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(MSNBC)   Citigroup shareholders make history by becoming the first Wall St. shareholders to reject the executives' compensation packages   (marketday.msnbc.msn.com) divider line 150
    More: Hero, Wall St, Vikram Pandit, Citigroup, executive compensation, share buyback, Meredith Whitney, shareholders, Citigroup shareholders  
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17355 clicks; posted to Main » on 18 Apr 2012 at 12:35 PM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-04-18 01:08:13 PM  

Cyclometh: Citigroup investors think their vote means something here?

I guess they were stupid enough to buy stock in Citigroup.

Board's gonna laugh at the rubes and do whatever the fark they want.


Until they get voted out.

Or piss the shareholders off enough that the shareholders lose faith and dump their stock.

Or both.

They may be able to do whatever the fark they want today, but as the shareholders continue to lose money the board members will not be able to do whatever the fark they want tomorrow.
 
2012-04-18 01:08:46 PM  
I wouldn't trust a CEO who would supposedly run a multi-billion dollar company a whole year for only $1. Sure it seems like a nice gesture, but is anyone buying that?
 
2012-04-18 01:08:57 PM  

trotsky:
Funny, because mass lay-offs, stupidly short-sighted business decisions and liquidation of profitable sections of many companies are done as a nod to "shareholders". Why is this any different?


If by "nod to shareholders" you mean "increased their holdings or dividend payouts" then yeah, I guess that makes sense. That's why they're shareholders in the first place, and those kinds of actions keep them happy. This is particularly relevant when you consider that the largest shareholders in the company are also those folks on the board and in the boardroom.

If they think they have any real control over the day to day management of the company, particularly executive compensation, they're nuts. Those same majority shareholders are going to take care of themselves just like they did with the layoffs and liquidations.
 
2012-04-18 01:09:43 PM  

farkityfarker: and just $128,741 in 2009

How can a person subsist on such a paltry salary?


And he took just $1 in another year, according to TFA.

I'm happy to hold exec's feet to the fire, but there's far worse abuses out there that get far less "punishment".
 
2012-04-18 01:09:48 PM  

Lost_in_Oregon: Ernesto Zedillo Director, Center for the Study of Globalization & Professor in the Field of International Economics and Politics, Yale Univ.


Ahh, so that's what happened to that guy.
 
2012-04-18 01:10:28 PM  

Lost_in_Oregon: Take a look at the Board of Directors membership. Tell me you've heard of even one person in this group of lightweight rubber-stamps.

Franz B. Humer Chairman, Roche Holding Ltd
Robert L. Joss, Ph.D. Professor of Finance Emeritus & Former Dean, Stanford University Graduate School of Business
Michael E. O'Neill Chairman, Citigroup Inc.
Vikram Pandit Chief Executive Officer / Citigroup Inc
Lawrence R. Ricciardi Senior Advisor, IBM Corporation, Jones Day & Lazard Freres & Co.
Judith Rodin President, Rockefeller Foundation
Robert L. Ryan Chief Financial Officer, Retired, Medtronic Inc.
Anthony M. Santomero Former President, Federal Reserve Bank of Philadelphia
Joan E. Spero Senior Research Scholar / Columbia University School of International and Public Affairs
Diana L. Taylor Managing Director, Wolfensohn Fund Management, L.P.
William S. Thompson, Jr. Chief Executive Officer, Retired, Pacific Investment Management Company (PIMCO)
Ernesto Zedillo Director, Center for the Study of Globalization & Professor in the Field of International Economics and Politics, Yale Univ.


So, the two guys running the company (which is typical), a few college professors, a former president of the Fed Reserve Bank of Philadelphia, an exec from one of their major institutional shareholders, and a few retired business execs? I'm not getting your point. Seems like the kind of people you'd want on the board of a major corporation.
 
2012-04-18 01:10:52 PM  

justoneznot: I wouldn't trust a CEO who would supposedly run a multi-billion dollar company a whole year for only $1. Sure it seems like a nice gesture, but is anyone buying that?


Steve Jobs took $1 salary when he was running Apple. if the company does well the stock options will make up for it.
 
