Photo: flickr/World Economic Forum
Jessica Silver-Greenberg and Susanne Craig at The New York Times have a fantastic account of how Vikram Pandit was forced out as Citi CEO by new chairman Michael O’Neill.The report explains how Pandit was completely blindsided on October 15, when he walked into O’Neill’s office, on the same day he reported strong earnings.
…Mr. Pandit, the chief executive of Citigroup, was told three news releases were ready. One stated that Mr. Pandit had resigned, effective immediately. Another that he would resign, effective at the end of the year. The third release stated Mr. Pandit had been fired without cause. The choice was his.
The abrupt encounter, described by three people briefed on the conversation, included a terse comment by the chairman, Michael E. O’Neill: “The board has lost confidence in you.”
Obviously, Pandit chose to resign right away.
Though Pandit and the company described the choice as “his” in the immediate aftermath of his departure, it was clear from the fact that Pandit said he didn’t want to be a “lame duck” that his time was soon up.
The background of the story is that O’Neill had pretty much been planning Pandit’s ouster since he got there. There had always been tension, in part since O’Neill himself had been a contender for the CEO job back in 2007. As Chairman, O’Neill had been slowly working over each board member, building the case to let Pandit go. A dispute with the Fed from last March — in which Citigroup was denied the ability to start paying a dividend — was a major point in O’Neill’s favour, allowing him to argue that Citi’s frosty relationship with regulators was a major impediment.
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