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Michael Corbat defended the huge compensation gap between low-level employees and top management at Citigroup, saying it should inspire the rank-and-file workers who could someday fill his shoes.
“My answer is I am that person,” Corbat said Thursday on CNBC’s Squawk on the Street. “I started at our firm in 1983 at $17,000 a year.”
The pay gap at Citigroup, led by Corbat since 2012, is the biggest among large U.S. banks. Corbat made $24.2 million last year, 486 times the median employee pay of $49,766. While other bank CEOs made similar paydays, higher median pay at Bank of America and J.P. Morgan Chase meant that Citigroup had the most extreme ratio.
That comparison is unfair to Citigroup because of the employees the bank has in places like Mexico and the Philippines, where compensation is low, he said. Excluding those workers, the “average employee in the U.S. makes right about $100,000 a year,” he said.
Income inequality at large U.S. corporations is a hot-button issue ahead of the 2020 U.S. elections. The pay ratio is even more extreme outside of banking, in industries like retail, food and entertainment. For instance, Disney CEO Bob Iger made 1,424 times the median pay of his employees, prompting Abigail Disney to call his compensation “insane.”
Corbat, along with other bank CEOs, was grilled last month by U.S. lawmakers over the pay gap at their institutions.
“If you were an employee, and you saw your boss making $486 for every dollar you make, how would you feel about that?” Rep. Nydia Velazquez of New York asked Corbat on April 10.
Echoing his answer then, Corbat added Thursday that “through the grace of God, through hard work, I got to where I am. So I am that person that looked up and said maybe if I work hard enough I can get there.”
Shares of Citigroup have climbed 35% this year as the stock recovered from a sharp decline in December. The New York-based bank posted mixed first-quarter results last month amid a sharp decline in equities trading.
