In the spring of 2010, almost exactly two years ago to date, the New York Times reported that some of Vikram Pandit’s top lieutenants had noticed “a new bounce in his step” and “a smile on his face,” with one executive speculating that the Citi CEO’s cheer could be attributed to the fact that he was starting to “see the day when he will earn more than $1 a year” as being within reach. On January 18, 2011, that day came. After essentially not receiving a salary since 2008, when he pledged to abstain from getting paid until Citi turned a profit, the board of directors approved “an increase in the annual rate of base salary for Vikram from $1 per year to $1,750,000 per year, effective immediately.” It felt good. Really good. Smiles and bouncing as far as the eye could see good. Know what does’t feel so good? This crap. Read more »
That’s Interesting, Because Just The Other Day, Vikram Pandit Was Telling Someone That He’d Rather Hear Alec Baldwin’s Opinions On Airplane Etiquette Than Mike Mayo’s On How To Run A BankBy Bess Levin
As those of you who keep up with the trials and travails of Wall Street’s celebrity analysts know, Citigroup has not always had the best relationships with these sensitive and highly-strung individuals. At one time or another, Meredith Whitney, Dick Bové, and Mike Mayo have all had their emotions toyed with and, particularly in the case of the men, have not responded well. Bové got drunk and sent out a mass email detailing the ways in which Citi defiled her and treated her like a cheap whore not deserving of respect and a couple years back, Mike Mayo went public with his own drama, wherein he and Vikram went from being super close in 2007 to the Citi CEO going radio-silent. FOR NO REASON. FOR TWO YEARS. Read more »
A thing you might want is for investors to be able to understand the financial situation of the companies they invest in. Traditionally, that is a thing that many people want, anyway.* Much of our system of corporate finance is dedicated to that and it mostly works okay.
A place where it breaks down a bit is in financial institutions. Because big financial institutions more or less take shareholder money, leverage it 10 or 30 times, and invest it all in a large and ever-changing mix of mark-to-market assets, some of which they mark themselves. Then they tell you things like “our assets have a current expected value of around X, with a daily variance of around Y” and since they’re sporting they also give you some sort of rough breakdown of what classes those assets fall into and stuff. This does not give you precise confidence about what those assets are worth today or what they’ll be worth in a week. And you can’t really find out much granular detail about the assets, because disclosing them all would be a competitive problem and/or just take too long / make your eyes glaze over. If you’re lucky maybe the banks disclose in some useful form actionable information about whatever you’re currently worried about, but you’re probably worried about the wrong things anyway.
So you do the best you can, and rely on external sources, like ratings agencies, who might know more than you, maybe, sometimes, or like Warren Buffett. Or you rely on government oversight to keep your financial institutions more or less solvent. But regulators, too, need some sort of heuristic for figuring out what assets are risky and how risky they are. After all, a big part of their job is regulating those risks, by doing things like setting capital requirements. It turns out that this is hard. So they sometimes outsource that job to ratings agencies. That doesn’t always work. Then they get all “we’re going to stop outsourcing risk regulation to ratings agencies.” That doesn’t always work either.
The bad news, as previously mentioned, is that Citi is firing a bunch of people. The good news, supposedly, is that if you’re looking for a gig, they’d love to take a meeting. Read more »
Something you may have picked up on is that lately? Customers are not so happy with their banks, particularly if their banks are Bank of America or Citigroup. The websites apparently never work, there are the rage-inducing fees, and there’s the general feeling that Brian Moynihan and Vikram Pandit? Don’t actually care about them. When was the last time Brian or Vik called, huh? When was the last time they did something nice, for no reason other than wanting to? When was the last time they thought to say “You look really pretty tonight”? Can’t remember, stopped counting and not since the checking account was opened. And while it would be one thing if every other bank treated its customers like they were expendable, some don’t. Take Société Générale Group-owned-Komerční Banka. Not only do they act like they really care but give people a reason to be loud, proud customers. Read more »
Area Hedge Fund Manager Pretty Sure Wall Street Protesters Are Just Looking To Rub Up Against Each Other And Score DopeBy Bess Levin
What do top financial services employees think of the month-long protests headquartered in Zucotti Park, which took over Times Square over the weekend? So far the most vocal people have expressed support for the movement, like Jim Chanos, who said, “New York is so finance-centric that people here underappreciate the reaction of the rest of the country” and that OWS shouldn’t be underestimated; Larry Fink, who told reporters, “I believe we should not turn our backs on these protests…Maybe we will get some balance”; Jamie Dimon, who told those listening to the JPM conference on Thursday, “I do vaguely remember the First Amendment that it is legal to demonstrate and it is completely fine. You should listen and not just have a knee-jerk reaction”; and Vikram Pandit, who in addition to saying that “trust has been broken between financial institutions and the citizens of the US,” told protesters he’d love to chat over the phone. With the exception of John Paulson, however, who last week issued a statement telling protesters to 1) beat it and 2) thank their lucky stars that as the founder of a ‘most successful business‘, he chose to set up shop in New York, most financiers with less then charitable feelings have kept their feelings to themselves, fearing retribution from the anti-Wall Street group. Until now. Read more »
Earlier this morning, Fortune hosted a breakfast with Vikram Pandit to pick his brain on what’s been a’ poppin’ at Citi and the economy in general. According to Pandit, the Big C will report a profit for the third quarter and he does “not expect the U.S. to go into a recession,” which is all very exciting news. When asked about the individuals occupying Wall Street, he said that their grievances are “completely understandable” and that “trust has been broken between financial institutions and citizens.” And that’s not all. Read more »
Dollars To Donuts You Don’t Have The Gastrointestinal Fortitude To Beat Vikram Pandit At His Own GameBy Bess Levin
“Citi North America Markets is raising money for the Police & Fire Widows’ & Childrens’ Benefit Fund- with an official food eating challenge. From an email sent today to all markets employees (Fixed Income, Equities, Commodities, Currencies)…” Read more »
‘Cause Uncle Vik’s about to make it rain. Read more »
Uncle Vikula, who just started receiving a salary in January after choosing to make $1 a year until Citi turned a profit, may now be eligible for a very exciting three-part bonus. Read more »