Citi CEO: Jump, or Push?
Board: Macro Economics
The biggest headline today was the surprise announcement of the resignation of Citi's CEO, Vikram Pandit. I don't really know anything about what happened but what's probably worth a worry or two is that no one else seems to know either, including Citi's management. Pandit publicly stated he decided to leave but other buzz emerging from the board meeting held Monday night indicates he resigned only after having the Chairman pointedly tell him to get his head in the game and stop being so passive.
After Pandit resigned, the COO who is close to Pandit also resigned so the board had to replace TWO senior executives in one night with zero notice.
Some stories about the departure are leading with a theme that he won't be leaving with much of a golden parachute -- most of his long term options and deferred compensation units are either underwater or null and void if he ends employment prior to his contract term. However, Pandit won't be visiting any soup kitchens any time in the next 50 years. He apparently took home a $100 million payout in 2011 from the close-out of a hedge fund he operated earlier.
Citi remains one of the weakest, most poorly operated TBTF banks. A major shift in its power structure might be exactly what it needs to reach terra firma (and what we need to lessen its TBTF threat to the rest of the system) but this merits close attention over the next few months.