Wall Street banks in $70bn staff payout
Pay and bonus deals equivalent to 10% of US government bail-out package
guardian.co.uk, Friday 17 October 2008 20.08 BST
Simon Bowers
http://www.guardian.co.uk/business/2008/oct/17/executivesalaries-banking
The sums that continue to be spent by Wall Street firms on payroll, payoffs and, most controversially, bonuses appear to bear no relation to the losses incurred by investors in the banks. Shares in Citigroup and Goldman Sachs have declined by more than 45% since the start of the year. Merrill Lynch and Morgan Stanley have fallen by more than 60%. JP MorganChase fell 6.4% and Lehman Brothers has collapsed.
At one point last week the Morgan Stanley $10.7bn pay pot for the year to date was greater than the entire stock market value of the business. In effect, staff, on receiving their remuneration, could club together and buy the bank.
In the first nine months of the year Citigroup, which employs thousands of staff in the UK, accrued $25.9bn for salaries and bonuses, an increase on the previous year of 4%. Earlier this week the bank accepted a $25bn investment by the US government as part of its bail-out plan.
At Goldman Sachs the figure was $11.4bn, Morgan Stanley $10.73bn, JP Morgan $6.53bn and Merrill Lynch $11.7bn. At Merrill, which was on the point of going bust last month before being taken over by Bank of America, the total accrued in the last quarter grew 76% to $3.49bn. At Morgan Stanley, the amount put aside for staff compensation also grew in the last quarter to the end of August by 3% to $3.7bn.
Days before it collapsed into bankruptcy protection a month ago Lehman Brothers revealed $6.12bn of staff pay plans in its corporate filings. These payouts, the bank insisted, were justified despite net revenue collapsing from $14.9bn to a net outgoing of $64m.
Financial workers at Wall Street’s top banks are to receive pay deals worth more than $70bn (£40bn), a substantial proportion of which is expected to be paid in discretionary bonuses, for their work so far this year – despite plunging the global financial system into its worst crisis since the 1929 stock market crash, the Guardian has learned.
Staff at six banks including Goldman Sachs and Citigroup are in line to pick up the payouts despite being the beneficiaries of a $700bn bail-out from the US government that has already prompted criticism. The government’s cash has been poured in on the condition that excessive executive pay would be curbed.
Many critics of investment banks have questioned why firms continue to siphon off billions of dollars of bank earnings into bonus pools rather than using the funds to shore up the capital position of the crisis-stricken institutions. One source said: That’s a fair question – and it may well be that by the end of the year the banks start review the situation.
Much of the anger about investment banking bonuses has focused on boardroom executives such as former Lehman boss Dick Fuld, who was paid $485m in salary, bonuses and options between 2000 and 2007.
Last year Merrill Lynch’s chairman Stan O’Neal retired after announcing losses of $8bn, taking a final pay deal worth $161m. Citigroup boss Chuck Prince left last year with a $38m in bonuses, shares and options after multibillion-dollar write-downs. In Britain, Bob Diamond, Barclays president, is one of the few investment bankers whose pay is public. Last year he received a salary of £250,000, but his total pay, including bonuses, reached £36m.
***
Stocks end at 12-year lows
Dow and S&P 500 continue their descent after Citigroup-U.S. deal and GDP plunge.
By Alexandra Twin, CNNMoney.com senior writer
Last Updated: February 27, 2009: 5:58 PM ET
http://money.cnn.com/2009/02/27/markets/markets_newyork/index.htm
The deal gives the bank more capital, which ideally would lead to more lending. The government already gave Citigroup $45 billion in exchange for preferred shares. Shares of Dow stock Citigroup have plunged around 90% over the last year as the company has struggled to stay solvent amid the housing collapse and the credit market crisis. (Full story)
However, the deal inspired no confidence and Citi (C, Fortune 500) shares slumped 39% with investors worrying that the company will ultimately have to be taken over by the government overall, a move that would completely wipe out shareholders.
Bank of America (BAC, Fortune 500) lost 26%. Wells Fargo (WFC, Fortune 500) lost 16% and Morgan Stanley (MS, Fortune 500) lost 8.4%. The KBW Bank (BKX) sector index lost 8.7%.
GDP: Fourth-quarter gross domestic product growth (GDP) shrank at the sharpest pace in 26 years, the government said Friday. GDP, which measures the output of goods and services made in the U.S., fell at a 6.2% annual rate, the biggest fall in GDP since the first quarter of 1982.
