The bank’s board immediately announced that Michael Corbat, previously chief executive for Europe, Middle East and Africa, would step up into the CEO spot vacated by Pandit.
Though the bank’s most recent earnings report, announced yesterday, was positive, Pandit was a bit of a lightning rod earlier this year when the bank’s shareholders rejected the CEO’s $15 million pay package.
In a letter to staff, Pandit wrote:
“Thanks to the dedication and sacrifice of people across Citigroup, we have emerged from the financial crisis as a strong institution. Citigroup is well-positioned for continued profitability and growth, having refocused the franchise on the basics of banking. Given the progress we have made in the last few years, I have concluded that now is the right time for someone else to take the helm at Citigroup. I could not be leaving the Company in better hands. Mike is the right person to tackle the difficult challenges ahead, with a 29-year record of achievement and leadership at this Company. I will truly miss the wonderful people throughout this organization. But I know that together with Mike they will continue to build on the progress we have made.”
Pandit joined Citi in 2007 when his hedge fund, Old Lane Partners, was acquired by the bank. Citi then closed Old Lane Down only a year later.
“It’s not a shock that (Pandit) is no longer there, but the surprise is this is all happening very quickly. Why is he leaving immediately?” Mike Holland, chairman of New York-based Holland & Co, tells Reuters.
New CEO Corbat wrote to staff about the changes:
Over the last five years, Vikram has led Citi back to its roots as a bank, building on our legacy of serving clients and helping them on their journey from ambition to achievement. I believe the fundamentals we have in place today are strong and that we are on the right path. However, the environment is a challenging and dynamic one. Regulatory, legislative and economic changes around the world present headwinds as we redefine our relationships with all of our stakeholders. To thrive, we must be vigilant about how we allocate our resources to ensure we are serving our clients and offering the products with the highest potential in the most productive markets. At the same time, we must deliver sustained profitability, improved operating efficiency and shareholder returns while ensuring that vigorous risk management and mitigation are always the cornerstone of how Citi operates.
As a first step, I’m going to take the next several weeks to immerse myself in the businesses and review reporting structures. These assessments will result in some changes, and I will make sure to communicate these changes with you as decisions are made so that you are informed and updated.
Make no mistake that our passion and collective strength are integral to taking full advantage of our unique global position and seizing the many opportunities the Board and I see for our Company. I know that you are working hard to serve our clients, and I thank you for your commitment and loyalty to Citi. During this leadership transition, we must not become distracted from continuing to serve our clients and delivering the strongest possible finish for the year.