It is hard to imagine how the bank could have done any worse if Bernie Madoff had been on its board.
There was sound and fury, but in the end it appeared to signify nothing. At Citigroup’s annual meeting last week, not a single shareholder proposal for reform was adopted. Every board/management nominee was returned. Over the past year, the company’s losses soared to $28 billion and its market capitalization has dwindled from $260 billion at the beginning of 2007 to $16 billion now. With its shares having fallen below the one-dollar range and still languishing around $3.00, many see Citigroup as basically a penny stock. Since the last AGM, the bank has become a ward of the state and could not have survived without the $45 billion it received in public funds. This is the shape of once-mighty Citigroup today. It is hard to imagine how the bank could have done any worse if Bernie Madoff had been on its board all this time.
Yet all of this was not enough to galvanize Citigroup’s institutional investors into making any changes whatever -or seeing that a new approach to corporate governance is desperately needed at this institution, beginning with the ouster of Richard Parsons, the long-serving director who became board chairman earlier this year.
If a company’s management and board can preside over the obliteration of shareholder value while losing billions, and the outcome at the annual meeting is the same as if it had the best year ever, you have to wonder about the health of shareholder democracy in America. Let’s hope that Citigroup’s investor flu does not spread.
Shareholders everywhere, dawn your masks!