2009 proxy season is fast approaching and it promises to be a doozy. Not since the Great Depression have we seen such a systematic failure of the capital markets and such widespread corporate failure at all levels. Investors are learning the harsh lessons of risk as they review their investment portfolios and 401k statements. As shareholder proxies arrive in the mail in the coming weeks, it will be interesting to see how shareholders respond to corporate management requests for their support on a range of issues up for votes.
Rumors are flying that a number of institutional investors are launching “Vote No” campaigns at several financial institutions. The targets for these campaigns against directors at these companies are obvious to anyone not in a coma for the last six months: Citigroup, Bank of America, AIG and so on.
For readers unfamiliar with what a “Vote No” campaign is, let me enlighten you.
A “Vote No” campaign is a call from a shareholder or group of shareholders in a company to vote no for some or all of the directors standing for election at a public company. Such a vote is symbolic in many ways since the company is under no obligation to remove a director if her or she receives a majority of no votes cast against him or her. However, the symbolism is significant in that it reflects a dramatic vote of no confidence in the directors slated for a vote no campaign.
Take for example the slate of directors at Citigroup up for a vote this year. Titans of industry, these directors oversaw a disaster inflicted on not only shareholders at Citi but at their own companies and institutions as well. The larger impact of their failure to manage Citi managers is all too obvious.
So who are the directors at Citibank? Here is the list:
C. Michael Armstrong
Chairman, Board of Trustees
Johns Hopkins Medicine, Health Systems and Hospital
Alain J.P. Belda
Chairman and Chief Executive Officer
Alcoa Inc.
John M. Deutch
Institute Professor
Massachusetts Institute of Technology
Jerry A. Grundhofer
Chairman Emeritus
U.S. Bancorp
Andrew N. Liveris
Chairman and Chief Executive Officer
The Dow Chemical Company
Anne M. Mulcahy
Chairman and Chief Executive Officer
Xerox Corporation
Michael E. O’Neill
Former Chairman and CEO
Bank of Hawaii Corporation
Vikram S. Pandit
Chief Executive Officer
Citigroup Inc.
Richard D. Parsons
Chairman
Citigroup Inc.
Lawrence R. Ricciardi
Senior Vice President and Advisor to the Chairman, Retired
IBM Corporation
Dr. Judith Rodin
President
Rockefeller Foundation
Robert L. Ryan
Chief Financial Officer, Retired
Medtronic Inc.
Anthony M. Santomero
Former President
Federal Reserve Bank of Philadelphia
William S. Thompson, Jr.
Chief Executive Officer, Retired
Pacific Investment Management Company (PIMCO)
For those of this exclusive club who still hold day jobs, their employers should initiate steps to fire them immediately. For instance, if a janitor at Xerox Corporation been as negligent as Anne Mulcahey, Xerox’s CEO, he would have been escorted from the building and directly into the back seat of a police cruiser.
Shareholders at Citi and other institutions responsible for the greed and shortsighted profiteering have a choice when they vote their proxies. Whether they take the time to send a message to management remains to be seen.
For a complete rundown on the directors at Citigroup, go to the SEC Edgar database located here.
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