Receiving Wide Coverage ...
The Bank Shareholder Revolt: It’s gone global. A group of activist investors is urging fellow shareholders of Deutsche Bank to vote against a resolution at the annual meeting approving the performance of the company’s “supervisory board.” (That’s the board made up exclusively of nonexecutive directors; Deutsche Bank has a separate “management board.” Everything’s a little bit different in Europe.) “The investor group is particularly angry that Europe’s largest bank by assets did not give shareholders the opportunity to vote on its remuneration report for last year,” especially since the year before a full 42% of shareholders had rejected the pay structure, the FT reports. The paper also notes that on Friday, Barclays will face a potential shareholder rebuke for the pay package of CEO Bob Diamond. In the big picture, writes the FT’s banking editor, Patrick Jenkins, “Investors feel empowered like never before.” Which he considers a welcome development, with a caveat: banks should resist shareholder calls for dividend hikes, even when regulators allow them, since the institutions must build thicker capital buffers to steel their balance sheets against future crises. Jenkins suggests that investors in the big diversified global banks broaden their protests to target investment bankers’ bonus pools along with CEO compensation packages, since those bonus pools are “the only feasible place” to claw back money to return to owners. In the Journal, columnist Francesco Guerrera faults Citigroup’s board, led by departing chairman Richard Parsons, for its handling of shareholder concerns about pay — concerns that were voiced loud and clear by last week’s shellacking in the say-on-pay vote at the annual meeting. Also, if you haven’t already, check out American Banker’s handy guide to the ongoing proxy season. Click here, then open the top related graphic on the left side of the page, and you’ll get a bird’s-eye view of shareholder say-on-pay votes so far, and for companies with upcoming meetings the dates, recommendations from proxy advisory firms, last year's ballot results and other data. Finally, Wells Fargo's annual meeting is today, and our colleague Victoria Finkle reports that the company faces a different kind of protest, this one over its lending and foreclosure practices (and the demonstrators won't just be picketing outside the building — Occupy-type activists have acquired shares so they can voice their concerns inside).
Strength in Numbers: The papers report that Citi, Goldman Sachs and Credit Suisse have banded together to jointly bid for part of the New York Fed’s Maiden Lane III portfolio, which the central bank inherited from the 2008 AIG bailout. Unlike previously auctioned Maiden Lane assets, the ones on the block now are commercial real estate CDOs. Two other bidders, Barclays and Deutsche Bank, reportedly have cost advantages related to their involvement in the original transactions: Barclays is the interest rate swap counterparty on the deals and Deutsche Bank, the issuer of the CDOs, is “widely believed” to hold other pieces of it. So any auction bidder that wanted to unwind the CDOs and liquidate the underlying bonds at a profit (which is apparently the play here) would have to pay off those two European institutions. Joining forces may give Citi, Goldman and Credit Suisse more flexibility to bid up for the assets than any one of them would have alone. Wall Street Journal, Financial Times
Wall Street Journal
There are more investment bankers right now than there are deals for them to make. So Wall Street’s corporate axes are moving from trading desks to advisory teams, according to a story on the front of the Journal’s “Money & Investing” section.
The FDIC is unlikely to cut deposit insurance premiums soon, acting director Marty Gruenberg said.
“Jeff Urwin, J.P. Morgan Chase's head of global investment banking coverage, is taking on the [additional] role as chief executive of Asia-Pacific, the first time the New York bank has based the global head of investment banking in” the far east.
New York Times
“DealBook” columnist Andrew Ross Sorkin looks at the curious phenomenon of “tainted” former executives who still serve on corporate boards. Former Fannie Mae CEO Jim Johnson, who stepped down in 1999 but is often blamed for sowing the seeds of its failure nine years later, sits on the boards of Goldman Sachs and Target, for example. Chuck Prince, Pandit’s predecessor who left Citi in shambles, is a director of Xerox and Johnson & Johnson, and Stanley O’Neal, who led Merrill Lynch to the precipice, has a board seat at Alcoa. Some argue that these tumultuous experiences make for better board members, but governance gadflies don’t buy it.