Citigroup also nominated four new independent directors to bolster the banking and financial expertise on its board, including Anthony Santomero, 62, a former president of the Federal Reserve Bank of Philadelphia.
The bank faces increased government pressure to right itself after more than $85 billion of writedowns and credit losses since the middle of 2007.
Pandit said in February he will accept a $1 annual salary and no incentive pay until the bank is profitable. His nearly $11 million of 2008 compensation included $7.73 million of sign-on and retention awards last January, the month after he took over.
If I were a shareholder, $11 million would be hard to justify for a year where the company's shares fell almost 80 percent, said Walter Todd, a portfolio manager at Greenwood Capital Associates LLC in Greenwood, South Carolina. But if he signed a contract, I guess it's hard to argue.
In 2008, the 52-year-old Pandit was awarded a $958,333 salary, $9.84 million of stock and option awards and $16,193 of other compensation, according to a summary compensation table included in a Monday proxy filing with the U.S. Securities and Exchange Commission.
Some pay consultants and governance experts tabulate executive pay differently, saying the summary total may be imperfect because it counts options and stock as part of pay when they vest rather than when they are awarded.
Wall Street compensation has come under intense scrutiny, especially at banks that, like Citigroup, received money under the government's Troubled Asset Relief Program.
Citigroup got a $45 billion injection from TARP and the government agreed to share losses on $300.8 billion of troubled assets.
Pandit's compensation was higher than the $9.96 million that Bank of America Corp
The other nominated directors are Jerry Grundhofer, 64, a former CEO of U.S. Bancorp
If the nominations are approved, Citigroup's board would have 14 members. Three of its 15 current members are not standing for reelection and two have reached retirement age.
Hopefully, this will provide better oversight, said Marshall Front, chairman of Front Barnett Associates LLC in Chicago, which invests $500 million. The board had to become more knowledgeable, rather than the prior board, which was largely a rubber stamp for management.
The three directors stepping down are former Citigroup senior counselor and U.S. Treasury Secretary Robert Rubin; former Chairman Sir Win Bischoff; and Roberto Hernandez Ramirez, who chairs Citigroup's Mexican unit Banamex.
Kenneth Derr and Franklin Thomas are leaving because of the retirement age.
Richard Parsons, Citigroup's chairman, is the bank's only outside director with top-level financial services experience, having once run Dime Savings Bank of New York. He is better known as Time Warner Inc's
Shareholders are expected to vote on the director nominations at Citigroup's annual meeting on April 21.
In afternoon trading, Citigroup shares were up 73 cents, or 41 percent, at $2.51 on the New York Stock Exchange. The shares bottomed at 97 cents on March 5.
(Reporting by Dan Wilchins and Jonathan Stempel; editing by John Wallace and Andre Grenon)