Just a question of which hedge fund he’ll be riding– his own or his former Old Lane colleague’s. Read more »
Long-time Citi critic Mike Mayo is jumping on the Citi bandwagon. The CLSA analyst upgraded Citi to outperform from underperform this morning saying the ousting of Vikram Pandit “seems to reflect a more proactive board and can improve poor governance.” Pandit resigned abruptly and has now been replaced by Michael Corbat. “We are taking Citigroup stock for a test drive,” Mayo says. Mayo says he expects a new three-year plan from Citigroup by March and places his bet that Chairman Michael O’Neill would have a role in shaping that plan and restructuring the bank based on his prior successes. [Deal Journal, related]
Depending on who you believe, at some point on Monday night, Vikram Pandit either decided to voluntarily leave his post at Citigroup or was pushed out by the board. Those going with Scenario B say Pandit was “ousted…after it was concluded his mismanagement had caused setbacks with regulators and cost credibility with investors,” and that the board wanted a chief executive officer who would “place a special emphasis on sharpening the company’s focus on achieving sustained, strong operating performance.” While some have suggested that Vikram did the best job anyone in his position could and that this fantasy that one day, with the right guy in charge, Citi could be competing with Goldman for most prestigious financial institution is laughable at best, others maintain the Big C’s best days are ahead of it.
One way the firm will supposedly get there is by cutting the many layers of fat it has accumulated over the years. Considering Citi is at the point that it has to be airlifted out of the house to get to work every morning and do basic errands around town, getting in shape will be no easy task. But if there’s one guy who can do it, it’s new CEO Mike Corbat, according his personal trainer. Read more »
Earlier today, we wondered if, in light of the news that Vikram Pandit had resigned as CEO of Citigroup, analyst Meredith Whitney’s opinion of the bank had changed. Choice comments that Whitney has made about the Big C in the past have included: “Citigroup is in such a mess Stephen Hawking couldn’t turn this company around“; “Citi is like an old broken-down Victorian house“; and Citi “has no earnings power, isn’t going to grow, hasn’t been investable in four years.” She also once told Maria Bartiromo that the only way she’d change her mind about company would be if she received “a new brain.” Still, sometimes analysts change their tune when new blood is brought in and, like former FDIC chair Sheila Bair, perhaps some of her beef with the bank had been a personal dislike of Uncle V. Now that he’s gone, is she seeing Citigroup in a new light? Read more »
Point: “This was decided yesterday afternoon. I made the decision. I talked to [Citigroup Chairman] Mr. O’Neill. I don’t believe in having lame-duck sessions, in having the outgoing CEO looking over the shoulder of the incoming CEO.” Counterpoint: “Citigroup directors ousted Chief Executive Officer Vikram Pandit after concluding that he had mismanaged operations, leading to setbacks with regulators and a loss of credibility with investors, a person with knowledge of the discussions said.”
As you may have heard, earlier today, Citigroup announced that CEO Vikram Pandit would be resigning from his post at the bank, effective immediately, along with several longtime lieutenants. While the news came as a shock to Wall Street, it was assumed that on the inside, employees had been given some advanced warning and time to get used to the idea of life without Uncle Vik. That they weren’t just realizing now those hugs on the elevator Monday had been their last. That he’d stashed something away for them to remember him by. (A one dollar bill with this face on it. A glossy 8X10 photo to keep on their desks. SOMETHING.) That he hadn’t just left in the middle of the night. Unfortunately for those who’ve grown quite attached to Vickles since he took the reigns in 2007, however, that’s exactly what happened.
The news of Mr. Pandit’s departure after five years atop the company came as a shock to Citigroup employees, including senior executives. In the firm’s London office, some executives emerged from a meeting and read the news on their computers and Bloomberg terminals, well before the bank’s internal memo was released. Soon a dozen employees were crowded in front of television monitors, following the story on financial business shows. Others were seen around a water cooler on the trading floor, discussing the news. Still others retreated to their desks to parse Citigroup’s recent earnings release, looking for hints of internal conflict. “There’s shock,” said a Citigroup executive based in New York. “Even senior people were surprised.”
And although early reports suggested that Count Vikula had simply decided that Citigroup had come so far since he’d taken the gig five years ago that his work was done, and that while it was time to move onto the next stage of his life, he’d cherish the memories and the people he met at Citi, it now sounds like the split was a bit more acrimonious than that. Read more »