Excerpt
MARGARET WARNER (Newshour): Shareholders delivered a loud message at Citigroup's annual meeting in Dallas yesterday.
They voted to reject a nearly $15 million pay package for CEO Vikram Pandit. The bank's board of directors already voted to award Pandit the money for 2011, but as part of the Dodd-Frank law on financial regulation, public companies now must offer a say on pay vote to their shareholders at least every three years.
Like many banks, Citi has struggled in recent years. It got a $45 billion bailout loan from the Treasury during the financial crisis, but has paid it all back, and now is profitable.
We look at what was behind the vote and what happens now with Anne Simpson, director of corporate governance for CalPERS, the California state pension fund. It holds 10 million Citi shares and voted against the pay package. And Russell Miller, founder and managing director of ClearBridge Compensation Group, which advises companies on executive pay.
We invited Citi to appear, but the company declined our invitation.
For the record, Citi is a NewsHour underwriter.
Other significant excerpts
ANNE SIMPSON: And I think what we're seeing now is that investors, the majority of investors have got well-thought-through frameworks for looking at long-term targets, and, also, I think in the banking sector particularly, being concerned that there is a robust risk strategy that wraps around the returns, because we know chasing short-term returns was one part of the reason the financial crisis took us to the edge.
ANNE SIMPSON: The United States celebrates success. That's a great feature of American culture.
And, therefore, if there's any complaint about pay, it's because performance has not matched up. Pay for performance is understood -- pay for failure or pay for under-performance, no.
No comments:
Post a Comment