Chuck Prince: Smith Barney Goin’ Nowhere
At Citigroup’s three-hour shareholder meeting Tuesday, CEO Chuck Prince made it clear he has no intention of selling Smith Barney.
Prince has been at the center of Citi news recently with his plans to cut costs including last week’s announcement of about 17,000 job cuts. That cut may affect over 100 Smith Barney employees and about 30 advisors. (For more on that story, click here.)
Prince’s cutbacks, and shareholders’ demands, are the result of Citi’s recent sluggish performance. First quarter profits dropped 11 percent and net income fell for the third straight quarter to $5.01 billion. And the stock price is up just 7 percent through Wednesday's close since the beginning of 2004. In that same period, rival firm Merrill Lynch has experienced a 55 percent increase in its stock price.It’s those growing pains that spawned rumors about the possible sale of Smith Barney. A recent Crain’s New York Business story reported on the benefits of a “smaller,” more fragmented Citigroup. The publication reported an exodus of unhappy Smith Barney brokers, saying 600 of the firm’s top reps jumped ship in the last six months to rival firms.
But Smith Barney officials say that number is simply wrong and have offered the numbers to prove it. According to earnings releases, Smith Barney had 13,321 reps in the first quarter of last year, and that number dropped to 13,009 as of the end of the first quarter of this year.
(To read more about Smith Barney’s latest challenges and efforts, click here.)
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