Reuters reports that days after being rebuked by
shareholders, He Who Must Be Obeyed, Citi’s absolute monarch, CEO Vikram Pandit and the bank's directors, have been sued
for allegedly awarding outsized pay to top executives. The complaint filed Thursday in Manhattan
federal court accuses directors of breaching 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 Citi 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," the complaint said. "Absent this (lawsuit), the majority
will of the company's stockholders shall be rendered meaningless."
Richard Parsons, a Citi director retiring as chairman of the
New York-based bank, called the rejection of Pandit's pay package a
"serious matter" that the board would address. Pandit was paid a symbolic $1 in 2010 and
$128,741 in 2009. He had joined Citigroup in 2007 when the bank bought his
hedge fund Old Lane Partners for $800 million.
Thursday's lawsuit was brought by Stanley Moskal, a
Citigroup shareholder. It seeks to force Pandit, Parsons and other Citigroup
directors to pay damages to the bank, and for Citigroup to bolster internal
controls.
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