Citi annual meeting: It’s Pandit-monium!

From Crain’s New York Business:
As a long line of people waited to pass through metal detectors at a midtown hotel ballroom, a security guard took one visitor aside, searched his knapsack and deftly removed an orange, advising: “No fruit allowed in there. They’re afraid people will throw it.”
Welcome to the fruit-free, anger-infused Citigroup Inc. 2008 stockholders meeting.
With the space free of oranges, apples, and other potential projectiles, shareholders had to settle for landing verbal blows on Citi management and the board of directors.
They rose to the challenge with the kind of gusto that can only be mustered after a company sheds $150 billion of market value in a year as it reveals $30 billion in mortgage-related losses and slashes its dividend by 40%.

“I urge investors to vote the board out!” shouted a Citi shareholder who identified himself as a former employee with 38 years of experience.
“Under [the board’s] watch we’ve had Enron; we were thrown out of Japan; and now (we have) the subprime debacle.”

Another former employee wailed: “I used to be very proud to be a Citibanker.”

Citi Chief Executive Vikram Pandit and Chairman Sir Win Bischoff could do little more but acknowledge shareholders’ pain and make vague assurances that better times lie ahead.

In a speech, which was briefly interrupted by the noise of hotel employees pulling aside huge curtains to open up more space for the angry, overflowing crowd, Mr. Pandit insisted that Citi remains well-positioned to take advantage of global growth trends.
He also pledged that it will deploy shareholder capital more effectively.

But at the moment, more pain is coming. The firm is in the process of sacking thousands of staffers and just last night raised another $6 billion in capital to shore up a balance sheet that’s been battered by enormous losses.
Mr. Pandit hinted that more write-downs of mortgages and other dud assets are in offing when, while trying to sound hopeful, he said: “We’re closer to the end of the [write-down] phase than the beginning.”
None of that seemed to totally appease Citi shareholders. While they were inclined to give Mr. Pandit a chance because he took the helm only four months ago, many demanded the scalps of the board.
Citi directors, who include the current or former CEOs of such blue-chip companies as AT&T, Chevron, Time Warner, and Xerox —in addition to former Treasury Secretary Robert Rubin—all hunched together in a corner of the room as investors unleashed their frustration over Citi’s dismal performance.

When one shareholder loudly demanded the directors rise so investors in the vast ballroom could see them, only one — Franklin Thomas, former head of the Ford Foundation — did so. Citi says it is actively seeking new directors, particularly those with financial expertise.

Related Topics: Citigroup Inc.