Citigroup's annual shareholder meeting yesterday ought to have been a celebratory affair. For the first time in two years, the bank had declared a profit, and seemed on the verge of getting it together. But whatever joy there might have been in the air over this happy eventuality was sucked out by the company's chairman, CEO Richard Parsons.
First, Parsons verbally attacked CEO Vikram Pandit's outfit (a blue shirt with a red-and-white striped tie; Vikram thought he looked nice) in front of Times reporter Eric Dash.
"Vikram, your driver looks more like a banker than you."
Then, he revealed the reasoning behind a high-level decision, reasoning that, frankly, shakes our faith in Citigroup's abilities to conduct its affairs in a responsible, prudent manner.
Regard this paragraph from the Times:
With Citigroup under siege last year, Richard D. Parsons, its chairman, told shareholders at the annual meeting that the bank skipped the coffee and doughnuts to save cash after three bailouts. This year, after posting a $4.4 billion first-quarter profit that was its best since the crisis erupted, the coffee was back. But what about the doughnuts? “This is called incremental progress,” Mr. Parsons said.
Clearly, Dick thinks this is adorable and we're supposed to be pleased with it. Like, oh, look, Citigroup was broke last year but now they are just being frugal. But in reality, it reveals a deficiency within Citigroup that we find frankly shocking. Think about it: The bank can give John Havens a $9 million bonus for making the decision to ban color copying , but they can't cough up the change to buy their shareholders a couple dozen Munchkins? First of all, where are their priorities? Secondly, if they can't manage their finances well enough to cover both kinds of expenditures, how are we supposed to trust them to manage the kind of day-to-day budget balancing required to keep solvent their systemically significant financial institution? If we were a Citigroup shareholder, this doughnut thing would make us very nervous. Is Citigroup doing as well as they say they are? Or are they merely hood rich?