Pandit: Exit pressure
New York, Oct. 17: Weeks before Vikram Pandit’s surprise resignation on Tuesday as chief executive of Citigroup, the banking giant’s powerful chairman, Michael E. ’Neill, was privately huddling with other board members to plan how to replace him, according to several people briefed on the talks.
On Monday night, a regular board meeting to talk about quarterly results took an unexpected turn when simmering tensions between ’Neill and Nagpur-born Pandit came to a boil.
’Neill criticised Pandit for being too detached from the bank’s day-to-day operations, and told him to get more involved, according to sources. Instead, Pandit, who had been thinking of leaving for some time, decided to resign. ’Neill did not stop him, the sources said.
John Havens, the bank’s chief operating officer and a close confidant of Pandit’s, also followed in his boss’s footsteps out of the third-largest US bank.
In the ensuing scramble, the board pulled out its succession plan and installed Michael Corbat, head of Europe, West Asia and Africa, as CEO.
Pandit believes he is leaving the bank in good shape. In an interview, he said that the decision to resign was entirely his own, adding that it was “something that I had been thinking about for a while” and that Monday “it occurred to me to go see Mike”.
However, the frustrations of the board members had been building: Citi was publicly embarrassed when the US Federal Reserve said that it was not healthy enough to pay more back to shareholders.
Then in September, some board members felt that Citigroup had left billions on the table when it sold a stake in its wealth management unit to Morgan Stanley.
For weeks, ’Neill and other board members had been mapping out the transfer of power during meetings that occurred, in part, while Pandit was in Japan last week attending a gathering of the International Monetary Fund and the World Bank, said the people briefed on the matter, who declined to be named because the meetings were private.
Pandit, who is 55, said that he had been thinking about early retirement for a while. “It was never my ambition that this would be the last thing I do in my life,” he said. “We wouldn't have done this if we did not have a succession plan in place”.