Citigroup’s Chief Rebuffed on Pay by Shareholders
From the article... said:
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 stock owners 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 percent of the shareholders voting were against the plan, which laid out compensation for the bank’s five top executives, including Mr. Pandit.
“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.
More at the link...
Change we can believe in. Oh, except that the "vote" is non-binding. Ooops.
The vote may be non binding but see how long the board lasts after it pisses off the share holders by vetoing their votes.
dinger
Reader
4/18/12 8:39 a.m.
Good for them. They, as shareholders, don't see the CEO as being worth the expenditure, and vote against it.
That's how market based economies are supposed to work. Government stays the berkeley out and things take care of themselves. (I realize the board of directors doesn't have to listen to them, but still a step in the right direction.)
dinger wrote:
Good for them. They, as shareholders, don't see the CEO as being worth the expenditure, and vote against it.
That's how market based economies are supposed to work. Government stays the berkeley out and things take care of themselves. (I realize the board of directors doesn't have to listen to them, but still a step in the right direction.)
I'm not trying to rain on your parade but this vote is required by federal law. Here's a paragraph from the article.
"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 percent of compensation plans were voted against, according to ISS Proxy Advisory Services. In some instances, boards responded by reducing executives’ pay."
It seems like the NYT wants you to believe that Citigroup is caving to pressure from the Occupy crowd. I'd rather chalk it up to shareholders tired of lackluster performance out of the board.
ThePhranc wrote:
The vote may be non binding but see how long the board lasts after it pisses off the share holders by vetoing their votes.
My bet would be that they last just as long either way. Boards of Directors today are cushy spots given to cronies. Do someone a favor in Washington and get a cushy Director spot. Common shares have no voting rights. Look at the recent Facebook purchase of image-whatever for a cool Billion. How did that go down? The 2 "CEOs" got together for the weekend and knocked it out. No BoD's input at all, as Zuckerman, while not owning the majority of the shares, owns "super special" shares that have 10x the voting "rights" as the junk shares that he wants to sell you peons in an IPO. So his shares hold 57% of the actual control of FB, while monetarily representing under 50%. Virtually all the corps are set up like this.
Looks more like damage control until we forget about 2008.
"Shareholders rarely vote against compensation plans....
and even in this case, it wasn't defeated by some ridiculous landslide. Until I see something else to coincide, I'm not going to treat this happening as more than a footnote.
