New York: Vikram Pandit is likely to quit Citigroup Inc without a rich exit package, although final terms of his departure will not be known for several days.
Quoting Citigroup's most recent annual proxy filing, an international newswire reported that Vikram Pandit is not eligible for a "golden parachute" - a pre-negotiated severance payout.
Still, as is typical in departures of high-profile CEOs, the company may end up hammering out a financial arrangement with Pandit that would include agreements not to disparage or compete against the bank, executive pay experts said.
Citigroup CEO Vikram Pandit on Tuesday stepped down from his post and member of the US banking giant's Board.
The Board of Directors has unanimously elected Michael Corbat CEO and a director of the Board, the company said.
The development comes a day after the India born CEO-led US banking giant reported 88 percent plunge in net profit at USD 468 million in the July-September quarter.
Nagpur-born Columbia University graduate Pandit, 55, had been the CEO of Citigroup since December, 2007.
Pandit said Citigroup has emerged from the financial crisis as a strong institution and "now is the right time for someone else to take the helm at Citigroup."
"Thanks to the dedication and sacrifice of people across Citigroup, we have emerged from the financial crisis as a strong institution. Citigroup is well-positioned for continued profitability and growth, having refocused the franchise on the basics of banking.
"Given the progress we have made in the last few years, I have concluded that now is the right time for someone else to take the helm at Citigroup," Pandit said in a statement.
He added that he is leaving the company in better hands. Corbat is the "right person" to tackle the difficult challenges ahead, with a 29-year record of achievement and leadership at this Company, he said.
"I will truly miss the wonderful people throughout this organisation. But I know that together with Mike, they will continue to build on the progress we have made," he added.
Citigroup further announced that President and Chief Operating Officer, John Havens, who also served as CEO of Citi's Institutional Clients Group, has resigned.
Havens said he had already been planning retirement from Citi at year-end but decided, in light of Pandit's resignation, to leave the company at this time.
Citi's new chief executive Corbat has previously served as the bank's CEO of Europe, Middle East and Africa.
Chairman of the Citi board Michael O'Neill praised Pandit's efforts in steering the company through the tough financial crisis.
Pandit had taken over at the helm of Citigroup at the start of the financial crisis. In 2009 and 2010, as Pandit struggled to pull the bank back from the brink of the crisis, he accepted only a USD 1 annual salary.
"We respect Vikram's decision. Since his appointment at the start of the financial crisis until the present time, Vikram has restructured and recapitalized the company, strengthened our global franchise and re-focused the business," O'Neill said.
He added that the Board is grateful to Pandit for his "leadership, integrity and resilience" in guiding Citi through the crisis and positioning it well for the future.
"We wish him all the best with the next stage in his career," Corbat said, expressing his appreciation to Pandit for his work and achievements at Citi.
"Without his leadership, Citigroup would not be so well positioned globally to tackle the challenges and opportunities ahead of us," he said.
Corbat said the fundamentals of the bank are strong and he will focus on the needs of Citi's clients.
"Given the considerable progress we have made in recent years, Citigroup possesses unique strengths to take on exciting opportunities around the world. With unprecedented economic, regulatory and political change, my top priority is to keep us focused on what our clients need, both today and tomorrow," Corbat said.
The Board and I firmly believe in Citigroup's future, and together are committed to delivering sustained profitability and shareholder returns, he added.
O'Neill said Corbat has demonstrated "outstanding leadership qualities" and the ability to sharpen Citi's focus on achieving strong, sustained operating performance.
"From his nearly three decades at the company he brings deep and varied operating experience across a broad spectrum of the financial services industry," O'Neill said.
The global bank said during the financial crisis, Corbat had successfully led the divestiture of more than 40 businesses, helping to strengthen the Citi's balance sheet substantially.
In this role, he also restructured and rebuilt a number of the company's consumer-facing businesses, including the mortgage and credit card businesses.
Citi credited Corbat for consistently delivering impressive bottom-line results at many of its major global business units and forging a strong track record of improving efficiency and mitigating risk while also optimising the allocation of the company's capital.
Speaking about Havens, O'Neill said: "Since joining Citigroup five years ago, John has served as a trusted partner to our institutional clients, helping some of the largest corporations and governments in the world navigate through one of the most challenging financial markets in history."
"In the last two years, he has successfully taken on the additional role of overseeing Citigroup's operations, where he drove significant improvement and streamlining. We wish him the best in the future," O'Neill added.
With Agency Inputs
First Published: Wednesday, October 17, 2012, 13:12