The vote came at Citi`s annual shareholder meeting held in Dallas on Tuesday. While the vote is not binding, it is the first time that investors at one of America`s largest banks have voted against a board`s compensation plan, the New York Times said.
Only 45 per cent of shareholders supported the plan while the rest voted against the proposal on executive compensation, which included approving Pandit`s USD 15 million pay package.
Since Citi does not have to act on the vote, Pandit and other top executives could still get their packages but the rejection nonetheless sends out a strong signal. "Citi`s board of directors takes the shareholder vote seriously, and along with senior management will consult with representative shareholders to understand their concerns," said Jon Diat, a spokesman for Citi.
Last year, Pandit`s USD 14.9 million compensation included USD 1.67 million salary and USD 5.3 million cash bonus. He had also received a retention package valued at USD 40 million. However, at the height of the financial crisis in 2009, Pandit had said he will take home just a dollar as salary.
"CEOs deserve good pay, but there`s good pay and there`s obscene pay," the report quoted Brian Wenzinger, a principal at a Philadelphia money management company that voted against the pay package, as saying.
Wenzinger, whose firm owns more than 5 million Citi shares said the bank is not bankrupt, "but you don`t get rewarded for not being bankrupt, at least not in 2012".
With the financial crisis eating into profits and revenues of firms and resulting in large scale lay-offs, there has been outrage among people over the millions of dollars of bonus and pay packages that Wall Street firms have doled out to their executives.
The New York Times report said that while Citigroup has had the worst stock price performance among large banks in the last decade, it ranked among the highest in terms of compensation for top executives. It is not common for shareholders to reject compensation plans, with only 2 per cent of such plans at a broad range of companies being voted down last year, according to ISS Proxy Advisory Services.
The vote at Citigroup is part of the Dodd-Frank financial regulatory overhaul that makes it mandatory for public companies to include "say on pay" votes, through which shareholders express opinions about compensation.