A mystery wrapped in an enigma…

April 11, 2007

images-12.jpegEarlier today, the Financial Times reported that former Citigroup (C) executive Todd S. Thomson had settled with the company. Thomson, as most remember, was essentially canned as chairman and CEO of Smith Barney in mid-January over various rumors involving him and CNBC star Maria Bartiromo. Today’s FT story notes that “following weeks of tough negotiations” both sides aren’t talking about the deal.

Which brings up an interesting question. Can Citigroup really get away with not disclosing this in an SEC filing? The last time Thomson’s name was even mentioned was in the proxy filed back on March 13, though it was only in passing. Given the circumstances and the fact that Thomson claims that he was fired without cause, not to mention the publicity, it would seem that the payment would have to be big enough to warrant disclosure.

Oddly enough, Thomson wasn’t even listed in the summary comp chart — ever — despite his lofty title, not to mention the fact that he was routinely portrayed in the press as one of two heir apparents for the top job. Even stranger is that Sallie Krawcheck, the other heir apparent, did routinely make the cut in the summary comp charts, including back in the 2004 proxy, when she held the same job that Thomson had when he was shown the door in January.

A bit more digging through filings reveals that Chairman Charlie Prince and former Treasury Secretary Bob Rubin seem to be the only top executives with employment contracts. And since severance terms are normally part of employment agreements, the fact that Thomson didn’t have one leaves plenty of room for negotiation. One precedent could be the separation agreement filed on Aug. 28, 2005 with former COO Bob Willumstad, who at the time, was reportedly pushed out to make room for Thomson.

Clearly, there’s more than enough intrigue to fuel lots of speculation here. If the settlement with Thomson wasn’t a big deal, why not disclose it like they did with Willumstad? Granted, Citibank still has some time to file the 8-K. Or they can try to claim that the deal wasn’t material and never disclose (my bet’s on the latter). But something seems more than a bit odd about this whole mess.

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