If Vikram Pandit’s experience is anything to go by, firing CEOs isn’t nearly as expensive as it used to be:
“Based on the progress this year through the date of separation, the board determined that an incentive award for their work in 2012 was appropriate and equitable,” Chairman Michael E. O’Neill said in the filing. “While Citi will also honor all past awards that they are legally entitled to, there are no severance payments. Awards to which they are not legally entitled have been forfeited.” [Emph. added]
Such a difference five years makes! Pandit will receive no severance, no automatic vesting of any restricted stock or options (although he will keep those awards), and no payouts related to a $40 million retention package the board gave him last year. What’s more, the $6.7 million he is getting will be paid out over five years, and the board can put the kibosh on future payments if it finds Pandit was responsible for a “material adverse outcome for Citigroup.” Oh, and he’s under a one-year non-compete. He doesn’t even get the use of an office.
You won’t find me shedding any tears for poor Vikram Then again, you can’t deny he didn’t do nearly as well as Chuck Prince who, after presiding over Citi’s march to insolvency, actually received a $10.4 million “separation award” when he was shown the door in 2007. That was crazy. The terms of Pandit’s departure are not. . . .