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out to combative analyst Mike Mayo before shareholder meeting
April 23, 2013,
CLSA analyst Mike Mayo,
Citigroup CEO Michael Corbat
Mike Mayo, analyst at CLSA,
known on Wall Street for his brash style and pointed questions to CEOs,
has had a contentious relationship with Citigroup over the last few year.
Now that may all be changing.
Citigroup Inc. has reached out to Mayo to meet with Chief Executive Mike
Corbat, the analyst told MarketWatch.
“The communication has been pretty continuous over the last few months,”
said Mayo. “It’s been a process of engagement and listening more.”
fact, it’s got so friendly that Mike was scheduled to meet with CEO Corbat
on Monday this week two days before the firm’s shareholder meeting in New
York. . But unfortunately, it was Mayo that had to decline the meeting, as
he couldn’t cancel on another meeting with another major firm’s chief
financial officer. Mayo has bought shares of Citigroup so he could
participate in that meeting and ask the firm’s leadership questions.
“It’s gone from cold war to détente to engagement,” said Mayo, on the
recent warming of relations with the firm.
Citigroup insiders say that Mayo follows that company and that they are
doing the right thing and reaching out to him.
Mayo has been a critic of the company for 10 years, and has fought with
Citi to meet with former CEO Vikram Pandit, complaining to media outlets
that all his competitors got meetings with Pandit and the key people there
and he didn’t. Mayo also criticized Pandit’s co-chairing the World
Economic Summit in Davos in 2012 saying: “What kind of signal does that
send that the bank that was the worst-performing in our country over the
last decade and whose stock price is still down significantly since he
took over is the ambassador for our financial industry.”
Citigroup confirms a meeting was scheduled.
Mayo currently has a buy recommendation on Citigroup stock.
Citigroup’s shareholder meeting on Wednesday will be the first after Mike
Corbat took over from ousted Chief Executive Vikram Pandit, that some have
called abrupt and a “black-eye” for the firm. Citi Chairman Michael
O’Neill and other board members will have an opportunity to talk publicly
about the firm’s progress directly to shareholders. There are seven
proposals for the meeting to be discussed.
The firm reported first-quarter net income was up 30% to $3.8 billion and
beat analyst estimates handily and
released loan reserves, a move analysts say signals the bank is more
confident in the economy. The firm is still struggling for growth and
cutting back expenses, say analysts.
Mayo says the firm reaching out to him is a microcosm of Citi’s more
shareholder friendly attitude today versus previous CEOs, but is still
pushing the firm to look at how it could break off units.
“How does the board measure and report success to shareholders, and how is
that review applied to its review of strategic alternatives, such as
splitting the company?” said Mayo in a recent research report.
Mayo says looking at breaking up Citi would be the 8th proposal
on the list if he could add it.
Sital S. Patel
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