The Lemmy and Vikram Pandit

Kudos, firstly, to Citibank shareholders. From the New York Times:

Citigroup received a particularly public rebuke on Tuesday when its shareholders voted to reject the bank’s executive compensation package at its annual shareholder meeting. Citigroup was required to hold this vote as part of the “say on pay” provision of the Dodd-Frank Act that mandates that companies hold advisory shareholder votes on their executive compensation pay. While the shareholder rejection is only advisory, it creates a major headache for Citigroup. 

... 

 Last year, the Citigroup board paid Mr. Pandit almost $15 million, plus one-time retention awards with a potential value of $34 million.... [A] proxy advisory firm recommended against Mr. Pandit’s package because parts of his awarded pay were not based on Citigroup’s financial performance, Citigroup stock had declined by more than 90 percent in the last five years and Mr. Pandit’s pay package was not in alignment with that of his peers. 

Citigroup in part defended this pay package by arguing that Mr. Pandit had not received a meaningful salary for the three previous years, being paid only a dollar a year. This was nice of Mr. Pandit, but it must be put against the fact that Citigroup paid about $800 million to acquire Mr. Pandit’s hedge fund, Old Lane, an investment that Citigroup subsequently wrote off completely. And Mr. Pandit received an $80 million payment from Citigroup last year as part of the Old Lane buyout. He’s not about to become part of the 99 percent anytime soon.

As the Lemmy (or LMI, or Lifetime Median Income or $1.36 million  -- the total amount of revenue the median American can expect to make over his lifetime) was defined to make large amounts of money more understandable, let's re-write the last two paragraphs above using the Lemmy.

Last year, the Citigroup board paid Mr. Pandit almost 11 Lemmies, plus one-time retention awards with a potential value of 25 Lemmies.... [A] proxy advisory firm recommended against Mr. Pandit’s package because parts of his awarded pay were not based on Citigroup’s financial performance, Citigroup stock had declined by more than 90 percent in the last five years and Mr. Pandit’s pay package was not in alignment with that of his peers. 

Citigroup in part defended this pay package by arguing that Mr. Pandit had not received a meaningful salary for the three previous years, being paid only a dollar a year. This was nice of Mr. Pandit, but it must be put against the fact that Citigroup paid about 588 Lemmies to acquire Mr. Pandit’s hedge fund, Old Lane, an investment that Citigroup subsequently wrote off completely. And Mr. Pandit received a 59 Lemmy payment from Citigroup last year as part of the Old Lane buyout. He’s not about to become part of the 99 percent anytime soon.

Matt Ygelsias notes that another SEC rule should be coming into play shortly.

Dodd-Frank instructs the SEC to promulgate a rule requiring firms to publish information about the ratio of CEO compensation to median employee compensation.