Citi Begins Damage Control After Shareholders Rebuff Pay Plan
At an otherwise-placid annual shareholder meeting held outside of New York City for the first time, Citigroup (C) shareholders dealt a blow to management and the board of directors by rejecting ratification of the bank's executive-compensation proposal.April 17
The New York banking giant has recently held its April annual meetings in Manhattan. But to celebrate its 200th anniversary this year, CEO Vikram Pandit is heading to Dallas to tell investors why he still can't raise their dividend.March 28
Citigroup (NYSE:C) said late Tuesday that it takes "seriously" the shareholder vote rejecting the bank's executive compensation plans, and that it will meet with some investors to understand their concerns.
Investors in the third-largest bank on Tuesday dealt a rare, if symbolic, blow by refusing to ratify Citigroup's executive-compensation proposal. The vote was non-binding, but outgoing Citigroup chairman Richard Parsons on Tuesday called it "a serious matter."
A Citigroup spokesman reiterated that reaction on Tuesday evening, saying in an emailed statement that the bank's board of directors "takes the shareholder vote seriously, and along with senior management will consult with representative shareholders to understand their concerns. The personnel and compensation committee of the board will carefully consider their input as we move forward."
The vote was the latest reminder that, although Citigroup has shed most of the government support it received during the financial crisis, the bank still has work ahead to fully recover. Citigroup held its annual meeting in Dallas on Tuesday, a day after it reported sluggish revenue growth in the first quarter.
Shareholders voted down the bank's compensation plan a month after the Federal Reserve killed Citigroup's much-promised plans to raise its dividend or buy back shares this year. Chief Executive Vikram Pandit reiterated in a speech Tuesday that the bank is in discussions with the Fed, but that the timeline for finally returning capital to shareholders remains uncertain.