fair value of the awards provided in the year in question are in a different table (the Grants of Plan Based Awards table). Taking only the CEO's base salary and All Other Compensation (in this case, "Ground Transportation" and a 401k match) into account, you get to $974,526 (pretty close to the original claim of $1 million).
Now, based on the Grants of Plan Based Awards table, the CEO also received several stock option and restricted stock awards in January 2008 (all attributed to either a retention award or a signing award). The total grant date fair value of all of these awards was about $37.2 million. Now much of this is now worthless because so much of it was granted in the form of stock options. The proxy goes on to disclose that the value of all of these grants at a stock price of $1.67 is about $1.8 million.
I know this is a bit in the weeds, but defining how much an executive "makes" is often an exercise in interpretations, definition, and assumptions.
March 18, 2009 6:28 PM | Reply | Permalink
Nice research and reporting!
The options might eventually be worth a lot more if the exercise price is not too far above current stock price, and if he didn't already exercise them.
March 18, 2009 6:36 PM | Reply | Permalink
The exercise prices of the options are in the high $20s/low $30s, so they've got a ways to go until they're worth anything.
March 18, 2009 6:42 PM | Reply | Permalink