Citigroup boss Vikram Pandit quits as CEO

Tuesday, 16 October 2012 - 11:10pm India News Bulletin

Indian-born American banker Vikram Pandit has resigned as the chief executive of Citigroup with immediate effect on Tuesday, October 16. Pandit had held the top job in the bank for five years since 2007.

Indian-born American banker Vikram Pandit resigns as Citi CEO

Image: Wikimedia Commons (Flickr - World Economic Forum)

55-year-old Pandit's sudden departure as the chief and as a member of Citi's board comes as a surprise to many industry insiders. While Citigroup’s official statement did not give reasons for Pandit’s immediate exit, a Bloomberg report suggested that he resigned following a clash in the board meeting.

The global bank has now appointed Michael Corbat as its chief executive and the director of its Board. Prior to his new role, Corbat served as the bank’s chief executive for Europe, Middle East and Africa.

Pandit was instrumental in helping Citigroup emerge from the financial crisis of the 2008 as a strong institution.

“Citigroup is well-positioned for continued profitability and growth, having refocused the franchise on the basics of banking. Given the progress we have made in the last few years, I have concluded that now is the right time for someone else to take the helm at Citigroup,” Pandit said while resigning.

"Since his appointment at the start of the financial crisis until the present time, Vikram has restructured and recapitalised Citi, strengthened our global franchise and re-focused the business," said Michael O’Neill, chairman of the Citigroup Board of Directors. "We are grateful to Vikram for his leadership, integrity and resilience in guiding Citi through the crisis and positioning it well for the future."

The bank’s Board too praised Pandit's "leadership, integrity and resilience in guiding Citigroup through the crisis and positioning it well for the future".

Corbat added that without Pandit’s leadership, "Citigroup would not be so well positioned globally to tackle the challenges and opportunities ahead of us".

Alongside Pandit, Citigroup’s president and chief operating officer and Pandit’s close aide, John Havens has also resigned. Havens had already been planning retirement from Citi at year-end but decided to leave the company at this time, in light of Pandit’s resignation.

Pandit, who was born in Nagpur, a town in Maharashtra, started his banking career with a role in Morgan Stanley in 1983. In his 22-year stint at the company he went on to hold several positions including the role of its chief operating officer. He played a chief role in developing Morgan Stanley’s prime brokerage division.

He left the bank in 2005 along with Havens. The duo together started a hedge fund company Old Lane LLC which was acquired by Citigroup thereby adding Havens and Pandit to its fold.

For two years since 2009, Pandit earned a salary of $1 until Citigroup revived from the financial crisis and returned to profitability. Following this in 2011, the board increased his salary to $1.75m and total compensation of $15m in 2011.

Pandit became one of the highest paid chief executives.

The Indian-born, who lives in New York city with his wife and two children, was honoured with Padma Bhushan by the Indian government in 2008.

It is not yet clear what will Pandit’s next career option be.