Call it a nod to shareholder activism. Citigroup under the leadership of Vikram Pandit announced record revenue on Monday, earning investors $0.95 per share. Nonetheless, just one day later, at its annual meeting in Dallas, shareholders rejected his pay package worth $15 million.
At an otherwise routine meeting, the only point of contention was the pay package, with over half of attendees voting ‘nay.’ Pandit’s not alone, and other pay plans of top officials will most likely be affected. The vote is non-binding, but Citigroup chairman Richard Parson said the board will discuss the shareholders’ concerns. Michael O’Neill replaced Parson as chairman after the meeting in a move announced in early March.
The rejection might in part be the result of the bank’s failure of its most recent stress test. Citigroup was one of four large U.S. banks that flunked stress tests on how they might hold up in a new economic crisis, according to Federal Reserve data released March 14.
Citigroup said at the time that it remained among the best capitalised large banks in the world and called on the Fed to make the methodology of the test public.