Monday, March 16, 2009

Citigroup Four Is This Really A Change?

Citigroup (C) announced the upcoming appointment of four new directors. I believe the press release was issued from Citigroup and not a federal regulator of some description.

The four new guys are the former chairmen of U.S. Bancorp (USB) Jerry Grundhofer and Bank of Hawaii (BOH) Michael O’Neill, as well as William Thompson, a Salomon Brothers veteran who went on to become the head of bond-fund giant Pacific Investment Management Company, or Pimco, and a former president of the Federal Reserve Bank of Philadelphia from 2000 to 2006 Anthony M. Santomero, who was most recently a senior adviser at McKinsey & Company.

Sounds like four pretty good guy’s. Some Citigroup directors are retiring, some are leaving but the majority of the board is unchanged. Given that these guy’s had to be signed off on by federal regulators, how do you manage the corporate governance? Whose interests do they represent? If Citigroup is not nationalized does the US government have control of the board. How does the Saudi Prince and Singapore Sovereign Fund feel about this one? They must have known on some level!

So the cast of characters has changed. What will the board be doing differently to ensure that the shareholders interests are protected and the American taxpayer is not cheated?