Vikram Pandit is stepping down as chief executive officer of Citigroup (C), and the executive who divested the bank’s toxic assets in the wake of the financial crisis is moving into the bank’s top job.
Citi said in a statement today that Mr. Pandit was resigning and that Michael Corbat, Citi’s head for Middle East and Europe, would be the firm’s new chief executive. Mr. Corbat, who has worked for Citi or its predecessor firms since graduating from Harvard in 1983, previously ran Citi Holdings, the so-called bad bank formed in the aftermath of the 2008 crisis.
Mr. Pandit’s resignation comes one day after Citi announced better-than-expected earnings for the third quarter.
“There is nothing better than our third quarter earnings announcement to demonstrate definitively that we have turned this company around,” said in a memo to Citi employees published at StreetInsider. “More importantly, I couldn’t be more optimistic about the bank’s future. Our formula has served the company well for 200 years. By going back to the basics of banking to serve the real economy, putting clients at the center of everything we do, and embracing the principles of Responsible Finance, we have put Citi in a great position for continued success.”
Vikram Pandit came to Citi in 2007, when the bank acquired his hedge fund, Old Lane Partners. According to Bloomberg, Mr. Pandit will have received $261 million in compensation since taking the helm at Citi in 2007, including $165 million he received in the sale of Old Lane.
“This is a complete shock,” said “Mad Money” Jim Cramer on CNBC today. “I have no idea what’s going on here, and this is major and something is very wrong.”
“Pandit’s young,” Mr. Cramer continued in a clip that can be viewed here. “Pandit’s young, people respect Pandit. He’s created this terrific team that everyone really respects. The guy inherited a total joke company. It had been destroyed, it had been destroyed and he resurrected it. It is shocking.”