Discretionary Annual Incentive Awards

Citigroup grants immediate cash bonus payments and various forms of immediate and deferred awards as part of its discretionary annual incentive award program involving a large segment of Citigroup’s employees worldwide.

Discretionary annual incentive awards are generally awarded in the first quarter of the year based on the previous year’s performance. Awards valued at less than $75,000 (or the local currency equivalent) are generally paid entirely in the form of an immediate cash bonus. Pursuant to Citigroup policy and/or regulatory requirements, certain employees are subject to mandatory deferrals of incentive pay and generally receive 15%–60% of their awards in the form of deferred stock or deferred cash stock units. Discretionary annual incentive awards to certain employees in the EU are subject to deferral requirements regardless of the total award value, with at least 50% of the immediate incentive delivered in the form of a stock payment award subject to a restriction on sale or transfer (generally, for 12 months).

Subject to certain exceptions (principally, for retirement-eligible employees), continuous employment within Citigroup is required to vest in deferred annual incentive awards. Post employment vesting by retirement-eligible employees and participants who meet other conditions is generally conditioned upon their compliance with certain restrictions during the remaining vesting period.

Generally, the deferred awards vest in equal annual installments over four years. Vested stock awards are delivered in shares of common stock. Deferred cash awards are payable in cash when the underlying principal award vests. Deferred cash stock unit awards are payable in cash at the vesting value of the underlying stock. The value of each deferred stock unit is equal to one share of Citigroup stock, and the award will fluctuate with changes in the stock price. Recipients of deferred stock awards and deferred cash stock unit awards, however, may, except as prohibited by applicable regulatory guidance, be entitled to receive or accrue dividend-equivalent payments during the vesting period. Generally, in the EU, vested shares are subject to a restriction on sale or transfer after vesting, and vested deferred cash awards and deferred cash stock units are subject to hold back (generally, for 6 or 12 months based on the award type).

Stock awards, deferred cash stock units and deferred cash awards are subject to one or more cancellation and clawback provisions that apply in certain circumstances, including gross misconduct and in the circumstances required by SEC rule 10D-1.

One-Time Equity Award

In October 2025, the Compensation, Performance Management and Culture (CPC) Committee approved a one-time award to the Chair of Citigroup’s Board of Directors and Chief Executive Officer in the form of deferred stock with respect to 259,605 shares of Citigroup common stock and a nonqualified stock option to purchase 1 million shares of Citigroup common stock. An additional nonqualified stock option to purchase 55,000 shares was granted on January 20, 2026. The value of the deferred stock award and the exercise price of the option are based on the closing price of Citigroup’s common stock on the grant date. The deferred stock award will vest and the option will become exercisable on a pro-rata basis on the third, fourth and fifth anniversaries of the grant date, subject to continued employment with Citigroup through the applicable vesting date. The option has a term of 10 years.

Outstanding (Unvested) Stock Awards

A summary of the status of other unvested stock awards granted as discretionary annual incentive or sign-on and replacement stock awards is presented below:


Unvested stock awards	Shares	Weighted- average grant date fair value per share
Unvested at December 31, 2024	67,686,535	$	53.87
Granted(1)	22,582,206	80.84
Canceled	(2,944,542)	60.79
Vested(2)	(24,092,057)	57.50
Unvested at December 31, 2025	63,232,142	$	61.79

(1)The weighted-average fair value of the shares granted during 2025, 2024 and 2023 was $80.84, $53.00 and $49.36, respectively.

(2)The total fair value of stock awards that vested during the years ending 2025, 2024 and 2023 was $1.9 billion, $1.1 billion and $835 million, respectively.

The total unrecognized compensation cost related to unvested stock awards was $1.1 billion at December 31, 2025. The cost is expected to be recognized over a remaining weighted-average period of 1.6 years.

Stock Options

Each stock option has an exercise price not less than the closing price of Citi’s common stock on the date of grant. The options have a contractual term of up to 10 years. A summary of the status of stock option awards is presented below:


Stock options	Options	Weighted- average exercise price		Weighted- average remaining contractual life (in years)	Aggregate intrinsic value
Outstanding at December 31, 2024	—	$	—
Granted(1)	1,000,000	96.30
Exercised	—	—
Canceled	—	—
Outstanding at December 31, 2025	1,000,000	$	96.30	9.8	$	20,390,000
Exercisable at December 31, 2025	—	$	—	—	$	—

(1)The weighted-average fair value of options granted during 2025 was $28.6 million.

There were no options exercised or exercisable during 2025. The total unrecognized compensation cost related to unvested option awards was $27.6 million at December 31, 2025. The cost is expected to be recognized over a remaining weighted-average period of 4.8 years.

The fair value of options is estimated on the date of grant using an option-pricing model. The following weighted-average assumptions were used for options granted in 2025:


	2025
Dividend yield	2.57	%
Expected volatility	31.94
Risk-free interest rate	3.74
Expected life of stock option (in years)	7

The expected option term represents the period that options granted are expected to be outstanding using the simplified method. Citigroup’s historical share option exercise experience does not provide a reasonable basis for estimating the expected term. The expected volatility is based on both weighted historical and implied volatilities of Citi’s common stock price. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant with an equivalent remaining term. The dividend yield is based on anticipated cash dividend payouts.

Performance Share Units

Certain senior executives were awarded performance share units (PSUs) every February from 2022 to 2025, for performance in the year prior to the award date. Each award referenced two forward-looking three-year performance metrics. In each year an award was granted, the metrics were equally weighted. For PSUs awarded in 2022 and 2023, the metrics were average return on tangible common equity and cumulative tangible book value per share. For PSUs awarded in 2024 and 2025, the metrics were weighted-average return on tangible common equity and cumulative tangible book value per share. The award is settled solely in cash after the end of each performance period.

