Citi board to raise CEO Pandit's pay in 2011

NEW YORK (Reuters) - Citigroup Inc said on Friday its board of directors would raise Chief Executive Vikram Pandit's salary above the token $1 he has earned for the past two years.

"Beginning in 2011, the Board intends to compensate Vikram commensurate with the job of CEO of Citi," Chairman Richard D. Parsons said in a statement on Friday.

Pandit said in February 2009 he would earn $1 annually until the bank returned to profitability. Massive losses on bad loans forced Citigroup to take a record $45 billion in U.S. taxpayer funds over three bailouts in 2008 and 2009.

The government is still unwinding its almost 18 percent stake in Citigroup, but the bank has posted two consecutive profitable quarters so far in 2010. Parsons said the board was "very pleased" with Pandit's progress in making Citigroup profitable.

Pandit will continue to earn $1 for the rest of 2010, the bank said on Friday. Citigroup plans to award the rest of its top executives incentive pay for the first nine months of 2010, in the form of common shares, at the end of September.

The "stock salary" is a holdover from the executive compensation standards set by former U.S. pay czar Kenneth Feinberg. As long as the government still holds a stake in Citigroup, the company is required under law to limit incentive pay to its top executives to one-third of their overall compensation.

John Havens, CEO of Citigroup's institutional clients group, will receive the highest level of incentives, with $750,000 in shares per month, according to the filing.

Other top executives who will receive share payouts include Chief Financial Officer John C. Gerspach, Vice Chairman Edward J. Kelly, and North American Consumer Banking CEO Manuel Medina-Mora.

Citigroup shares were trading up 2.1 percent at $3.88 on Friday afternoon.

(Reporting by Maria Aspan, editing by Gerald E. McCormick; Editing by Derek Caney)