Will Citigroup Inc. (C) Return to Its Former Glory?

Page 1 of 2

Citigroup Inc. (NYSE:C) is a company which provides a large gamut of financial services that includes retail banking, investment banking, asset management, and corporate banking to consumers, corporations, governments, and institutions worldwide. The departure of Vikram Pandit as CEO of Citigroup has become a positive catalyst for the company. It seems that the former manager was not so efficient. Hence, the company was quite unstable with no growth in shareholders’ value. Former Citigroup Inc. (NYSE:C) director and current chairman Michael E. O’Neill has reshaped the New York Company, by focusing on cost cutting.

Citigroup Inc (NYSE:C)Executive pay plan

Citigroup has now introduced a compensation structure that aligns with performance and is more competitive. In 2012, Citigroup Inc. (NYSE:C) earned a profit of $7.54 billion. If the annual net income divided by total assets (i.e. return on assets) falls below 0.6%, executives won’t be eligible for any kind of stock units. The executives are only capable of having 150% of its allocation, if the returns of the company are higher. For 2012, there was no cash bonus offered to JPMorgan Chase & Co. (JPM)’s Jamie Dimon, as well as to Bank of America Corp (NYSE:BAC)’s Brian T. Moynihan. While, Lloyd C. Blankfein of was awarded with $5.7 million cash bonus. In 2011, Vikram Pandit was paid $15 million.

Stock performance

The CEO has planned to fire 11,000 workers to help increase the return for shareholders and to cut costs. In 2012, Citigroup shares returned 50% compared to JPMorgan Chase & Co. (NYSE:JPM)’s i.e. 32%.

Blankfein at Goldman Sachs was awarded with $21 million package, while Charlotte based Bank of America awarded Moynihan $12 million.

Citigroup Inc. (NYSE:C) has been working on soured loans, whittling costs, and unwinding unprofitable business lines which are key prospects for the revenue increase in future. I am highly bullish in this particular stock in long –term which is truly valuable.

Competitor analysis

JPMorgan Chase, Bank of America, HSBC Holdings plc (ADR) (NYSE: HBC) are Citi’s main competitors. Bank of America reported a 77% drop in fourth-quarter earnings as it was clearing old problems from its mortgage unit. Bank of America has been reporting quarterly losses that are linked to acquisitions. Citigroup Inc. (NYSE:C) reported earnings of $1.2 billion in the final few months of the year.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!