Citigroup's blockbuster $52 million recruitment of Vis Raghavan, the former JPMorgan Chase investment banking chief now leading Citi's banking division, has come under renewed scrutiny. According to a Financial Times report, JPMorgan informed Raghavan that he was being let go after years of complaints about his conduct, and Citi hired him just three days later. The report, based on conversations with more than 15 sources familiar with the matter, casts a shadow over one of Citi's most prominent external hires.
The timing is critical: Citi's investor day is scheduled for May 7, where CEO Jane Fraser, finance chief Gonzalo Luchetti, and Raghavan are all slated to present. The event was intended to showcase progress on Fraser's turnaround strategy, but the fresh controversy surrounding Raghavan could distract from the narrative. Citi's shares dipped 0.5% in premarket trading to $128.53, reflecting investor unease.
Details of the Compensation Package
Raghavan's compensation package, valued at $52.25 million, has been a point of contention since its announcement. Citi has described it as a "make-whole" award, designed to compensate for deferred compensation Raghavan forfeited when leaving JPMorgan. According to an SEC filing, the awards are structured to mirror the lost pay, with most equity scheduled to vest between 2026 and 2031. However, the awards are not guaranteed and can be forfeited or clawed back in cases of misconduct.
The package drew criticism from proxy adviser Glass Lewis, which initially objected to the disclosure. Citi later provided additional details, leading Glass Lewis to soften its stance. The bank split the award into $39.38 million in deferred equity and $12.87 million in deferred cash.
Business Performance and Strategic Context
Despite the controversy, Citi's business has shown signs of improvement. The bank reported $24.6 billion in first-quarter revenue, its strongest performance in a decade. Revenue at the banking division climbed 15%, with investment banking fees benefiting from a pickup in M&A and equity underwriting. According to Dealogic data cited by Reuters, Citi ranked fifth globally in banking fees for the quarter, trailing JPMorgan, Goldman Sachs, and other Wall Street heavyweights.
Raghavan has been actively reshaping the division. Last week, Reuters reported that Citi established a Financial and Strategic Investors group within its investment bank, hiring Klaus Hessberger from Lazard to co-lead the team. Hessberger spent 25 years at JPMorgan before joining Lazard.
Implications for Citi's Turnaround
Citi is investing heavily in top talent as part of its effort to boost returns, control costs, and narrow the gap with rivals like JPMorgan, Goldman Sachs, and Morgan Stanley. When Raghavan was hired in 2024, Fraser hailed him as a "proven leader" and evidence that Citi could attract top-tier executives. However, the FT report raises questions about due diligence and could undermine confidence among staff, clients, and shareholders.
Wells Fargo analyst Mike Mayo noted at the time of Raghavan's hiring that Citi's banking arm was ripe for an overhaul, citing the bank's international reach and Raghavan's leadership potential. That assessment remains unchanged, but the stakes have risen. If the controversy persists, it could complicate Fraser's messaging at the upcoming investor day.
In premarket trading, Citi shares slipped 0.5% to $128.53, while JPMorgan shares were little changed and Goldman Sachs pointed to a softer open. The market will be watching closely to see how Citi addresses the issue next week.