In other news, the New York Stock Exchange said it is temporarily waving its minimum price for listed stocks, due to the unprecedented stock market environment. There are 50 stocks that have traded for less than a $100 for at least 30 days, the NYSE said. Typically, those stocks would be put under review, which could eventually lead to a delisting.
Last month, the NYSE changed its market capitalization for listed companies to $15 million from $25 million. Both changes are in effect through the end of June.
NEW YORK (CNNMoney.com) — Stocks tumbled Friday on worries about the government taking a bigger chunk of Citigroup and a bleak reading on the economy, again touching 12-year lows.
The Dow Jones industrial average (INDU) lost 119 points, or 1.7%. It was the lowest close since May 1, 1997.
The S&P 500 (SPX) index lost 18 points, or 2.4%, closing at its lowest point since Dec. 18, 1996.
The Nasdaq composite (COMP) lost 13.5 points, or 1%. The tech-fueled Nasdaq has held up better than the other major averages this year and remains above its lows from Nov. 21, 2008.
The economy shrank at the sharpest pace in 26 years in the fourth quarter of last year, confirming other earlier reports that suggested the economy took a hit in the last three months of last year.
General Electric (GE, Fortune 500) said Friday that it will cut its quarterly dividend by 68% to 10 cents per share from 31 cents per share, a move the company says will save it about $9 billion a year. GE shares lost 6.5%.
Market breadth was negative. On the New York Stock Exchange, losers beat winners two to one on volume of 1.43 billion shares. On the Nasdaq, decliners topped advancers five to four on volume of 1.8 billion shares.
Bonds: Treasury prices slipped, raising the yield on the benchmark 10-year note to 3.01% from 2.99% Thursday. Treasury prices and yields move in opposite directions.
***
Smith Barney is a division of Citigroup Global Capital Markets Inc., a global, full-service financial firm, that provides brokerage, investment banking and asset management services to corporations, governments and individuals around the world. In 800 offices, Financial Advisors service 9.6 million domestic client accounts representing $1.562 trillion in client assets worldwide.[1] Clients range from individual investors to small- and mid-sized businesses, as well as large corporations, non-profit organizations and family foundations.
Origins
Smith Barney & Co. was formed in 1938 through the merger of Charles D. Barney & Co., founded in 1873, and Edward B. Smith & Co., founded in 1892. In the late 1980s the retail brokerage firm Smith Barney was owned by Primerica Financial Services. Commercial Credit purchased Primerica in 1988, for $1.5 billion. In 1992, they paid $722 million to buy a 27 percent share of Travelers Insurance. By the end of 1993, the merged company was known as Travelers Group Inc. In September 1997, Travelers acquired Salomon Inc. (parent company of Salomon Brothers Inc.), for over $9 billion in stock, and merged it with its own investment arm to create Salomon Smith Barney.
In April 1998 Travelers Group announced an agreement to undertake a $76 billion merger between Travelers and Citicorp, creating the largest single financial services company in the world. It now has over one trillion U.S. dollars in assets.
On January 13, 2009, Morgan Stanley and Citigroup announced the merger of Smith Barney with Morgan Stanley’s Global Wealth Management Group, with Morgan Stanley paying US$2.7 billion cash upfront to Citigroup for a 51 percent stake in the joint venture. The joint venture will operate under the name Morgan Stanley Smith Barney.[2]
http://en.wikipedia.org/wiki/Smith_Barney
***
The Travelers Companies (NYSE: TRV) is the largest American insurance company by market value.[2] It is also the second largest writer of commercial property casualty and personal insurance in the United States. The company is headquartered in St. Paul, Minnesota and has major operations in Hartford, Connecticut.
The company has field offices in every U.S. state, plus operations in the United Kingdom, Ireland, Singapore, Shanghai and Canada. In 2008, the company reported revenues of US $24 billion and total assets of US $110 billion.
