The resignation, which came just a day after the firm reported stronger-than-expected Q3 earnings, sent shock waves through the financial world. No reasons were cited, but Citigroup’s board said Pandit had stepped down as CEO effective immediately, and he would be replaced by the head of the bank’s European and Middle Eastern division, Michael L Corbat.
In a pro-forma departing statement, Pandit was quoted as saying “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”, and that he “could not be leaving the company in better hands”.
Pandit, who was credited with pulling Citigroup out of terminal decline after he was unexpectedly thrust into the top position in 2007 just before the financial crisis hit, is the son of a pharma representative and businessman. Vikram Shankar Pandit came to the US when he was only 16 for undergraduate studies at Columbia University, home to several prominent Indian academics, including economist Jagdish Bhagwati, philosopher Gayatri Chakravorty Spivak, and also alma mater of Dr B R Ambedkar. He earned a bachelor’s degree and a master’s degree in electrical engineering before switching to finance and earning a Ph.D.
Before joining Citigroup, Pandit had served as president and chief operating officer at Morgan Stanley from 2000 to 2005. He left Morgan Stanley, and in 2006, formed Old Lane Capital, a hedge-fund firm that Citigroup acquired in 2007 for $600 million, pitching him into the limelight and the bank’s inner circle. He would soon replace the man who brought him into Citi, the charismatic Charles O “Chuck” Prince III, who was forced out after the banking giant reported its first loss in 17 years amid a massive financial crisis.
Staggering under monumental bleeding from the mortgage melt-down and other exposures, Citigroup resurfaced after Pandit went to Uncle Sam for a bailout, famously accepting a token $1 salary and no bonus until the bank returned to profitability. But such was the public anger in America against the excesses of bankers-including Pandit, who had proposed to buy a $50 million private jet amid government bail out-that one blogger wrote about his $1 salary, “He’s still overpaid!”
On Tuesday, Pandit will depart from the hot seat, doubtless with a lot more in bonus and