I have mentioned that we will see a wave of shareholder activism this spring, with direct action challenges to the biggest corporations in America. This outcome at the Citigroup meeting in Dallas is one of the first fruits of that plan.

Citigroup‘s shareholders rejected the bank’s plan to award its chief executive, Vikram S. Pandit, $15 million in compensation, in a show of frustration about Wall Street pay.

At the bank’s annual meeting Tuesday in Dallas, a majority of investors voted against a proposal on executive compensation, which included approving Mr. Pandit’s pay package [...]

Citi doesn’t have to act on the vote, which isn’t binding. Still, it speaks to shareholders’ issues. Only 45 percent of shareholders supported the plan.

“Citi’s board of directors takes the shareholder vote seriously, and along with senior management will consult with representative shareholders to understand their concerns,” said Jon Diat, a spokesman for Citi.

Chief Financial Officer John Gerspach and two other top executives had their pay plans rejected as well.

Dodd-Frank included a “say on pay” provision that allow for shareholder votes on these kind of matters, but they are not binding, unlike in the UK. Nevertheless, what’s notable here is that shareholders almost always approve the pay packages of their corporate executives. This suggests that the anger at executive pay untied to performance has finally reached the investor class.

The spokesman’s quote sounds like boilerplate, but if major institutional shareholders continue to speak up, I could see Pandit’s compensation getting a tweak. Back in 2009 shareholders ousted Ken Lewis from Bank of America, so there’s at least a precedent for the value of shareholder activism. And unlike the BofA debacle, this was largely a surprising outcome.

Since say on pay was instituted in Dodd-Frank, 25 companies saw their pay packages rejected by shareholders last year. Basically, say on pay is a leverage point against large corporations. And shareholders effectively exercised their leverage today.