Citigroup, based in New York, faces restrictions on executive compensation because it received US$45 billion in government bailout money after the peak of the credit crisis last fall.

Salary caps for top executives were recently set by the Obama administration's pay czar, Kenneth Feinberg, for Citi and six other companies that received big bailouts.

The new compensation packages at Citigroup fall within the guidelines set last month by Feinberg, Citi said in a regulatory filing submitted to the Securities and Exchange Commission.

There has been some justified concern that top executives might leave banks where compensation is restricted, said Nancy Atkinson, a senior analyst at research firm Aite Group.

But Atkinson noted that there are only so many high-ranking banking jobs available in the industry, making it unlikely that a large portion of Citi's would leave for better-paying jobs. Many other banks face similar restrictions, she said.

Year-end bonuses

"We're in an economy where there's not that many other opportunities," Atkinson said.

In the case of some Citi executives, while they are getting cash raises, that could be offset by reductions in other forms of compensation such as year-end bonuses or other perks. Citi said earlier in the year it was changing the mix between employees' salary and bonuses.

CFO John Gerspach's salary was increased to US$500,000 from US$400,000, according to the filing late Tuesday. James Forese, co-head of global markets, will now make US$475,000, more than double the US$225,000 he previously earned.

The pair will also receive "stock salary" for 2009. Gerspach will receive stock valued at US$2.9 million as part of his compensation for 2009. Forese will receive stock valued at $5.4 million.

Stephen Volk, a vice-chairman at the bank, will continue to receive a base salary of US$500,000. He will receive stock worth US$3.4 million.

Pandit did not receive any stock compensation.

The stock portion of the pay will be awarded on November 30. The number of shares given to each employee will be based on Citi's closing price that day.

Shares of Citigroup rose three cents to US$4.27 in afternoon trading.

The shares awarded can only be sold or transferred in three equal installments, beginning January 20, 2011, and only if Citigroup repays its bailout money.

- ap