Michael Corbat, the new chief executive officer of Citigroup Inc. (C:US), said Chief Risk Officer Brian Leach and Chief Financial Officer John Gerspach plan to remain at the bank after the departure of Vikram Pandit as CEO.
“Both are committed to staying,” Corbat said yesterday in a conference call with analysts held by the New York-based bank. “I’ve spent a good part of today with members of our senior management and without exception they are committed to our firm.”
Corbat, 52, and Chairman Michael O’Neill are seeking to assure investors there will be a smooth transition after the departure of Pandit, who left after failing to win approval from federal regulators for increased shareholder payouts (C:US). Chief Operating Officer John Havens also departed. The new CEO was promoted from the job running Citigroup’s operations in Europe, the Middle East and Africa after heading the Citi Holdings unit, which contained assets tagged for sale.
“Contrary to speculation, no strategic, regulatory or operating issue precipitated the resignation nor is there another shoe to drop,” O’Neill said on the call. “And certainly there is no issue of conduct or ethics.”
Pandit named Gerspach CFO in July 2009 in the wake of Citigroup’s $45 billion bailout from U.S. taxpayers. Gerspach, 59, had been chief accounting officer.
Leach, Pandit and Havens worked at Morgan Stanley before leaving the New York-based firm to form the Old Lane Partners LP hedge fund. Pandit appointed Leach as Citigroup’s top risk manager (C:US) in February 2008, soon after he became CEO.
‘We Just Wonder’
Michael Mayo, an analyst with CLSA Ltd., asked whether O’Neill sought Pandit’s resignation and if the departure was related to compensation. Pandit spoke with analysts on Oct. 15 about the company’s third-quarter results (C:US).
“Just yesterday we were asking Vikram Pandit questions on the earnings call and he was talking about long-term strategy, and now today we have a new CEO,” said Mayo, who has an underperform rating (C:US) on the firm’s shares. “We just wonder what were some of the steps behind the scenes.”
O’Neill said that Pandit’s departure was “categorically” not related to compensation. The bank had been preparing a succession plan for more than two years, he said.
“Vikram offered his resignation and the board accepted it,” O’Neill said. “I’m proud of what we’ve done and we were very well prepared when this occurred.” O’Neill said the company considered internal and external candidates.
Citigroup climbed 1.6 percent yesterday to $37.25 in New York. The company has rallied (C:US) 42 percent this year after dropping 44 percent in 2011.
Pandit sold mortgages, a life insurer (PRI:US) and a student-lending business as part of his effort to concentrate on growth in emerging markets.
“The streamlining and the focus of the business model and shedding things that were non-core, I think were the right and smart moves,” Corbat said. “At this point, we feel good about the strategy, we feel the strategy is right and we feel like we’ve got to be focused and execute.”
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