Are Citigroup's shareholders starting a trend?
Citibank CEO Vikram Pandit speaks at the official opening of Citibank flagship branch in New York City. Citigroup shareholders have acted against the board's pay package plan, which included $15 million for Pandit.
Stacey Vanek Smith: Citigroup stock is down 0.1 percent , that after shareholders in an advisory vote said no dice to a hefty pay package for executives, including a $15 million salary for Citigroup's CEO.
Josh Brown is vice president at Fusion Analytics joins me now. Good morning, Josh.
Josh Brown: Good morning.
Smith: So Josh, shareholders getting kinda tough here. What's going on?
Brown: This is a milestone. This is the first time, really ever, that a major financial institution saw its compensation proposal voted down by shareholders. 55 percent of Citigroup’s shareholders, most of them institutions, essentially said, “absolutely not” in terms of what the five highest paid executives wanted to make this year.
Smith: You say this is a milestone. Is this something we should expect to see more of?
Brown: Yeah, I do. Last year, only two percent of compensation plans at public companies were voted against. So it’s a very remote thing. But you’re starting to hear more and more vocal shareholders. Another great example of this could be Yahoo. This morning, there was some startling news about a company called Chesapeake energy and the types of things they’re allowing their CEO to get away with, so I do think there’s going to be a lot more vocal shareholder meetings this spring.
Smith: Will this change the way companies are run?
Brown: You know, I think this will change the way companies look at pay packages for executives. There’s a thing that goes on where, it’s a constant that there’s bad behavior and that there are outsized compensation packages, but it’s not until people actually notice and the money is gone that they say, “wait a minute, wait a minute” so when things are good, this stuff gets overlooked. Right now, things are not great and I think that what’s driving this.
Smith: Josh Brown is vice president at Fusion Analytics. Thank you.
Brown: Thank you.