Fraser Consolidates Power with $25M Stock Bonus
Citigroup’s board has appointed CEO Jane Fraser as chair, awarding her a restricted stock bonus valued at $25 million alongside additional stock options. The decision ends nearly two decades of leadership separation at the bank and signals full confidence in Fraser’s vision for the $1.8 trillion institution.
This move aligns Citigroup with other banking giants such as JPMorgan Chase, Bank of America, Wells Fargo, Morgan Stanley, and Goldman Sachs, where CEOs also chair the board. The board’s current chair, John Dugan, will transition to lead independent director. Dugan emphasized Citi’s transformation under Fraser, stating, “Jane’s very deliberate plan to make Citi a simpler and more focused bank has created meaningful shareholder value.”
A Reshaped Citi Under Fraser’s Leadership
Fraser took over as CEO in 2021 and has since restructured Citigroup into five streamlined divisions. Once the largest financial supermarket in the U.S., Citi’s complex structure proved unsustainable, especially after the 2008 financial crisis. Since then, the company has been gradually shedding assets and simplifying operations.
Citigroup stock is up 36% year-to-date, outperforming its peers. Over Fraser’s tenure, the stock has gained 46%. Her $25 million bonus is tied to long-term vesting, signaling expectations she will stay through at least the end of the decade.
Challenges Ahead: ROTCE, Banamex, and Regulation
Despite investor confidence, challenges remain. Citigroup’s return on tangible common equity (ROTCE) stands at 8%, below its revised 2024 target of 10% to 11%. The bank also has yet to resolve a 2020 consent order from regulators concerning data integrity and compliance.
A key part of Fraser’s plan includes spinning off its Mexican consumer banking unit, Banamex, through an IPO. In September, Citi sold a 25% stake in Banamex to an entity owned by billionaire Fernando Chico Pardo, advancing its divestiture strategy.
Criticism Over Governance and Bonus
Not all reactions have been positive. Wells Fargo analyst Mike Mayo, a vocal supporter of Citi stock, criticized the board’s decision, calling it an example of “subpar governance” and excessive compensation. He argued the move is premature given Citi’s ongoing regulatory issues and unmet profitability targets.
Fraser, however, remains optimistic: “As we get more and more of the hard yards behind us, my excitement about what’s possible for Citi grows exponentially.”
