Citigroup shareholders did something pretty unusual at their meeting in Dallas on Tuesday: They rejected the bank’s executive-compensation proposal.
Fourty-five percent approved the proposal, but since the law counts absentee votes as rejections, 55 percent disapproved of Citi bankers’ pay, according to American Banker. The board can ignore the vote or chose to alter the packages.
“The board of directors takes this matter seriously,” [said former Chairman Richard Parsons] and the directors will consult with shareholder groups to determine their concerns.
It is unusual for large number of shareholders to vote against a proposal brought forward by the board, and a significant number of large institutional investors such as mutual and pension funds must have decided to disapprove.
Even some institutional shareholders didn’t see the vote coming. “I was surprised to see this,” said Terry Maltese, the president of Sandler O’Neill Asset Management LLC. Frank J. Barkocy, director of research at Mendon Capital Advisors Corp. said the vote was “interesting, particularly since the company [has made] good progress.”
Read the full story here.
This article appears in Apr 17-23, 2012.
What are the odds that the board will ignore the vote?
Holy cow! And it didn’t take an act of Congress or Executive Order.
Pokeinthenose:
You are mistaken. It DID take an act of Congress. Under the Dodd-Frank financial overhaul law, major U.S. companies are required to allow shareholders to have a “say on pay” vote at least every three years. The votes are not binding.
So, the Dodd-Frank bill in reality does nothing. What a surprise.
I wonder which party is responsible for it being non binding.
The guys in the Majority. Guess who that was?