Citigroup chiefs booed by irate investors

Stephen Foley
Wednesday 23 April 2008 00:00
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The chairman and chief executive of Citigroup were heckled and booed at the financial giant's annual shareholder meeting yesterday. The rest of the board was assailed for pocketing giant pay packages while the company lost billions of dollars on sub-prime mortgages.

Vikram Pandit, who was installed as chief executive in December, faced questions from a number of the thousands of employees made redundant in the latest round of cost-cutting and was jeered when he said that such decisions were tough to make.

And Sir Win Bischoff, the British investment banker who is now Citigroup's chairman, was booed as he repeatedly tried to cut questioners short and keep a grip on the fractious meeting.

Citigroup's shareholders vented their fury at the company's handling of the credit crisis, which led to $20.4bn in write-offs last year, a further $9.1bn so far this year and no guarantee that there will not be more to come. In particular, they are angry at a savage dividend cut imposed by Mr Pandit to help conserve cash.

And a powerful union organisation promised yesterday that it would move next year to oust the board unless it is refreshed with new blood and begins to consider major strategic changes, such as breaking up the company.

"The company operates more like a run-down department store than a financial supermarket," said Rich Ferlauto of the AFL-CIO, in an assault on boardroom excess that was repeatedly interrupted with applause. "Shareholders shouldn't be the only ones that suffer. I think the theme of this meeting is outrage at the form and size and scope of executive compensation at this company."

Several top executives received lower pay in 2007 than the previous year, but were then awarded "retention packages" this January which ran as high as $12m for Gary Crittenden, chief financial officer, and Sallie Krawcheck, head of the wealth management business.

There was also outrage at the nine-figure compensation package netted by Chuck Prince when he was ousted last year, which led to Citigroup board members being hauled before Congress for a hearing on excessive pay.

Although all the board members were re-elected, some received just two-thirds of the vote, marking one of the biggest such protests during this year's shareholder meeting season.

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