Citigroup, Inc. (C Quick QuoteC - Free Report) axed payouts of 250 top executives' bonuses under a program in 2024 that tied their payout to a turnaround effort to boost shareholder returns and fix regulatory compliance shortcomings, per the bank's proxy filing filed on Tuesday.

More on Lower Bonus Paid by Citigroup

C’s “Transformation Bonus Program” was put in place three years ago to incentivize senior staff to increase the company’s financial performance, and improve its risk and control systems following an order by regulators.

According to proxy filings, in the third annual installment, the “Transformation Bonus Program” paid out 68% of the target for 2024 to about 250 senior employees, lower than in the previous two years.

The final tranche, unlike the first two, included a boost from the performance of Citigroup shares. Without that, the so-called “performance achievement percentage” determined by the board’s compensation committee was just 53%.

C’s Ongoing Regulatory Issues

In lieu of Citigroup’s ongoing operational issues, in July 2024, regulators fined C $136 million due to its slow improvement in data quality management. The bank remains subject to consent orders from the Federal Reserve and Office of the Comptroller of the Currency. 

Earlier this month, Citigroup accidentally credited a client’s account with $81 trillion when it was supposed to credit only $280. This was first reported by the Financial Times.

Last year, C was hit by British regulators with a $79-million fine over a May 2022 incident when one of its traders sold $1.4 billion worth of stocks on European exchanges, triggering a so-called “flash crash.” The trader meant to sell just $58 million worth of stocks but accidentally issued an order to sell $444 billion, the majority of which was blocked before being sold.
In 2020, Citigroup erroneously used its funds to pay off a $894-million loan owned by Revlon, a cosmetics company. Although some of the cash was returned by lenders, 10 of them refused to give back the funds.

In June 2024, another regulatory blow occurred when regulators identified deficiencies in “living wills” submitted by Citigroup, describing how the lenders would wind themselves down amid a catastrophic event. The bank has been asked to report to regulators its plans to correct the inadequacies.

In a proxy filing, Citigroup has acknowledged that, “despite making important progress in advancing the transformation, including remediating the consent orders, there were areas where we have not made progress quickly enough, such as in our data quality management related to governance and regulatory reporting.” The bank said these areas are in the performance metric categories and affected the third tranche of the bonus.

Citigroup’s Zacks Rank & Price Performance

Over the past six months, C shares have gained 15.3% compared with the industry’s growth of 13.9%.

Image Source: Zacks Investment Research

Currently, C carries a Zacks Rank #3 (Hold).

Stocks Worth Considering

Some better-ranked bank stocks are BancFirst Corporation (BANF Quick QuoteBANF - Free Report) and Cullen/Frost Bankers, Inc. (CFR Quick QuoteCFR - Free Report) .

BANF’s earnings estimates for 2025 have been unchanged at $6.52 per share in the past 30 days. The company’s shares have gained 29.6% in the past year. At present, BANF sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CFR’s 2025 earnings estimates have been revised upward to $8.87 per share in the past 30 days. The stock has gained 19% in the past year. Currently, CFR flaunts a Zacks Rank #1.