Citigroup CEO Michael Corbat discussed compensation, growth and underperforming assets with Bloomberg TV's Erik Schatzker at the World Economic Forum in Davos. Corbat said that he expects the environment for investment banking will remain "challenging" and weigh on compensation.
Corbat said: "People recognize the times we are in, these are challenging times…Things will remain challenging going forward for a period of time. Our people recognize that." He also said: "I think morale is good…Our employees are very confident about the strategy if you think about what's going on in the world today."
Video and excerpts below:
Corbat on his number one priority as CEO of Citigroup Inc. (NYSE:C):
"Right now we're very focused on executing against our strategy. We think we've got a sound strategy, we think we've got a plan to execute against that and we're focused around the execution of that."
"Getting the work done."
On what he wants people to think of Citigroup Inc. (NYSE:C) when they think of that name and everything the bank has been through:
"An indisputably safe and sound institution."
On whether people doubt that Citigroup is "an indisputably safe and sound institution":
"I think we need to do a better job of telling it. I think we have done a lot of work in terms of restructuring ourselves over the past three or four years."
"I think the brand is still strong around the world but we need to continue to build on it."
On whether he's worried about employee morale:
"I think morale is good it. Our employees are very confident around the strategy. If you think about what is going on in the world today and the things that we're focused on, the globalization and the urbanization, the digitization, the big secular themes in the world, we are as well-positioned as anyone to take advantage of those and it's about making sure that we do."
On cutting compensation:
"I think that people recognise the times we're in. These are challenging times and I think things will probably remain challenging going forward for a period of time. I think our people recognize that but they are on a platform where they have relevance to customers and clients and I think they are excited by that.
On whether Citi can afford to be competitive or should the bank be tougher with comp than others in the industry:
"We absolutely can be competitive; absolutely we can."
On what he wants shareholders to think when they hear his name:
"Well I don't want them to think of Michael Corbat. I want them to think of Citi and what we can do at Citi. And again, I think it's an institution, as I said last week on our earnings call, that we have to get beyond the point of destroying our shareholders' capital and returning it, and that we are executing against a unique set of opportunities that we have as a company and that we are making the most out of those."
"I am working for them. We all work for the shareholders."
On whether there's anything about the strategy set under Vikram Pandit that he would like to change:
"I think our strategy we have today is the right one and I am really focused going forward. I think it is focused around execution. This is, as I described, a challenging environment, an environment where we have to be smart about where and how and with whom we use our resources. In that environment you have to be mindful of expenses, and we are."
On the biggest challenge to Citi right now:
"I think it's the uncertainty in the economies. We are in an environment right now where economically, politically, regulatory - lots of change. We are in an industry that is probably a stage of redefining most, if not all, of our significant relationships. What does it mean to be a shareholder of a bank today and what does it mean to be a customer client, what does it mean to be an employee? All of those things are in a state of flux."
On whether he anticipates more downsizing on top of the 11,000 job cuts already announced:
"I think will be focused on operating efficiency. What I don't want to do is be a company that comes in once a year and makes a decision around cutting jobs or changing business mix. It has to be part of us. I think going forward we will be more focused on the operating efficiency of the company."
On whether growth is important or overdone:
"Growth is critical. You not only want to be growing top line but you've got to be mindful of that top line ultimately when you get to the bottom line. The environment today, a global economy that is posting and will continue to post very mixed results. We see some recovery in the United States, Europe probably stays in recession at least through 2013. Slowing growth but still good growth in Asia, not some of the double-digit figures we were used to. You have got to be more mindful of where that's going to come from."
On why he didn't do a "kitchen sink quarter"--or taking