Citigroup CEO and directors sued over executive pay

[MindMover]

Source: Reuters

(Reuters) - Days after being rebuked by shareholders, Citigroup Inc (C.N) Chief Executive Vikram Pandit and the bank's directors have been sued by a shareholder accusing them of awarding outsized pay to top executives.

The complaint, filed Thursday in Manhattan federal court, said 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 necessarily justify it.

At Citigroup's annual meeting on Tuesday, about 55 percent of shareholders participating in an advisory vote rejected Pandit's pay package. That marked the first time that investors had rejected a compensation plan at a major U.S. bank.

That vote "has cast doubt on the board's decision-making process, as well as the accuracy and truthfulness of its public statements," said the complaint, brought by shareholder Stanley Moskal. "Absent this (lawsuit), the majority will of the company's stockholders shall be rendered meaningless."

Citigroup spokeswoman Shannon Bell said the lawsuit is without merit and that the bank will seek its dismissal, "consistent with court rulings in similar cases."

Read more: http://www.reuters.com/article/2012/04/20/us-citigroup-pay-lawsuit-idUSBRE83J15720120420

[Vincardog]

1. So much for the fiction that companies work only to satisfy their stock holders nt

[AllyCat]

2. CEOs only care about shareholders' MONEY, not their opinions on anything else

So a lawsuit it great. Spokester sounds like a tool and complacent as h*ll. Hope she eats crow.

[1StrongBlackMan]

3. If this case goes to trial ...

I expect a huge bump in investor suits against the boards of every major corporation, since it would validate the idea that the board's primiary duty is to protect shareholder value.

It'll be interesting to see whether the plaintiff's will argue that the same down-ward market forces that allow the executives to undercut low(er) wage earners' wages, also apply to executive compensation.

I'd love to see the boards answer the wage philosophy that for every $20/hour job, there are others who are willing and able to do that same job, just as well; but for $18 or $16 or even $10/hr. And then, have to argue that somehow executive compensation is somehow different ... that they have to pau $20 million to the executive because there is no one out there who is willing and able to do the job for less.

[rfranklin]

4. I will do the same job, just as badly, for half the pay...

but I do insist on using the company jet.

[SnowCritter]

5. Well, so it begins -

I'll do it for half the pay and I'll fly business class.

Race to the bottom, wee!

A few more bids and, who knows?, we could get to a salary and compensation package commensurate with what the job entails.

[jeff47]

6. You know, an H1B CEO would probably do it for even less than an American CEO.

What's good for the goose...

[rfranklin]

9. I think Pandit is already an Indian import...

sure sounds foreign!

[NCcoast]

7. Oh please let this be the beginning of a trend

Let this be the beginning of the end of the long years of abuse. Shareholders everywhere take note.

[tawadi]

8. Good. eom