When Charles Prince, the chief executive of Citigroup, announced two weeks ago that he was getting rid of his bank’s rather likeable corporate logo, a red umbrella, I feared that he might be tempting the household gods. And the gods have duly stirred. The Financial Times has reported grumblings from some big shareholders that the Citigroup board has been giving Mr Prince too easy a ride while the share price has languished. The external directors are mostly other big bosses ‘naturally sympathetic to Chuck’, says one complainer.
A fair argument, and a timely one. American shareholders are getting generally tougher with chief executives just now, after a flurry of boardroom scandals including wire-tapping, extravagant severance payments, and share-option deals rigged in the bosses’ favour. Charles Prince has not been touched by any of these things, but nor has he done anything very distinctive in his time at Citigroup either, save to improve its compliance record. He is a lawyer by training, which has helped him deal with the regulators, but it would probably be a good idea if the world’s largest bank were to be run, every now and again, by a banker.
Another complaint against Mr Prince might be that he has been slow, or bad, in planning his succession. Last month he sacked one plausible heir, Todd Thomson, the head of wealth management, and demoted (or at least moved sideways) another, Sally Krawcheck, the chief financial officer, who took Mr Thomson’s job. It may not matter to Citigroup that it is short of leadership if there is no particular place it wants to go. But at this rate its big shareholders are only going to get more restless. The biggest of them all, Prince Alwaleed bin Talal, has already spoken openly about the need for ‘draconian’ steps to improve performance.
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