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In a flash, Vikram Pandit is out and Michael Corbat is in. Citibank’s (NYSE:C) sudden CEO swap caught pretty much everyone by surprise, and all eyes have turned to the new boss, whose leadership style could mark a new era for the bank.
Tensions between Pandit and Michael O’Neill, chairman of the Citigroup board, had apparently been rising for a while. Reuters reports that people briefed on the situation say a final spat between the two men — over Pandit’s detachment from day-to-day operations — spurred his departure. Pandit’s colleague and Citigroup chief operating officer John Havens followed him out the door.
Pandit and O’Neill didn’t disagree on strategy, but on how well that strategy was being executed. One particular instance was the failure to win regulatory approval to buy back shares in March, which would have increased dividends. Corbat, on the other hand, developed strong relationships with regulators while overseeing the Citi Holdings portfolio of troubled assets.
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“There’s no question that Vikram laid the foundation to support Citi’s long-term growth,” said Corbat. But it’s unlikely that Corbat will follow in his footsteps. Looking to fill the vacant COO position, the new CEO looks more likely to promote from within. Pandit had filled several top positions with people who he had worked with at his hedge fund Old Lane or at Morgan Stanley (NYSE:MS), such as Havens.
Reuters reports that sources familiar with the matter suggest that Jim Cowles, currently chief operating officer of Citi’s EMEA unit, and Francesco Vanni d’Archirafi, head of Global Transaction Services, are possible candidates for Havens’s old position.
Citigroup’s executive exchanges come in the wake of shake-ups at other banks like JPMorgan (NYSE:JPM). Post-crisis scrutiny has triggered wide-spread restructuring at many banks as they look to stabilize divisions that had grown too dependent on individuals.
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