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Like most of the 2% of companies that failed Say on Pay in 2011, Citigroup has proved to be essentially tone-deaf when it comes to executive compensation. Complaints against their CEO pay have gone back to at least the prior two CEOs. The only reason Mr Pandit escaped this criticism was his $1 salary since the collapse.

I agree a big part of this was a communication issue, but in this case it was their lacking of listening skills. Their shareholders have lost money (except those who had money to buy the stock immediately after everything fell apart). The company was propped up using government provided support. Regulators have said less than kind words. Shareholders have made it clear that performance had to improve.

Perhaps Citigroup ignored all of this. Perhaps they simply couldn't hear it because it did not meet there view of reality. Either way, this will not be the last vote we see like this in 2012. Hubris is unlikely to be rewarded in this climate

Thanks for weighing in, Dan. If Citigroup is tone deaf, it's a disorder that is often found in boardrooms, as you know. You're right on the money -- it will be interesting to see whether other shareholder groups are emboldened by this. It will also be interesting to see what this will do, if anything, to Mr. Pandit's leadership approach. Wouldn't it be great if this improved things at Citigroup?

The Hay report on the effects of global exec comp interventions by governments summarized today in the May 1 WorkSpan Weekly observed that negative SayOnPay votes can hurt the very stockholders who complain. "Many investors specifically stated that they were less likely to query executive pay under such rules, to avoid an adverse market reaction." Guess that means that those who vote disapproval feel overwhelmingly angry, in order to overcome that initial reluctance to invite more pain upon themselves.

If they were really serious about changing the direction of the companies they own, you would think they would vote against the current compensation committee and elect a new corporate board of directors. Why engage in Gesture Politics when you can actually DO something to remedy the issue?

A cynic might suspect they vote NO simply to depress the stock price so they can buy more shares at a lower cost. Isn't that illegal, to conspire to manipulate stock prices? This rule has to be a short-seller's dream.

Jim,given what is going on today, May Day, I think there may be some disconnect between the consultants' and W@W's views on how their clients should be treated, and what is actually going to happen. Feelings are running high in this country, but there's no real, powerful movements forming up yet. So there is no reason yet for Hay and W@W to acknowledge anything but the usual dollar issues.

It's hard to know what, if anything, will happen with other shareholder groups. But it is clear that shareholders are no longer willing to play along no matter what -- and that many companies are finally starting to notice that shareholder communication needs to involve listening.

Part of the Citigroup shareholders' motivation came from the company's poor performance. As I mentioned earlier, the real tell will be if the Citigroup vote influences any leadership behavior there. Then we can truly show that Say on Pay has an impact, and shareholder "no" votes are worth the effort.

Thanks for sharing the interesting research!

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