- Title: FILE: Citigroup CEO Vikram Pandit resigns
- Date: 16th October 2012
- Summary: WASHINGTON, D.C., UNITED STATES (FILE) (REUTERS) VARIOUS OF FORMER CITIGROUP CEO VIKRAM PANDIT WALKING WITH REPORTERS IN HALL PANDIT ANSWERING A REPORTER'S QUESTION PANDIT WALKING AWAY
- Embargoed: 31st October 2012 12:00
- Location: Usa
- Country: USA
- Topics: Economy
- Reuters ID: LVA8O0ZIERIG8PYEDDPM6Q68ADOI
- Story Text: Vikram Pandit resigns abruptly as CEO of banking giant Citigroup.
Citigroup Inc Chief Executive Vikram Pandit resigned abruptly on Tuesday (October 16), effective immediately, a shock change at the top of the No. 3 U.S. bank just one day after a surprisingly strong quarterly earnings report.
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 percent in morning trading as some investors said they were not sorry to see the one-time hedge fund executive leave.
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. He was awarded more than $15 million (USD) in 2011 compensation, but 55 percent of shareholders voted against it at an April meeting.
Pandit's resignation comes after a series of high-profile defeats this year. In March the Federal Reserve rejected the bank's capital plans after a stress test; Pandit had led analysts and investors to believe the dividend-raising plans would be approved.
Last month, Pandit agreed to a low sale price for his bank's stake in the brokerage operated by Morgan Stanley. Citigroup had to take a $4.7 billion charge in the third quarter to write down the value of that stake.
Yet the bank's stock rose sharply on Monday (October 15) after Citigroup reported third-quarter results, even with the writedown, that were much better than analysts expected. The stock gained another 45 cents to $37.11 in morning trading.
Pandit's successor, Corbat, has held a number of senior roles at Citigroup, including running Citi Holdings, the unit established to house businesses and assets the company wants to shed.
- Copyright Holder: FILE REUTERS (CAN SELL)
- Copyright Notice: (c) Copyright Thomson Reuters 2012. Open For Restrictions - http://about.reuters.com/fulllegal.asp
- Usage Terms/Restrictions: None