Citigroup CEO tells investors they own a ‘great opportunity’
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Citigroup Inc. is ‘one of the great business opportunities of our age,’ Chief Executive Vikram Pandit told investors at the bank’s annual meeting today in New York.
That should thrill U.S. taxpayers, who collectively are set to become the biggest single stockholder in Citi, thanks to the government’s $45-billion bailout of the battered company.
But other shareholders didn’t seem to respond well to Pandit’s enthusiasm, coming after their stock has lost 94% of its value over the last two years.
From the Associated Press:
The meeting is usually a well-attended affair lasting many hours as shareholders air their grievances, and today’s gathering was as somber and full of ire as ever. When Chairman Richard Parsons recognized the five departing members of the board, who include ex-chairman Win Bischoff and former U.S. Treasury Secretary Robert Rubin, one man from the audience yelled out: ‘Thank God you’ve gone!’ Shareholders -- many in suits, a few in baseball hats and jean jackets, and one in a bedazzled red satin cap -- brought up other issues, too, questioning Citigroup’s underwriting standards for credit cards, the government’s involvement in the bank, executive compensation and the decision to sponsor the New York Mets ballpark, Citi Field. Chuck Jones, who said he owned about 25,000 Citi shares, asked Parsons and the board whether they were betting on Citigroup’s recovery and buying Citigroup shares. ‘How many of these directors,’ Jones asked, ‘bought Citi at a dollar a share?’ ‘I wish I had,’ Parsons said with a chuckle. Citigroup’s shares have tripled since dropping to 97 cents in early March.
The stock rose 30 cents to $3.24 today, after slumping 71 cents on Monday amid the broad sell-off in the market overall.
Despite Citi’s need for a Treasury rescue because of crushing loan losses, shareholders reelected all returning directors and four new ones with at least 70% of votes in favor -- a testament to institutional investors’ typical mentality of just going with the flow.
‘They totally ruined the company,’ shareholder Arthur Friedman told Bloomberg News. ‘This is not capitalism. This is cronyism. Why are these guys still running the show?’
A good question for new significant shareholder Uncle Sam to answer.
-- Tom Petruno