2012-04-18 01:12:02 PM  

justoneznot: I wouldn't trust a CEO who would supposedly run a multi-billion dollar company a whole year for only $1. Sure it seems like a nice gesture, but is anyone buying that?


Bill Ford Jr, Steve Jobs, etc., did that. It's not atypical for the CEO of a failing company to take no pay until he turns the company around.
 
2012-04-18 01:18:12 PM  

Serious Black: cameroncrazy1984: Serious Black: Petit_Merdeux: From another article (that I can't link to since it's the Financial Times):

Some 55 per cent of shareholders either went against the plan or abstained at Citi's annual meeting in Dallas in a non-binding vote on Tuesday.

So WTF does that mean?

It means that Citigroup's board of directors can give their shareholders the bird and jack up the CEO's outlandish pay even more.

Because it's smart to piss off your shareholders

Presumably, their shareholders were pissed off before now. It didn't seem to stop the board then.


Heh, Citigroup has been about the shadiest and worst-run of the banks for over 20 years. They've been bailed out of near-bankruptcy at least twice (once by government, once by a prince from the middle east in the early 90s). Their corporate policies suck; it's a company that should have been nixed a long time ago. That said, I certainly hope this produces some waves.
 
2012-04-18 01:20:02 PM  

Debeo Summa Credo: Lost_in_Oregon: Take a look at the Board of Directors membership. Tell me you've heard of even one person in this group of lightweight rubber-stamps.
LOL! Who would you want to be on the BoD? Celebrities?


You bait me sir, but no joy.
I would expect to see a former Treasure Secretary or Chairman of the Fed or retired CEO/Chairmen of major corporations - those with global reach.
 
2012-04-18 01:22:06 PM  
Grand_Moff_Joseph: "the PR generated by events like this can make it very tough for the board to publicly justify the pay packages going forward"

Please. This is a no-brainer. From now on CEOs will just ask high, get rejected and the board will grant a 'compromise' raise. Because we all know that halfway between reality and a nonsense daydream is automatically a reasonable compromise. Ya know, because you met in the middle.

e.g. If you made 10 and want 25, you ask for 40. The shareholders predictably say 'no'. The board revises it down to the original goal of 25. The Board still does whatever it wants and now the PR department gets to trumpet the same old situation as the board being responsive to its shareholders' wishes.

And, really, if the shareholders really thought compensation was 'a problem', they'd sell. Trick is, none really do. They care as much about the business' fundamentals as house flippers cared about the shiat they flipped. As long as they can time the movements of the nonsense numbers, they get paid. They'll offer sour grapes about someone else working that system to get more. But as long as they get theirs, they don't *really* care.
 
2012-04-18 01:22:16 PM  
TyrantII: Majority shareholders, CEO's and BOD's are usually all Ivy League frat brothers. It's why compensation is a giant circle jerk to funnel cash out of public companies into private bank accounts. Socialism for the rich, it's what they teach at HBS.

Having dealt with my share of HBS people, this.



"I would like to introduce our next CEO here at JPMOrgan Chase, a recent graduate of Boonesboro Junior College and Appalachia State with an AA degree in English, Bubba Tinkertoy."

*eyeroll*
 
2012-04-18 01:23:47 PM  

Lost_in_Oregon: Take a look at the Board of Directors membership. Tell me you've heard of even one person in this group of lightweight rubber-stamps.

Franz B. Humer Chairman, Roche Holding Ltd
Robert L. Joss, Ph.D. Professor of Finance Emeritus & Former Dean, Stanford University Graduate School of Business
Michael E. O'Neill Chairman, Citigroup Inc.
Vikram Pandit Chief Executive Officer / Citigroup Inc
Lawrence R. Ricciardi Senior Advisor, IBM Corporation, Jones Day & Lazard Freres & Co.
Judith Rodin President, Rockefeller Foundation
Robert L. Ryan Chief Financial Officer, Retired, Medtronic Inc.
Anthony M. Santomero Former President, Federal Reserve Bank of Philadelphia
Joan E. Spero Senior Research Scholar / Columbia University School of International and Public Affairs
Diana L. Taylor Managing Director, Wolfensohn Fund Management, L.P.
William S. Thompson, Jr. Chief Executive Officer, Retired, Pacific Investment Management Company (PIMCO)
Ernesto Zedillo Director, Center for the Study of Globalization & Professor in the Field of International Economics and Politics, Yale Univ.


