Citigroup sets exec bonus payouts, tied to profits

NEW YORK (Reuters) - Citigroup Inc , recovering after a series of government bailouts, will pay some top executives millions of dollars of cash bonuses if its core operations earn at least $12 billion before taxes over the next two years.

The awards "are intended to sharpen the executives' focus" on long-term performance without excess risk, and align their interests with those of stockholders, the third-largest U.S. bank by assets said in a regulatory filing on Friday.

John Havens, the bank's chief operating officer and a longtime confidant of Chief Executive Vikram Pandit, could get a $5.2 million bonus under the plan.

Friday's filing is the second time this week that Citigroup has discussed long-term compensation for top executives.

The New York-based bank is trying to reward those who helped it recover from the crisis and ensure they do not take risks that might endanger it again.

Citigroup took $45 billion in bailout money during the financial crisis. The U.S. Treasury finished selling its common stock stake in the bank in December.

Last month, Citigroup reported a profit for 2010, its first full year in the black since 2007.

Its main Citicorp unit earned $20 billion from continuing operations before taxes in 2010, just above the $19.9 billion a year earlier.

In contrast, its Citi Holdings unit, comprising businesses that the bank wants to sell or wind down, lost $6.6 billion before taxes in 2010.

7-FIGURE PAYOUTS

If Citicorp earns $12 billion pretax from continuing operations over the next two years, just 30 percent of what it earned in the previous two, then Havens would earn his $5.2 million bonus under a predetermined ratio.

Other executives' bonuses if Citicorp's two-year pretax profit reaches $12 billion include: Chief Financial Officer John Gerspach, $1.7 million; Manuel Medina-Mora, head of consumer banking in the Americas, $2.7 million; and Alberto Verme, head of Europe, Middle East and Africa, $2.3 million.

Citigroup said other executives it did not name would also qualify for cash awards.

Even if Citicorp meets or exceeds the $12 billion target, the payouts are not a given.

While two-thirds of the payout would be made on January 20, 2013, the remaining payout due a year later would be reduced if there were losses in 2013.

Executives would also need to remain employed at Citigroup to get the full bonuses, unless certain conditions are met, according to the filing.

On Wednesday, in separate filings, Citigroup disclosed awards of millions of stock options to top executives over the next three years.

The filings do not address compensation for Pandit, whose base salary has already been raised to $1.75 million from $1.

(Reporting by Maria Aspan and Jonathan Stempel; Editing by Richard Chang)

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