A shareholder has sued Citigroup's (NYSE:C) Chief Executive Vikram Pandit and directors over compensation for the bank's top executives.
The lawsuit claimed that even though the New York bank's performance did not necessarily warrant it, directors approved more than $54 million in compensation last year to executives, including $15 million to Pandit, Reuters reported Friday. By doing so, directors breached their fiduciary duty, the complaint said.
In a nonbinding vote during Citigroup's meeting on Tuesday, 55% of votes cast by shareholders disapproved the board's executive compensation plan. Shareholders voting on compensation proposals was part of the Dodd-Frank Act.
Citigroup spokeswoman Shannon Bell said in a written statement that "the suit is completely without merit" and that the company "will seek its prompt dismissal, consistent with court rulings in similar cases." She reiterated that the "board takes the shareholder vote on executive compensation very seriously and will consult with representative shareholders to better understand their concerns."
Citigroup's outgoing chairman Richard Parsons had also called the vote "a serious matter" on Tuesday.
The complaint said that the vote "has cast doubt on the board's decision-making process, as well as the accuracy and truthfulness of its public statements," and that without the lawsuit, "the majority will of the company's stockholders shall be rendered meaningless," Reuters reported.
The lawsuit was filed in the Southern District of New York on Thursday by Stanley Moskal, Reuters reported.