Citigroup Slashes Top Executives Bonus in 2024 for Regulatory Fixes

Core Viewpoint - Citigroup has reduced the bonuses for 250 top executives under its "Transformation Bonus Program" for 2024, reflecting ongoing regulatory compliance issues and a need for improved shareholder returns [1][2]. Group 1: Bonus Program Details - The "Transformation Bonus Program" was initiated three years ago to motivate senior staff to enhance financial performance and risk management systems following regulatory orders [2]. - In the third installment of the program, the payout was only 68% of the target for 2024, which is lower than the previous two years [2]. - The final tranche included a performance boost from Citigroup shares, but without this, the performance achievement percentage would have been just 53% [3]. Group 2: Regulatory Issues - Citigroup faced a $136 million fine in July 2024 due to slow improvements in data quality management, and it remains under consent orders from the Federal Reserve and the Office of the Comptroller of the Currency [4]. - The bank was fined$79 million by British regulators for a trading incident that caused a "flash crash" in May 2022, where a trader mistakenly attempted to sell $444 billion worth of stocks [5]. - In June 2024, regulators identified deficiencies in Citigroup's "living wills," which outline how the bank would wind down in a crisis, prompting the need for corrective plans [6]. Group 3: Performance and Market Position - Despite the challenges, Citigroup's shares have increased by 15.3% over the past six months, outperforming the industry growth of 13.9% [8]. - Currently, Citigroup holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [10].