People Of WFIT
Tue October 16, 2012
Citigroup CEO's Exit Leaves Wall Street Scratching Its Head
Today's announcement that Vikram Pandit had abruptly resigned as chief executive of banking giant Citigroup has left competitors, analysts and media pundits stunned and sputtering.
"This comes as a huge surprise," William George, a Goldman Sachs board member, said in an interview on CNBC.
Fox Business reporter Charles Gasparino tweeted that he believes it was "obvious Vikram Pandit was fired."
Speculation is centering on a clash Pandit may have had with the board of directors over strategy and/or execution.
Pandit himself told Bloomberg that the decision to quit was his own.
In a memo to the staff, the new CEO, Michael Corbat, said he's going to study up over the "the next several weeks" to understand Citigroup's business and then "these assessments will result in some changes."
Citi employees are widely believed to have responded en masse by saying: "Yikes!"
George, in the CNBC interview, said that the making such a sudden change in leadership simply is not done at big, important banks.
"This is not the way boards do things," he said. Usually, a top management change is announced months before it takes effect, giving investors, customers and employees time to absorb and assess the news, he said.
The announcement came one day after the company reported third-quarter earnings that, aside from some one-time items, were seen as very positive. High-speed stock traders jumped in as soon as markets opened today, sending the stock price a bit higher on heavy volume.
Pandit, an Indian-born American, had been the CEO of Citigroup since December, 2007 — a tough time to start. That was the month that the Great Recession officially began.
From the start of his tenure, the stock price was down 89 percent.