Sunday, June 21, 2009
Working for $hitigroup a Patriotic Duty, Chairman Says, but
has close ties to Uncle Sam. Could this be a case of cronieism, special interest or conflict of interest? More like good ole American BS if you ask me. You want Patriotic Duty Mr BigBank Chairman, go on over to Afganistan and join our troops. I am sure they would love to have you there and they will show you what "patriotic duty" is, for real. Lots of soldiers lost their homes to BigBank forclosures while they were out doing their patriotic duty to keep your banker-asses safe. Yes, I am sure they would love to have you in the trenches with them,....so they could do their patriotic duty upon you!
Of all the ways the government's hefty ownership of Citigroup hurts the banks, the number one harm has to be recruitment. Fortune asked Citigroup chairman Dick Parsons about why anyone would want to work there. His answer: "It's almost like a patriotic duty...Plus it's damned interesting." Appealing to patriotism will likely not work--not while other banks are pitching the lack of government tinkering in corporate affairs and for many mid-level folks, the ostensible ability to make more money.
However, my sense is that Citi will still be able to attract younger folks sensing the ability to move fast, make their mark and gain experience. At the same time, there just might be some upside to a stock that now sits in the $3.50 range. The stigma of working for a bank that is 36-percent owned by the government may dissuade some. But if you go in with the right attitude, you may be able to move up quickly, which will look great on a resume. It doesn't have to be forever. Plus if you really want to work in finance at time when jobs are scarce and you are fierce, it might not be a bad place. It's not Goldman Sachs, but it never has been.
Citigroup’s chairman on the bank’s long-term hazard
by Patricia Sellers
How do you get top talent to work for a Fortune 500 company that’s one-third owned by the federal government, bound by onerous rules on pay and benefits, and so out of favor with investors that its stock won’t budge above $3.50?
If you’re Citigroup (C) chairman Dick Parsons, who is trying to help embattled CEO Vikram Pandit lure talent to the bank giant’s management and board, you pitch a higher calling. “It’s almost like a patriotic duty,” says Parsons about working at Citi. “Plus it’s damned interesting.”
Parsons, a Citi director since 1996, stepped up to chairman in February — an unexpected career shift for the man who spent most of the past decade as chairman and CEO of Time Warner (TWX). Parsons talked about Citi’s challenges in an interview with Fortune managing editor Andy Serwer Monday morning at “The Economy 2009,” a half-day confab hosted by CNN, Time and Fortune.
As healthier rivals such as JPMorgan Chase (JPM) and Goldman Sachs (GS) have received the green light to return TARP bailout funds to the federal government — while Uncle Sam’s ownership stake on Citi is growing larger — the bank’s main problem long-term will likely be “HR,” admitted Parsons. That is, Citi’s ability to lure top talent. “I do worry that we’ll be at a competitive disadvantage,” he said, pointing out that he’s working for no cash, only stock and options. “There are some people in the world,” he said, obviously referring to himself, “who want to do something that is fascinating and interesting and important.”
Maybe he should have added the word “impossible.” Anyone who stayed to the end of “The Economy 2009″ wouldn’t want to go work for Citi — or probably anywhere else in the banking industry. The summit closed with a doom-and-gloom panel that included Yale Professor Robert Shiller, New York University Professor Nouriel Roubini, and bank-industry analyst Meredith Whitney, who helped expose the balance-sheet problems at Citi and other banks two years ago. With CNN anchor Christine Romans leading the discussion, this session could have been titled “Goldilocks and the Three Bears.” (No offense to Romans, who isn’t quite blond!)
As each of the three economic oracles vied to be more bearish than the other, they laid out a scenario where home prices will fall another 15-20%, unemployment will rise to 11% by year-end, the recession will last another six to nine months — and banks will pay the brunt of it. “Losses of banks will accelerate,” Roubini predicted, contending that commercial real-estate loans are the industry’s next toxic problem.
Whitney, who declined to talk about her outlook for Citi specifically, nonetheless agreed and suggested that it’s not yet the time to bet on an industry recovery. “Banks are sitting on rotting assets,” she said. “The liquidity crisis is over. But the credit crisis continues.”
Embedded video from CNNMoney.com Video
Back to main column
Filed under Uncategorized
4 Comments | Add a Comment | Email Digg Facebook
It is a fool’s errand to fish for A-team players by appealing to patriotism. That is not going to attract anybody. Instead, he should pitch it as a high pay-off opportunity. If they go to work for Citi, there will be short-term disadvantages, but if they help catapult the company back, their names will become legend, and they stand to profit big. They can write their own ticket after that. And the chance of failure is minimized since the government has already indicated Citi is too big to fail.
Posted By Brenda H., Atlanta, GA : June 16, 2009 2:36 pm
once the conversion of preferred to common stock takes place which gives the gov’t an approx. 34% stake citi will be the best capitalized bank bringing tier 1 common from a current $22.1 Billion to about $86 billion and boost citi’s tangible common equity to more than $90 Billion, not to mention that not having to pay those preferred dividends saves citi about $1 Billion. Furthermore, theres a good change that sumitomo bank will buy Citi’s japanese unit for about $6 billion. There’s a myriad of other things that Pandit, parsons and company are doing, the gov’t needs to not micromanage them and we’ll get through this.
Posted By Leonard DiFilippi Dupont WA : June 15, 2009 5:08 pm
“Patriotic Duty” – MY ASS! What an asinine statement. Welcome to the world of Obama.
Posted By SandyBeachWeil : June 15, 2009 4:41 pm
no…citi will rise again…
u’ll see. i’ll bet my life on it if u dare me..
Posted By LAM, NY,NY : June 15, 2009 3:37 pm