Citigroup (C) investors have been remarkably patient with relatively new CEO Vikram Pandit. But, the company’s shares traded under $10 today. The stock has not been that low since 1995.
Pandit earned $165.2 million in connection with the sale of Old Lane Partners, the investment firm Citigroup bought in April 2007. Old Lane later folded because its performance was so poor.
Pandit has now been head of the bank for nearly a year. During that time he has repeatedly talked about turning the bank around, restructuring it to get the yield from its best assets, and getting rid of divisions which are dogs.
Citi’s shares hit a new 52-week low today at $9.52 down from a period high of $37.50.
It would be easy to say that Pandit is the victim of problems which have assaulted the entire US banking system. That would miss the point that Citi’s shares are off almost 80% over the last year while shares of JP Morgan (JPM), Wells Fargo (WFC), and Bank of America (BAC) have done much better. WFC and JPM are close to flat over that period.
Mr. Pandit makes a base salary of $1 million, which looks like a bargain until shareholders look at the bank’s billions of dollars in losses and the $150 billion in market cap it has lost this year.
Douglas A. McIntyre