The third-largest bank in the US – Citigroup Inc – received a shock as their CEO Vikram Pandit quit his post on October 16, 2012. There has been some tension between Pandit and the group for the past few months; however Pandit’s decision to quit came as a surprise to employees and investors alike. Michael Corbat has been named as the bank’s new CEO by its board of directors.
According to some sources, there have been months of tension between Pandit and Citigroup’s Chairman Michael O’Neill over a variety of issues, this tension may have led to Pandit stepping down. O’Neill and Pandit were at loggerheads in regards to the role of the COO and compensation, among other things.
It has not been an easy ride for Vikram, as he has been involved in some questionable choices, including selling stake of its retail brokerage at a loss to Morgan Stanley. He was also against breaking-up the bank, a notion that did not sit well with some money managers, as they suggested that shareholder value could increase as a result.
Earlier shareholders had rejected the CEO’s pay package in April in an advisory vote. In 2011, the CEO was awarded more than $15 million in compensation however, 55 percent of shareholders had voted against it. As of now, it appears that some shareholders are not disappointed to watch Pandit leave, as Citigroup’s shares ended regular trading up 1.6 percent at $37.25 on Tuesday.