Citigroup to pay new director $350,000 for three weeks' work

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Citigroup, the banking giant 27 per cent-owned by the US taxpayer, plans to pay one of its directors $350,000 for just three weeks' work as a consultant, it has emerged.

The size of the payout for Bob Joss was revealed in a regulatory filing, weeks after proxy voting services urged Citigroup shareholders to reject Mr Joss's appointment to the board for fear the consulting job would cause a conflict of interest.

Mr Joss, a former executive of Citigroup's rival Wells Fargo, says that his consulting fee – at a rate equivalent to $6m a year – offers value for money.

Citigroup is in the throes of a major restructuring, after coming close to bankruptcy during the financial crisis, and was told by regulators to strengthen its board with independent directors with banking experience. But Mr Joss said he would rather be a consultant, so Citigroup chairman Richard Parsons offered him a hybrid role.

As well as the $225,000 paid to all outside directors, Mr Joss will be paid $350,000 for what his letter of employment from Mr Parsons describes as consulting advice "from time to time on projects agreed by you and me... for a minimum of approximately three weeks annually".

Investors overwhelmingly backed Mr Joss's appointment at their annual meeting last month, despite objections from proxy voting advisers Glass, Lewis. "We question the need for the company to engage in consulting relationships with its directors," Glass, Lewis said. "We view such relationships as potentially creating conflicts for directors, as they may be forced to weigh their own interests in relation to shareholder interests when making board decisions."

Mr Joss told Bloomberg his consulting fee compared well with "people who go out there and give speeches for $50,000". He said: "I'm putting in a lot of time and it seems like it's fair."