Citigroup to 'fix' Vikram Pandit's pay plan

NEW YORK: Citigroup shareholders rejected its executive pay plan, a first among the six largest US banks, amid criticism it lets chief executive officer Vikram Pandit collect millions of dollars in rewards too easily.

About 45% of the votes favored the plan, which Citigroup had said will attract and retain top talent, according to a preliminary tally at the New York-based firm's annual meeting in Dallas on Tuesday.

While the vote isn't binding, outgoing Chairman Richard Parsons said changes will be made.

"That's a serious matter," Parsons said during his final Citigroup shareholders' meeting as chairman. The board will seek a more quantitative, formula-based method for setting top executives' pay, he said in a subsequent interview.

"We're going to have some more conversation with our shareholders, make sure we understand their concerns and then fix it," he said. The rejection is a rarity for companies in the US, which temporarily imposed pay curbs on financial firms as part of the industry's $700 billion taxpayer bailout in 2008.

While new rules require "say-on-pay" votes, only 41 firms in the Russell 3000 Index failed last year to win a majority for executive pay plans, according to Ted Allen, a spokesman for ISS Proxy Advisory Services. Just three have been rejected this year, none of them at banks, Allen said.