Good news for those of us who know that only a reformed version of market capitalism can survive current unhappiness with its performance. Citigroup’s shareholders have told their executive employees, and most especially CEO Vikram Pandit, that it is the owners of the business, not their hired hands, who run the show. And that if these employees want to make the big bucks, they had better deliver stellar performance. So a majority of the shareholders turned down a plan that paid Mr. Pandit almost $15 million last year, and promised to pay him millions more this year despite less-than-stellar performance.
This is important because it addresses one of the discontents with capitalism. True or not, there is a perception that inequality of income and wealth is increasing, that the rise is due not to great performance by executives but to the fact that game is somehow rigged against the ordinary worker. And the president of the United States is building his reelection campaign around the theme of socking it to the rich whom he says are not paying their fair share of taxes, while several nervous politicians in other countries, unable to deliver economic growth, are blaming “fat cat bankers.” In Britain one of that hated breed has been de-ennobled, his peerage rescinded, and his seat in the House of Lords snatched from him.
