An Uncomfortable Shareholder’s Meeting for Citigroup
Wednesday April 23, 2008 11:38 pm ET

Citigroup’s directors have been re-elected, but they were shelled with criticism at Tuesday’s annual meeting of shareholders, whose stock in the bank has lost half its value since they convened a year ago.

The shareholder meeting was the first for Vikram S. Pandit as chief executive. Citigroup brought him in last summer when it bought his hedge fund, and then promoted him in December to succeed the ousted Charles O. Prince III.

Last year “was a year of disappointments for Citi,” Mr. Pandit told shareholders Tuesday, referring to the mortgage crisis that led to deep losses for the banking industry. Bad investments in mortgages and other types of loans have forced Citigroup to write down the value of its assets by some $38 billion over the last three quarters — the most write-downs made by any global financial institution so far.

Dozens of shareholders — including some employees and even a few fired employees — approached the microphones set up at a hotel ballroom in Midtown Manhattan. They spent hours calling Citigroup executives and board members to task for the company’s lagging stock, its poor customer service, the questionable environmental friendliness of its investments and more.

The most complaints and questions by far dealt with the accountability of Citi’s board and how much they were paying Citigroup executives in light of job cuts that have mounted to 13,200 since the company reported its first significant credit losses last fall.

Rich Ferlauto, the director of A.F.S.C.M.E.’s Pension Investment Policy, called Citi’s compensation plan a “shell game” that gave compensation unrelated to performance, while shareholders have seen their fortunes slashed in half. “Our returns are way down,” he said.

Mr. Prince left in December with a $40 million payout, which included a $10 million bonus.

In January, Citigroup signed off on awards for Mr. Pandit valued at about $102 million, including a $2.5 million retention equity award, nearly $27 million worth of stock and 3 million options that in January were worth around $73 million.

The new chairman, Win Bischoff, who led Tuesday’s meeting, 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 rose 9 cents Tuesday to $25.12; after last year’s meeting on April 17, 2007, shares had closed at $52.53.

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