(By Mani) Shareholders of Citigroup
, Inc. (NYSE:C
) have expressed
their opinion that CEO Vikram Pandit doesn't deserve a $15 million pay package
by voting against the bank's executive compensation plan.
The shareholder vote, which was mandated by the Dodd-Frank
financial overhaul law, is not binding, and Citi can still pay the CEO's salary
by ignoring the shareholders "say on pay."
In general, activist shareholder groups
have been against huge pay packages for Wall Street banks, citing lackluster
financial performance and falling stock prices. In response, the large cap
banks have revised their compensation policies by including more bonus money in
the form of restricted stock units.
[Related -Citigroup Inc (NYSE:C): Potential Fed Taper Could Limit Upside In Citi Shares]
Leading proxy firms ISS and Glass Lewis
& Co., have criticized Citigroup for paying millions to Pandit and
recommended that investors reject the bank's executive compensation plan for
About 55 percent of the shareholders voted against the
executive's compensation, sending a powerful message to company management that
the CEO compensation is not in-line with company performance.
In 2011, Citigroup's profit rose 4 percent to $10.6
billion, while revenues fell 10 percent to $86.6 billion. For the first quarter
of 2012, the company's profit and revenue fell 2 percent, but, excluding valuation
adjustments, both these metrics improved from last year and topped Wall Street
[Related -Citigroup Inc (C): Can Citi Resume Dividend In 2014?]
For the first-quarter, Citi earned $2.93
billion or 95 cents a share, down from last year's $3.0 billion, or 99 cents a
share. Excluding debt valuation adjustments, it earned $1.11 per
share. Total revenues declined to $19.41 billion from $19.73 billion a
year-ago. Excluding valuation adjustments, revenue came in at $20.69 billion.
Revenues also improved 13 percent from the fourth quarter.
Though, Citi shares have gained 24 percent year-to-date,
it declined 23 percent in the past year and lost 93 percent in the past 5
years. Moreover, Citi shares have plummeted 90 percent since Pandit took over
as CEO in December 2007.
Pandit, who received only $1 last year as compensation,
has been awarded about $15 million as compensation in 2011. The amount includes
salary of $1.67 million, bonus of $5.33 million and stock option awards of
$7.84 million. He also received a $40 million retention package that will be
paid out over the next few years.
Among the peers, Goldman Sachs CEO Lloyd Blankfein got a 14.5
percent hike in compensation to $16.2 million, while Morgan Stanley (NYSE:MS)
Chief Executive James Gorman saw his compensation for 2011 drop by 25 percent
to $13 million. Meanwhile, JPMorgan Chase & Co.