Rejection Two weeks ago, the shareholders of Citibank voted to reject the pay package of CEO Vikram Pandit for a year. No wonder. Its shares have fallen by 44%. The vote was taken under the so-called “say on pay” legislation that was introduced in 2010 after the credit crisis. This non-binding action drew a lot of attention and signals an era of emerging activist shareholders and increasingly aggressive governmental oversight. Much closer to home, it was reported that the shareholders of Simon Property Group, the country’s largest mall owner, rejected an eight-year compensation package for the REIT’s chief executive, David Simon, which included an annual base salary of $1.25 million and stock awards valued at $132 million over the length of the term. The company responded that the REIT’s performance has “led our industry” in Simon’s tenure and that the compensation deal is critical to retaining him. I don’t know about that, but I do know that if a company such as Simon performs as it has and its shareholders reject the CEO’s pay package, we are in for a period of ultra-cautious compensation committees and compensation consultants who will make a tidy sum advising public boards.

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