Citigroup Inc. investors rejected the bank's $15 million pay package Tuesday for its chief executive, Vikram Pandit, a first among the six largest U.S. lenders.
The shareholder vote, which comes amid a rising national debate over income equality, suggests that anger over pay for chief executives has spread from Occupy Wall Street to wealthy institutional investors, the New York Times said.
About 45 percent of the votes favored the plan, which Citigroup had argued would help attract and retain top talent, the San Francisco Chronicle said.
"C.E.O.'s deserve good pay but there's good pay and there's obscene pay," said Brian Wenzinger, a principal at Aronson Johnson Ortiz, a Philadelphia money management company that voted against the pay package.
Though 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.
"We're going to have some more conversation with our shareholders, make sure we understand their concerns and then fix it," he said.
Shareholders rarely vote against compensation plans, the Times said. 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.
The rejection is a rarity for companies in the U.S., which temporary imposed pay curbs on financial firms as part of the industry's $700 billion U.S. bailout in 2008, the Chronicle said. Only 41 firms among 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.