The federal government bailed out Citigroup for the third time a few weeks ago, and bailouts 4, 5 and 6 could be just around the corner. At this point, the US government has already put more public money into Citigroup then it is worth. Yet American taxpayers now own only about 36% of the company’s common stock.
There’s another blatantly bogus aspect of the latest deal the US government has made with Citi: apparently under pressure from the US Treasury, the firm has promised to reconstitute its board of directors so that a majority of its members are “independent.” But Citi execs are picking the new members, not the government.
Citi execs says they’re having a hard time finding people to serve – even though board members are paid $75,000 per year (plus stock).
What that tells you is that the Citi fat cats are looking for other fat cats. And these days most fat cats are fat enough that they can afford not to serve on companies whose stock is trading at $1 a share.
Boards aren’t really independent if they’re made up of wealthy corporate types who do business the Wall Street Way. The government’s “independent majority” requirement is a kabuki dance designed to placate the American public without upsetting Citi or its shareholders.
Here’s a better idea: why not put regular Americans on the board? Say, a few folks from Main Street, maybe a couple of small business people. Maybe they could be chosen by lottery. I’m betting there’s a lot of citizens in this country who’d serve for a fraction of the pay the board members get right now.
“Nationalized” or not, Americans own Citigroup, and to restore public confidence in the firm – and what it is doing with our money – it ought to be supervised by people who bring to it good old fashioned American values.