DRIVERS OF COMPENSATION F

YEAR

2007

2008

BENCHMARKING
(PEER GROUPS)

ABN AMRO, AIG, American Express,

Bank of America, Bank of New York,
Credit Suisse Group, Deutsche Bank,
General Electric, Goldman Sachs,
HSBC, JP Morgan Chase, Merrill Lynch,
Morgan Stanley, UBS, Wachovia and
Wells Fargo.
The criteria benchmarked were
earnings, earnings per share growth,
revenue growth, return on common
equity, and criteria relating to stock
price (five-year and one-year total
returns, price to book value ratio, and
2006 price/earnings ratio).

American Express, Bank of America,

Bank of New York Mellon, Capital One,
Credit Suisse Group, Deutsche Bank,
General Electric, Goldman Sachs,
HSBC, JP Morgan Chase, Lehman
Brothers, Merrill Lynch, Morgan Stanley,
UBS, Wachovia and Wells Fargo. The
financial criteria benchmarked were
earnings, net income after cost of
capital, earnings per share growth,
revenue growth, return on common
equity, and criteria relating to stock
price (five-year and one-year total
returns, price to book value ratio, and
2007 price/earnings ratio).

2009

2010

In light of the extraordinary financial

upheavals that occurred during 2008,
market data provided limited
meaningful guidance regarding
contemporary compensation practices.

Bank of America/Merrill Lynch,

Barclays, Credit Suisse, Deutsche Bank,
Goldman Sachs, JPMorgan Chase,
Morgan Stanley, and UBS were the
companies considered to be
comparable. The market information
was developed based on parameters
set by management.

DRIVERS OF COMPENSATION FOR THE PERIOD OF 2007-2010

PAY-FOR-PERFORMANCE BASED EVALUATION

Business Practices Performance

i) Federal Reserve approved several significant

acquisitions by Citigroup.
Ii) Excellence in talent development, including the
development of diverse talent.
Iii) Internal audit and control scores continued to
improve during 2006 across Citigroup.

2008 compensation reflects the extraordinary market conditions in 2007 and the decline in financial p
is more varied than it has been historically. The committee reduced the value of the incentive awards
paid for 2006 (in some cases, awarding zero bonus amounts for 2007).
Bonus and equity compensation awards
i) Reduced percentage of cash awards
ii) No Executive Performance Plan bonus pool for 2007
iii) Limited eligibility for CAP awards
iv) Deferred cash retention awards
v) No LTIP awards earned
vi) Stock ownership: The named executive officers held significant amounts of stock throughout 2007
other stockholders. In addition, due to their significant stock holdings, the executive officers, like othe
the Board of Directors reduced the dividend to stockholders as announced in 2008.

The Citigroup Pension Plan was closed to new entrants after December 31, 2006, and accordingly, Mr.
are not eligible to participate in that plan.

Compensation structure approach emphasized the following general principles: performance-based in

individual compensation decisions, a mix of incentive and retention awards, and recovery or clawbac
Bonus and equity compensation awards
i) Executive officers did not receive any cash awards for 2008
ii) Executive officers who received awards received 60% of the total award in the form of deferred cas
iii) Eligible to receive 10% of their awards as performance priced stock options
iv) No CAP awards for senior executives
v) No Executive Performance Plan bonus pool for 2008
vi) No LTIP (Long-term Incentive Program) awards earned.

In 2009, Citi built its financial strength:

i) Citi substantially increased its capital and improved its liquidity position.
ii) Despite very difficult market and economic conditions, Citicorp remained profitable during 2009 wit
billion in 2008.
iii) TARP repayment. In December 2009, Citi repaid $20 billion of funds invested in the company by th
sharing agreement with the US government.

The committee used a balanced scorecard in determining compensation for the applicable named exe
on the 2009 results for the businesses led by the executive using objective metrics, including percent
prior year. The metrics were:
Revenue (unadjusted for marks, but stated with and without credit valuation adjustments (CVAs))
Non-incentive Compensation Expense (expenses other than incentive compensation)
Cost of Credit (credit write-offs and provisions for credit losses, net of credit recoveries)
Pre-tax pre-bonus income (Revenue less Non-incentive Compensation Expense less Cost of Credit)
Total Expenses (includes all expenses compensation and non-compensation managed by the b
Net Income (Revenues less Total Expenses less Cost of Credit less taxes)
Efficiency Ratio (Total Expenses divided by Revenues)
Risk Capital (measures the potential unexpected loss of economic value over one year, calculated a
Return on Risk Capital (Net Income divided by Risk Capital)
GAAP Assets (assets valued according to GAAP)
RAP Assets (risk-weighted assets, net of credit default swap hedges)
Headcount (full-time employees)
The scorecard also includes (a) ratings from Citis independent risk management function on the exec
and overall risk management, (b) information on performance against objective control metrics, such
cited in internal audits, and (c) relative scores on qualitative measures, such as client service, teamwo
integrity, and leadership. Finally, the scorecard contains information on prior years compensation and

