This week’s winner of the Lame Leader Award has to be Vikram Pandit, CEO of Citigroup. Pandit’s inability or refusal to read the writing on the wall – to forestall outrage at his outsized compensation – resulted in his public humiliation at the hands of his shareholders, who rejected a pay plan that would have awarded him $15 million.
Of course it’s not the first time Pandit’s reputation has taken a hit – only a month ago Citigroup failed the Fed’s stress test, measuring its potential strength in the event of major adversity. Moreover Citigroup has delivered the worst stock performance among all large banks for the last decade, while having the chutzpah to rank among the highest in executive pay. This makes it all the more surprising that Pandit so misread his situation – or maybe not. Leaders generally have adjusted poorly to this brave new world, in which watching your back is a survival skill.
Dodd-Frank requires public companies to give shareholders a say on pay. This at a moment when anger against inequity is undiminished and shareholder activism is showing new signs of life. How foolish, then, how arrogant of Pandit to imagine himself immune to the temper of the times!