During its annual shareholder meeting, Citigroup answers questions with regards to upcoming regulations, status of personal accounts and its strategy. The three hour long session saw shareholders praise management and the board for improving the bank’s strategy.
Citigroup shareholders converged at the midtown Manhattan’s Hilton Hotel with questions that they want answers. The previous year, the bank failed the Federal Reserve’s stress tests, failed to sell its brokerage to Morgan Stanley, and gave an underperforming CEO a multi-million dollar bonus package.
The bank’s board immediately replaced Pandit with Mike Corbat, who wasted no time in cutting $1.1 billion in costs and non-core businesses. Chairman Mike O’Neill said described Corbat as a manager who is decisive and gets the right results. Citigroup shares went up as much as 2 percent during the day.
Most of the questions were about the idea that Citigroup could get smaller or break up. Both Corbat and O’Neill said that making the company smaller would be an uneconomic way. Corbat maintained that the core strategy would remain the same.
Trillium Asset Management, which owns $20 million in Citigroup stock, gave a proposal in November that shareholders should have a vote on a company strategy to disclose more fully the valuation of the bank or go through a more rigorous restructuring. The Securities and Exchange Commission stopped the proposal because of its vague nature.
Citigroup’s strategy is to refocus on the world’s top 150 cities, serve a denser population, and provide more online services. It would also try to cut away at the Citi holdings, which is a cause of a major headwind on the bank’s capital base.
Shareholders calmed down after the meeting Wednesday. Even Russell Forenza, who claimed to had lost $1.5 million over the years as a Citi shareholder, told management that they were doing a great job.