Citigroup CEO Abruptly Steps Down
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This is ALL THINGS CONSIDERED from NPR News. I'm Robert Siegel.
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And I'm Melissa Block. In a move that surprised many people on Wall Street, Citigroup CEO Vikram Pandit said today he's stepping down. He'll be replaced by Michael Corbat, who's been with the bank for nearly 30 years. Pandit gave no reason for the abrupt decision, saying it was simply time to move on. But there have been reports he clashed with the board over the bank's direction. NPR's Jim Zarroli has the story.
JIM ZARROLI, BYLINE: The announcement came one day after Citigroup announced its third quarter earnings. They were stronger than expected and revenue was finally on the upswing, so hardly anyone was expecting that Pandit to step down, said bank analyst Nancy Bush, a contributing editor at SNL Financial.
NANCY BUSH: It was not that Vikram left. It was the timing because the earnings, for the first time in a number of quarters, seemed to be stabilized. They seemed to be moving more or less in the correct direction, so I think that's the thing that shocked everybody.
ZARROLI: The 55-year-old Pandit was born in India. He was a hedge fund operator before he became CEO of Citigroup in December 2007 on the eve of the financial crisis. He replaced Charles Prince. Pandit presided over Citigroup during one of its rockiest periods in a long time. Over the years, he tried hard to shrink the company, getting rid of some of its more troubled assets and eliminating thousands of jobs. He spoke at Stanford earlier this year.
VIKRAM PANDIT: As I came in, you know, I had to start looking at everything. So are we in the right businesses? Why are we doing what we're doing and what should we be? And it became very clear that we needed to return to the basics of banking.
ZARROLI: But the changes didn't come fast enough, and Pandit had his detractors. Former FDIC head Sheila Bair had tough words for Pandit in her recent memoir. She said the company had been hijacked by an investment culture that made profits through high stakes betting on the direction of the market as opposed to prudent lending. There was a shareholder revolt over executive pay and a clash with the Fed over a plan to buy back stock. Although the company's share of price had risen lately, it still underperformed the big banks. Nancy Bush says all of these factors may have persuaded the board that it was time to let Pandit go.
BUSH: He was an accidental CEO who was not a bank operator. I mean, he was a strategic guy. I think he was able to look at the company and strategize about what needed to be done. But in the end, he was not an operator and not a banker.
ZARROLI: The man who is replacing Pandit, Michael Corbat, was formerly the CEO of the bank's Europe, Middle East and Africa division. An article in The Wall Street Journal this summer speculated that he was being groomed to replace Pandit, now that's happened a lot sooner than anyone expected. Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.