The new cast of characters at Citigroup (NYSE:C) got markedly better reviews at this year's annual meeting, though even the star executives themselves acknowledged that their bank's performance needs a lot of work.
Shareholders resoundingly approved Citigroup's executive compensation package on Wednesday, with more than 90% voting in favor of the proposal a year after investors rejected former Chief Executive Vikram Pandit's pay package. Citigroup's board ousted Pandit in October in favor of Michael Corbat, who presided over his inaugural shareholder gathering with Chairman Michael O'Neill.
While investors at the three-hour-long meeting were characteristically querulous, airing repeated laments about the bank's share price and penny dividend, they ultimately gave a strong endorsement to the bank's new leaders. All of Citigroup's proposals won approval from more than 90% of its shareholders; all of the shareholder proposals that the bank opposed failed. Even shareholder Russell Forenza, one of the most vocal and critical attendees, told Corbat and O'Neill by the end of the meeting that he would give them "an A" for their performances.
The executives themselves were a bit more modest in their self-evaluations. Corbat said that the bank had "its share of disappointments" in 2012 and acknowledged that he faces an uphill battle to accelerate Citigroup's recovery from the financial crisis.
"I'm not going to be satisfied until Citi has completely rebuilt our credibility with all of our stakeholders," Corbat told investors in a Hilton Hotel ballroom in midtown Manhattan.
Much of that credibility was lost during the financial crisis, when Citigroup required three bailouts to survive and turned into the poster child of "too big to fail" banks. The company has sold off or closed down many of its businesses since then, but still remains the third-largest bank in this country. Now, as lawmakers and regulators revisit the question of breaking up the biggest banks, Corbat called Citi's size a competitive advantage.
"Today, there is no appetite for financial firms to get bigger, whether that's through merging or even through organic growth," he said.
Six months into his new job and fresh from a surprisingly decent first-quarter report, Corbat asked his investors for more time to accomplish the rather complicated task of repairing Citigroup's reputation and improving its businesses.
"We've started on a path, we've put out public targets, I think that we've got more we need to deliver in terms of transparency … but I think you've got to give me a little bit of time to get there," he told analyst Mike Mayo, a frequent critic of the bank and especially of its previous management.
O'Neill, who became chairman last year and handpicked Corbat to replace Pandit, also gave his protégé a ringing endorsement: "We have seen Mike operate — he is a good manager, he is decisive, and he gets results," he told Mayo. "Given what we think we need at this time in our history, we think he is absolutely the right man."
Asked about his own role at the company and influence over its management, O'Neill called his relationship with Corbat "not intrusive but interested."
"The role of the board is not to run the company" but "to understand and vet the strategy that management brings us … and to [see] that the strategy that we have approved is implemented in as good a way as possible. A subset of that second role is the selection of a leader," O'Neill told Mayo. "I work closely with Mike, and he briefs me on what is going on."
The day marked a return to New York for Citigroup, which last year decamped to Dallas for its annual meeting. About 100 to 150 people attended Wednesday, a smaller crowd than in previous years in New York.
A handful of protestors gathered outside the hotel, but metal detectors and a rigorous bag check kept them from infiltrating the main event. (Security guards even refused to allow attendees to bring in coffee.) Unlike Wells Fargo (WFC), which on Tuesday saw its annual meeting interrupted by protestors, Corbat and O'Neill spoke without interruptions from the crowd, and spent the rest of the morning answering questions and hearing complaints.