Citigroup shareholder Stanley Moskal’s lawsuit against the bank’s directors is not expected to result in an award of damages, but it could be a wake-up call for boards to reach out to shareholders on compensation issues.
The claim followed 65% shareholder disapproval of the $14.8 million total compensation paid to Citigroup CEO Vikram Pandit in 2011.
Moskal claims the board of directors breached its fiduciary duty in awarding $54 million to executives in 2011. Precedent suggests he does not have the right to bring these claims.
“Litigation doesn’t really work,” Wachtell Lipton Rosen & Katz partner David Katz said. “Dodd-Frank made it clear the say-on-pay vote did not create liability for a negative say-on-pay vote.”
The case is expected...