I don't get this post. Should I copy/paste a list of the guys on my (fantasy football or DnD game as you like here)? I don't run in that industry why would the names mean anything?
 
2012-04-18 01:24:47 PM  

SkunkWerks: Always found it curious that the concept of, yanno, pay being tied inextricably to performance was such a foreign one in institutions which purportedly are the backbone of Capitalism in this country.

Weirdos.


Very few people's pay is tied directly to performance. Commissions, that's really all I can think of.
 
2012-04-18 01:26:05 PM  

sharkbeagle: Many MANY companies have these votes on their annual meetings. Citi is the first prominent very large company to lose a proxy fight though.


No they aren't. HP lost a vote, as did Black & Decker.
 
2012-04-18 01:26:20 PM  

meanmutton: justoneznot: I wouldn't trust a CEO who would supposedly run a multi-billion dollar company a whole year for only $1. Sure it seems like a nice gesture, but is anyone buying that?

Bill Ford Jr, Steve Jobs, etc., did that. It's not atypical for the CEO (who is likely already a millionaire) of a failing company to take no pay other than lucrative stock options and a number of paid board positions at other companies which are directly related to his position at said company until he turns the company around, at which time he back-collects additional millions for his supposed "pro bono" time.


FTFY.
 
2012-04-18 01:28:25 PM  
SkunkWerks:
Always found it curious that the concept of, yanno, pay being tied inextricably to performance was such a foreign one in institutions which purportedly are the backbone of Capitalism in this country.

I somehow read this as "yanno, /yan/nō/ noun: the principle that one's pay is tied inextricably to one's job performance."

I like it. I will use this word from now on.
 
2012-04-18 01:28:54 PM  

Rent Party: trotsky:
Funny, because mass lay-offs, stupidly short-sighted business decisions and liquidation of profitable sections of many companies are done as a nod to "shareholders". Why is this any different?

If by "nod to shareholders" you mean "increased their holdings or dividend payouts" then yeah, I guess that makes sense. That's why they're shareholders in the first place, and those kinds of actions keep them happy. This is particularly relevant when you consider that the largest shareholders in the company are also those folks on the board and in the boardroom.

If they think they have any real control over the day to day management of the company, particularly executive compensation, they're nuts. Those same majority shareholders are going to take care of themselves just like they did with the layoffs and liquidations.


And how many companies survive after short term business decisions blow up in their face? The "short term disease" has destroyed the idea of American Business. Woah boy, a farking nickel increase at the cost of long term stability, what a bargain! Did they teach that in MBA school?
 
2012-04-18 01:31:18 PM  
The idea that compensation tied to (some corporate defined) performance criteria will solve governance issues is often illusory. That concept is what led to the recent real estate problems since executives were compensated for current revenue regardless of the future financial stability of the bank.
 
2012-04-18 01:31:33 PM  

Rent Party: trotsky:
Funny, because mass lay-offs, stupidly short-sighted business decisions and liquidation of profitable sections of many companies are done as a nod to "shareholders". Why is this any different?

If by "nod to shareholders" you mean "increased their holdings or dividend payouts" then yeah, I guess that makes sense. That's why they're shareholders in the first place, and those kinds of actions keep them happy. This is particularly relevant when you consider that the largest shareholders in the company are also those folks on the board and in the boardroom.

If they think they have any real control over the day to day management of the company, particularly executive compensation, they're nuts. Those same majority shareholders are going to take care of themselves just like they did with the layoffs and liquidations.


Bad assumption to make. Part of the corporate governance problems is that of "pocket" boards. The board members are beholden to a CEO/chairman, as is the case here in Citigroup. Except for Humer, Taylor and Thompson I'd expect the board members control very little of the stock, and even those three I wouldn't assume have much either, instead they probably represent the idea that large funds control much of the company stocks, not that they or their funds do. As is the case in most large corporate boards, the members got there because the previous board added their name to the rolls at the suggestion of senior management.

Given how tenuous the shareholder - board - executive relationship has become with the general policy of voting with your feet (ie. selling your stock) this entire "say on pay" vote is rather remarkable.
 
