Okay, so Citigroup. In all objectivity, would you say that their board of directors has done a bang-up job protecting the interests of shareholders in recent years? Let’s see: In the last five years, the stock has lost 93 percent of its value. So, no. Meanwhile, as Fortune tells us today, each of them receives annual compensation of $225,000* for doing God knows what, other than appearing at meetings and receiving a big stack of documents that probably cost hundreds of thousands of dollars to produce and that they almost certainly did not read. (Or maybe they did read it and were too embarrassed to admit they couldn't understand a word?) As American taxpayers who are now paying to correct the bank's megamistakes, that this happened bothers us. But we have an idea about how they can make it better!
It’s simple. Each director should be compelled, at this very moment, to head out of their house or office and spend every last penny of that $225K until it is all gone (we’ll graciously let them keep the previous year’s haul, as a gesture of goodwill and an understanding that their house in Nantucket probably does need to be reshingled — that salty air really does do a number on it). They can spend the dough on whatever they wish — give it to a waitress, sprinkle it down from a rooftop, go hog wild at the boutiques on Elizabeth Street, invest in the world’s most expensive MetroCard, whatever.
The point is, they can’t return home until it’s all gone. Good? Okay! So let's go!
Directors, in case you don’t know who you are, here’s who you are:
C. Michael Armstrong, Chairman, Board of Trustees, Johns Hopkins Medicine, Health System Corporation and Hospital
Alain J.P. Belda, Chairman, Alcoa Inc.
Sir Win Bischoff, Chairman, Citigroup
Kenneth T. Derr, Chairman, Retired, Chevron Corporation
John M. Deutch, Institute Professor, Massachusetts Institute of Technology
Roberto Hernández Ramírez, Chairman, Banco Nacional de Mexico
Andrew N. Liveris, Chairman and Chief Executive Officer, The Dow Chemical Company
Anne Mulcahy, Chairman and Chief Executive Officer, Xerox Corporation
Vikram Pandit, Chief Executive Officer, Citi
Richard D. Parsons, Former Chairman of the Board, Time Warner Inc.
Lawrence R. Ricciardi, Senior Vice President, General Counsel, and Adviser to the Chairman, Retired, IBM Corporation
Judith Rodin, President, Rockefeller Foundation
Robert E. Rubin, Director and Former Senior Counselor, Citi
Robert L. Ryan, Chief Financial Officer, Retired, Medtronic Inc.
Franklin A. Thomas, Consultant, TFF Study Group
These are the names currently listed on Citi’s website, which also notes that they’re searching for new members. Great idea! We say replace the whole lot of them. And pay them in company stock, which is to say pennies.
*The $225, 000 figure is as of 2007, but as Alan Sloan notes in Fortune, Citi “declined to say whether board pay had been cut this year or last, which I treat as meaning there have been no cuts.”
Geithner's redemption [Fortune]
Previously: Daily Intel's Plan for Solving the Economic Crisis