Everyone’s trying to figure out the real story behind Citi CEO Vikram Pandit’s abrupt resignation.CEOs don’t just resign effective immediately, so something obviously happened.
The first question is whether Pandit “jumped” or “was pushed.”
And the second question is “Why now? What happened in the past few days that precipitated such a sudden departure?”
Pandit’s memo to the troops offers few clues.
The memo reads as though this was, in fact, Pandit’s decision. There are no code words in there suggesting that the Board ordered his resignation. (i.e., nothing like “The Board and I have decided…”).
If Pandit decided to quit, then the question becomes, “Why?” “What changed?”
In the absence of real information, one of the working theories is this:
Pandit quit because he wasn’t getting paid enough.
In the years after the government bailout, you will recall, Pandit made very little. And then, a few months ago, Citi shareholders rejected a proposed $15 million pay package.
$15 million may sound like a lot, but in the world in which Pandit lives, it’s actually not all that much. Many of Pandit’s friends at hedge funds and other banks are likely making much more. So Pandit may have finally decided to tell Citi shareholders to take this job and shove it.
Even that explanation, of course, doesn’t fully explain the timing. Why not wait until the end of the year?
So, even if the decision was Pandit’s, it’s likely that there was some straw that broke the camel’s back. What was it? We’ll let you know as soon as we know.
UPDATE: As expected, the WSJ is reporting that Pandit quit after a “clash” with the board.