Former Bank of Hawaii Chairman and CEO Mike O’Neill has been named chairman of the Citigroup Inc. board of directors.
The announcement about O’Neill, 65, was made following the annual Citi stockholders’ meeting in Dallas, Texas. O’Neill has been a board member since 2009. He previously was vice chairman and chief financial officer at BankAmerica Corp., now known as Bank of America.
In addition to O’Neill, Franz B. Humer and Joan E. Spero were elected by stockholders to serve on the Citi board.
O’Neill replaces former Chairman Richard Parsons who also has ties to Hawaii. Parsons played basketball for the University of Hawaii in the 1960s. Parsons also serves as an economic adviser to President Barrack Obama
The Citigroup succession plan was announced last month.
O’Neill, a member of the board’s personnel and compensation committee, will have to deal with shareholder ire over executive pay in his new role.
At today’s annual meeting, 55 percent of the bank’s shareholders voted against the pay packages that have been granted to Citigroup’s top executives, including CEO Vikram Pandit’s $15 million for last year and $10 million retention pay. The vote is advisory and won’t force the bank to change its pay practices, but it did send a powerful message of discontent to Citi’s leadership.
Under the Dodd-Frank financial overhaul law, major U.S. companies are required to allow shareholders to have a "say on pay" vote at least every three years.
Besides Citi so far this year, only three companies — International Game Technology and Actuant Corp. — have failed to muster shareholders’ approval of its pay practices. Last year, 41 companies failed.
For Citigroup’s CEO Vikram Pandit, the lost vote at the annual meeting comes at a bad time. Last month the bank’s chief regulator the Federal Reserve dealt Citi a huge setback by barring the company from paying a higher dividend, saying the bank wasn’t financially strong enough. The Fed’s decision came soon after Pandit had been promising to raise dividends.
Pandit received $14.8 million in total compensation for 2011, up from his token $1 compensation in 2010.
Pandit was also awarded $10 million in retention pay, which vests after 2013. Paid as an incentive for Pandit to stay on as CEO, Citi’s compensation committee will assess him not on financial performance, but on non-quantifiable measures such as talent management, organizational culture and risk management.