Travelers, through its subsidiaries and approximately 14,000 independent agents and brokers, provides commercial and personal property and casualty insurance products and services to businesses, government units, associations, and individuals. The company offers insurance through three segments:
* Personal Insurance, which includes home, auto and other insurance products for individuals
* Business Insurance, which includes a broad array of property and casualty insurance and insurance-related services in the United States
* Financial, Professional & International Insurance, which includes surety, crime, and financial liability businesses which primarily use credit-based underwriting processes, as well as property and casualty products that are predominantly marketed on an international basis
Saint Paul Fire and Marine Insurance Co. was founded March 5, 1853, in St. Paul, Minnesota, serving local customers who were having a difficult time getting claim payments in a timely manner from insurance companies on the east coast of the United States. It barely survived the Panic of 1857 by dramatically paring down its operations and later reorganizing itself into a stock company (as opposed to a mutual company). It soon spread its operations across the country. In 1998 it acquired USF&G, known formerly as United States Fidelity and Guaranty Company, an insurance company based in Baltimore, Maryland, but was forced to downsize by almost half due to a competitive marketplace.[3]
Travelers was founded in 1864 in Hartford. Along the way it had many industry firsts, including the first automobile policy, the first commercial airline policy, and the first policy for space travel.[4]
In the 1990s, it went through a series of mergers and acquisitions. It was bought by Primerica in 1993[5], but the resulting company retained the Travelers name. In 1995 it became The Travelers Group[4]. It bought Aetna’s property and casualty business in 1996.[6]
In 1998, the Travelers Group merged with Citicorp to form Citigroup.[5] However, the synergies between the banking and insurance arms of the company did not work as well as planned, so Citigroup spun off Travelers Property and Casualty into a subsidiary company in 2002[7], although it kept the red umbrella logo. Three years later, Citigroup sold Travelers Life & Annuity to MetLife.[8] In 2003, Travelers bought renewal rights for Zenith’s Commercial businesses.[9]
St. Paul Travelers logo used until February 2007
In 2004, the St. Paul and Travelers Companies merged and renamed itself St. Paul Travelers, with the headquarters set in St. Paul, Minnesota. This corporate name lasted until 2007, when the company repurchased the rights to the famous red umbrella logo from Citigroup and readopted it as its main corporate symbol, while also changing the corporate name to The Travelers Companies.[10][11]
Travelers is currently 93 on the Fortune 500 list of largest U.S. companies.
Alleged anticompetitive practices
In January 2007, Travelers agreed to pay US$ 77 million to six states to settle a class action suit and end investigations into its insurance practices.[13] The charges involved paying the insurance broker Marsh & McLennan Companies contingent commissions to win business without the knowledge of clients, thus creating a conflict of interest.[14] Additionally, the investigation examined whether Travelers had created the illusion of competition by submitting fake bids,[15] thus misleading clients into believing they were receiving competitive commercial premiums.[16]
http://en.wikipedia.org/wiki/The_Travelers_Companies
***
IndyMac Regulator Failed to Catch ‘Unsound’ Lending, Audit Says
By Linda Shen
Feb. 26 (Bloomberg) — IndyMac Bancorp Inc.’s collapse last year cost the U.S. government about $10.7 billion and occurred because the company’s primary regulator didn’t track the lender’s “unsafe and unsound” practices, an audit concluded.
While the Office of Thrift Supervision had blamed Senator Charles Schumer for sparking a run on the bank by releasing a letter critical of IndyMac, today’s audit said the company was already headed for probable failure. The OTS, which regulates the Pasadena, California-based lender, “failed to prevent a material loss” to the Federal Deposit Insurance Corp., the Treasury Department said in the report.
“The thrift’s high-risk business strategy warranted more careful and much earlier attention” from regulators, according to the report distributed by the Treasury’s Office of the Inspector General.
IndyMac’s “nontraditional” loans and “insufficient underwriting” helped lead to its seizure by regulators in July, according to the audit. The FDIC estimated last month that IndyMac’s failure would cost the insurance fund $8.5 billion to $9.4 billion, up from its prediction in July of $4 billion to $8 billion.
Leader in Mortgages
IndyMac was once the second-biggest independent mortgage lender behind Countrywide Financial Corp., which almost failed before being bought by Bank of America Corp. It was also the second-largest lender to collapse last year, behind Washington Mutual Inc., as a deepening national recession sent home foreclosures rising.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aG_FyLTipBVc&refer=home
***
U.S. Thrifts Post Record $13.4 Billion Loss in 2008 (Update2)
By Margaret Chadbourn and Alison Vekshin
Feb. 26 (Bloomberg) — U.S. savings and loans reported a record $13.4 billion loss last year as they set aside more funds for loan losses amid the recession and worsening financial crisis, the industry’s regulator said today.
