Citigroup Inc has withheld part of the compensation intended for Paco Ybarra, the head of the institutional clients group after the bank was penalized with a $200 million fine for its employees’ unauthorized use of messaging channels such as WhatsApp last year. According to a regulatory filing, Citigroup made a “downward adjustment” to Ybarra’s compensation, attributing the cultural issues that emerged in his division to remedial action. A source with knowledge of the matter confirmed that the pay cut is linked to the messaging controversy.
Despite the reduction in compensation, Ybarra’s earnings for the year 2022 saw an increase of $18.9 million, from $18.4 million in the previous year. The institutional clients group, which houses approximately 75,000 employees, recorded a 3% revenue rise to 441.2 billion in 2022, in spite of a decrease in deal activity and capital markets origination across the industry. Ybarra has been with Citigroup for more than three decades and has held a variety of senior roles in the company. He was appointed to his current position in 2019, succeeding the long-time head of the institutional clients group, Jamie Forese.
Citigroup acknowledged the robust financial results of the institutional client group amid volatile macroeconomic conditions while lauding Ybarra’s leadership in implementing strategies to counter attrition and exhibiting sound judgment. The regulatory filing also stated that there is still a lot of work to be done to improve market share and customer satisfaction in the unit.
Last year, Citigroup and eleven other global banks paid a total of $2 billion in penalties to the US regulator for the use of unmonitored communication channels for business purposes. Other financial institutions, such as Morgan Stanley and Barclays Plc, have also reduced compensation in response to the same matter.
In its bid to align executive incentives with shareholder interests, Citigroup expanded its use of performance share units, but its board’s compensation committee opted not to make any payments for PSUs granted in 2019 due to the company’s stock performance not meeting the required standards between 2020 and 2022.
Citigroup made progress toward closing the gender pay and racial pay gap in 2022. The median pay for women globally was 22% less than that for men, a decrease from the 26% disparity reported the previous year. Additionally, in the United States, minorities made 97 cents for every dollar earned by non-minorities, up from 96 cents in the previous year.
Citigroup is one of the few large companies that disclose their unadjusted pay gap figures. Most competitors offer adjusted data that considers employees’ roles and locations. Women globally are paid more than 99% of what men earn at Citigroup, according to adjusted figures. However, the median pay gap for women is still a concern and Citigroup continues to work toward closing the gap.
Citigroup is a multinational financial services corporation based in New York City. It was formed in 1998 by the merger of Citicorp and Travelers Group. It provides a broad range of financial products and services, including consumer banking, corporate and investment banking, securities brokerage, wealth management, and insurance. As of 2022, Citigroup was the fourth-largest bank in the United States by total assets.