[ by Melanie Gretchen ] Citigroup may have opened Pandora's Box.  After shareholders held a nonbinding vote against CEO Vikram Pandit's $14.9 million pay package for 2011, FirstMerit Corp.'s shareholders rejected the $64 million pay package for Chairman and CEO Executive Paul Greig for  2011, during which stock declined 20%. Firm Response. Citigroup has promised that directors would meet with shareholders about their concerns, according to departing chairman, Richard Parsons.  To date, the nation's 3rd-largest bank in assets hasn't scheduled meetings with angry investors. For its part, FirstMerit defended its compensation package in a statement. "Our incentive package was devised to be fair and effective in maintaining, rewarding and retaining executive talent with skills and experience necessary to achieve our business goals and create long-term shareholder value."  In the future, it will continue to evaluate future incentive package.  [CI Note: Translation: it won't do anything now.] Out of Favor. The tide is slowly turning in favor - away from the banks: last month the Federal Reserve rejected a Citigroup proposal to raise its dividend or buy back more shares.  Michael Garland, executive director for corporate governance for the New York City Comptroller's Office, predicted the trend would continue into proxy voting season.  His agency voted the 7.8 million shares it controls against Citigroup's pay plan. Indeed, proxy-advisory firms Glass Lewis & Co. and Institutional Shareholder Services Inc. advised shareholders to vote against both the Citigroup and FirstMerit plans.  Going forward, the firms are advising investors to vote the packages down at other banks, including Huntingdon Bancshares Inc., a regional bank based in Columbus, Ohio.  Its pay package for CEO Stephen Steinour is valued at $6.4 million. Shareholder Response. Glass Lewis said the bank is seeking approval at its annual meeting Thursday to strengthen its link between performance and pay.  Chief policy officer Robert McCormick's conversation with Citigroup officials on 12/8/11 is telling.  What he noticed was the "disconnect between pay and performance and the lack of challenging aspects to the grants made to the senior executive." Grant, the movement has a long way to go.  ISS and Glass Lewis weren't able to convince shareholders to vote against the compensation plan at boutique investment bank Greenhill & Co.  Yet, Robert Fields, head of the executive compensation group for New York law firm Fox Rothschild is convinced a turning point is at hand.  He said the Citigroup vote "will fuel more legal action."  We'll see come shareholders' votes on the issue at other big banks, such as JPMorgan Chase and Bank of America, both of whose annual meetings are scheduled for next month. For further details, go to [WSJ, 4/19/12].