In a surprising vote this week, Citigroup’s shareholders rejected CEO Vikram Pandit’s proposed executive compensation package. The nonbinding shareholder vote–which garnered only 46% in favor–is the most notable rejection so far under the Dodd-Frank Act’s shareholder advisory votes on executive compensation.
Citigroup’s board approved a pay package that would give Pandit about $15 million in 2012. He received about the same amount in 2011, plus one-time “retention” payments potentially worth $34 million. Meanwhile, Citigroup’s share price has plummeted over the course of the past several years.
The vote will likely force an awkward decision for the bank: ignore its shareholders, or drastically reduce its CEO’s compensation.