Wednesday, April 18, 2012

Citi dealt another blow

Specifically Citi's senior management has been dealt the blow that is. The whole theory behind the concept of pay for performance is you have to perform well in order to be paid well. Yesterday, at its annual meeting, shareholders voted no to the pay packages executives at Citi are extending themselves. Citi has not performed well since the 2008 financial meltdown (it really wasn't performing that great before it either) and shareholders do not believe that the management of the firm should be rewarded for the underwhelming results the company has repeatedly posted quarter after quarter.

It has been a long time since shareholders have seen any significant dividend checks and they are not happy. Uncle Vik was trying to change that but got shot down by the Fed when Citi failed the most recent stress test. Citi reported its first quarter profits for 2012 were down 2.3%. These results were better than analysts' expectations, but the vote yesterday is a signal to Citi's management that better performance is expected.

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