2012-04-18 01:32:10 PM  

ringersol: And, really, if the shareholders really thought compensation was 'a problem', they'd sell. Trick is, none really do. They care as much about the business' fundamentals as house flippers cared about the shiat they flipped. As long as they can time the movements of the nonsense numbers, they get paid. They'll offer sour grapes about someone else working that system to get more. But as long as they get theirs, they don't *really* care.


Mark Cuban: Stock Market is Platform for High Frequency Trading "Hackers"

And the "hackers" in this case are the major investment firms with the resources to pull off HFT.
 
2012-04-18 01:35:18 PM  

Grand_Moff_Joseph: DamnYankees: Petit_Merdeux: From another article (that I can't link to since it's the Financial Times):


Some 55 per cent of shareholders either went against the plan or abstained at Citi's annual meeting in Dallas in a non-binding vote on Tuesday.

So WTF does that mean?

The Say on Pay laws require that shareholders be given an advisory vote on compensation packages. Doesn't require the board to follow the vote.

This. While it would be great if the vote did have some teeth to it, the PR generated by events like this can make it very tough for the board to publicly justify the pay packages going forward. Sometimes, negative press is worse than actual technical punishments.


It's also slightly possible that ignoring a vote of shareholders on something like this could abbrogate the protection Directors and officers get under the "business judgment Rule" Quick summary copypastaed from wiki: : "directors of a corporation . . . are clothed with [the] presumption, which the law accords to them, of being [motivated] in their conduct by a bona fide regard for the interests of the corporation whose affairs the stockholders have committed to their charge".

To challenge the actions of a corporation's board of directors, a plaintiff assumes "the burden of providing evidence that directors, in reaching their challenged decision, breached any one of the triads of their fiduciary duty - good faith, loyalty, or due care".


you could argue that directly going against the express wishes of the shareholders is a breach of the duty of loyalty
 
2012-04-18 01:35:22 PM  

trotsky: Rent Party: trotsky:
Funny, because mass lay-offs, stupidly short-sighted business decisions and liquidation of profitable sections of many companies are done as a nod to "shareholders". Why is this any different?

If by "nod to shareholders" you mean "increased their holdings or dividend payouts" then yeah, I guess that makes sense. That's why they're shareholders in the first place, and those kinds of actions keep them happy. This is particularly relevant when you consider that the largest shareholders in the company are also those folks on the board and in the boardroom.

If they think they have any real control over the day to day management of the company, particularly executive compensation, they're nuts. Those same majority shareholders are going to take care of themselves just like they did with the layoffs and liquidations.

And how many companies survive after short term business decisions blow up in their face? The "short term disease" has destroyed the idea of American Business. Woah boy, a farking nickel increase at the cost of long term stability, what a bargain! Did they teach that in MBA school?


It wouldn't come as a surprise.
 
2012-04-18 01:37:25 PM  

trotsky:
And how many companies survive after short term business decisions blow up in their face? The "short term disease" has destroyed the idea of American Business. Woah boy, a farking nickel increase at the cost of long term stability, what a bargain! Did they teach that in MBA school?


Most of them survive, and a good number of them profit considerably. Short term disease is not new, nor novel. It has been going on since quarterly reports started being issued.
 
2012-04-18 01:38:47 PM  
Bathe in the blood of kings.
 
2012-04-18 01:39:16 PM  

justoneznot: I wouldn't trust a CEO who would supposedly run a multi-billion dollar company a whole year for only $1. Sure it seems like a nice gesture, but is anyone buying that?


It looks like he also got 470,000 stock options, so I don't think he'll be out selling pencils on the street any time soon.
 
2012-04-18 01:39:58 PM  

Eddie Adams from Torrance: justoneznot: I wouldn't trust a CEO who would supposedly run a multi-billion dollar company a whole year for only $1. Sure it seems like a nice gesture, but is anyone buying that?

It looks like he also got 470,000 stock options, so I don't think he'll be out selling pencils on the street any time soon.


A stock option *is* performance pay. After all, those options only have value if the price of the stock goes up.
 
2012-04-18 01:44:26 PM  

Lost_in_Oregon: The idea that compensation tied to (some corporate defined) performance criteria will solve governance issues is often illusory. That concept is what led to the recent real estate problems since executives were compensated for current revenue regardless of the future financial stability of the bank.


