Shareholders generally have little practical sway in American business life, but Citi's shareholders made headlines yesterday by failing to grant majority support to an executive compensation plan that would have showered CEO Vikram Pandit and his colleagues with money. It's not exactly an unprecedented move. Last year was the first year that publicly traded firms were required to hold "say on pay" votes and 41 Russell 3000 firms' managements ended up losing. But none of those companies were banks and none were nearly as large or high profile as Citi. But the banking giant now joins Hewlett-Packard and Stanley Black & Decker on the list of shame.
I think it remains to be seen exactly how big a deal these kind of votes will be in practice, but the fact that they're being held at all is one of the underheralded impacts of the Dodd-Frank financial regulation overhaul. This is one of these good ideas that snuck in there despite not really being related to the core of the financial crisis that almost certainly never would have seen the light of day as a stand-alone.