Thrifts lost $3 billion in the fourth quarter, down from $4.4 billion in the preceding three months, the Office of Thrift Supervision, the regulator of savings and loans, said today in a report on the industry’s health.
[Etc. - a lot more good stuff in this article - etc., etc., etc. ]
The OTS, an agency of the Treasury, supervised 810 thrifts, including Hudson City Savings Bank and Sovereign Bank, that had a combined $1.2 trillion in assets at the end of the fourth quarter.
The government’s planned overhaul of U.S. financial regulation is putting the agency’s future in doubt amid suggestions it was a light-touch regulator. Former Treasury Secretary Henry Paulson in March proposed eliminating the agency and merging its functions into the Office of the Comptroller of the Currency, the regulator of national banks.
Reich, a Republican who is serving a five-year term that would have ended in August 2010, told OTS employees on Feb. 12 that he will resign as director effective tomorrow. Scott Polakoff, the agency’s chief operating officer, will become acting director until Obama, a Democrat, names a permanent successor.
To contact the reporters on this story: Margaret Chadbourn in Washington at mchadbourn@bloomberg.net; Alison Vekshin in Washington at avekshin@bloomberg.net.
Last Updated: February 26, 2009 11:43 EST
http://www.bloomberg.com/apps/news?pid=20601103&sid=a1DEmgK_DsZ0&refer=news
***
John M. Reich was sworn in August 9, 2005, as Director of the Office of Thrift Supervision (OTS). U.S. President George W. Bush nominated Mr. Reich to be OTS Director on June 7, 2005, and the Senate confirmed his nomination on July 29, 2005. In this capacity, Mr. Reich will continue to serve as a member of the Board of Directors of the Federal Deposit Insurance Corporation (FDIC).
Director Office of Thrift Supervision
Incumbent
Assumed office
August 9, 2005
Prior to joining OTS, Mr. Reich served as Vice Chairman of the Board of Directors of the FDIC since November 2002. He has been a member of the FDIC Board since January 2001. He also served as Acting Chairman of the FDIC from July to August 2001.
Mr. Reich also served 12 years on the staff of U.S. Senator Connie Mack (R-FL), before joining the FDIC. From 1998 through 2000, he was Senator Mack’s Chief of Staff, directing and overseeing all of the Senator’s offices and committee activities, including those at the Senate Banking Committee.
http://en.wikipedia.org/wiki/John_M._Reich
***
http://www.forbes.com/lists/2006/12/RMSG.html
Nifty list of compensations for executives – look for previous and next links directly above the person’s name and check out the great chart that compares what they make to others in the same industry.
***
Board of Directors – Members
C. Michael Armstrong
Chairman – Board of Trustees, Johns Hopkins Medicine, Health System Corporation and Hospital
Alain J.P. Belda
Chairman, Alcoa Inc.
Sir Win Bischoff
Former Chairman, Citigroup
Kenneth T. Derr
Chairman, Retired, Chevron Corporation
John M. Deutch
Institute Professor, Massachusetts Institute of Technology
Roberto Hernández Ramírez
Chairman, Banco Nacional de Mexico
Andrew N. Liveris
Chairman and Chief Executive Officer, The Dow Chemical Company
Anne Mulcahy
Chairman and Chief Executive Officer, Xerox Corporation
Vikram Pandit
Chief Executive Officer, Citi
Richard D. Parsons
Chairman, Citi
Lawrence R. Ricciardi
Senior Vice President, General Counsel, and Advisor to the Chairman, Retired, IBM Corporation
Judith Rodin
President, Rockefeller Foundation
Robert E. Rubin
Director and Former Senior Counselor, Citi
Robert L. Ryan
Chief Financial Officer, Retired, Medtronic Inc.
Franklin A. Thomas
Consultant, TFF Study Group
http://www.citigroup.com/citi/corporategovernance/bddir.htm
***
Federal bailout 2008
On 24 November 2008 the U.S. government announced a massive bailout of Citigroup, designed to rescue the company from bankruptcy while giving the government a major say in its operations. The Treasury will provide another $20 billion in TARP funds in addition to $25 billion given in October. The Treasury Department, the Federal Reserve and the FDIC will cover 90% of the losses on its $335-billion portfolio after Citigroup absorbs the first $29 billion in losses.[48] In return the bank will give Washington $27 billion of preferred shares and warrants to acquire stock. The government will obtain wide powers over banking operations. Citigroup has agreed to try to modify mortgages, using standards set up by the FDIC after the collapse of IndyMac Bank, with the goal of keeping as many homeowners as possible in their houses. Executive salaries will be capped.[49]
As a condition of the bailout, Citigroup’s dividend payment has been reduced to a mere 1 cent a share.
