April 24, 2018 / 4:47 PM / 2 months ago

Citi chairman says all options open to find his replacement

CHICAGO (Reuters) - Citigroup Inc (C.N) Chairman Mike O’Neill said on Tuesday all options were being considered to find a successor before he steps down in the next 12 months, after reaching the retirement age of 72.

FILE PHOTO: The Citigroup Inc (Citi) logo is seen at the SIBOS banking and financial conference in Toronto, Ontario, Canada October 19, 2017. Picture taken October 19, 2017. REUTERS/Chris Helgren

The options include having Citigroup Chief Executive Officer Mike Corbat take on the additional role of chairman, O’Neill said at the Wall Street bank’s annual shareholder meeting.

O’Neill added he was “a bit agnostic” about keeping the roles of chairman and CEO separate.

At last year’s meeting, O’Neill said the board of directors preferred to have different people in the two roles.

Corbat, 57, has spent his career at Citigroup and was installed as CEO with O’Neill’s backing in October 2012 when the board fired Vikram Pandit, a few months after O’Neill had become chairman.

O’Neill’s comments came as he and Corbat took questions from veteran bank analyst Mike Mayo, now at Wells Fargo, who bought one share of stock to have the rare audience with O’Neill.

In the only closely contested matter at the meeting, a proposal to lower the stock ownership threshold required to call a special meeting of shareholders failed narrowly, getting 49.8 percent of votes cast, a preliminary count showed. The proposal, from investor Kenneth Steiner, called for a 15 percent threshold, down from Citi’s current 25 percent.

Proxy advisory firm Institutional Shareholder Services Inc had recommended the lower threshold.

Special meetings can be used between annual shareholder meetings to elect new directors.

In another referendum, more than 94 percent of votes cast backed the 2017 executive pay awards, Citi said.

The compensation included a 48 percent raise for Corbat in 2017, a year in which Citi made more money, but fell short of earlier targets.

Mayo called Citi’s performance “worst in class” among large U.S. banks. He has said it could improve from poor to average and boost Citi’s laggard stock price.

Citigroup’s return on tangible common equity, a key profit performance measure, was 11 percent in the first quarter while major competitors all topped 15 percent, according to analyst Jason Goldberg of Barclay’s.

Corbat said the consumer banking division was not reaching its potential. One solution is in using technology to automate processes and attract deposits beyond Citi’s small branch network.

Corbat also said Citi is reviewing its businesses in light of the new federal tax law.

“We need to take a fresh look at all of the places that we operate,” he said.

Reporting by Aparajita Saxena in Bengaluru and David Henry in Chicago; editing by Sai Sachin Ravikumar and Tom Brown

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