Citigroup Cuts Executive Bonuses Amid Turnaround and Regulatory Fixes

Citigroup has reduced performance-based bonuses for its top executives, reflecting progress in the bank’s ongoing turnaround and regulatory compliance efforts, according to the company’s proxy filing released on Tuesday.

The bonuses, awarded to members of Citigroup’s executive management committee and 250 senior managers critical to the bank’s transformation, were granted at 68% of the maximum payout in 2024. This marks a decline from the previous two years, as the bank continues working on operational improvements mandated by regulators. Notably, CEO Jane Fraser was not included in this group.

The reduced payout was linked to the bank’s milestone completion rate, which fell to 53% in 2024—significantly lower than the 80% achieved in 2023 and the 94% in 2022. The bank cited ongoing efforts to meet key regulatory requirements set in 2020 by the Federal Reserve and the Office of the Comptroller of the Currency (OCC) as a primary factor influencing the bonus structure.

Citigroup has been under regulatory scrutiny due to risk management and internal controls deficiencies. The Federal Reserve and OCC had mandated a series of changes aimed at strengthening the bank’s operations and compliance framework. Meeting these requirements has been a top priority for the institution, with executive compensation tied to progress on these efforts.

Despite the lower milestone completion rate, the bank factored in total shareholder return, which reached 15% over a three-year period, to determine the final bonus payouts. While the exact bonus amounts were not disclosed, the decision to limit payouts underscores Citigroup’s measured approach in balancing executive incentives with regulatory obligations and shareholder interests.

The latest figures highlight the challenges Citigroup faces in executing its turnaround strategy under Fraser’s leadership. Since taking over as CEO, Fraser has implemented structural changes and cost-cutting measures to improve the bank’s financial performance and regulatory standing. However, meeting compliance goals remains a complex and ongoing process.

Industry analysts view the lower bonus payouts as a sign that Citigroup is holding its leadership accountable for delivering on regulatory commitments and operational improvements. The bank’s ability to fully execute its transformation strategy will be closely watched by regulators, investors, and stakeholders in the coming years.

With a renewed focus on risk management and efficiency, Citigroup continues to navigate its turnaround while balancing executive compensation with long-term performance. As the bank works toward achieving regulatory milestones, future bonus payouts are expected to align with its progress on these critical reforms.