However, the retention bonus to Pandit will only be paid subject to certain commitments. He will only be eligible for a deferred stock of $ 10 million if he succeeds in meeting the regulatory considerations like maintaining capital levels.
This reward shall come in three annual equal installments, starting at the end of 2013. Compensation experts said those targets were difficult to measure and may not provide much immediate benefit to shareholders.
"They're soft measures," said Robin Ferracone, the executive chair of the compensation advisory firm Farient Advisors. Looking at the monetary targets, he will be awarded $ 6.65 million if the bank earns a minimum of $ 12 billion before taxes over 2011 and 2012.
The salary hike comes with a present condition of Pandit drawing $ 1.75 million base salary in 2011. Though, Pandit had earlier agreed to take a token $ 1 salary until the bank would sustain its profitability.
This bonus hike is not subject to limitations; over and above it he could be awarded a greater payout in 2011, according to spokesperson Shannon Bell.