As the subprime mortgage crisis began to unfold, heavy exposure to toxic mortgages in the forms of Collateralized debt obligation (CDOs), compounded by poor risk management led the company into serious trouble. In early 2007 Citigroup began eliminating about 5 percent of its workforce, in a broad restructuring designed to cut costs and bolster its long underperforming stock.[20] By November 2008, the ongoing crisis hit Citigroup hard and despite federal TARP bailout money, the company announced further cuts.[22] Its stock market value dropped to $21 billion, down from $244 billion two years prior.[23] As a result, Citigroup and Federal regulators negotiated a plan to stabilize the company.[9] Its single largest shareholder is Prince Al-Waleed bin Talal of Saudi Arabia, who has a 4.9% stake.[50] Vikram Pandit is Citigroup’s current CEO, while Richard Parsons is the current chairman.[39]
Political donations
Citigroup is the 16th largest political campaign contributor, out of all organizations, according to the Center for Responsive Politics. Members of the firm have donated over $23,033,490 from 1989-2006, 49% of which went to Democrats and 51% of which went to Republicans.[51] According to Matthew Vadum, a senior editor at the conservative Capital Research Center, Citigroup is also a heavy contributor to left of center political causes.[52]
http://en.wikipedia.org/wiki/Citigroup
***
HRH Prince Al-Waleed bin Talal bin Abdul Aziz Al Saud (born 7 March 1955) is a member of the Saudi Royal Family, and an entrepreneur and international investor. He has amassed his fortune through investments in real estate and the stock market. As of December 2, 2008, his net worth is estimated at US$17.08 billion, down from $21 billion, according to the Arabian Business rich list published December 2, 2008.
Although his stake in Citibank once accounted for approximately half of his wealth, by January 2009 this holding had lost nearly all of its value. At the end of 1990 he bought 4.9% of Citicorp’s existing common shares for $207m ($12.46 per share)—the most that he could without being legally obliged to declare his interest. In February 1991, as American troops stationed in Saudi Arabia were preparing for war with Iraq, the prince spent $590m buying new preferred shares, convertible into common shares at $16 each. This amounted to a further 10% of Citicorp and took his stake to 14.9%.[2] In January 2008, the Prince participated — together with the Singapore government investment coporation and other investors — in a $12.5 Billion capital raise, in an unsucessful effort to shore up Citi’s capital position, but the value of these shares continued to plunge. http://www.forbes.com/lists/2008/10/billionaires08_Prince-Alwaleed-Bin-Talal-Alsaud_0RD0.html.
Excerpt from -
http://en.wikipedia.org/wiki/Al-Waleed_bin_Talal
**MY note – it looks like Citigroup would have been in bankruptcy a long time ago if it hadn’t been for this guardian angel underwriting their bad habits.
***
MORE from Wikipedia about CITIGROUP -
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The Terra Securities scandal
In November 2007 it became public that the Citigroup is heavily involved in the Terra Securities scandal, which involved investments by eight municipalities of Norway in various hedge funds in the United States bond market.[45] The funds were sold by Terra Securities ASA to the municipalities, while the products were delivered by Citigroup. Terra Securities ASA filed for bankruptcy November 28, 2007, the day after they received a letter[46] from The Financial Supervisory Authority of Norway announcing withdrawal of permissions to operate. The same letter also stated, “The Supervisory Authority contends that Citigroup’s presentation, as well as the presentation from Terra Securities ASA, appears insufficient and misleading because central elements like information about potential extra payments and the size of these are omitted.”
