Pandit vows to turn Citi around, repay governmentApril 22nd, 2009 - 11:33 am ICT by IANS
By Arun Kumar
Washington, April 22 (IANS) Citigroup’s Indian American CEO Vikram Pandit survived an angry annual shareholder meeting as he pledged to complete efforts aimed at turning around the embattled bank and repay every dollar it owes to the US government.
But Pandit, who was installed to lead the bank in late 2007 just as Citigroup’s troubles began to compound, acknowledged at Tuesday’s meeting in New York that “challenges” remained ahead. “I intend to see this through,” he said.
There has been increased speculation recently that Pandit’s days at Citigroup could be numbered if the company winds up requiring an additional capital injection. So far, Citigroup has been one of the biggest recipients of taxpayer assistance, taking in $45 billion in government funds.
As investor outrage boiled over with shareholders picking apart company management for what they viewed as a litany of failures over the past year, Pandit and long-time board member and current chairman Richard Parsons stepped in to defuse some of the tension, CNN reported.
With an estimated 1,500 shareholders in attendance, Tuesday’s event became a forum for angry investors that have seen their personal fortunes evaporate over the past year.
The government is currently conducting stress tests of America’s largest banks to determine if banks need more capital. The results of those tests are due to be announced in early May.
Pandit, however, maintained that the company will repay “every dollar” it owes to the US government under the Troubled Asset Relief programme (TARP), with a great return for taxpayers.
The company is expected to make $3.4 billion in dividend payments to the government every year in exchange for the funds.
Tuesday’s meeting came less than a week after the bank delivered its first profitable quarter in more than a year, surprising Wall Street analysts, with a $1.59 billion profit before payments of preferred dividends to the US Treasury.
Angry investors’ efforts aimed at reshaping the bank, including ejecting long-standing directors, fell flat.
Ten incoming members of the company’s board of directors, some of whom have been in place for two decades, were affirmed by shareholder votes, according to preliminary results released by the company.
Investors also confirmed four new directors to its board that were proposed in March, including former US Bancorp chief Jerry Grundhofer, onetime Federal Reserve Bank of Philadelphia president Anthony Santomero and ex-Pimco executive William Thompson.
A wide variety of shareholder proposals, including one that would have effectively established an election for directors, was among those that failed.
After the meeting, Citigroup shares soared Tuesday, finishing more than 10 percent higher on the New York Stock Exchange.
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Tags: arun kumar, board member, chairman richard, citigroup, cnn, company management, dividend payments, government funds, litany, personal fortunes, preferred dividends, profitable quarter, richard parsons, stress tests, tarp, taxpayer assistance, time board, us treasury, vikram pandit, wall street analysts