Vikram Pandit, the CEO of Citigroup, who presided over some of the worst years in the history of the bank, abruptly stepped down today. He will be replaced by longtime Citi executive Michael Corbat. Here’s Pandit’s statement:
Thanks to the dedication and sacrifice of people across Citigroup, we have emerged from the financial crisis as a strong institution. Citigroup is well-positioned for continued profitability and growth, having refocused the franchise on the basics of banking. Given the progress we have made in the last few years, I have concluded that now is the right time for someone else to take the helm at Citigroup. I could not be leaving the Company in better hands. Mike is the right person to tackle the difficult challenges ahead, with a 29-year record of achievement and leadership at this Company. I will truly miss the wonderful people throughout this organization. But I know that together with Mike they will continue to build on the progress we have made.
I would amend that to read “Thanks to the largesse of the American people, who through the Federal Reserve and Treasury poured cash into our company like it was a bottomless chili bowl, we have emerged from the financial crisis as a strong institution.” Sheila Bair talks in her book about how the extraordinary financial measures taken during the crisis appeared to be designed almost entirely for the benefit of Citigroup. The powerful alumni of the company included former CEO Robert Rubin, whose proteges litter the Obama Administration.
Pandit did well by the executives to call in all those favors. The shareholders, not so much. Citi stock is 88% below the peak from when Pandit first came into the CEO chair. The stock is up 1.77% on the news of Pandit’s resignation. I think they understand how the past few years have gone.
Corbat ran European and Middle East operations for Citi. The company also needs a new President, as John Havens has resigned.
Shareholders rejected Pandit’s $15 million compensation package in a non-binding vote earlier this year. Maybe Pandit got the message that he wasn’t entirely well-liked.
But he probably won’t head right from the boardroom to the bread line, I suspect.
Photo by World Economic Forum under Creative Commons license