9486 in the collection
Researcher slams Citi, McGraw-Hill and Merrill boards
By Neil Roland
Citigroup Inc., The McGraw-Hill Cos. and
Merrill Lynch & Co. Inc. had directors who sat
on too many other corporate boards and who
received an unusually high percentage of
disapproval votes from shareholders, a research
firm said today.
The findings stem from an effort by The
Corporate Library in Portland, Maine, an
independent-research firm, to identify
governance risk factors that may have
contributed to the decline of more than a dozen
mostly financial companies last year. The
research excluded executive compensation.
American International Group Inc., like
Citigroup and McGraw-Hill, which owns Standard
& Poor’s, had three board members who received
unusually high disapproval votes from investors
between July 2007 and December 2008, the report
said. All three companies are based in New
York.
“In comparison to the largest U.S. companies,
these numbers are truly remarkable,” said
Corporate Library chief analyst Ric Marshall.
Sir Win Bischoff, Citigroup’s chairman, also
was on the boards of McGraw-Hill and two other
companies, according to the report.
He received the highest percentage of
“withhold” votes from shareholders — 38.6% —
while at McGraw-Hill of any other board member
examined.
Shareholders can express their symbolic
disapproval of management’s board nominees by
withholding their votes in annual balloting.
Standard & Poor’s of New York is among the
largest credit-rating agencies that have been
sharply criticized by lawmakers and analysts
for inflating the ratings on bonds comprising
pooled mortgages that later collapsed, helping
to fuel the financial crisis.
Two other McGraw-Hill directors, chief
executive Harold McGraw III and Edward Rust,
were among the top five directors who also
received the highest percentage of disapproval
votes from shareholders, the report said.
At Citigroup, Mr. Bischoff, who also had been
acting chief executive in 2007, was scheduled
to step down today and be replaced by Richard
Parsons, former chairman and chief executive of
Time Warner Inc. of New York.
Mr. Parsons, who has been a Citigroup director
for a dozen years, ranked sixth among board
members with the highest disapproval ratings,
with 30.6% of shareholders withholding their
votes from him, the report said. Citi declined
to comment.
Board oversight at financial institutions
leading up to the financial crisis will be the
subject of a Securities and Exchange Commission
probe under new Chairman Mary Schapiro, the
Washington Post reported last week.
The Corporate Library’s research focused on 17
troubled companies, including AIG, Bank of
America Corp., Citigroup, Fannie Mae, Lehman
Brothers Holdings Inc., Morgan Stanley and
Wachovia Corp. for the 18-month period through
the end of last year.
During that period, these companies lost more
than $1.3 trillion in shareholder value, the
report said.
Spokespeople at AIG, Citigroup, McGraw-Hill and
Bank of America, which now owns Merrill,
declined immediate comment today.
Efforts to reach Mr. Bischoff, Mr. McGraw, Mr.
Rust and Mr. Parsons through a Citigroup
spokeswoman weren’t immediately successful.
— Neil Roland
Investment News
2009-02-23
http://www.investmentnews.com/apps/pbcs.dll/article?AID=2009902239965&template=printart
INDEX OF OUTRAGES
Pages: 380
[1] 2 3 4 5 6 Next >> Last >>
