Citi Reshuffles Top Job as Pandit Steps Down

Pandit has held the top post at Citigroup since December 2007, following the acquisition of his hedge fund, Old Lane, in 2007. He famously spent two years working for a salary of $1 after testifying to Congress in 2009 that his compensation should be set at that level until the bank returned to profit, although he quickly became one of the highest-paid executives in the industry following a retention bonus and salary hike in 2011.

Corbat, who has been at Citigroup since graduating from Harvard in 1983, was the bank's CEO of EMEA, overseeing securities trading, investment banking and consumer banking for the region.

Citigroup also announced that president and COO John P Havens has also resigned from the banking group. Havens had reportedly been planning to leave at year-end, but in light of Pandit's resignation, decided to accelerate his plans.

Despite Citigroup's improving performance, including yesterday's figures which were well above analyst expectations, Pandit has borne the brunt of a series of high-profile misses with regulators and competitors of late. The bank's capital plans were dismissed as inadequate by the Federal Reserve following stress tests earlier this year, and the group made a loss on the sale of its stake in a joint brokerage venture with Morgan Stanley.

Shock Move
Pandit's resignation still comes as something of a shock following the company's results. However, Corbat's lengthy service with Citigroup and his array of experience both in consumer and investment banking met with marked praise in a statement released by the board of directors. Others, however, are unsure as to the reasons behind Pandit's sudden and abrupt departure.

The bank's capital plans were dismissed as inadequate by the Federal Reserve following stress tests earlier this year, and the group made a loss on the sale of its stake in a joint brokerage venture with Morgan Stanley.

"Vikram Pandit's sudden exit from the top post at Citi has caused some surprise on Wall Street, not least because the Wall Street Journal had been positing recently that he was angling to lengthen his tenure," says Rik Turner, senior analyst at Ovum. "Also, the Q3 results announced on Monday were, discounting the huge $4.7bn write-down of Citi's 49 percent stake in brokerage firm Morgan Stanley Smith Barney, quite reasonable."

This story was updated at 1418 on October 16, and 0957 on October 17 to reflect ongoing commentary.