SATION FOR THE PERIOD OF 2007-2010

PAY-FOR-PERFORMANCE BASED EVALUATION
Financial Performance

i) Revenues grew 7%, almost all of which

was organic.
Ii) Net income from continuing operations
grew at about the same rate as total
revenues (about 7% in each case).
Iii) The 2006 return on equity was 18.8% in
the range of 18-20%.
Iv) Total return to
stockholders was 19.6%, which was lower
than many of the listed peer companies but
comparable to large money center banks.

nary market conditions in 2007 and the decline in financial performance of Citi. Citis compensation framework
y. The committee reduced the value of the incentive awards payable to some senior executives from the awards
ero bonus amounts for 2007).
rds

pool for 2007

e officers held significant amounts of stock throughout 2007 and experienced a diminution in wealth along with
ir significant stock holdings, the executive officers, like other stockholders, received an income reduction when
nd to stockholders as announced in 2008.

new entrants after December 31, 2006, and accordingly, Mr. Pandit and Mr. Crittenden (who were hired in 2007)

sized the following general principles: performance-based incentive pools, performance-based differentiation of
of incentive and retention awards, and recovery or clawback of compensation where appropriate.
rds
ash awards for 2008
received 60% of the total award in the form of deferred cash
as performance priced stock options

pool for 2008

awards earned.

th:
nd improved its liquidity position.
mic conditions, Citicorp remained profitable during 2009 with $14.8 billion in net income compared to $6.2

iti repaid $20 billion of funds invested in the company by the US government through TARP and exited the lossnt.

d in determining compensation for the applicable named executive officers. The scorecard provides information
by the executive using objective metrics, including percentage increases or decreases in the item from the

ted with and without credit valuation adjustments (CVAs))

expenses other than incentive compensation)
isions for credit losses, net of credit recoveries)
Non-incentive Compensation Expense less Cost of Credit)
compensation and non-compensation managed by the business)
es less Cost of Credit less taxes)
by Revenues)
expected loss of economic value over one year, calculated at a very high confidence level)
ded by Risk Capital)
o GAAP)
f credit default swap hedges)

m Citis independent risk management function on the executives risk knowledge, appropriate risk mitigation,
tion on performance against objective control metrics, such as internal audit scores, major business issues
ores on qualitative measures, such as client service, teamwork and partnership, producing results with
ecard contains information on prior years compensation and market compensation data.

EVALUATION
Strategic Performance

i) Highlights included the opening of over 1,100 retail

bank and consumer finance branches, partnerships with
7-Eleven, Expedia, Shell and Home Depot, and
exceeding the targeted reduction in data centers.
Ii) Performance of new investments exceeded
expectations for both financial results and franchise
development.
iii) In 2006, announced strategic acquisitions or
significant ownership stakes included HDFC, Akbank,
Grupo Uno, Guangdong Development Bank, Grupo
Cuscatlan and Quilter. In addition, certain credit ratings
were upgraded in 2006.

e in financial performance of Citi. Citis compensation framework

entive awards payable to some senior executives from the awards

roughout 2007 and experienced a diminution in wealth along with

fficers, like other stockholders, received an income reduction when

ccordingly, Mr. Pandit and Mr. Crittenden (who were hired in 2007)

mance-based incentive pools, performance-based differentiation of

ery or clawback of compensation where appropriate.

of deferred cash

during 2009 with $14.8 billion in net income compared to $6.2

company by the US government through TARP and exited the loss-

ble named executive officers. The scorecard provides information

luding percentage increases or decreases in the item from the

ents (CVAs))

s)
ost of Credit)
naged by the business)

ar, calculated at a very high confidence level)

on on the executives risk knowledge, appropriate risk mitigation,

metrics, such as internal audit scores, major business issues
ervice, teamwork and partnership, producing results with
mpensation and market compensation data.