By IANS,
New York : At the first Citigroup shareholders meeting here with Vikram Pandit as chief executive, the board of directors was re-elected but was taken to task for the company’s stock losing half its value, high salaries to its executives and the accountability of the board.
India-born Pandit told shareholders Tuesday that last year was a year of disappointments for the US’s biggest financial institution, as bad investments in mortgages and other types of loans forced a write down of the value of its assets by $38 billion over the last three quarters.
But referring to the recent turmoil in the credit markets, Pandit said: “I think we’re closer to the end of this phase than the beginning.”
He faced questions from some of the thousands of sacked employees in the latest round of cost-cutting and was booed when he remarked about the inevitability of such tough decisions.
A powerful union organisation threatened that it would move next year to oust the board unless it inducted new blood and began to consider major strategic changes, such as breaking up the company.
Rich Ferlauto of the union said: “Shareholders shouldn’t be the only ones that suffer. The theme of this meeting is outrage at the form and size and scope of executive compensation at this company.”
In January, Citigroup agreed on awards for Pandit valued at about $102 million, including a $2.5 million retention equity award; nearly $27 million worth of stock, and three million options that in January were worth around $73 million.
The new Citi chairman, Win Bischoff, received in January a $1.95 million cash bonus, $3.09 million in stock awards and $1.95 million in retention equity awards.
Citigroup shares ended the day at $25.12, compared to $52.53 April 17, 2007 when the last annual shareholder meeting was held.
Pandit also said at the meeting that he had no plans to change the bank’s dividend policy at this time, after having already cut the dividend earlier this year.
Analysts were expecting Citi to cut its 32 cent quarterly dividend after the bank posted losses and write-downs Friday.
Citi’s succession of troubles has made analysts wonder whether the banking behemoth is unmanageable after it was created a decade ago by merging Travelers Group and Citicorp, marrying insurance and banking.
Pandit, however, is confident that the company can be managed. He told the Fortune magazine recently that it is only a matter of people, organization, and execution. He has no plans to break it up either.
Meanwhile, there were media reports that top executives from Citigroup had recently held talks with their counterparts at Hewlett-Packard to learn how the computer maker managed in the past three years to overcome a crisis similar to the current one at Citi.