NEW YORK, Fri Apr 20, 2012 – Days after being rebuked by shareholders, Citigroup Inc. CEO Vikram Pandit and the bank’s directors have been sued by a shareholder accusing them of awarding outsized pay to top executives.
The complaint, filed Thursday in Manhattan federal court, said directors breached their fiduciary duties by awarding more than $54 million of compensation in 2011 to the executives, including $15 million to Pandit, though the bank’s performance did not necessarily justify it.
At Citigroup’s annual meeting on Tuesday, about 55 percent of shareholders participating in an advisory vote rejected Pandit’s pay package. That marked the first time that investors had rejected a compensation plan at a major U.S. bank.
That vote “has cast doubt on the board’s decision-making process, as well as the accuracy and truthfulness of its public statements,” said the complaint, brought by shareholder Stanley Moskal. “Absent this (lawsuit), the majority will of the company’s stockholders shall be rendered meaningless.”
Citigroup spokeswoman Shannon Bell said the lawsuit is without merit and that the bank will seek its dismissal, “consistent with court rulings in similar cases.”
“The board takes the shareholder vote on executive compensation very seriously and will consult with representative shareholders to better understand their concerns,” she added.