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It is far more offensive that Citi is still using tax dollars to pay its shareholder dividend.

• aaronblohowiak 18y ago
  Can you please provide some documentation for that? I'd be really interested in learning more!
  • Hexstream 18y ago
    I think it goes something like this: The People paid taxes to the government for the bailout, Citi got some of that money, which allowed them to survive, which allowed them to pay dividends to its shareholders. Therefore, Citi is using tax dollars to pay its shareholder dividend.
    • anewaccountname 18y ago
      http://www.forbes.com/feeds/ap/2009/01/20/ap5943395.html http://www.forbes.com/feeds/ap/2009/01/20/ap5943395.html Since the government didn't insist on stricter terms, Citi is paying a 1 cent dividend. Blame the government for not negotiating stricter terms. If Citi didn't pay the max dividend it could under the terms, its shareholders could sue the board in a shareholder class-action suit for violating their fiduciary duty to maximize shareholder returns.
      • jcdreads 18y ago
        No, that bit about dividends can't possibly be right. Relatively few public companies pay a dividend, and basically none of the other companies face shareholder lawsuits about the absence of a dividend. And if Citi were a poorly programmed automaton then it might make sense to avoid blaming its board for politically boneheaded moves; but its board is made up of directors who _ought_ to be spending some energy not pointlessly offending a public on whose dole they now find themselves. The shareholders will be (rightly) for more offended if the board so pisses off Treasury that the public assistance dries up. I agree, however, that the (then-) government should have negotiated (decreed?) better terms for the bailout money.
        • anewaccountname 18y ago
          >No, that bit about dividends can't possibly be right. Relatively few public companies pay a dividend, and basically none of the other companies face shareholder lawsuits about the absence of a dividend. Relatively few public companies are in Citi's situation. I wasn't saying all public companies have to a pay a dividend or face a lawsuit. Supposing Citi is practically insolvent, it would be irresponsible (legally/fiduciarily, not morally) to shareholders not to try and launder out as a much money as possible. Once it is paid to shareholders as a dividend, creditors can't go after it.
• dockd 18y ago
  Why must the shareholder get stuck holding the bag? It's not like they get special inside knowledge or treatment. We're punishing the people who bought Citi's story instead of the ones who ran it into the ground?
  • dantheman 18y ago
    Because they get compensated for the risk they are taking. Now if the shareholders want to sue or overthrow the management they have that right.
  • mattmaroon 18y ago
    Because that's the point of being a shareholder. We're not punishing anyone. The real question is why should the government reward people who bought bad equities?
  • reitzensteinm 18y ago
    So you'd rather punish the US taxpayer, who very likely has no direct investment in the company (outside of index funds), and has nothing to gain if the company does well? Sure, it sucks for the shareholders, but that's exactly what they signed up for - a share of the companies returns in good times and bad.
• Dilpil 18y ago
  This is why the terms should have been decided before, rather than after these loans were given.