Theft from customer accounts
On August 26, 2008 it was announced that Citigroup agreed to pay nearly $18 million in refunds and fines to settle accusations by California Attorney General Jerry Brown that it wrongly took funds from the accounts of credit card customers. Citigroup would pay $14 million of restitution to roughly 53,000 customers nationwide. A three-year investigation found that Citigroup from 1992 to 2003 used an improper computerized “sweep” feature to move positive balances from card accounts into the bank’s general fund, without telling cardholders.[47]
Brown said in a statement that Citigroup “knowingly stole from its customers, mostly poor people and the recently deceased, when it designed and implemented the sweeps…When a whistleblower uncovered the scam and brought it to his superiors, they buried the information and continued the illegal practice.”[47]
http://en.wikipedia.org/wiki/Citigroup
***
http://djindexes.com/mdsidx/downloads/DJIA_Hist_Comp.pdf
Complete history of Dow Jones Indexes Components – through September 2008
***
***
Risks And Riches
(MONEY Magazine)
By Jason Zweig
April 1, 1999
(MONEY Magazine) – Over the full sweep of time, mutual funds have shown that they are probably the greatest contribution to financial democracy ever devised.
But like every democratic structure, they are far from perfect.
Failing to beat the market, as 90% of all funds have done for the past four years running, is a longstanding pattern (see the chart below).
1993: Complex “mortgage derivative” funds earn remarkably high returns at remarkably low risk.
1993: Emerging markets funds gain 72%, and investors pour in more than $1 billion.
1994: Mortgage derivative funds lose up to 28% when interest rates rise.
Emerging markets funds fall more than 10%.
1995: SEC proposes measuring risk mathematically. Only trouble is, no one (least of all the SEC) knows how to do it.
1997: The SEC proposes the “profile” prospectus, urging funds to write in plain English–instead of the languages they had long preferred, Doublethink and Middle Slobovian.
1998: Emerging markets funds lose 26.8%, and disgusted investors yank out more than $3 billion in assets.
FUNDS 7343
ASSETS 5.5 TRILLION
AS OF 12/31/98
Note: Number of funds treats multiple-class shares as one portfolio
http://money.cnn.com/magazines/moneymag/moneymag_archive/1999/04/01/257688/index.htm
MY NOTE -
This is the most amazing timeline about mutual funds starting in the 20′s – simple to read – great overview. From 1999.
***
AIG: The bailout that won’t quit
The world’s largest insurer is expected to announce yet another bailout iteration Monday. But some say its options are limited.
By David Goldman and Tami Luhby, CNNMoney.com staff writers
Last Updated: February 27, 2009: 6:22 PM ET
NEW YORK (CNNMoney.com) — Troubled insurer American International Group is looking for more help from the federal government as it struggles to sell off assets and keep its core businesses afloat.
The company, which is blowing through the $152.2 billion bailout it already received from the government, is keeping mum about possible revisions to the rescue package. But it’s likely the feds will take a bigger stake and wield more control over the world’s largest insurer, according to published reports.
[Etc.]
AIG’s troubles stem from its financial products unit, which sold credit default swaps – essentially insurance contracts – on collateralized debt obligations, or CDOs. The value of the CDOs plummeted in 2008, and AIG was forced to post more collateral to back up the swaps.
The company also took sizeable writedowns on its subprime mortgage-backed securities holdings, which fell in value as the housing crisis wore on.
AIG suffered a loss of more than $18 billion in the nine months prior to its Sept. 16 bailout, and shares of the company tanked, limiting its ability to raise cash. Credit raters then downgraded AIG, requiring it to post more collateral.
Government officials decided they had to act lest the insurance titan file bankruptcy. At the time, AIG had $1.1 trillion in assets and 74 million clients in 130 countries, so the company’s collapse would likely roil the global markets.
http://money.cnn.com/2009/02/27/news/companies/aig_bailout/index.htm
***
Citigroup Inc., doing business as Citi, is a major American financial services company based in New York, NY. Citigroup was formed from one of the world’s largest mergers in history by combining the banking giant Citicorp and financial conglomerate Travelers Group on April 7, 1998.[6] Citigroup Inc. has the world’s largest financial services network, spanning 107 countries with approximately 12,000 offices worldwide. The company employs approximately 300,000 staff around the world, and holds over 200 million customer accounts in more than 100 countries. It is the world’s largest bank by revenues as of 2008. It is a primary dealer in US Treasury securities[7] and its stock has been a component of the Dow Jones Industrial Average since March 17, 1997.[8] Citigroup suffered huge losses during the global financial crisis of 2008 and was rescued in November 2008 in a massive bailout by the U.S. government.[9] Its largest shareholders include funds from the Middle East and Singapore.[10] On February 27, 2009 Citigroup announced that the United States government would be taking a 36% equity stake in the company by converting $25 billion in emergency aid into common shares.[11]
http://en.wikipedia.org/wiki/Citigroup
***
**MY note -
This is the most bizarre idea – but I bet this is where the “brilliant” financial investors are getting their virtually stupid investment information. Not because the info is stupid – but because it relies, as they do also – on last year or the year before to get guidance about now and tomorrow. That is a problem.
