Citigroup CEO resigns in unexpected move
Source: Agencies |
October 17, 2012, Wednesday
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Print Edition
Print Edition
VIKRAM Pandit abruptly stepped down as CEO of Citigroup yesterday, surprising Wall Street, after steering the bank through the 2008 financial crisis and the choppy years that followed.
Pandit's replacement, effective immediately, is Michael Corbat, the current CEO of Citigroup's Europe, Middle East and Africa division, the bank said. Corbat has worked at Citi and its predecessors since he graduated from Harvard in 1983, it said.
Pandit will also relinquish his seat on Citi's board of directors. And a second top executive also resigned as part of the shake-up: President and Chief Operating Officer John Havens, who also served as CEO of Citi's Institutional Client Group.
The news shocked Wall Street, a day after the bank reported strong third-quarter earnings. Pandit is credited with slimming the bank by selling businesses, removing it from government ownership after a bailout in 2008 and righting its balance sheet after billions in losses on bad mortgage investments made before he took the helm.
Today, Citi is America's third-largest bank, with US$1.9 trillion in assets, according to the Federal Reserve. It trails only JPMorgan Chase, with US$2.3 trillion, and Bank of America, with US$2.1 trillion.
But Pandit's massive pay packages have raised the ire of investors. Some in government believed the bank was too slow to address its problems as they emerged in the months before the crisis caught fire in September 2008.
Citigroup offered no explanation for the sudden departure of its two top executives. On Monday, the bank announced earnings that beat analysts' expectations, after stripping out one-time items like a big write-down it had to take because it got less money than it had hoped when it negotiated to sell its stake in its retail brokerage.
"He's done pretty much all he can do to turn the bank around," said Daniel Alpert, managing partner at the New York investment bank Westwood Capital Partners LLC.
In April, Citigroup shareholders rejected the bank's proposed pay deals for executives, including Pandit. It was the first time shareholders dinged a Wall Street bank under a provision of the 2010 financial overhaul law.
Pandit's replacement, effective immediately, is Michael Corbat, the current CEO of Citigroup's Europe, Middle East and Africa division, the bank said. Corbat has worked at Citi and its predecessors since he graduated from Harvard in 1983, it said.
Pandit will also relinquish his seat on Citi's board of directors. And a second top executive also resigned as part of the shake-up: President and Chief Operating Officer John Havens, who also served as CEO of Citi's Institutional Client Group.
The news shocked Wall Street, a day after the bank reported strong third-quarter earnings. Pandit is credited with slimming the bank by selling businesses, removing it from government ownership after a bailout in 2008 and righting its balance sheet after billions in losses on bad mortgage investments made before he took the helm.
Today, Citi is America's third-largest bank, with US$1.9 trillion in assets, according to the Federal Reserve. It trails only JPMorgan Chase, with US$2.3 trillion, and Bank of America, with US$2.1 trillion.
But Pandit's massive pay packages have raised the ire of investors. Some in government believed the bank was too slow to address its problems as they emerged in the months before the crisis caught fire in September 2008.
Citigroup offered no explanation for the sudden departure of its two top executives. On Monday, the bank announced earnings that beat analysts' expectations, after stripping out one-time items like a big write-down it had to take because it got less money than it had hoped when it negotiated to sell its stake in its retail brokerage.
"He's done pretty much all he can do to turn the bank around," said Daniel Alpert, managing partner at the New York investment bank Westwood Capital Partners LLC.
In April, Citigroup shareholders rejected the bank's proposed pay deals for executives, including Pandit. It was the first time shareholders dinged a Wall Street bank under a provision of the 2010 financial overhaul law.
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