Case | HBS Case Collection | August 2011 (Revised July 2012)

Mike Mayo Takes on Citigroup (A)

by Suraj Srinivasan and Amy Kaser

Abstract

The case details the conflict between Mike Mayo, an influential banking analyst and Citigroup about what Mayo considers aggressive accounting policies. Mike Mayo questions Citigroup's lack of a valuation allowance against their Deferred Tax Assets despite Citi's recent loss. The case discusses the economics and accounting for deferred tax assets. It also focuses on management-analyst relations and challenges faced by analysts in providing bad news on companies. The inclusion of deferred tax assets in Tier 1 capital and implications for regulatory capital are also discussed.

Keywords: Accounting; Taxation; Capital; Financial Reporting; Corporate Disclosure; Valuation; Banks and Banking; Financial Strategy; Money; Conflict Management; Capital Budgeting; Asset Management; Banking Industry;

Citation:

Srinivasan, Suraj, and Amy Kaser. "Mike Mayo Takes on Citigroup (A)." Harvard Business School Case 112-025, August 2011. (Revised July 2012.)