A shockwave felt around the financial world
The financial services industry received a shock yesterday as Citigroup’s CEO Vikram Pandit and Chief Operating Officer John Havens both resigned. The announcement came without any forewarning, leaving many puzzled not at the fact that the two left, but at the abrupt manner in which they did so, especially in the case of Pandit.
Pandit had a less than stellar track record with Citigroup as many cite him for the bank’s failure to acquire Wachovia during its tough times in 2008, resulting in it being snapped up by Wells Fargo. He was also involved in the sale of Citigroup’s remaining stake to Morgan Stanley, which was reported as a loss. Earlier this year, shareholders rejected Pandit’s $15 million pay package, and following his resignation yesterday, Citigroup immediately announced Michael Corbat as new CEO. Pandit gave no specific reason for his abrupt departure other than a letter he wrote to staff.
Not much of an explanation
“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. I could not be leaving the Company in better hands,” said Pandit. “Mike is the right person to tackle the difficult challenges ahead, with a 29-year record of achievement and leadership at this Company. I will truly miss the wonderful people throughout this organization. But I know that together with Mike they will continue to build on the progress we have made.”
The bank’s most recent earnings reports are positive, however all eyes will be on Corbat and his next steps as new CEO. He has held several senior roles while at Citigroup, including running Citi Holdings, the bank’s business unit dedicated to businesses and assets the company no longer wants to be a part of. Corbat says he plans to take his time and thoroughly assess the company’s standing before making any immediate changes, but he does feel that the company is set up for success. “I believe the fundamentals we have in place today are strong and that we are on the right path,” he said.