Citigroup Shareholders Slam Pandit and Parsons Over Stock
Citigroup posted a profit for the past five quarters, but Dick Parsons, the chairman of the once failing bank, is not declaring victory yet.
"We're not up to the level of earnings and profitability and sustained, responsible growth we know we can get this thing to," Parsons told CNBC, ahead of the bank's annual meeting in New York City. "I think that's the assignment for this year."
Citi shareholders attending the meeting are in agreement. Parsons and Pandit were hammered by criticism about the bank's share price and the planned reverse ten-for-one stock split.
Many expressed their opposition to the reverse split. Shareholders repeatedly using the meeting's open mike to tell management they would do better to get the share price higher by growing earnings, raising the dividend and buying back shares.
Citi received $45 billion in government aid during the financial crisis. Last year the Treasury sold the more than 30 percent stake it held in the bank and Citi repaid $20 billion it owed the government.
Despite these actions and Citi posting its first annual profit since 2010, its shares have remained mired below $5 a share.
Pandit told shareholders the decision to undergo the reverse split is not a "choice between the individual and institutional" shareholders. He did say a higher share price, and the penny a share dividend Citi will reinstate once the reverse split is completed, will attract new institutional shareholders.
As for growing the banks earnings Pandit laid out a three point plan to maintain and grow profitability. The plan involves harnessing Citi to the growing banking needs of emerging market consumers and helping U.S. companies do business in these developing economies. Second, the bank plans to use technology to improve profitability in its U.S. consumer business and third, Citi sees globalization leading to improved trade flows Citi can help its clients manage.
During the meeting Parsons expressed the board's support for Pandit. As for his future at Citi, the former chairman and CEO of Time Warner was less clear. Named chairman in 2009, he indicated his decision to remain at the helm of the bank depends on the progress it makes this year.
Asked if he will leave if Citi reaches its goals Parsons said, "We'll see."