The shareholders of Citigroup voted to reject the generous pay package of the CEO Vikram Pandit this week, setting up a potential showdown that could ripple throughout the corporate world. The "advisory" vote — which is required by the Dodd-Frank Act, but is not binding — now puts the company's directors in awkward position. The can go along with it and ask Pandit to "give back" some of the $34 million it paid him last year, or can they can ignore it and defy the people they theoretically work for. Neither option is attractive, but how it plays out could change the very nature of the shareholder-corporation relationship. It's the first time a major Wall Street firm has had to face such a vote and it probably won't be the last one to lose it.

Though Citigroup has performed reasonably well in the last year, there is still a sense among average investors that executive pay is far out of whack. Pandit's pay in particular is not tied tightly to performance, as some CEO packages are, and much of his income from Citi is actually the payments on an $800 million buyout of the hedge fund he ran before joining the company. (They would owe him that even if he got fired tomorrow.) However, it's now clear from this shareholder move that it isn't just Occupy Wall Streeters who are annoyed with the outrageous sums that top executives take home. Now they're actively trying to do something about it.

So what can Citigroup do? Even if they don't adjust Pandit's pay now, they'll certainly have to tread more lightly in the future and it won't take long for other companies to get the message. Even though the votes aren't binding, there's still the possibility (probability?) of lawsuits from those who will claim that a board that ignores their wishes is not doing its duty to uphold shareholder interests. The public shame alone might even be enough to move the needle. It's one thing to ignore kids camping in a park, but tangling with your own shareholders is a different story altogether. Wall Street firms have been under the microscope for the last few years now, but this vote may finally provide a mechanism — even if it's clunky and indirect — for outsiders to actually have a real effect on the way a company is run.

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Dashiell Bennett