Completely agree - it's an idea that is floated by the boards and executives themselves to continue the model of the detached shareholder. The only way to really solve the governance problems is to move to an actively engaged set of shareholders. Shareholder meetings would be quarterly - probably not worth the overhead of doing more often as it would add excessive amounts of cost (ie. you have quarterly reports that have to be filed for regulatory reasons, that would be the basis of your shareholder reporting). Annual compensation packages would be only covered in one meeting. Reviewing and validating board decisions would be the major topic for each shareholder meeting.

The major problem with this is that being a shareholder now becomes "work". And if there is anything we know, people just aren't that motivated - they want their dividend or capital gain and not have to do anything. So forgive me if I'm not holding my breath while waiting for such changes.
 
2012-04-18 01:48:41 PM  

Beemer_Vol: Maybe the first Wall Street firm, but not the first company. Same thing happened with Jacobs Engineering over a year ago.

I believe the Jacobs board went ahead and approved those those salary adjustments anyway Link
 
2012-04-18 01:48:47 PM  
Pandit received only a symbolic $1 in 2010, and just $128,741 in 2009

I understand some companies need to be made an example of, but Citigroup probably shouldn't have been the one. If they want to retain Pandit, they are going to have to pay him. He's not going to keep CEO'ing for $1 a year.

Personally, I'd like to see Goldman Sachs and BofA be made the example of.
 
2012-04-18 01:53:16 PM  

Grand_Moff_Joseph: Better late than never. I hope this is the start of a beautiful trend.


Yep screw Contracts and the Rule of Law
 
2012-04-18 02:01:02 PM  

Petit_Merdeux: From another article (that I can't link to since it's the Financial Times):


Some 55 per cent of shareholders either went against the plan or abstained at Citi's annual meeting in Dallas in a non-binding vote on Tuesday.

So WTF does that mean?


It means the shareholders said "WAAAAAAHHHHHHH we are stupid and listen to the media" but the execs got their pay and bonuses, as contracted, anyway.
 
2012-04-18 02:01:09 PM  
This guy made his debut when I was in college. I'll be 47 in a few months. That's just farking insane Meh.
 
2012-04-18 02:01:21 PM  

Jake Havechek: Interesting.

Citigroup is still on the shiatlist, though.


So much This.
 
2012-04-18 02:02:09 PM  

farkityfarker: and just $128,741 in 2009

How can a person subsist on such a paltry salary?


He'll never be able to put food on his family at that rate.
 
2012-04-18 02:02:31 PM  

DamnYankees: Eddie Adams from Torrance: justoneznot: I wouldn't trust a CEO who would supposedly run a multi-billion dollar company a whole year for only $1. Sure it seems like a nice gesture, but is anyone buying that?

It looks like he also got 470,000 stock options, so I don't think he'll be out selling pencils on the street any time soon.

A stock option *is* performance pay. After all, those options only have value if the price of the stock goes up.


Maybe. Remember there were a bunch of cases recently where options were backdated to the lowest point of a stock.
 
2012-04-18 02:03:10 PM  
oop's wrong thread :P
 
2012-04-18 02:05:04 PM  

Magorn: Grand_Moff_Joseph: DamnYankees: Petit_Merdeux: From another article (that I can't link to since it's the Financial Times):


Some 55 per cent of shareholders either went against the plan or abstained at Citi's annual meeting in Dallas in a non-binding vote on Tuesday.

So WTF does that mean?

The Say on Pay laws require that shareholders be given an advisory vote on compensation packages. Doesn't require the board to follow the vote.

This. While it would be great if the vote did have some teeth to it, the PR generated by events like this can make it very tough for the board to publicly justify the pay packages going forward. Sometimes, negative press is worse than actual technical punishments.

It's also slightly possible that ignoring a vote of shareholders on something like this could abbrogate the protection Directors and officers get under the "business judgment Rule" Quick summary copypastaed from wiki: : "directors of a corporation . . . are clothed with [the] presumption, which the law accords to them, of being [motivated] in their conduct by a bona fide regard for the interests of the corporation whose affairs the stockholders have committed to their charge".

