Big Changes Coming for Citigroup Management
02.27.09 |
The federal government will be announcing a deal with Citigroup today that involves no additional taxpayer funding and mandates a major management shakeup. The government will not nationalize the massive lending institution as many investors around the world had feared.
The deal involves turning currently held preferred stocks with fixed dividends and no voting rights but first dibs on a business should it fail for common equity which, in essence, is the kind of stock most Americans own. The swap would be made at the same rate current holders of preferred stocks agree to change over their holdings.
The agreement, which is the third time the U.S. Treasury has had a hand in saving the company since last October, requires a total overhaul of the Citigroup board of directors. The government wants to see a board of independent people around the big table although Vikram Pandit will, apparently, keep his CEO position.
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