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.
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