Citi shareholders vote no on exec pay plan

Citigroup Inc. shareholders gave a vote of no confidence to the bank's executive compensation plan Tuesday, dealing a surprise embarrassment to chief executive Vikram Pandit.

Only 45 percent of shareholders endorsed the pay plan in an advisory vote required under the Dodd-Frank law, Michael Helfer, general counsel and corporate secretary, said at Citi's annual meeting, citing preliminary vote totals. The vote is nonbinding.

Citigroup's failed "say on pay" measure is the latest signal that shareholders are turning up the pressure on top executives who have failed to deliver improved performance.

On Monday, Citigroup posted a 2 percent decline in net income for the first quarter from a year earlier, reflecting the bank's difficulties as it works to boost profits in a sluggish global economy. Still, Citigroup shares, up more than 33 percent so far this year, closed at $35.08, up 3.18 percent in New York Stock Exchange trading.

Richard Parsons, chairman of the board, called the outcome "a serious matter" and said directors would meet shareholder representatives to discuss their objections.

The Citigroup vote tally surprised some analysts who follow corporate governance issues.

Last week, casino equipment maker International Game Technology got only 44 percent shareholder support for its pay vote.

Citigroup may have upset shareholders by increasing Pandit's pay to $14.8 million last year, similar to executive pay levels before the credit crisis struck, despite the challenges that the bank still faces. Last month, Citigroup was one of only a handful of large financial institutions that failed to win approval from regulators for a dividend increase or share buyback.

Pandit received only a symbolic $1 in 2010, and just $128,741 in 2009, said Todd Sirras, a partner at compensation consulting firm Semler, Brossy, which tracks the "say on pay" votes.