Citigroup fired the incompetent the 55-year-old Nagpur (India) born CEO Vikram Pandit after months of simmering tensions with the board and with Chairman Michael O’Neill. The COO Chief Operating Officer John Havens was also fired. Citigroup faced various challenges because of the dictatorial attitude of Pandit.
- Old Lane Partners LP was bought for $800 million but due to incompetence of Pandit Citigroup had to shut down Old Lane the next summer.
- He was not beloved by Wall Street.
- In March, the Federal Reserve rejected the bank’s plans to return capital to shareholders.
- Pandit had told analysts and investors the bank had enough capital to return some to shareholders.
- 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.
Pandit’s was fired for selling the remaining stake of its retail brokerage business to Morgan Stanley at a loss. A new CEO Corbat places O’Neill in control of the bank.Shareholders were ecstatic. The shares rose as much as 2 percent as some investors said they were not sorry to see Pandit leave.
Sheila Bai said “Citi management’s performance during the crisis had not been impressive. They had a very difficult time making decisions and then executing once the decisions were made.”