Citigroup has elected chief executive officer (CEO) Jane Fraser as chair of the US bank’s board of directors and is paying her a one-off $25 million (€21.5 million) bonus, underscoring her leadership position atop the lender as it pursues a radical overhaul.
Ms Fraser became chief executive in 2021. John Dugan has been the bank’s chair since 2019, about a decade after the bank split the chair and CEO role.
“Citi is in a fundamentally different place than it was when these roles were separated,” said Dugan, who will now be Citi’s lead independent director. “Jane’s very deliberate plan to make Citi a simpler and more focused bank has created meaningful shareholder value.”
US companies have been outliers compared to other multinationals in allowing top executives to also chair the boards they are accountable to. Combining the two roles is commonplace for Wall Street banks and a model favoured by JPMorgan, Morgan Stanley, Bank of America and Goldman Sachs.
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Fraser’s appointment to lead Citi’s board follows a similar announcement by US bank Wells Fargo, which in July said it would appoint chief executive Charlie Scharf as chair of its board. Her bonus was not awarded pursuant to a preset performance target. Citi said in a regulatory filing that it reflected the board’s “belief that Ms Fraser’s strategic priorities are sound and that she is executing on them promptly and thoughtfully”.
It said two-thirds of its transformation programmes were “at or mostly at Citi’s target state” as well as its stock market performance. Ms Fraser’s appointment comes two years after the Scottish chief executive unveiled Citi’s biggest restructuring in more than a decade, in an effort to revive a bank which has lagged behind its peers since the 2008 financial crisis.
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The third-largest US bank by assets last year said it would cut 20,000 jobs – about 10 per cent of its workforce – as part of the overhaul, which also handed Fraser more control through eliminating a layer of management between her and Citi’s business heads.
While the bank has since lowered its target for return on tangible common equity – a key profitability metric – from 11 per cent to 12 per cent down to 10 per cent to 11 per cent in 2026, there are signs the restructuring may be starting to pay off.
Citi shares have climbed more than 50 per cent in the past year, their highest level since the financial crisis.
Net income rose 16 per cent in the third quarter to $3.8bn as Citi increased revenue across its main divisions including trading, investment banking and wealth management. Return on tangible common equity rose to 8 per cent from 7 per cent in the same quarter in 2024.
The last Citi chief to hold chair and chief executive roles was Charles Prince, who became CEO starting in 2003 and chair in 2006. He stepped down from both in November 2007. – Copyright The Financial Times Limited 2025
