Morning Business Memo
The big question for corporate America today is the scathing rebuke for Citigroup over executive pay: is it just a one-time thing or the start of a trend? Shareholders said no to CEO Vikram Pandit’s $15 million pay package. “This vote is historic,” says Elanor Bloxham, CEO of the board advisory firm Value Alliance. “The vote is not binding but the vote in fact matters.”
Critics of outsized CEO pay call the rebuke a milestone. Citi is the first major bank and by far the largest company to have suffered a no vote by shareholders. “CEOs deserve good pay, but there’s good pay and there’s obscene pay,” Philadelphia money management firm executive Brian Wenzinger tells today’s New York Times. Some corporate compensation experts say other companies should brace themselves for more pay revolts. Despite increased signs of shareholder activism this vote is extremely rare. Earlier this week, Citigroup reported its first-quarter profit dropped 2 percent compared with a year earlier.
Federal regulators have approved America’s first large-scale natural gas export facility, and that could lead to a new bonanza for a booming industry. The facility in Louisiana will chill natural gas into a liquid to be shipped on tankers. This will allow US producers to export natural gas overseas for potentially huge profits. The Federal Energy Regulatory Commission voted in favor of Texas-based Cheniere Energy’s plan to build a huge natural gas liquefaction and export terminal at Sabine Pass, near the Texas-Louisiana border. Some environmentalists oppose the $10 billion project and plan to sue to stop it. But Cherniere says it plans to start building this summer.
So far so good for first-quarter earnings. Profit season is here and so far some big corporate names are doing better than expected. This trend and a strong Spanish bond auction boosted global markets. The Dow closed up 194 points yesterday. Futures are just a little bit higher this morning. IBM posted better- than-expected quarterly profits after the closing bell and raised its full year outlook.. This report followed positive numbers from Coca Cola Johnson and Johnson and Goldman Sachs. Yahoo’s earnings surprised investors. The long struggling Internet firm earned $286 million in the first three months of this year – up 28 percent from 2011′s first quarter
Richard Davies Business Correspondent ABC NEWS Radio twitter.com/daviesabc