Citi’s Pandit sued over excessive payApril 21st, 2012 - 11:17 am ICT by IANS
Washington, April 21 (IANS) Citigroup’s Indian American CEO Vikram Pandit and its directors have been sued by a bank shareholder over a compensation package that was contested by investors in a rare failed “say-on-pay” vote.
A lawsuit filed in Manhattan Friday by shareholder Stanley Moskal says Pandit and directors breached their fiduciary duties by awarding more than $54 million of compensation in 2011 to the executives.
That pay included $15 million to Pandit, which as the suit says “represented a raise of 1,499,999,900 percent over his 2010 compensation”, in a year when the bank’s share price fell 44 percent.
Pandit, 55, had the 45th highest compensation among CEOs last year, according to Equilar, an executive compensation research firm. He had an annual salary of $1 for most of 2009 and 2010 while the bank dug out from a government bailout.
The suit follows Tuesday’s vote by Citi’s shareholders at the bank’s annual meeting in Dallas after critics complained Pandit and other top bank officials enjoy high pay that’s not well connected to increasing shareholder value.
Friday’s suit is filed under the “say on pay” provision of the Dodd Frank reform act which gives shareholders the right to vote on executive pay.
Citi says the suit is baseless and plans to seek its dismissal.
At issue is what shareholders believe are undeserving compensation packages despite poor performance. In addition to its stock taking a big hit in 2011, Citi failed the Fed’s stress test this year.
In an earning call with analysts Pandit said he wasn’t sure yet about whether or not the bank would resubmit its capital plans or just wait for the 2013 round of stress tests.
The pay proposal received just 45 percent of votes cast and followed Citigroup’s announcement on Monday that profit fell 2 percent to $2.9 billion from a year earlier, missing analyst expectations.
(Arun Kumar can be contacted at email@example.com)
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- Amid tough times, Citibank to cut 4500 jobs - Dec 07, 2011
- Citi's Pandit will work for $1 in 2010 too - Sep 25, 2010
- Citi's Pandit gets a big raise: from $1 to $1.75 million (Lead) - Jan 22, 2011
- Pandit's Citi makes profit with India sale - Apr 17, 2012
- CEO pay in US drops with economic meltdown - Apr 06, 2009
- Pandit's Citi reports $3.8 bn profit - Oct 18, 2011
- Pandit says Citigroup now 'a different company' - Aug 10, 2011
- Pandit's Citigroup reports first profitable year - Jan 18, 2011
- Nooyi, Jha, Pandit among US' top-paid CEOs: Report - Nov 16, 2010
- Financial world needs more transparency: Vikram Pandit - Nov 08, 2011
- Indra Nooyi, Sanjay Jha among highest paid CEOs in US: Report - May 10, 2011
- Vikram Pandit: 'Occupy Wall Street' sentiments understandable - Oct 13, 2011
- Pandit's Citi Bank found wanting in stress test (Lead) - Mar 14, 2012
- Pandit's Citi returns $20 bn in bailout funds - Dec 24, 2009
Tags: analyst expectations, annual salary, arun kumar, bailout, bank officials, citi, citigroup, compensation package, compensation packages, dodd, executive compensation research, fiduciary duties, increasing shareholder value, moskal, poor performance, reform act, share price, stress test, stress tests, vikram pandit