Home News Citigroup Inc shareholders revolt over chief executive Vikram Pandit's pay
Citigroup Inc shareholders revolt over chief executive Vikram Pandit's pay
Wednesday, 18 April 2012 08:10

News round up: Citi, Spending cuts, Yahoo!, Euro and The Bank of England.

Citigroup Inc (NYSE:C) shareholders have emphatically rejected the bank's executive pay plan in a major embarrassment for one of the world's biggest banks. Just 45pc of Citi's investors supported the $15m (£9m) that the bank paid chief executive Vikram Pandit for 2011, according to an initial tally.

Shares in Citi almost halved last year and America's major corporate governance advisers, ISS and Glass Lewis, both recommended that shareholders vote down the plan. The bank "takes the shareholder vote seriously, and along with senior management will consult with representative shareholders to understand their concerns," Citi said at its annual shareholder meeting in Dallas yesterday. The board "will carefully consider their input as we move forward."

Although the vote by shareholders is not binding on the board, the rejection presents Citi's new chairman, Michael O'Neill, with an immediate headache as he takes over from Richard Parsons. The rare revolt is also likely to reverberate across the rest of Wall Street, writes the Telegraph.

Spending cuts

Britain faces another £50bn of spending cuts and tax rises to cover the costs of age-related care and put the national debt under control, the International Monetary Fund has warned. A "second generation" of UK austerity measures, which the IMF suggested should be completed before 2030, would outstrip programmes in both Greece and Portugal.

Only the US, Japan and Ireland are facing a larger adjustment among advanced economies. To bring public debt down from 82.5pc to 60pc of GDP and pay for rising health and pension costs, the UK will need "a fiscal adjustment strategy" over the next 18 years equivalent to 11.3pc of national output, or roughly £170bn, according to IMF estimates. By comparison, the existing £123bn austerity program is equivalent to 7.5pc of GDP, The Telegraph reports.


After years spent putting an ill-deserved gloss on poor results, Yahoo! has changed its tune, by declaring its best performance in three years as unsatisfactory. Scott Thompson, who became chief executive in January, said the company was not growing fast enough, despite surpassing analysts’ expectations.

"I’m not satisfied by the pace of top line growth and I won’t be satisfied until it is at least in line with the market," he told analysts, adding that the commercial performance of its display advertising business had not kept pace with improvements in the technology that underpins it. Yahoo! grew first-quarter revenues to $1.08bn, putting it slightly ahead of the analysts’ consensus of $1.06bn, and marking the first year-on-year increase since 2008, The Telegraph reports.


The departure of a single member from the euro could trigger a "full-blown panic" that rips the entire single currency apart, according to alarming analysis by the International Monetary Fund. In its starkest examination of the euro crisis to date, the Washington-based body urged strong euro members, such as Germany, to dig deeper into their wallets in an attempt to shore up the single currency, warning that a disintegration of the euro would have worse consequences than the Lehman Brothers crash.

The Fund also said that austerity alone was not enough to strengthen leading economies, in words seized upon by the Labour Party, which has attacked George Osborne for prioritising cutting the deficit over pro-growth policies, says The Times.

The Bank of England

A Canadian has been informally approached as a potential candidate to replace Sir Mervyn King as Governor of the Bank of England next year, according to reports last night. Mark Carney, who is Governor of the Canadian central bank and also heads the Financial Stability Board, which overseas global financial regulation, is understood to have been contacted by a member of the Bank’s Court, its supervisory body.

Foreigners are rarely appointed as heads of central banks and the potential appointment of Mr Carney would be a radical move aimed at shaking up the Bank in the aftermath of the financial crisis, writes The Times.

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