Citigroup shareholders rebel against executive pay scheme

James Nickerson
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Writedowns Cost Citigroup $2.5 Billion Loss In 2nd Quarter
Citi defended its pay packages (Source: Getty)

Citigroup shareholders have rebelled against the company's executive pay scheme, with more than a third of voters going against the bank's plan.

Near 64 per cent of shareholders voted in favour of the company's executive pay packages, the bank said at its annual meeting, down from 84 per cent who voted in favour last year.

This year Citi bolstered the potential pay package for chief executive Michael Corbat by 27 per cent to $16.5m (£11.4m).

Read more: Focus on remuneration packages is distracting from the real issues

Two influential firms that advise big shareholders on how to vote, Institutional Shareholder Services and Glass Lewis & Co., had recommended that shareholders vote no in the "say on pay" proposal.

The firms argued that the bank needs to more closely link the executives' pay to the bank's performance, and Citi's stock price is down by near nine per cent this year.

That contrasts to a four per cent drop in the KBW Nasdaq bank stock index.

‚ÄčRead more: AstraZeneca and HSBC chief executives next in line to face shareholder votes

But Citi defended its pay packages, including to Corbat. At the meeting today chairman Michael O'Neill listed other accomplishments over the past year, including passing the stress test and boosting earnings to their biggest in nearly a decade.

He also noted that Corbat's remuneration is lower than that of most of his peers at other banks, but said that the bank is not where it wanted to be.

O'Neill added that the board would be considering other ways to tweak the pay packages for next year.

The news comes after BP shareholders rejected chief executive Bob Dudley's 20 per cent pay rise at its general meeting earlier this month.

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