To challenge the actions of a corporation's board of directors, a plaintiff assumes "the burden of providing evidence that directors, in reaching their challenged decision, breached any one of the triads of their fiduciary duty - good faith, loyalty, or due care".

you could argue that directly going against the express wishes of the shareholders is a breach of the duty of loyalty


Compared to money in pocket? Mmeehh, fark 'em and let 'em try to get it back.

/amidoingitrite?
 
2012-04-18 02:08:32 PM  

Serious Black: Petit_Merdeux: From another article (that I can't link to since it's the Financial Times):

Some 55 per cent of shareholders either went against the plan or abstained at Citi's annual meeting in Dallas in a non-binding vote on Tuesday.

So WTF does that mean?

It means that Citigroup's board of directors can give their shareholders the bird and jack up the CEO's outlandish pay even more.


Posts on the internet about how a CEO making $25M over 3 years is outlandish...

Keeps watching people play a football game on TV for $100M+ a year.
 
2012-04-18 02:09:54 PM  

Ronin FF: This guy was not exactly getting "outlandish" pay to begin with. My bet is that if he winds up not getting his millions, he'll go somewhere else that will pay him what he feels he is worth.

I'm not sure how I feel about this non-story.

Meh, I guess.


If he can't make the Citibank shareholders happy, it is doubtful many companies will be lining up to take him on.

I hope along with the other posters that this is the beginning of a trend.
 
2012-04-18 02:09:57 PM  

meanmutton: farkityfarker: and just $128,741 in 2009

How can a person subsist on such a paltry salary?

When did hating the rich turn into hating the middle class? in Manhattan, where this guy is required to live for his job, that's like 65th percentile.


He could commute, like most of his employees have to.
 
2012-04-18 02:14:54 PM  
So, the people who own stock in the company, who theoretically "own" the company, can make non-binding advisory votes.

The Board of Directors, overlapping oligarchs who sit on the boards of multiple corporations and are old friends/frat brothers from college, actually make the decisions with only token regard for what the stockholders want.

The CEO's get huge pay and multi-million-dollar-bonuses whether or not the company is successful. Generous contracts with "golden parachute" clauses means that even if they completely fark up the company, they still get a severance package so generous that they'll be set for life.

This is supposed to be the glorious, holy "free market" that fixes everything? A system that seems to exist to funnel wealth into the hands of a few, away from the many, with no regard for merit or skill and only regard for political and familial ties?

WTF happened to capitalism?
 
2012-04-18 02:17:14 PM  

Bullseyed: Serious Black: Petit_Merdeux: From another article (that I can't link to since it's the Financial Times):

Some 55 per cent of shareholders either went against the plan or abstained at Citi's annual meeting in Dallas in a non-binding vote on Tuesday.

So WTF does that mean?

It means that Citigroup's board of directors can give their shareholders the bird and jack up the CEO's outlandish pay even more.

Posts on the internet about how a CEO making $25M over 3 years is outlandish...

Keeps watching people play a football game on TV for $100M+ a year.


Two things

1) who makes 100m/year playing any professional sport? Tiger Woods was theonly one that came close and that includes all his endorsement money

2) I can identify the skill that makes Tiger woods Unique in the world. I can't say the same about Vikram Pandit, or John Thune or any of those guys

and you're right $10 mill a year IS peanuts compared to say, hedge fund managers who get paid $3 Billion/ year but they by and large aren't publicly traded so at least there are no shareholders to rip off
 
2012-04-18 02:17:26 PM  

Phil Derup: This CEO is a top Job Creator. He is worth far more than than what these people want to pay him. We really need to give breaks to all Job Creators.


LOL, welcome back! Finally some logic on FARK. Oh, wait..

/sometimes, I see your namesake on another website that shall remain nameless
 
2012-04-18 02:18:42 PM  
If I'm reading the article correctly, the vote was only "advisory" and the CEO still got his multi million dollar payout.
 
2012-04-18 02:19:03 PM  

Rent Party: cameroncrazy1984: Serious Black: Petit_Merdeux: From another article (that I can't link to since it's the Financial Times):

Some 55 per cent of shareholders either went against the plan or abstained at Citi's annual meeting in Daiillas in a non-binding vote on Tuesday.

