Citigroup CEO Vikram Pandit abruptly resigned on Tuesday, taking Wall Street by surprise. "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," said Pandit, who will be replaced by Michael Corbat, the head of Citigroup's European division. Citigroup President and Chief Operating Officer John Havens also stepped down, shaking up the leadership team that steered Citigroup through the financial crisis with the help of a $45 billion government bailout. Here, four takeaways from Pandit's sudden resignation:
1. Wall Street is shocked
Only two months ago, Suzanne Kapner at The Wall Street Journal reported that Pandit intended "to stay for several years, until the banking giant is on stronger footing and he has more fully put his stamp on the company." No one outside the company knows what happened in the intervening period that made Pandit change his mind. "Bottom line is this is odd," says Joe Wiesenthal at Business Insider.
2. And investors don't know what happens next
Pandit is leaving just a day after Citigroup reported a better-than-expected third-quarter profit of $468 million, an indication that Citigroup may finally be emerging from a years-long hangover. But now, Pandit "is leaving considerable uncertainty behind," says Matthias Rieker at the Journal. Since taking charge in late 2007, Pandit has returned Citigroup to profitability by selling off some of the bloated company's units, and positioning Citigroup as a leading bank in emerging markets. Will Citigroup continue down that path? Or does Pandit's resignation indicate that something has changed?
3. Pandit may have left over a pay dispute
Pandit famously took a $1 annual salary in the midst of the crisis, pledging to return the company to profitability before earning more. However, in a humiliating rebuke, shareholders in April rejected a $15 million pay package for Pandit that had been approved by the board. Since 2007, Pandit has earned $261 million, including $165 million for selling his old hedge fund, Old Lane Partners, to Citigroup. Old Lane Partners ended up forcing Citigroup to post a $202 million writedown.
4. He leaves behind a mixed legacy
Pandit has been praised for streamlining the bank, turning profits, and returning the government's aid money. However, the hard fact of the matter is that Citigroup's stock is down 88 percent from when he took over in 2007. "Not so good!" says Matthew Yglesias at Slate. "I dare say that presiding over the destruction of 88 percent of the value of an enterprise is a job many of us could probably pull off," and "yet Pandit managed to earn tens of millions of dollars for his trouble."