Kai Ryssdal: In the American corporate calendar, spring is a special time. It’s annual meeting season, when shareholders gather from far and wide to inspect the investments they’ve made.

And they’re restless this year. Citigroup shareholders gave a big N-O to a nearly $15 million pay package for CEO Vikram Pandit. The Dodd-Frank financial reform law does in fact require companies to hold a shareholder Say on Pay vote.

But here’s the catch: It’s not legally binding. Marketplace’s Sally Herships has more.

Sally Herships: Say I’m the board of directors for a company you own stock in. I’m tell you how much I’d like to pay my CEO — lots and lots — and you, the shareholder, get to vote on it. Remember I don’t have to pay attention — so will I?

Steve Kaplan: There’s no doubt boards pay attention, no doubt.

That’s finance professor Steve Kaplan at University of Chicago’s Booth School of Business. He says last year more than half the shareholders in Stanley Black and Decker voted against proposed executive pay. So the tool company made changes. It required its executives hold stock longer and:

Kaplan: And they reduced the pay of their CEO.

 
John Lundgren took a $19 million pay cut, but he still made almost $14 million. But Kaplan says the vast majority of companies  got a thumbs up on executive pay. Companies with grumpy shareholders face a balancing act.

Theo Francis writes for Footnoted.com, a blog published by Morningstar.

Theo Francis: Essentially what they’re trying to do is find a middle ground between the critics and the executives. Because the executives presumably think they’re worth every penny they’ve been paid.

And Citigroup says it’s taking Tuesday’s shareholder vote seriously.

In New York, I’m Sally Herships for Marketplace.