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Sunday, September 25, 2016

Citigroup, one of a litany of American banks bailed out by U.S. taxpayers at the height of the financial crisis in 2008, was sued in Manhattan Federal Court Thursday by a shareholder angry at $54 million in compensation doled out to executives last year.

The suit, brought by shareholder Stanley Moskal against CEO Vikram Pandit and the board of directors, comes in the wake of the Citigroup annual meeting on Tuesday, where some 55 percent of shareholders (in a non-binding, advisory vote) rejected the executive pay scheme, which included $15 million for Pandit.

The vote “has cast doubt on the board’s decision-making process, as well as the accuracy and truthfulness of its public statements,” reads the complaint. “Absent this (lawsuit), the majority will of the company’s stockholders shall be rendered meaningless.”

While Citigroup said the lawsuit was without merit, the third-largest bank by assets in the United States did attempt to sympathize with shareholder anger.

“The board takes the shareholder vote on executive compensation very seriously and will consult with representative shareholders to better understand their concerns,” said Citigroup spokeswoman Shannon Bell. The ability to cast a shareholder vote on executive pay at publicly-traded companies stems from the 2010 Dodd-Frank financial reform bill.

Citigroup has bounced back since its collapse, gaining market value and posting significant — if underwhelming — profits in 2011. The culture has not changed enough to assuage the concerns of shareholders frustrated at its low stock price and vulnerability to European debt troubles, however.

  • Gladys5215G

    Glad to hear someone is suing for these outlandish compensations. These are the reasons “we” get ripped off at the bank with the little schemes they always come up with to charge us for practically anything we do. Too many cash deposits, not handing the cash to the teller in proper order (yes, it happened to me at Wellsfargo), NSF charges by sabotaging your acct and the list goes on.

  • Gladys5215G

    Glad to hear someone is suing for these outlandish compensations. These are the reasons “we” get ripped off at the bank with the little schemes they always come up with to charge us for practically anything we do. Too many cash deposits, not handing the cash to the teller in proper order (yes, it happened to me at Wellsfargo), NSF charges by sabotaging your acct and the list goes on.

  • dalnb

    Good News for all Americans! It is time to stop unreasonably high wages and huge bonuses! It is time shareholders and consumers show some fortitude and put a stop to unrealistic payouts!

    It is time shareholders start fighting back. It is time consumers start putting pressure on companies who seem so dedicated to paying unreasonably high wages and bonuses because “if they don’t their top performers will go some where else.” Hell – let them go. Put the money into investors, shareholders and consumer’s interests rather than salesmen and managers pockets. Industry and corporations who put more emphasis in management bonuses than they do in customer programs should not exist anyway. CEOs and managers who feel they need more should become extinct.

    The expertise and performance of any CEO or employee is NOT worth the huge bonuses paid them. It is time investors and shareholders stand up and tell those who think they can demand that kind of funding to just find someplace else to work. Get rid of those who don’t measure up rather than super-reward those who do.

  • One point: this suit was an available option due to the Dodd / Frank act, an Obama reform bill. When Romney points out President Obama’s “failed economic policies”, this is one thing he would do away with.

    • Of course Romney objects to this – it takes power out of the hands of those he ACTUALLY represents!

  • The stockholders receive a standing ovation from me. Everyone who owns stock needs to take a more active role in the companies they invest it. It is only THEN that the powerful will be forced to be less greedy. Ultimately, we need to start valuing the “little” people in the organization (you know the ones that ACTUALLY produce the product/service)! The decrease in value we place on those individuals is RESPONSIBLE for where we are today. So again, love to see people taking part in the process and putting an end to GREED!

  • Good for them. These are the same people who put the company on it’s knees, why should they get fat bonuses(no matter what they call them they are bonuses)?

  • jkoller

    Japan’s average exec salary vs. average worker’s is said to be 11:1, ours was said to be 45:1 ten years ago. Today it is said to be 475:1 I applaude those that still give profit sharing to workers, and those that are a Co-op, like Mondragon in Spain. The cost of doing business includes being a contributor to the general quality of life of workers and the community. The days of selfserving is over, a new paradigm focusing on quality of life needs to take hold or we continue toward being a 3rd world country. It seems Starbucks and others are beginning to lead the way.

  • about time somone called these failures out. why would a company reward crooks and failures? the tax money wasted on these pigs should have been given directly to the people cheeted out of their life savings, not to the parasites who caused the crash with their greed.

  • Jimh77

    Share Holders, This is awesome!!! Maybe this will give other share holders the incentive to follow your foot steps and start cutting these fat cats bonuses that deserve so much less after destroying the American people.

  • tobewan

    Someone recently used a better term than “Conservative Right,” its Corporate Right, and better yet, the Corporate Wrong. At the Top, they are not only GREEDY, but they are moving in a PANIC mode, because of what they see coming, and, in the process, are helping to bring it on. Ever see something go down a spiraling cauldron? No way out.

  • All these shareholder CORRUPTION cause by USA REPUBLICAN Politician to BANRUPT ALL AMERICAN BANKS.

  • It’s about time that the shareholders spoke out. I’ve been a holder of shares in the market for about 5 decades. Sometimes it goes up and sometimes it goes down. The only thing that seems to remain the same is that compensation for the elites keeps going up and up. The leaders of the investment banks and brokerage houses on Wall Street have had the best of both worlds without any fear of responsibility. The government apparently believes it does not have a case, or is afraid to take on the job…too close to the problem???

    The stockholders may indeed be our only hope of forcing those who brought the country to its knees to any level of accountability. I wish them luck and look forward to seeing the response from the elites when it is their ox that is being gored. Hurting them in the pocket book is the only possible punishment that they might receive, so bring it on stockholders.