Citigroup Inc. Chief Executive Officer Vikram Pandit, who led the bank through its government rescue, stepped down and will be replaced by Michael Corbat. The bank slid in early trading.
President and Chief Operating Officer John P. Havens also resigned, the New York-based bank said today in a statement. Corbat, who led Citigroup in Europe, the Middle East and Africa, takes the helm immediately as Pandit, 55, leaves the board, according to the statement.
The departures remove a leadership team that navigated Citigroup through 2008’s global credit crisis, when taxpayers rescued the bank from collapse with a $45 billion bailout. Pandit has been challenged this year as Citigroup’s plan to boost payouts to investors was rejected by regulators and as shareholders voted against his compensation plan.
“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 in the statement. “Mike is the right person to tackle the difficult challenges ahead.”
Shares of New York-based Citigroup, the third-largest U.S. bank, declined 2.6 percent to $35.70 at 8:10 a.m. in early trading in New York. The stock had gained 39 percent this year through yesterday.
Corbat, 52, has worked at Citigroup and predecessor companies since graduating from Harvard in 1983, according to today’s statement. He was previously CEO of Citigroup’s Europe, Middle East and Africa region, overseeing consumer banking, corporate and investment banking and trading in that region. Before that, he was CEO of Citi Holdings, where he oversaw the divestiture of more than 40 businesses.
“With unprecedented economic, regulatory and political change, my top priority is to keep us focused on what our clients need,” Corbat said in the statement. “The fundamentals we have in place today are solid, and we are on the right path.”
If no changes are made to Pandit’s compensation package, Citigroup will have paid him 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.
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