Citigroup Chief Executive Michael Corbat made one point clear when he succeeded former CEO Vikram Pandit last year: The bank will answer the call of investors, not its employees. Shareholders expressed their support for Corbat and his cost-cutting strategy by overwhelmingly approving the bank’s 2012 compensation plan, which includes an $11.5 million package earmarked for Corbat.
The vote comes a year after shareholders rejected a similar plan authored by Pandit, an embarrassing failure that reportedly helped convince the board to give the former chief his walking papers.
The new plan is more performance-based than Pandit’s version. Citi’s new CEO has been efficient, if not ruthless with his cost-control measures, announcing 11,000 job cuts and putting lesser-performing divisions on notice: shape up or hit the road.
Corbat’s strategy has begun to bear fruit. Citi’s first-quarter net income rose 30% to $3.81 billion while the bank reined in its ratio of expenses to revenue, from 68.6% in the fourth quarter to 59.6% in the three months ending in March.
In his first annual meeting as chief executive, Corbat raised eyebrows by taking a veiled shot at J.P. Morgan, noting that Citi’s ability to manage risk will allow it to avoid trading losses, like $6.2 billion loss recorded by Jamie Dimon’s team last year.
Maybe Barclays Chief Executive Antony Jenkins should play nicer with the firm’s investment banking division. The unit carried the U.K. bank during the first quarter, accounting for 74% of Barclays' pretax profit.
Credit Suisse booked $1.4 billion in profit during the first quarter, buoyed by its strong investment banking performance and a cost-cutting effort that saw the bank cut 4% of its staff over the last year.
A new bill introduced by two senators, the "Terminating Bailouts for Taxpayer Fairness" Act, will require big banks to hold enormous capital reserves. We all know what banks do when forced to hold on to money: hire less, pay less and generate less revenue.
Here’s a chart that will make you queasy. The number of people employed in the securities industry in New York City reached a 33-year low in March. It’s due to layoffs and automated trading systems replacing workers.
Pacific Investment Management is leaning less on founder Bill Gross, providing opportunities for rising stars like Mark Kiesel, global head of corporate bonds.
Royal Bank of Scotland’s financial institutions group will be managed regionally after the unit’s global head, William Fall, abruptly left the bank.
Buzz Around the Office
Local politicians have a knack of creating great fodder. The latest comes from West Virginia’s Ray Canterbury, who believes elementary school students should be required to work for lunch. He believes the tykes should be mowing the school lawn, among other things.
List of the Day: Phone Interviews
If you aren’t a veteran of phone interviews, you may get caught by surprise. Follow these tips to land the in-person interview.