Vikram Pandit Resigned??

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Rank: King Kong | 1,588

FrontPage of the WSJ. Article says nobody saw this coming. His resignation is effective immediately. Wtf?

Mod Note (Andy): See these related threads:

"Pandit's Legacy"

It was a boardroom coup, I went to high school with the son of the member of the board and was able to speak to him for a little while earlier today. He said that the board and Pandit had opposite views on the future of the company and neither wanted to budge. Basically Corbat had more backing and shared the views of a majority of the board on the future of Citigroup.

"Pandit Leaving was about Money"

Anyone trying to convince themselves that Vikram Pandit left because of "philosophical differences" is full of crap. Everyone knows he left because he didn't think he was being compensated highly enough.

From WSJ:

Citigroup Inc. Chief Executive Vikram Pandit abruptly stepped down following a clash with the New York company's board over strategy and operating performance at businesses including its institutional clients group, according to people with knowledge of the bank.

Mr. Pandit and his top aide, John Havens, Citigroup's president and chief operating officer, resigned Tuesday. The nation's third-largest bank by assets named Mike Corbat as Mr. Pandit's successor.

"We respect Vikram's decision," Chairman Michael E. O'Neill said. "Since his appointment at the start of the financial crisis until the present time, Vikram has restructured and recapitalized the company, strengthened our global franchise and refocused the business."

https://online.wsj.com/article/SB10000872396390443...

Some more commentary by Bloomberg TV below:

Comments (40)

Oct 16, 2012

Sounds like a boardroom coup...He's not staying on the board either. COO Havens is gone too (he's old, protest resignation?). Terrible timing, earnings were decent and he had a lot of levers he could still pull to get the stock price up.

Oct 16, 2012
monkeyc:

Sounds like a boardroom coup...He's not staying on the board either. COO Havens is gone too (he's old, protest resignation?). Terrible timing, earnings were decent and he had a lot of levers he could still pull to get the stock price up.

I was wondering if they would consider this good timing and if it was done this way on purpose. By waiting until after decent earnings were filed, I wonder if they mitigated the bad news.

Oct 16, 2012
monkeyc:

Sounds like a boardroom coup...He's not staying on the board either. COO Havens is gone too (he's old, protest resignation?). Terrible timing, earnings were decent and he had a lot of levers he could still pull to get the stock price up.

Are you high? Half of their net income was from a loan loss reserve release, nevermind the other P&L fudging going on. I mean, just look at page 3 of their earnings report. A better analyst than I would require weeks to find all the bullshit contained therein.

"My caddie's chauffeur informs me that a bank is a place where people put money that isn't properly invested."

Oct 16, 2012
mikesswimn:
monkeyc:

Sounds like a boardroom coup...He's not staying on the board either. COO Havens is gone too (he's old, protest resignation?). Terrible timing, earnings were decent and he had a lot of levers he could still pull to get the stock price up.

Are you high? Half of their net income was from a loan loss reserve release, nevermind the other P&L fudging going on. I mean, just look at page 3 of their earnings report. A better analyst than I would require weeks to find all the bullshit contained therein.

Exactly. He might have thought he was just cutting his (and C's) losses. But it seems that since everyone is so shocked, he could have done it in a more professional way. Or maybe he just doesn't give a shit anymore.

Oct 16, 2012

Forced to resign

Oct 16, 2012

Wouldn't you quit if you took a $1 per year salary, then shareholders threw a fit when you tried to get a raise? He'll be able to get more elsewhere. Corbat looks interesting: ex-Salomon.

Oct 16, 2012

It's gonna be hard to find that level of mediocrity in his replacement.

    • 1
Oct 16, 2012
Edmundo Braverman:

It's gonna be hard to find that level of mediocrity in his replacement.

Haha. Well put

Oct 16, 2012
Edmundo Braverman:

It's gonna be hard to find that level of mediocrity in his replacement.

A picture's worth a thousand words...

http://qz.com/16093/this-is-what-the-vikram-pandit...

"Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to become the means by which men deal with one another, then men become the tools of other men. Blood, whips and guns or dollars."

Oct 16, 2012
Independent Gestion:
Edmundo Braverman:

It's gonna be hard to find that level of mediocrity in his replacement.

A picture's worth a thousand words...

http://qz.com/16093/this-is-what-the-vikram-pandit...

BoAs stock chart looks exactly the same as that.

Oct 16, 2012
Independent Gestion:
Edmundo Braverman:

It's gonna be hard to find that level of mediocrity in his replacement.

A picture's worth a thousand words...

http://qz.com/16093/this-is-what-the-vikram-pandit...

I think you are confused with correlation and causation

Oct 16, 2012
Edmundo Braverman:

It's gonna be hard to find that level of mediocrity in his replacement.

who has 2 thumbs and that level of mediocrity???

this guy...

If the glove don't fit, you must acquit!

Oct 16, 2012

He must have really big balls

Oct 16, 2012

boardroom coup, or maybe he wasn't getting the compensation/respect he thought he deserved.

Money Never Sleeps? More like Money Never SUCKS amirite?!?!?!?

Oct 16, 2012
sayandarula:

boardroom coup, or maybe he wasn't getting the compensation/respect he thought he deserved.

Haha, if that's the case, how fucking much money does this piece of shit think he deserved?

http://www.rollingstone.com/politics/blogs/taibblo...

Per Bloomberg:

If no changes are made, Citigroup will have paid Pandit about $261 million in the five years since he became CEO, including his personal compensation and about $165 million for buying his Old Lane Partners LP hedge fund in 2007 in a deal that led to his becoming CEO. The bank shut Old Lane soon after Pandit took the post, causing a $202 million writedown.

Oct 16, 2012

What does everyone think of the new guy, Michael Corbat?

