Citigroup Inc. Chief Executive Vikram Pandit and the bank’s directors have been sued by a shareholder, who has accused them of awarding outsized pay to top executives. The complaint, filed last month in Manhattan federal court, contends that the directors breached their fiduciary duties by awarding more than $54 million of compensation in 2011 to the executives, including $15 million to Pandit, though the bank’s performance did not justify it.
At Citigroup’s annual meeting, about 55 percent of shareholders participating in an advisory vote, rejected Pandit’s pay package. That marked the first time investors had rejected a compensation plan at a major U.S. bank. As you may know, shareholders won the right to vote on executive pay at most public companies under the 2010 Dodd-Frank Act. The lawsuit seeks to force the Citigroup directors to pay damages to the bank and for Citigroup to improve internal controls.
Source: Insurance Journal
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