For our site this equals breaking news. There are so many stories of CEOs and their friends who reward themselves lavishly, or abuse their positions, we don’t worry about getting them out the day they happen. But yesterday was a watershed day on this topic.
The front page of today’s Wall Street Journal reports on Citigroup Inc. shareholders yesterday “rejecting a board-approved compensation package for its senior executives that boosted Chief Executive Vikram Pandit’s 2011 pay to $14.9 million.” The sharehoder vote is non-binding, but sends shockwaves through corporate boardrooms.
We will be following the effects of the Dodd-Frank law which requires corporations to ask their owners — the stockholders — to chime in on executive compensation. Will this be remembered as the first of many major no-votes to come? The usual politicos cannot say this shows that Dodd-Frank causes “meddling” when it is by company owners, can they?
“Citigroup is the first major bank and the biggest company by market value to have suffered a no vote on executive compensation,” writes the Journal.