Vikram S. Pandit, the CEO of Citigroup, unexpectedly calls it quits and leaves the company. The Citigroup financial company had their CEO unexpectedly quit on Tuesday, but sources indicate he may have been forced out by the companies board of directors after accusations of mismanagement.
Pandit, who once famously told Congress in 2009 he would accept a $1 a year salary with no bonus till the company returned to probability, was promoted to Citi’s CEO position in December of 2007, replacing interim-CEO Sir Winfried Bischoff.
After keeping his promise and working for $1 between 2009 and 2011 his base salary was raised to $1.75 million dollars, due to the progress Citi made under Vikram’s leadership, after posting five consecutive quarterly profits.
Then in May 2011, Citigroup announced a $23.2m retention award to Pandit making him one of the highest paid CEOs. In April 2012, shareholders voted against increasing his pay to $15 million.
Now, while Pandit and the company officially maintain that he resigned, Bloomberg News cited anonymous board sources indicating that Pandit was forced out by the board after eroding investor confidence and damaging company relations with regulators over an extended period.
James Greiff of Bloomberg reports that many in the financial world had long thought that “Vikram Pandit was never the right man for the top job.” He says Mr. Pandit’s hedge fund background left him unsuited to running a commercial and consumer bank, and says his rise to the top was “by default as much as anything.”
Weeks before his resignation, “frustrations of the board members had been building,” Jessica Silver-Greenberg and Susanne Craig wrote in Dealbook Tuesday.
The resignation also makes others wonder what was really behind it since it came a day after the company had announced a stronger than ever earnings for the last quarter.
The Economic Times reports that Citigroup directors replaced Mr. Pandit because they believed he had “mismanaged operations,” which led to “setbacks with regulators and a loss of credibility with investors.”
Pandit is being replaced by American banker, Michael L. Corbat, who previously headed up Citigroup’s EMEA (Europe, Middle East, and Africa) Division.