Top level shakedown at Citigroup leaves air of uncertainty
Famously known as the $1 CEO, Vikram Pandit has left Citigroup with immediate effect, along with president and COO John Havens. Will more follow? October 17, 2012 | Timothy ShimAfter months of tension with Citigroup’s board of directors, chief executive officer Vikram Pandit has tendered his immediate resignation and will be replaced by Michael Corbat, who although a long-time veteran of Citigroup, is relatively unknown to Wall Street. Pandit, who led Citigroup through the past five difficult years, was supposedly pressured by the board of directors who claimed mismanagement of operations, which led to issues with regulators and resulted in a loss of faith amongst investors. Among various factors cited included the $2.9 billion write-off on the Smith Barney brokerage, as well as ratings cuts by Moody’s. Pandit became CEO of Citigroup in 2007, and guided the group through some of its most difficult patches in a 200-year history. Close to collapse during the financial crisis, it was bailed out by the US government, and under Pandit’s leadership, has even turned profitable over the past few years, with the US government cashing out of its bailout to the tune of a $12 billion profit for taxpayers. His departure does however follow sharply on the heels of an 88% drop in quarterly profit for the group. Citigroup has also come under criticism from US regulators, and was one of the banks that have failed the latest round of stress tests. Investor’s loss of confidence in Pandit showed as well, with a vote to reject a proposed $15 million pay package for the former CEO earlier this year. Sheila Bair, former chairwoman of the Federal Deposit Insurance Corporation was vocal in her criticism of Pandit, saying that Citigroup needed a CEO with international experience and a traditional banking background, both of which Corbat has. “The board is doing the right thing here,” said Bair. Even as Pandit’s resignation sends ripples through Wall Street, other factors have also raised question marks about Citigroup’s actual intentions. Citigroup president and chief operating officer, John Havens, has also resigned. ... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Capital & Strategic Issues, Leadership, Risk and Regulation, Saudi ArabiaCapital & Strategic Issues,Leadership,Risk and Regulation,Saudi Arabia, Capital & Strategic Issues,Leadership,Risk and Regulation,Saudi Arabia, Keywords:Vikram Pandit, Citigroup, Michael Corbat, Smith Barney, Sheila Bair, John Havens, Brian Leach Vikram Pandit, Citigroup, Michael Corbat, Smith Barney, Sheila Bair, John Havens, Brian Leach
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