Human Capital & Careers

Citigroup’s Krawcheck Earned Nearly $12M

Other recent filings detail the compensation for the finance chiefs of Johnson & Johnson, Bank of New York, IBM, The New York Times Co., Gannett, a...
Stephen TaubMarch 15, 2007

As chief financial officer of Citigroup last year, Sallie Krawcheck earned $11.66 million, according to the bank’s recently filed proxy statement.

As required under new Securities and Exchange Commission disclosure rules, Citigroup detailed the compensation of Krawcheck and its other four highest-paid executives in the summary compensation table. That table, however, actually understates their stock awards. For example, in 2006 Krawcheck received a bonus of $5.8 million and stock awards worth nearly $4.7 million, but only $2.95 million of the latter amount is included in the table.

According to the bank, the summary compensation table values equity awards under Statement of Financial Accounting Standards No. 123. Citigroup elaborated: “In general under that rule, an equity award is expensed over the vesting period of the equity award, unless the employee is eligible to retire. If the employee is eligible to retire, then the award must be expensed on the grant date or accrued over a service period prior to the grant date. Although [the bank’s] equity programs do not expressly contain retirement provisions, they do have terms that result in retirement treatment under the applicable accounting standards.”

Krawcheck, who earlier this week left her finance post for the Global Wealth Management division, was just one of dozens of CFOs whose pay packages were recently disclosed.

Robert J. Darretta of Johnson & Johnson earned about $11.3 million last year. This included $3.2 million in options awards, $2.6 million in non-equity incentive plan compensation, $2.2 million in change in pension value and non-qualified deferred compensation earnings, and nearly $1.6 million in “other compensation,” mostly attributed to the value of dividend equivalents earned last year.

Bank of New York CFO Thomas Gibbons took home about $6.4 million, including a bonus of nearly $1.9 million, option grants valued at $823 million, and $943,000 realized from exercising previously granted stock options.

At IBM, senior vice president and CFO Mark Loughridge earned more than $6 million from 14 different categories of compensation, underscoring how the SEC’s new disclosure rules compel companies to slice and dice the source of earnings. For example, his salary was $659,167, his bonus was $200,000, and he received nearly $1.8 million from stock awards, including performance share units, restricted stock units, and retention restricted stock units.

Even in struggling industries, some finance chiefs fared well in 2006. Leonard P. Forman, executive vice president and CFO of The New York Times Co. — which like most newspaper businesses has suffered circulation declines — took home more than $1.8 million last year.

Gracia C. Martore, executive vice president and CFO of Gannett, earned nearly $4.6 million last year, including nearly $2 million for the change in pension value and non-qualified deferred compensation earnings.

Warren Buffett’s top finance executive, Berkshire Hathaway chief financial officer Marc Hamburg, earned a relatively paltry $673,500, mostly from salary. However, Hamburg was actually the company’s highest-earning executive among the three included in the compensation table; the figure for Buffett himself was just $214,250.