Shareholders Say No to Big Pay at Citigroup
Even corporate shareholders are starting to get the message coming from the 99 percent. During Citigroup’s annual shareholders meeting on Tuesday, voters stood up against the proposed executive pay package, a first in the company’s history. About 55 percent of voting shareholders were against the plan that would give substantial amounts of money to its top five executives, including CEO Vikram Pandit.
The New York Times notes:
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.
Unfortunately, the vote is not binding, but retiring chairman, Richard Parsons, says that the board will take the vote seriously. Time will tell, but major investing firms are taking a stance as well.
“C.E.O.’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. Mr. Wenzinger’s firm owns more than 5 million shares of Citigroup.
The Dodd-Frank financial reform bill mandates public companies to include a “say on pay” vote for shareholders. Conservatives and corporations tend to be against the reform bill.
“Citigroup was terribly managed and whatever could be done wrong, they did wrong,” said David Dreman, whose money management firm owns about $400,000 worth of Citigroup shares. While many of those mistakes predated Mr. Pandit, he said, it was way too early to start handing out generous pay packages. “Shareholders have finally done something constructive on the whole C.E.O. pay problem,” he said.
Pandit received $15 million in total compensation last year after taking $1 in pay during the financial crisis.
The question remains if more shareholder meetings will have similar results. Bank of America, who is also struggling, holds its annual meeting on May 9.
Interestingly, New York Mayor Mike Bloomberg’s partner, Diana Taylor, sits on Citigroup’s board. That’s a real symbol of Occupy Wall Street and its allies’ fight against corporate greed, income inequality and the one percent’s ownership of democracy.
Photo by eflon