By Jonathan Stempel
Feb 26 (Reuters) - Current and former Citigroup Inc
officials on Tuesday urged a federal judge to reject a $6
million fee request by lawyers who brought, and then agreed to
dismiss, a shareholder lawsuit accusing the bank of awarding
outsize pay to top executives.
Litigation begun in April 2012 accused directors of
breaching their fiduciary duties by awarding more than $54
million of pay the prior year to several executives, including
$15 million to then chief executive Vikram Pandit, though
performance at the third-largest U.S. bank did not justify it.
A shareholder filed the initial complaint after a majority
of shareholders had in a non-binding vote at Citigroup's annual
meeting rejected Pandit's pay package, the first time that
investors had rejected a compensation plan at a major U.S. bank.
In October, Pandit and Chief Operating Officer John Havens
left the bank, and ultimately agreed to forfeit some pay.
Citing these events and their "obvious impact" on the
litigation, lawyers for the shareholders expressed an intention
to drop the case but nonetheless seek legal fees.
In a Jan. 25 court filing, they said their efforts "produced
(or at minimum, significantly helped to produce) unusually good
results for the company and its stockholders, including the
departures of defendants Pandit and Havens, as well as
significantly reduced levels of executive compensation made in
connection with those departures."
But Pandit, Havens and 15 other current and former
executives and directors said this was wrong, and on Monday
urged U.S. District Judge Paul Oetken to reject the request.
"Having taken no steps to prosecute their claims beyond
filing their meritless copycat complaints, plaintiffs now ask
the court to order Citigroup and its shareholders to bear the
costs - to the tune of $6 million - of plaintiffs'
self-proclaimed 'success,'" the Monday filing said.
"Because plaintiffs' counsel did nothing and achieved
nothing, they should take nothing for commencing this patently
frivolous lawsuit," it added.
Curtis Trinko, a lawyer for the plaintiffs, did not
immediately respond to a request for comment.
Pandit had been paid a symbolic $1 in 2010 and $128,741 in
2009. He joined Citigroup in 2007 when the bank bought his hedge
fund Old Lane Partners for $800 million.
On Feb. 21, Citigroup announced an overhaul of its executive
pay plan to more closely tie bonuses to stock performance and
The case is In re Citigroup Inc Shareholder Derivative
Litigation, U.S. District Court, Southern District of New York,
For plaintiffs: Curtis Trinko.
For Pandit, Havens, other executives: Brad Karp, at Paul,
Weiss, Rifkind, Wharton & Garrison.
For directors: Mary Eaton, at Willkie Farr & Gallagher.
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