Value Line, Inc.(NASDAQ: VALU), is a New York corporation founded in 1931 by Arnold Bernhard, best known for publishing the The Value Line Investment Survey , a stock analysis newsletter that’s updated weekly and kept by subscribers in a large black or green binder. The survey itself is broken into three parts; Ratings & Reports, Table of Summary & Index Contents, and Selection & Opinion.
Company background
Value Line, in its current form, was incorporated in 1982 and is the successor to substantially all of the operations of Arnold Bernhard & Co., Inc. In June 2005, AB & Co. owned approximately 86.5% of the Company’s issued and outstanding common stock.
The Company’s periodical investment publications are produced through its wholly owned subsidiary, Value Line Publishing, Inc. The publications provide investment advisory services to mutual funds, institutions, and individuals. VLP publishes in both print and electronic formats
* The Value Line Investment Survey
* The Value Line Investment Survey – Small and Mid-Cap Edition,
* The Value Line 600,
* Value Line Select (more in-depth coverage of one stock per month)
* The Value Line Mutual Fund Survey
* The Value Line No-Load Fund Advisor
* The Value Line Special Situations Service (for speculators)
* The Value Line Options Survey and The Value Line Convertibles Survey
VLP also provides current and historical financial databases DataFile, Estimates & Projections, Convertibles, Mutual Funds and other services (in standard computer formats) and markets investment analysis software:
* The Value Line Investment Analyzer
* Value Line ETF Survey
* Mutual Fund Survey for Windows
* Value Line Daily Options Survey
* Value Line Electronic Convertibles
* Value Line Research Center
The Company is the investment adviser for the Value Line Family of Mutual Funds, which on April 30, 2005, include 14 open-end investment companies with various investment objectives. In addition, the Company manages investments for private and institutional clients. The Company is registered with the Securities and Exchange Commission as an Investment Adviser under the Investment Advisers Act of 1940.
In addition to VLP, the Company’s other wholly owned subsidiaries include a registered broker-dealer, Value Line Securities, Inc., and an advertising agency, Vanderbilt Advertising Agency, Inc. These subsidiaries primarily provide services used by the Company in its investment management and publishing businesses. Compupower Corporation, another subsidiary, serves the subscription fulfillment needs of the Company’s publishing operations. Value Line Distribution Center, Inc. handles all of the mailings of the publications to the Company’s subscribers. Additionally, VLDC provides office space for Compupower
In 1965, Value Line introduced a mathematical formula, called the Timeliness Ranking System, that serves as the basis for its survey picks. The company also manages a series of mutual funds, again based on the firm’s Timeliness Ranking System, and produces several other publications, both print and electronic.
http://en.wikipedia.org/wiki/Value_Line
***
** My Note -
I also don’t get how the ratings, value analysis sorts of companies can also own investment businesses which brokers the products they are valuing. – Just a thought, it seems that it wouldn’t really make sense from a fair and unbiased kind of standpoint. – cricketdiane, 02-28-09
(But then I noticed it is also true that every member on the board of directors at Citigroup and other corporations is on other boards or is an acting chairman or CEO or CFO or COO of some other mega conglomerate – how does that make sense, is it a private club or something?)
***
Many critics of investment banks have questioned why firms continue to siphon off billions of dollars of bank earnings into bonus pools rather than using the funds to shore up the capital position of the crisis-stricken institutions. One source said: That’s a fair question – and it may well be that by the end of the year the banks start review the situation.
Much of the anger about investment banking bonuses has focused on boardroom executives such as former Lehman boss Dick Fuld, who was paid $485m in salary, bonuses and options between 2000 and 2007.
