FrontPage of the WSJ. Article says nobody saw this coming. His resignation is effective immediately. Wtf?
Mod Note (Andy): See these related threads:
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/SB10000872396390443854204578060280201488…
Some more commentary by Bloomberg TV below:
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.
Forced to resign
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.
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-era-looked-like-at-c…
A picture's worth a thousand words...
http://qz.com/16093/this-is-what-the-vikram-pandit-era-looked-like-at-c…] BoAs stock chart looks exactly the same as that.
A picture's worth a thousand words...
http://qz.com/16093/this-is-what-the-vikram-pandit-era-looked-like-at-c…]
I think you are confused with correlation and causation
who has 2 thumbs and that level of mediocrity???
this guy...
He must have really big balls
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/taibblog/citigroup-ceo-vikra…
Per Bloomberg:
What does everyone think of the new guy, Michael Corbat?
Citi never sleeps.
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.
I don't think it was a forced resignation. This sudden action is not good for the Board or the stock.
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.
Chairman and CEO to host conference call @ 4.30 PM EST
I wonder if it has anything to the MorganStanley Smith Barney deal.
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.
Dealbook getting into a little bit of Pandit bashing here:
http://dealbook.nytimes.com/2012/10/16/a-trip-down-the-short-sad-path-o…
[quote=VoidTrading]Dealbook getting into a little bit of Pandit bashing here:
http://dealbook.nytimes.com/2012/10/16/a-trip-down-the-short-sad-path-o…]
Rather shallow of them.
Says here that it might be because of a clash with the board:
http://uk.reuters.com/article/2012/10/16/uk-citigroup-pandit-idUKBRE89F…
Thanks for the helpful emphasis, brah.
Anytime chief! I can do italics as well if you'd like.
How much work actually happens at that level?
Upset about compensation of $50MM a year?
Ungrateful
Damn, now someone needs to edit:
http://www.wallstreetoasis.com/blog/revealed-wall-street-ceo-facebook-c…
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.
http://www.bloomberg.com/news/2012-10-17/pandit-stands-to-forgo-33-mill…
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
Yeah. Dealbook ran this article regarding his comp:
http://dealbook.nytimes.com/2012/10/16/pandit-a-low-paid-c-e-o-among-wa…
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-stands-to-forgo-33-mill…
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."
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