In a stinging rebuke, Citigroup shareholders rebuffed on Tuesday the bank’s $15 million pay package for its chief executive, Vikram S Pandit, marking the first time that stockowners have united in opposition to outsized compensation at a financial giant.
The shareholder vote, which comes amid a rising national debate over income inequality, suggests that anger over pay for chief executives has spread from Occupy Wall Street to wealthy institutional investors like pension fund and mutual fund managers. About 55% of the shareholders voting were against the plan, which laid out compensation for the bank's five top executives, including Pandit.
“CEO’s deserve good pay but there’s good pay and there's obscene pay,” said Brian Wenzinger, a principal at Aronson Johnson Ortiz, a Philadelphia money management company that voted against the pay package. Wenzinger’s firm owns more than 5 million shares of Citigroup.
After the vote, Richard D Parsons, who is retiring as Citigroup chairman, said that he takes the vote seriously and Citi’s board will carefully consider it. Shareholders rarely vote against compensation plans. The votes are part of the Dodd-Frank financial overhaul that mandates that public companies include “say on pay” votes for shareholders to express opinions about compensation. Last year, only 2% of compensation plans were voted against, according to ISS Proxy Advisory Services.