Citi shareholders fume at annual meeting

But key initiatives, including plans to oust long-standing Citigroup directors, fall flat.

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By David Ellis, staff writer

Citigroup CEO Vikram Pandit and other members of the bank's board faced the wrath of some shareholders at Citi's annual meeting Tuesday.
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NEW YORK ( -- Investor outrage boiled over during Citigroup's annual shareholder meeting Tuesday, as shareholders picked apart company management for what they viewed as a litany of failures over the past year.

But even as tensions flared, efforts aimed at reshaping the bank, including ejecting long-standing directors, fell flat.

Ten incoming members of the company's board of directors, some of whom have been in place for two decades, were affirmed by shareholder votes, according to preliminary results released by the company.

Investors also confirmed four new directors to its board that were proposed in March, including former U.S. Bancorp (USB, Fortune 500) chief Jerry Grundhofer, onetime Federal Reserve Bank of Philadelphia President Anthony Santomero and ex-Pimco executive William Thompson.

A wide variety of shareholder proposals, including one that would have effectively established an election for directors, was among those that failed.

With an estimated 1,500 shareholders in attendance, Tuesday's event became a forum for angry investors that have seen their personal fortunes evaporate over the past year.

Much of that blame was squarely aimed at Citi's top management, including many of its long-standing board of directors.

"These directors have served long enough - it is time for them to go!" said Richard Ferlauto, the director of corporate governance and pension investment at the American Federation of State, County and Municipal Employees, or AFSCME.

"This great institution was brought to its knees by a very few people," roared another investor.

Others groused about how members of the board were chosen, contending that it bordered on communism, leaving investors virtually no choice in the matter.

"The election you are holding today is very similar to the one they held in Cuba to re-elect Raul Castro," said William Steiner, one shareholder who sponsored one of the nine shareholder proposals that were put up for a vote this year.

There were also some jeers for former interim chairman Robert Rubin, who stepped down from the company's board earlier this year following scrutiny about his role in allowing the financial giant to overextend itself in the U.S. housing market.

Attempting to defuse some of the tension was long-time board member and current chairman Richard Parsons as well as current Citigroup CEO Vikram Pandit. (Parsons was formerly chairman and CEO of Time Warner, the parent company of

Pandit, who was installed to lead the bank in late 2007 just as Citigroup's troubles began to compound, pledged to complete efforts aimed at turning around the embattled bank. But he acknowledged that "challenges" remained ahead.

"I intend to see this through," Pandit said.

There has been increased speculation recently that Pandit's days at Citigroup could be numbered if the company winds up requiring an additional capital injection. So far, Citigroup has been one of the biggest recipients of taxpayer assistance, taking in $45 billion in government funds.

The government is currently conducting stress tests of the nation's largest banks to determine if banks need more capital. The results of those tests are due to be announced in early May.

Pandit, however, maintained that the company will repay every dollar under the Troubled Asset Relief Program, or TARP, with a great return for taxpayers.

The company is expected to make $3.4 billion in dividend payments to the government every year in exchange for the funds.

Tuesday's meeting comes less than a week after the company delivered its first profitable quarter in more than a year, surprising Wall Street analysts.

Citigroup (C, Fortune 500) shares soared Tuesday, finishing more than 10% higher on the New York Stock Exchange. To top of page

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