Citigroup Inc. withheld some compensation it planned to award to Paco Ybarra, who leads the sprawling institutional clients group, after the bank was forced to pay $200 million in penalties over employees’ use of unauthorized messaging channels like WhatsApp last year.
(Bloomberg) — Citigroup Inc. withheld some compensation it planned to award to Paco Ybarra, who leads the sprawling institutional clients group, after the bank was forced to pay $200 million in penalties over employees’ use of unauthorized messaging channels like WhatsApp last year.
Citigroup made a “downward adjustment” to Ybarra’s pay, citing cultural issues that arose in his division that require remediation, according to a regulatory filing. The pay cut stems from the messaging issue, said a person with knowledge of the matter who asked not to be identified discussing confidential information.
Even with the cut, Ybarra’s $18.9 million in compensation for 2022 still rose from $18.4 million a year earlier. Revenue from the institutional clients group, which is home to nearly 75,000 employees, climbed 3% to $41.2 billion last year, despite an industrywide slowdown in deal activity and capital markets origination.
“ICG posted strong revenue and overall positive financial results despite volatile macroeconomic conditions,” Citigroup said in the filing. “Mr. Ybarra showed strong leadership in implementing strategies to combat attrition while continuing to display sound judgment.” Even so, there is “much work to be done” to improve market share and client satisfaction in the unit.
Citigroup was among a dozen global banks that paid a combined $2 billion in penalties to US regulators last year when their employees used unmonitored communications channels such as WhatsApp for business. Other banks including Morgan Stanley and Barclays Plc have trimmed compensation over the matter.
Citigroup last year expanded the use of so-called performance share units as part of its efforts to more closely align executive incentives with shareholders’ interests. The board’s compensation committee this year decided it wouldn’t make any payments for PSUs granted in 2019 because the company’s stock performance between 2020 and 2022 didn’t meet the necessary levels, the filing shows.
Separately, the bank said it’s made progress toward closing the gender pay gap in 2022. On a global basis, median pay for women was 22% less than for men, a smaller disparity than the 26% it reported a year earlier.
The firm also made progress on the racial pay gap: In the US, minorities made 97 cents for every dollar earned by non-minorities, up a penny a year earlier.
Citigroup remains one of the few major companies to disclose its unadjusted pay gap. Instead, many competitors offer an adjusted look that takes into account an employee’s role and location. On that basis, women globally are paid on average more than 99% of what men are paid at Citigroup.
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