So WTF does that mean?

It means that Citigroup's board of directors can give their shareholders the bird and jack up the CEO's outlandish pay even more.

Because it's smart to piss off your shareholders

If shareholders are limited to advisory votes, why on Earth would anyone give a shiat if they were pissed off or not?


That's the joke
 
2012-04-18 02:20:46 PM  

Ronin FF: This guy was not exactly getting "outlandish" pay to begin with. My bet is that if he winds up not getting his millions, he'll go somewhere else that will pay him what he feels he is worth.

I'm not sure how I feel about this non-story.

Meh, I guess.


It's really $25 million since it's $15 million base and another $10 million "retention pay" - which is a misnomer since the supposed reason for the millions in base pay to our executive class is supposedly justified on the basis of retaining them. So basically, it's $25 million in compensation.

$25 million a year is outlandish pay for pretty much anyone, and may not even be his total compensation as he may also be getting stock options and other more clandestine compensation. We have gotten used to hearing about it, but that doesn't make it any less ridiculous. He's getting probably around 600 - 700 hundreds of times more compensation than the average worker. I think that's ludicrous.

IMHO we pay our executives so much that it ends up amounting to a material siphoning of wealth from these organizations, harming the profitability and harming the community through the reduction in pay to hundreds of other people.

The next time you hear about a company which pays it's CEO $25,000,000 dollars laying people off... think about how many of those people they could have afforded to keep if the CEO and other executives made the "poorhouse" wage of something like "only" a million a year instead. Most likely they would have been able to keep everyone and also had money to spare. Those people that got laid off now cost more in social services and no longer have money to spend on bills and circulate through the economy - which hits even MORE people's pocketbooks. That's how it harms us all.
 
2012-04-18 02:20:50 PM  

ringersol: And, really, if the shareholders really thought compensation was 'a problem', they'd sell. Trick is, none really do. They care as much about the business' fundamentals as house flippers cared about the shiat they flipped. As long as they can time the movements of the nonsense numbers, they get paid. They'll offer sour grapes about someone else working that system to get more. But as long as they get theirs, they don't *really* care.



"Just sell" is the same retarded excuse that MBA's and finance guys give when confronted on the issue of corporate governance (or the lack thereof). It's inexcusably stupid and relies upon a fundamental level of ignorance about how the markets work.

The majority of stocks are held by mutual funds, banks, insurance companies, institutions (colleges, foundations, etc), and pension funds. Liquidating holdings into cash isn't done lightly and is only accomplished after weighing the consequences of such a sale (transaction costs, tax implications, rating issues, etc) and planning for investment in another company since 1) these organizations may have fiduciary duties requiring a certain level of income or 2) their charter restricts their investment decisions (e.g. mutual fund investment strategies) or 3) the proceeds from the sale and interest income yielded while it's held as cash will result in taxable income for the current year that they had not planned for.

More importantly, it relies on the (false) assumption that there is something to buy. Sure you can sell your holding but what the hell are you going to do with it? You can't be so deluded as to think that corporate governance and compensation is better at another company. These problems are pervasive and "just sell" is the stupid and ultimately untrue response often given whose only virtue is its ability to fit on a bumper sticker.
 
2012-04-18 02:25:26 PM  

Joshudan: Ronin FF: This guy was not exactly getting "outlandish" pay to begin with. My bet is that if he winds up not getting his millions, he'll go somewhere else that will pay him what he feels he is worth.

I'm not sure how I feel about this non-story.

Meh, I guess.

If he can't make the Citibank shareholders happy, it is doubtful many companies will be lining up to take him on.

I hope along with the other posters that this is the beginning of a trend.


More likely a small, boney scrap thrown to the media.
Sumbody in PR got a bonus.
 
2012-04-18 02:27:49 PM  
From an article with additional info: Citigroup shareholders rebuffed on Tuesday the bank's $15 million pay package for its chief executive, the bank has struggled to make up for lackluster revenue.The votes are part of the Dodd-Frank financial overhaul that mandates that public companies include "say on pay" votes for shareholders to express opinions about compensation. Last year, shareholders at 42 companies - out of more than 3,000 firms - voted against pay plans
 
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