Angry Citigroup shareholders spent four hours yesterday jousting with CEO Vikram Pandit and Chairman Winfried Bischoff about everything from the company’s recent dividend cuts to the effectiveness of the board of directors.
At one point, a discussion about the dividend cut – a particularly sore subject for attendees at the annual meeting in Midtown – led to jeers from the crowd, with people shouting, “What about the dividend?” and “Reinstate the dividend!”
“The tension in the room was palpable,” said Richard Ferlauto, director of pensions and benefits for union group AFSCME.
In January, the company slashed the dividend to 32 cents from 54 cents as part of an effort to raise capital.
Pandit, who was hired four months ago to take over for ousted CEO Chuck Prince, assured shareholders that dividend cutting is over, for now – even though many on Wall Street think it is still an option.
“We are not considering a change in the dividend policy at this time,” he said in regard to a question from a small shareholder.
Investors eagerly offered suggestions for getting the company back on track – from revamping the board of directors to spinning off units.
Others protested recent payments to executives, especially those made to ousted Prince, who walked away last year with $29.5 million in stock and other compensation.
Despite concerns by attending shareholders, all 14 members of the company’s board were re-elected with at least two-thirds of the vote.
Some large shareholders, including union group AFL-CIO, withdrew plans to vote against directors after the company said C. Michael Armstrong, chairman of the board’s audit committee, may be stepping down.
Last year, the board, which includes high- powered names such as Time Warner Chairman Dick Parsons and Xerox CEO Anne M. Mulcahy, were re-elected with at least 94 percent of the vote.
Some suggested a break-up of the company, a sentiment that was echoed by Vincent Russo, owner of 34,180 Citi shares.
Russo told Pandit that Citigroup should take a page from Altria, parent company of cigarette maker Philip Morris, which recently announced plans to spin off Kraft Foods.
Separately, Wachovia’s CEO Ken Thompson was the target of his own set of angry shareholders, who were calling for his resignation at the bank’s annual meeting in Charlotte, NC, yesterday.
Wachovia, the nation’s fourth-largest bank, slashed its dividend 41 percent after reporting a first-quarter loss of $393 million.
After being slammed by mortgage troubles, its shares have fallen 54 percent in the past year.
“I’m not here to sugarcoat things, to make excuses or to tell you we’re a victim of circumstance,” Thompson said.
Acknowledging the problem he has on his hands, he told the crowd, “There’s nothing more important to me or this management than to restore credibility.”
Citi shares rose 9 cents to $25.12. Wachovia shares fell 23 cents to $26.20.