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Annual meetings held by Citi and Bank of New York Mellon have been shaken by investor dissent over executive pay, and observers anticipate more rebukes in the coming month.
April 20 -
Citigroup's shareholders have latched onto what was formerly a radical idea. Namely, that CEOs like Vikram Pandit should receive gigantic pay packages tied to performance only after they've actually performed. Wall Street bosses beware.
April 18 -
Citigroup said late Tuesday that it takes "seriously" the shareholder vote rejecting the bank's executive compensation plans, and that it will meet with some investors to understand their concerns.
April 18
The past is
Goldman Sachs (GS) investors next month will decide whether to re-elect board member Johnson, who ran Fannie from 1991 to 1998. He is facing vocal opposition from a large mutual fund investor, which has cited Johnson's mortgage industry past as part of what it calls his presence "at the center of several egregious corporate governance debacles."
Robert D. Goldfarb and David M. Poppe, managers of the
"We believe Mr. Johnson's history should disqualify him from service on the board of any public company," wrote the Sequoia managers, who held 1.4 million Goldman shares at the end of 2011. "This information has long been in the public record. Yet Mr. Johnson remains the chairman of the compensation committee at Goldman Sachs and at Target."
Johnson, who is a
When Johnson, 68, ran Fannie, he "lobbied Congress relentlessly to relax Fannie's underwriting standards and lower the capital requirements put in place to protect taxpayers from losses in the event of a downturn in the housing market," the fund managers wrote.
The managers cited a 2006 report from the former Office of Federal Housing Enterprise Oversight that found that Fannie had overstated its earnings every year from 1998 to 2004 "to make targets that boosted executive compensation," the fund managers wrote.
Fannie took a $7 billion charge in 2006 to restate earnings for several years prior to 2002.
"As a comment on the management culture Johnson created, we can't think of a stronger indictment than this: from 2004 to 2006, Fannie Mae replaced its CEO, CFO, all senior accounting officers, general counsel, chief risk officer, chief audit executive and chief compliance officer," the fund managers wrote in the two-page letter to clients.
The fund managers also cited media reports that claimed Johnson received home loans from Countrywide Financial Corp., now part of Bank of America Corp. In 2008, when Johnson was an advisor to Barack Obama's presidential campaign, The Wall Street Journal reported that Johnson received more than $7 million in loans from Countrywide at favorable interest rates.
Sequoia is overseen by Ruane, Cunniff & Goldfarb Inc., a New York investment firm long associated with Warren Buffett. The fund managers could not be reached for comment.
Bloomberg News reported that
Johnson did not return a call seeking comment.
