An "effective immediately" resignation is almost always a signal of bad blood between the person leaving and the powers that be - typically the board. That's how today's surprise departure of Chief Executive Vikram Pandit is being portrayed in several news stories. The WSJ reports that Pandit had been squabbling with board members over the banking giant's strategy and performance. Mike Corbat, who has been CEO for Europe, the Middle East and Africa, is Citi's new chief executive. Also leaving is John P. Havens, the bank's president and a longtime ally of Pandit, Other departures are possible.
Friction between Mr. Pandit and certain board members "has been bubbling for some time,'' one person familiar with Citi said. "There were always differences.'' They clashed over strategic priorities, resource allocation, selection of directors, regulatory cooperation and executives' pay packages, this person said.
One person within Citigroup familiar with the events said an article in The Wall Street Journal in early August naming Mr. Corbat as a lead contender to be Mr. Pandit's potential successor was a sign preparations for a handover had begun. He added that the board, led by [Chairman Michael E. O'Neill], may have been seeking to stimulate the share price with a new appointment. Mr. O'Neill, a former marine, has been meeting with major Citigroup shareholders this year.
From the NYT:
The board's chairman, Michael E. O'Neill, had been increasingly critical of Mr. Pandit's management, according to several people close to the bank. Mr. Pandit was seen by some board members as not being able to quickly and effectively execute strategy, lurching from crisis to crisis, these people said. There were concerns he lacked the breadth of vision needed to turn the bank around. "He was considered more technically skilled," one Citi executive said.