Citi has cut chief executive Michael Corbat’s 2014 compensation package due to his failure in stopping FX traders from participating in currency market manipulation, according to chairman Michael O’Neill.
Speaking at the US bank’s annual shareholders’ meeting in New York, O’Neill said that while the malfeasance started before Corbat joined in October 2012, it continued after he had taken over the helm.
Citi, alongside five other banks, was fined a total of $4.3 billion in November 2014 for alleged activities relating to its FX businesses.
In addition, it is one of the 12 banks involved in an antitrust litigation lawsuit in the US. Three of its rivals – Bank of America Merrill Lynch, JP Morgan Chase and UBS – have already agreed settlements with the investors.
Corbat’s 2014 compensation was cut by 10%, reducing it to $13 million from $14.5 million in 2013, which was “below estimated market median for the CEO role”, according to Citi. Although his base salary was maintained at $1.5 million, the bank reduced his annual incentive by £1.5 million.
Other senior executives also saw a decrease in their overall compensation, reflecting disappointing operating performance and the results of the bank’s 2014 stress test and control lapses, according to the company.
In response to what it termed “ethical lapses”, Citi’s management team launched a company-wide program to “more firmly foster a culture of ethical decision-making at Citi” and formed an Ethics and Culture Committee in April 2014 to examine potential factors that “might better influence appropriate conduct”.
Separately, shareholders voted against a proposal that would have deferred a portion of top executives’ pay for 10 years and used the money to cover fines if the bank is found to have broken laws. About 4.9% of investors voted in favour, the bank said.
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