Now that shareholders have rejected Citigroup CEO Vikram Pandit's $15 million pay package, all eyes are on Wells Fargo and Bank of America, both of which are holding their own "say on pay" votes in the coming weeks. The votes are required as part of post-financial crisis financial reform laws, and though negative votes have been cast before, Citigroup marks the first big bank to suffer one. "If it can happen at Citigroup it can happen anywhere, particularly at other big financial firms," an AFL-CIO director tells the Los Angeles Times.
"We believe the outcome of the vote will have a ripple effect through the industry by sheer power of an example," says a spokesperson for the California Public Employees' Retirement System, one of Citi's biggest shareholders. A shareholder advisory firm notes that Wells Fargo suffers from "similar issues to Citigroup," and Bank of America isn't doing too well either—though its stock has recovered a bit this year, it fell 58% last year while the CEO's compensation more than quadrupled. One significant BofA investor notes that the Citi vote "could be a watershed event"—and he, for one, is voting no at BofA's meeting.