For all award years, if the total shareholder return is negative over the three-year performance period, executives may earn no more than 100% of the target PSUs, regardless of the extent to which Citigroup outperforms against performance goals and/or peer firms. The number of PSUs ultimately earned could vary from zero, if performance goals are not met, to as much as 150% of target, if performance goals are meaningfully exceeded. The reported financial metrics during the performance period are adjusted to reflect any mandatory equitable adjustments as required under the applicable award agreements for unusual and non-recurring items as presented to and approved by the CPC.

For all award years, the value of each PSU is equal to the value of one share of Citi common stock. Dividend equivalents are forfeitable, accrued and paid on the number of earned PSUs after the end of the performance period.

PSUs are subject to remeasurement, pursuant to which the associated value of the award will fluctuate with changes in Citigroup’s stock price and the attainment of the specified performance goals for each award. The value of the award, subject to the performance goals and taking into account any mandatory equitable adjustments as per the terms of the award agreement, is estimated using a simulation model that incorporates multiple valuation assumptions, including the probability of achieving the specified performance goals of each award. The risk-free rate used in the model is based on the applicable U.S. Treasury yield curve. Other significant assumptions for the awards are as follows:


Valuation assumptions—weighted average	2025		2024		2023
Expected volatility	26.58	%	26.82	%	35.97	%
Expected dividend yield	2.73		3.84		4.13

A summary of the performance share unit activity for 2025 is presented below:


Performance share units			Units
Outstanding, beginning of year			2,859,893
Granted			963,390
Canceled			(178,693)
Payments(1)			(353,131)
Outstanding, end of year			3,291,459

(1) $27.9 million in payments were processed for this program in 2025.

Transformation Program

In order to provide an incentive for select employees to effectively execute Citi’s transformation program, in August 2021 the Personnel and Compensation (P&C) Committee of Citigroup’s Board of Directors, the predecessor of the Compensation, Performance Management and Culture (CPC) Committee of Citigroup’s Board of Directors, approved a program for the select employees to earn additional compensation based on the achievement of Citi’s transformation goals from August 2021 through December 2024 and satisfaction of other conditions. The performance program concluded in 2025. The awards were subject to remeasurement, pursuant to which the associated value of the award fluctuated with the attainment of the performance conditions for each tranche and changes to Citigroup’s stock price for the third tranche. Payment was cash settled, in a lump sum, with the third payment indexed to changes in the value of Citi’s common stock from the service inception date through the payment date. Earnings were based on collective performance with respect to Citi’s transformation goals and were evaluated and approved by the CPC Committee on an annual basis.

Payments in the event of any category of employment termination or change in job title or employment status were subject to Citi’s discretion. Cancellation and clawback were provided for in the event of misconduct and certain other circumstances. The program applied to senior leaders, other than the CEO, critical to helping deliver a successful transformation with the value of the awards varying based on individual compensation levels.

Other Variable Incentive Compensation

Citigroup has various incentive plans globally that are used to motivate and reward performance primarily in the areas of sales, operational excellence and customer satisfaction. Participation in these plans is generally limited to employees who are not eligible for discretionary annual incentive awards. Other forms of variable compensation include commissions paid to financial advisors and mortgage loan officers.

Additional Information

Except for awards subject to remeasurement, the total expense recognized for stock awards represents the grant date fair value of such awards, which is generally recognized as a charge to income ratably over the vesting period, other than for awards to retirement-eligible employees and immediately vested awards. Whenever awards are granted or are expected to be granted to employees who are, or are expected to be while the awards are outstanding, retirement eligible, the charge to income is accelerated based on when the applicable conditions for retirement eligibility were or will be met. If the employee is retirement eligible on the grant date, or the award is vested at the grant date, Citi recognizes the expense each year equal to the grant date fair value of the awards that it estimates will be granted in the following year.

Recipients of Citigroup stock awards generally do not have any stockholder rights until shares are delivered upon vesting. Recipients of stock-settled awards and other vested stock awards subject to a sale-restriction period are generally entitled to vote the shares in their award and receive dividends

on such shares during the sale-restriction period. Once a stock award vests, the shares delivered to the participant are freely transferable, unless they are subject to a restriction on sale or transfer for a specified period.

All equity awards granted since April 19, 2005 have been made pursuant to stockholder-approved stock incentive plans that are administered by the CPC Committee (or its predecessor), which is composed entirely of independent non-employee directors.

On December 31, 2025, approximately 51.4 million shares of Citigroup common stock were authorized and available for grant under Citigroup’s 2019 Stock Incentive Plan, the only plan from which equity awards are currently granted.

The 2019 Stock Incentive Plan and predecessor plans permit the use of treasury stock or newly issued shares in connection with awards granted under the plans. Except where local laws favor newly issued shares, treasury shares were used to settle stock vestings and option exercises. The use of treasury stock or newly issued shares to settle stock awards does not affect the compensation expense recorded in the Consolidated Statement of Income for equity awards.

Incentive Compensation Cost

The following table presents components of compensation expense, relating to the incentive compensation programs described above:


In millions of dollars	2025		2024		2023
Charges for estimated awards to retirement-eligible employees	$	819	$	741	$	663
Amortization of deferred cash awards, deferred cash stock units and performance stock units	254		186		340
Immediately vested stock award expense(1)	29		130		127
Amortization of restricted and deferred stock awards(2)	758		718		689
Option expense	1		—		—
Other variable incentive compensation	398		355		286
Total	$	2,259	$	2,130	$	2,091

(1) Represents expense for immediately vested stock awards that generally were stock payments in lieu of cash compensation. The expense is generally accrued as cash incentive compensation in the year prior to grant.

(2) All periods include amortization expense for all unvested awards to non-retirement-eligible employees.