Citi CEO to get a raise on $1 salary

NEW YORK (CNNMoney.com) -- Citigroup plans to begin paying its chief executive more money next year, whether he likes it or not.

CEO Vikram Pandit refused to accept more than $1 for his 2010 salary, which was the same amount he was paid in 2009. However, the bank's chairman said Friday that Citi plans to give Pandit compensation in 2011 that is "commensurate with the job of CEO."

Richard Parsons, the former CEO of Time Warner and current chairman of Citi's board of directors, praised Pandit's performance in returning the bank to profitability. He said Pandit had worked "tirelessly" to restructure the company, which was brought to its knees two years ago when the collapse of the housing market gave rise to a severe financial crisis.

"Although we respect Vikram's decision again to decline salary or an incentive award for 2010, we believe that his performance would merit a different outcome," Parsons said in a written statement.

Citi also said it has decided to give its top 25 executives stock-based salaries this year, even though it was no longer obligated to do so by U.S. authorities. Incentive payments, such as bonuses, for those executives will be determined later in the year.

Like many of the nation's top banks, Citi received billions of dollars in taxpayer aid during the financial crisis. As a result, the government restricted the amount of money it could pay executives until the bailout money was returned.

While Citi has since repaid its government loans, the U.S. Treasury Department still owns a significant stake in the company's common stock, which it plans to sell by the end of the year.

Under this year's financial reform law, Citi (C, Fortune 500) cannot award top executives incentive payments that total more than one third of their overall compensation while the U.S. is still a shareholder.