Last year Merrill Lynch’s chairman Stan O’Neal retired after announcing losses of $8bn, taking a final pay deal worth $161m. Citigroup boss Chuck Prince left last year with a $38m in bonuses, shares and options after multibillion-dollar write-downs. In Britain, Bob Diamond, Barclays president, is one of the few investment bankers whose pay is public. Last year he received a salary of £250,000, but his total pay, including bonuses, reached £36m.
http://www.guardian.co.uk/business/2008/oct/17/executivesalaries-banking
***
Gary L. Crittenden (born 1953) is an American financial manager currently employed as the Chief Financial Officer of Citigroup, and serving on the boards of Staples Inc., Ryerson, Inc., TJX Companies, and Utah Capital Investment Corp.
He was the CFO of Sears Roebuck and Company from 1997 and 1998. Later, he served as the CFO of Monsanto from 1998 to 2000. Prior to joining Citigroup, Crittenden was Executive Vice President and CFO of American Express, as well as the head of the company’s Global Network Services division.[2] At American Express, he is credited with an ambitious re-engineering effort as well as a Corporate Portfolio Management effort which aimed to optimize the enterprise’s resource allocation
It was reported that for 2007 Crittenden earned a salary of $403,410, and a total compensation of $19.4 million.[5] He also serves on the boards of Staples Inc., Ryerson, Inc., TJX Companies, and Utah Capital Investment Corp.[2]
http://en.wikipedia.org/wiki/Gary_Crittenden
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American Express
Payment products
Credit cards • Charge cards • Traveler’s cheques • Centurion Card • Red Card • ExpressPay • Plum Card
Magazines
Travel + Leisure • Food & Wine • Departures Magazine • Executive Travel • Black Ink
Spun-off companies
Ameriprise Financial • First Data Corp. • Lehman Brothers • American Railway Express Agency • Merchants Despatch
Notable current and former executives
Henry Wells • William Fargo • J.C. Fargo • Ralph Reed • James D. Robinson III • Lou Gerstner • Sandy Weill • Harvey Golub • Ken Chenault
Corporate directors
Ken Chenault (Chairman) • Daniel Akerson • Charlene Barshefsky • Ursula Burns • Peter Chernin • Vernon Jordan, Jr. • Jan Leschly • Rick Levin • Richard McGinn • Edward Miller • Frank Popoff • Robert Walter • Ron Williams
Other
Amex Bank of Canada • The Adventures of Seinfeld & Superman • World Monuments Watch • Salad Oil Scandal
Annual revenue: $24.27 billion USD (? 10% FY 2005) A Employees: 65,800 A Stock symbol: NYSE: AXP A Website: www.americanexpress.com
http://en.wikipedia.org/wiki/Gary_Crittenden
Peter Chernin (Russian: ???? ??????, or Pyotr Chernin, born May 29, 1951 in Harrison, New York, of Jewish roots) is President and Chief Operating Officer of News Corporation, and Chairman and CEO of Fox Entertainment Group, a position he will hold until June 2009 (see below for note). In addition to the Fox duties, he is also a Corporate Director for American Express.
Chernin earned a B.A. in English literature from UC Berkeley.
According to The New York Times he is a major fund raiser for Senator Hillary Clinton.[1]
Widely considered one of the most powerful media executives in the world, Chernin has been credited in particular with the success of Fox’s cable operations. Prior to joining Fox, Chernin was president and COO of Lorimar Film Entertainment. His other executive roles include positions at Showtime/The Movie Channel, Warner Books and St. Martin’s Press.
It was rumored in the media that he will leave his current position at News Corp. by June 2009, when his contract expires, and will be replaced in his current position by James Murdoch, the media executive youngest son of Rupert Murdoch. On February 24, 2009, the Wall Street Journal reported that Peter Chernin would leave News Corporation, effective June 30. [2][3] [4]
http://en.wikipedia.org/wiki/Peter_Chernin
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http://en.wikipedia.org/wiki/List_of_assets_owned_by_News_Corporation
News Corporation
Corporate directors
Rupert Murdoch A José María Aznar A Natalie Bancroft A Peter Chernin A David DeVoe A Arthur Siskind A Rod Eddington A Andrew Knight A James Murdoch A Lachlan Murdoch A Rod Paige A Thomas Perkins A Viet Dinh A John L. Thornton
http://en.wikipedia.org/wiki/Peter_Chernin
Annual revenue: $23.9 billion USD (?17% FY 2005) A Employees: 44,000 A Stock symbol: NYSE: NWS, NYSE: NWSa, ASX: NWS, LSE: NCRA
See List of assets owned by News Corporation.
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