You can no longer say that there's no accountability at Wall Street banks. Just ask Manuel Medina-Mora, the co-president of Citigroup, head of its global consumer banking business, and its Mexico chairman, whose pay was slashed last year by more than 7%.
Medina-Mora, 62, was on the job when Citi's Mexico unit, Banamex, suffered an apparent fraud of as much as $400 million, disclosed last year. The fraud resulted in Citi's cutting its net income for 2013 by $235 million. U.S. money-laundering regulators are investigating the case.
Consequently, Medina-Mora's pay was slashed — to $14 million in 2013 from $15.1 million the year before. In its annual proxy statement, Citi said the cut was made in "consideration of leadership accountability for disclosed control issues that were identified in 2013, including in Banamex USA." Medina-Mora's pay cut would have been much steeper had his annual stock grant not increased to $6.5 million from $2.9 million, based on his job performance in 2012. But you can't have everything.
Medina-Mora, who in the past has been mentioned as a possible future Citigroup CEO, remains the third-highest-paid executive at the company, behind CEO Michael Corbat ($17.6 million) and James Forese, its investment banking chief ($17.5 million).
In a memo to employees last month, Corbat called the fraud at Banamex "galling" and pledged to send "a crystal clear message about the consequences of such actions."
On Wall Street, the pay cut for Medina-Mora is being interpreted as proof that Corbat means what he says. Observed the Financial Times: "The decision to dock the pay of a senior executive is highly unusual." And by a million bucks? Even more unusual.