The news at a glance
Citigroup’s Pandit steps down; Japan’s Softbank snaps up Sprint; Government mulls antitrust case; Walmart tests same-day delivery; Leaders spar over path to recovery
Banking: Citigroup’s Pandit steps down Citigroup CEO Vikram Pandit surprised Wall Street by abruptly resigning this week, said Michael J. de la Merced in The New York Times. The news came a day after the bank announced better-than-expected quarterly earnings, but Pandit’s five-year tenure had been difficult, with a series of government rescues during the financial crisis and a long and fitful slog back to profitability. Pandit had won some plaudits for slimming the bank’s operations and backing tougher regulations, but shareholders remained dissatisfied. Earlier this year they rejected his $15 million pay package, noting that the company’s stock price had fallen 89 percent since he took over.
“Simmering tensions” with Citigroup’s board of directors over strategy likely hastened Pandit’s exit, said Matthew Goldstein in Reuters.com. The board reportedly faulted Pandit for a number of recent setbacks, including the Federal Reserve’s rejection of the bank’s dividend increase after a failed stress test this spring. The arrival of Chairman Michael O’Neill in April and the addition of several new board members further “upended the status quo.” Pandit was immediately replaced by Michael Corbat, 52, who is said to be close to O’Neill. Corbat has worked at Citigroup his entire career, and hinted that he may shake up the bank’s operations in the near future.
Mobile: Japan’s Softbank snaps up SprintThe $20.1 billion deal Japan’s Softbank signed this week for a 70 percent stake in mobile carrier Sprint Nextel could be good news for U.S. consumers, said Cecilia Kang and Chico Harlan in The Washington Post. The investment, by one of Japan’s biggest wireless companies, will give No. 3 U.S. carrier Sprint the means to better compete with its bigger rivals, Verizon and AT&T, which could mean lower wireless prices. The deal is the largest foreign acquisition ever by a Japanese firm, and gives Softbank a lucrative foothold in the growing U.S. mobile market.
Google: Government mulls antitrust caseThe Federal Trade Commission could soon sue Google, said Diane Bartz in Reuters.com. Four of the FTC’s five commissioners reportedly favor bringing an antitrust case against the search giant for using “its dominance of the search market to hurt its rivals.” Websites like Yelp have complained that Google’s search results steer users away from rivals by giving them lower search rankings. If the FTC moves forward, it would be the biggest antitrust case against a technology company since the landmark case against Microsoft in the late 1990s.
Retail: Walmart tests same-day deliveryWalmart is launching same-day delivery in some markets in a bid to challenge Amazon, said Tiffany Hsu in the Los Angeles Times. The program will be available first in Northern Virginia, Philadelphia, and Minneapolis, and later in San Francisco and San Jose, and will cost $10 for each delivery, with no minimum purchase requirement. Brick-and-mortar retailers like Walmart are unveiling “a slew of shopping options and perks” in order to keep customers from jumping to online rival Amazon, which is already offering same-day delivery in 10 U.S. cities.
Economy: Leaders spar over path to recoveryAmid new signs that the global economy is “perilously close to recession,” bickering intensified last week among the world’s top finance officials, said Sudeep Reddy in The Wall Street Journal, “raising fresh doubts about their ability” to boost the flagging recovery. At the annual meetings of the International Monetary Fund and World Bank in Tokyo, European officials quarreled over demands for austerity, while others pointed fingers at the U.S. for failing to come to terms with its fiscal crisis. The ongoing territorial row between China and Japan also adds a “wild card to a global economy already riddled with risks.”