Updated:

Jan 14, 2019

Original:

Apr 21, 2009

Vikram Pandit To Get The Heave-Ho?

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We don't want to type it, let alone think it, but it's possible Vikula won't be around long enough to enjoy his new $10 million office (though, really, now that it's been stripped of a Zen Garden, is it really worth sticking around for? Probably not). The Financial Timesreports that senior officials at the FDIC have been talking Pandito replacements, in the event the bank needs more cash-money. Apparently successors include new CFO Ned Kelly, old CFO Gary Crittenden, and an unnamed new board member.

"It is unthinkable that Vikram could stay on if Citi requires more federal funds," said a person familiar with the matter. "It is prudent to be thinking about different scenarios."
The FDIC is only one of the regulators that has a say on whether Mr Pandit steps down if the government bails out Citi for the fourth time in six months following completion of a "stress test" of its health.
Any decision on Citi's leadership will be led by the Treasury, which is about to take a 36 per cent stake in the company and will sanction further capital injections.
The Federal Reserve and the Office of the Comptroller of the Currency, which regulate national banks, will also have to bless top management changes.

If you didn't know Chief Executive Officer Vikram Pandit, you might think he enjoyed not being compensated for the work he does at Citigroup because for quite some time, he wasn't. And although the "I will only get paid $1/year until Citi turns a profit" exercise was fun for a while, he was pretty happy when the old jalopy started making money again, in part because it meant he could receive a paycheck. Then last April, his shareholders rejected the bank's executive pay plan, claiming the Big C "lets Chief Executive Officer Vikram Pandit collect millions of dollars in rewards too easily." And while it's possible that Citi shareholders are just a bunch of pricks who chose to overlook the fact that Uncle Vikula didn't collect squat for several years and once had an entire article written about the fact that lieutenants attributed a "new bounce in his step" to him daydreaming "the day when he is going to earn more than a $1 a year,” maybe they just assume that he doesn't care about getting paid either way? Anyway, here's Vickles, reminding anyone who forgot about the sacrifices he made and setting the record straight: “The board has this process with them, they’re going through it, and they are committed, as I am, to making sure that they resolve this,” Pandit said. “I want to get paid what the board thinks is right for me, for the job that I’ve done and for the incentives that they think I ought to have.” Pandit told lawmakers in 2009 that he would take a $1 annual salary until he restored the bank to profitability. Citigroup made a $21.7 billion profit for 2011 and 2010 combined, compared with a $29.3 billion loss for the two preceding years. “When the company was losing money, I stepped up and said I’ll take a dollar a year and I did, exactly for that reason, exactly the right thing to do,” Pandit said. For those having trouble separating the nice guy/don't want to offend anyone statement from what he's actually trying to say, a rough translation of the above would be: get me paid, bitch! Citigroup Will Resolve CEO Pay By End Of Year, Pandit Says [Bloomberg]

Just a question of which hedge fund he'll be riding-- his own or his former Old Lane colleague's. The buzz on Wall Street is that ousted Citigroup CEO Vikram Pandit will return to the hedge-fund world. UK hedge fund Portman Square Capital declined to comment on chatter that its founder, Sutesh Sharma, is eager to nab Pandit for his new firm. Sharma, a former money manager at Pandit’s now defunct Old Lane hedge fund, launched Portman this year with $500 million...Pandit is viewed by the hedge fund community as a rainmaker due to his ties to deep-pocketed investors. “I wouldn’t be surprised if he felt the timing was right to join an existing fund . . . or start his own fund,” said Robert Olman of hedge-fund search firm Alpha Search Advisory Partners. Thinking ahead, how much do we predict Citi will pay to acquire Portman Square (or Pandit Partners) in order to lure Big Vik back, which is kind their thing? Last time around it was $800 million so they'll probably have to offer at least $2bn. Pandit Packing For London Hedges [NYP via FINalternatives]

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