Citibank revival plans do not succeed
CITIGROUP shareholders refused to endorse a pay plan for chief executive Vikram Pandit and four other officials on Tuesday (April 17), dealing a blow to a management that has failed to pull up the bank’s stock since the financial crisis.
Shareholders turned back the board’s compensation plan for the top five executives, which included a $14.9m (£9.32m) package for Pandit for 2011, after he kept his salary in 2010 at just $1 (£0.62).
According to a source close to the bank, just 45 per cent of shareholders voted for the compensation plan at the company’s shareholder meeting in Dallas.
The number voting against and the number of abstentions was not available, but a majority was needed to pass the measure.
Pandit has been under pressure as the bank’s stock’s has been stuck below $40 (£25.02) since August compared to the $500 (£312.80)-plus level it achieved before the crisis struck in 2007.
Other banks have rebounded more and resumed significant dividends, while Citi’s payout remains at a bare one cent per quarter.
The vote also rejected the proposed $7.2m (£4.50m) package for chief financial officer John Gerspach, and pay of $11.4m (£7.13m)-$13.0m (£8.13m) for two others.
“Citi’s board of directors takes the shareholder vote seriously and along with senior management will consult with representative shareholders to understand their concerns,” the bank said in a statement after the vote.
“The personnel and compensation committee of the board will carefully consider their input as we move forward.”
The bank announced on Monday (April 16) a two per cent fall in first quarter profit to $2.9bn (£1.81bn), a better-than-expected result that helped its stock rebound from a slump at the end of last week.
In afternoon trade on Tuesday the stock was up 3.9 per cent to $35.32 (£22.10).
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