In March of 2006, three men started the hedge fund Old Lane LLC. One of three, Vikram Pandit has since been named Citigroup's CEO. In 2007, Citigroup welcomed aboard Pandit with the $800 million purchase of the hedge fund. From the deal, $165 million lined Pandit's pockets. Since late in year of 2008, this fund has been out of public view.
At the end of 2007, Citi Capital Advisors managed $59 billion in high risk investments; this would include hedge funds, private equity pools, and real estate. As of February 2012, the figure has dropped to $18.9 billion. Since Citi Capital Advisors have not shared their performance details with the public since 2008, it is hard to say if the drop was derived from losses or sold assets. It would be a safe bet however to say the change came from losses, as the majority of Citigroup's hedge funds have been said to underperform.
In an interview with CNN on October 21, 2011, Mr Pandit discussed how they emerged from their 2009 collapse. "The most important thing is we're back to the basics of banking." Unfortunately for the client, the basics tend to result in high fees for the consumer and large compensation for the top executives. Thanks to the Dodd-Frank reform, shareholders get a vote on Executive pay. This reform was put into place at the time of the bail outs; the terms had to be agreed to in order to receive the TARP funds.
On February 20, 2009, Citigroup's stock opened at $2.20. On April 17, 2012, Citigroup's stock opened at $34.82. Based on Citigroup's performance, Vikram Pandit asked share holders for a raise. The compensation he sought was valued at $15 million. The compensation requested by Citigroup's executives was thought to be fair in their minds, as Pandit had agreed to a salary of $1 a year until the financial giant returned from red to black. Many shareholders found the request to be a bit obscene, and rejected it in a shareholder's meeting on April 17, 2012. Don't shed too many tears for Vikram Pandit; when considering the sell of his hedge fund with salary and rewards throughout all his years with citigroup, he has raked in hundreds of millions of dollars in compensation since he joined Citigroup in 2007.