This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Citigroup's Chairman Needs to Go Now: Mayo

NEW YORK ( TheStreet) -- Citigroup (C - Get Report) needs a new chairman who will better represent shareholders interest, according to CLSA Banking analyst Mike Mayo.

"Dick Parsons should go," Mayo said before a gathering of hedge fund managers last week in New York. "For Citigroup, it is all part of a larger puzzle regarding the lack of corporate governance."

His comments come amid reports that current chairman Richard Parsons is planning to step down. Parsons has been chairman since 2009 and has overseen the bank's restructuring since the crisis. However, critics have argued that Parsons was the wrong choice as Chairman, as he was a director on the board as early as 2006 when the bank was barreling towards crisis.

Mayo said his rationale for pushing for Parsons' ouster is tied to his long tenure at the firm. Parson's was chairman of Citigroup's compensation committee from 2002 to 2007 when then CEO Charles Prince and Chairman Robert Rubin earned $180 million leading up to the financial crisis, Mayo said.

"The CEO of Citigroup got paid more than anyone else in the past decade, during a time when the stock performed the absolute worst," Mayo argued. "That's no capitalism. That's entitlement."

Mayo, who recently authored a book "Exile on Wall Street", is no fan of Citigroup. When CEO Vikram Pandit was appointed co-chair at the World Economic Forum at Davos recently and spoke at a panel on the reshaping of a global financial system, Mayo quipped, "Asking Vikram Pandit about the crisis in capitalism is like asking Alec Baldwin about airplane etiquette."

In a Feb.23 report, Mayo calls for a series of changes at Citi, starting with a replacement of Parsons as a necessary first step to "help better evolve Citi's culture, controls, conduct, costs, conservatism, and communication."

"If a change were to occur, our hope would be that the new person would be more than a figurehead, acting as somebody who could better "mind the store" and act as a true agent on behalf of investors," he wrote.

Ideas for a new chairman range from current Citi director Michael O'Neill, ex-Bank of New York CEO, Robert Kelly and Ex Wells Fargo CEO Dick Kovacevich. Ex-IBM CEO Sam Palmisano, Bill Gates, and chairman of Hewlett Packard, Ray Lane were some suggestions from CLSA tech analyst Ed Maguire.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
C $53.02 0.22%
YHOO $44.50 -0.04%
AAPL $131.58 0.99%
FB $82.25 0.88%
GOOG $555.44 -1.70%

Markets

DOW 18,063.49 -16.65 -0.09%
S&P 500 2,112.14 -5.55 -0.26%
NASDAQ 5,062.5410 -29.5440 -0.58%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs