By Jennifer Yousfi
Managing Editor
Just one day after the possibility was reported in Money Morning, Citigroup Inc. (C) yesterday (Tuesday) named insider Vikram Pandit, 50, as its new chief executive officer.
Win Bischoff, acting CEO since the Nov. 4 ouster of CEO Charles O. "Chuck" Prince III, 57, will assume the duties as chairman. Prince was forced out chiefly because of spiraling losses from Citi's credit-related businesses and the growing subprime mortgage crisis.
Pandit, a former Morgan Stanley (MS) executive, was appointed in mid-October to oversee Citigroup's newly created investment-banking and alternative-investments business unit. He joined the bank in July when the hedge fund he ran was bought out by the No. 1 U.S. bank.
At Morgan Stanley, Pandit was president and chief operating officer of the Institutional Securities and Investment Banking Group, where he focused on the trading, sales and infrastructure aspects of the business. Before that, he served as the managing director and head of Morgan's Worldwide Institutional Equities Division, and as the managing director and head of the U.S. Equity Syndicate. Pandit also served on the board of the NASDAQ stock market from 2000 to 2003.
Reaction to the appointment from market analysts was mixed, Reuters reported:
- Henry Asher, president of independent NY-based adviser Northstar Group: "Think of the people they could have gotten for this role who didn't make themselves available or didn't want it. People with experience running a major money center bank. People with experience running a massive corporation. And they couldn't get someone like that."
- William Smith, CEO of SAM Advisors: "It's disappointing. Pandit is probably a decent manager but he is a segment manager. He is not a CEO. Win Bischoff is an absolute disgrace - he has absolutely no reason to be even near the chairmanship."
- Milton Ezrati, senior economist and market strategist at Lord, Abbett & Co.: "To some extent, the resolution of this situation will help because Citigroup has been leaderless for a while and this will at least give them some clarity. Although splitting it continues the ambiguity."
The announcement did not help Citi's shares, which fell $1.50, or 4.31%, to close at $33.27.
News and Related Story Links:
- Reuters:
Citigroup names Pandit CEO, Bischoff chairman
- CNNMoney:
Citigroup Names Win Bischoff Chairman, Vikram Pandit CEO