Why Citigroup's $261 million dollar man got sacked.
The resignation of Citigroup CEO Vikram Pandit last week was not as sudden as it seemed, reports CNBC's Kayla Tausche. Here's the NYT story published Friday.
Pandit was completely blindsided Oct. 15 when he walked into Chairman Michael O'Neill's office, the same day Citigroup reported strong earnings.
Mr. Pandit was immediately told three news releases were ready. One stated that Mr. Pandit had resigned, effective immediately. Another that he would resign, effective at the end of the year. The third release stated Mr. Pandit had been fired without cause. The choice was his. The abrupt encounter, described by three people briefed on the conversation, included a terse comment by the chairman, Michael E. O’Neill: "The board has lost confidence in you."
Accprding to sources, O'Neill had been planning Pandit's ouster for several years There had always been tension, in part since O'Neill himself had been a contender for the Citi CEO job back in 2007. As Chairman, O'Neill spent the past few years slowly converting the board to his side, building the case for sacking Pandit. A dispute with the Federal Reserve last March, in which Citigroup's request to start paying a dividend was denied, was a big boost to O'Neill, allowing him to argue that Pandit's poor relationship with regulators was an impediment to Citi's future growth.
And the result is now history. But don't feel bad for Vikram. He made $261 million in five years at Citi, and virtually all of it was paid for, at least indirectly, by American taxpayers.