Citigroup CEO Vikram Pandit was denied a $15 million payday on Wednesday when the company’s shareholders voted against a proposed pay package that would have put millions of dollars into the pockets of the company’s top five executives.
A principal at a firm that owns 5 million Citi shares told the New York Times:
“CEOs deserve good pay, but there’s good pay and there’s obscene pay.”
55% of the company’s shareholders voted against the pay package and while the vote is non-binding outgoing chairman Richard Parsons says the board of directors will take it under serious consideration.
The vote comes after Citigroup has long been criticized for providing some of the biggest bonuses in the banking industry despite awful stock performance that regularly places the company as dead last among large scale banking providers. Citi shares managed to close up 3.18 percent at $35.08 however the company’s stock is still down 80 percent since the financial crisis.
Shareholders deciding to vote against the pay marks one of the very few times shareholders have voted against a compensation package since the Dodd-Frank Act created a “say on pay” voting system. This is the first time Citigroup has been targeted with a vote although 2% of compensation packages received the same type of criticism in 2011.
Not all Citigroup investors oppose the compensation package, Bill Ackman, head of Perhshing Square Capital Management pointed out that Mr. Pandit received a $1 salary in both 2009 and 2010 adn taht in 2011 the company’s net income was up 4 percent from 2010 to $11.1 billion.
With 2 percent of its workforce being axed to you think CEO Vikram Pandit deserves a $15 million payday?