Oct 16, 2012

Citi never sleeps.

Oct 16, 2012

Heard its something to do with LIBOR. Interesting times for Citi. Investors who were happy to get rid of him will look idiots when the eventuality of LIBOR comes at them.

Oct 16, 2012
BoxerRebeller:

Heard its something to do with LIBOR. Interesting times for Citi. Investors who were happy to get rid of him will look idiots when the eventuality of LIBOR comes at them.

If it were Libor, then Citi's board would have announced prior wrongdoing and laid it all on Vikram. It makes no sense to fire him now, not talk about the scandal for which he has been fired, and then let the scandal break.

Oct 16, 2012

I don't think it was a forced resignation. This sudden action is not good for the Board or the stock.

Oct 16, 2012

Vikram is saying it was his decision.

Oct 16, 2012
BTbanker:

Vikram is saying it was his decision.

Considering there's no major scandal going on (a la Diamond's Libor fiasco), I would assume that's a general trend, right? Looks better than an "ousting" for both parties. Kinda.

Oct 16, 2012

Chairman and CEO to host conference call @ 4.30 PM EST

Oct 16, 2012

I wonder if it has anything to the MorganStanley Smith Barney deal.

But Rhaegar fought valiantly, Rhaegar fought nobly, Rhaegar fought bravely.

And Rhaegar died.

Oct 16, 2012

Kudos to the mods who are continually updating the OP. This thread definitely did not deserve to be on the WSO frontpage when I first posted it haha.

Oct 16, 2012

Dealbook getting into a little bit of Pandit bashing here:

http://dealbook.nytimes.com/2012/10/16/a-trip-down...

Oct 16, 2012
VoidTrading:

Dealbook getting into a little bit of Pandit bashing here:

http://dealbook.nytimes.com/2012/10/16/a-trip-down...

Rather shallow of them.

Oct 16, 2012

Says here that it might be because of a clash with the board:

http://uk.reuters.com/article/2012/10/16/uk-citigr...

Multiple sources within and outside the bank said Pandit's departure followed months of tension with Chairman Michael O'Neill over a range of issues, including compensation and the role of Chief Operating Officer John Havens.

Oct 16, 2012
cheme-ib:

Says here that it might be because of a clash with the board:

http://uk.reuters.com/article/2012/10/16/uk-citigr...

Thanks for the helpful emphasis, brah.

Oct 17, 2012
Sandhurst:
cheme-ib:

Says here that it might be because of a clash with the board:

http://uk.reuters.com/article/2012/10/16/uk-citigr...

Thanks for the helpful emphasis, brah.

Anytime chief! I can do italics as well if you'd like.

Oct 16, 2012

How much work actually happens at that level?

Upset about compensation of $50MM a year?

Ungrateful

Oct 16, 2012

Robert Clayton Dean: What is happening?
Brill: I blew up the building.
Robert Clayton Dean: Why?
Brill: Because you made a phone call.

Oct 16, 2012

And their stock is up today...

Oct 16, 2012
turtles:

And their stock is up today...

I don't know how meaningfully though: Citi +1.61%, vs. S&P Financials +0.65%, and S&P 500 +1.03%.

It doesn't really look like much to be honest. As you might expect, there was a ton of volatility on heavy volume early in the day, but by 11 Citi was trading pretty tightly with the S&P Financials. It was only after 3 that Citi added ~90 bps to close up 160bps for the day, and only on relatively light volume. It's not like there has been a consensus that Vikram sucked, and the market may be partially reacting to good earnings. In addition, if this ends up having been caused by a personal clash between O'Neill and Vikram, I'd be worried about a meddling Chairman who can't handle a CEO with differing views. In any event, it's not a clear referendum one way or the other.

Oct 17, 2012

I was also wondering about the LIBOR thing. So far it sounds like we've thought of three plausible reasons...

1) Vikram was mad he wasn't getting paid enough
2) Something related to LIBOR scandal (maybe Board trying to quietly cleanse the firm of anyone connected to LIBOR-scandal decisions?)
3) Board's decision based on under-performance of Pandit as CEO

and then 4)....it was something else

Does anybody have the numbers on Vikram's salary and all-in compensation at Citi? Comparison to other bank CEOs, and his previous compensation before joining Citi would be even better

Oct 17, 2012
JDimon:

Does anybody have the numbers on Vikram's salary and all-in compensation at Citi? Comparison to other bank CEOs, and his previous compensation before joining Citi would be even better

Yeah. Dealbook ran this article regarding his comp:

http://dealbook.nytimes.com/2012/10/16/pandit-a-lo...
All compensation analysis here is done by Equilar who state that even though he received $1 in 2009 and 2010, his total take home pay was $1.3MM in both of those years. Article does compare Pandit's take home earnings ($11.9MM) to Dimon's ($23MM) last year. (It should be noted that if you mark his equity bonus to the price when he received it, the value was $13.5MM). Total direct comp was $56.4MM (this includes equity that did not vest btw)

On the conference call yesterday, Mayo tried to get Citi to admit the reason Pandit left was because of comp but Citi continues to say it was because the board did not agree with Pandits vision and he opted to resign. Mayo did get a good parting shot with saying that Citi was ripe for change and that the Citi stock declined 89% under VP.

Edit: Caught this on Bloomberg:

http://www.bloomberg.com/news/2012-10-17/pandit-st...
The part that is most interesting (in terms of comp) is this: "If Citigroup doesn't alter Pandit's compensation, its shareholders will have paid him about $261 million in the five years since he became CEO, including personal compensation and about $165 million for the 2007 purchase of his Old Lane Partners LP hedge fund in a deal that positioned him to take charge of the company. Pandit shut Old Lane and booked a $202 million writedown soon after he took the post."

Oct 18, 2012
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Oct 25, 2012