Shock as Citigroup chief quits

Citigroup chief executive Vikram Pandit resigned abruptly yesterday, a shock change at the top of the number three US bank just one day after a surprisingly strong quarterly earnings report.
By The Newsroom
Published 17th Oct 2012, 07:00 BST

Analysts and investors quickly raised red flags about the timing, saying it did not appear to be a natural transition and rather suggested some sort of dispute at the bank.

But Citigroup shares rose 1.5 per cent in early trading as some investors said they were not sorry to see the one-time hedge fund executive leave.

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A statement from chairman Michael O’Neill said Michael Corbat, previously chief executive for Europe, Middle East and Africa, would succeed Pandit as CEO and as a board member.

Within minutes of the bank’s announcement, Pandit’s name was gone from Citigroup’s website.

Chief operating officer John Havens, a long-time associate of Pandit, also resigned. The fact that both Pandit and Havens left was another red flag that observers suggested pointed to some sort of difference of opinion with the Citigroup board.

The board’s relationship with Pandit was already under pressure after shareholders rejected the CEO’s pay package in an advisory vote.

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He was awarded more than $15m in 2011 compensation, but 55 per cent of shareholders voted against it at an April meeting.

“It’s not a shock that (Pandit) is no longer there, but the surprise is this is all happening very quickly. Why is he leaving immediately?” asked Mike Holland, chairman of New York-based Holland & Co.