Management Turnover as Change Agent

Friday, April 24, 2009

CEO Watch - Vikram Pandit, CitiGroup, Update #1

As the government’s bank stress test results come closer to being released, rumors continue to fly that Citi’s CEO Vikram Pandit may be forced to become a sacrificial lamb. While not over impressed with the results he has had over his short stint as CEO, Pandit was never dealt a good hand from the beginning of his tenure. He has certainly made a serious effort to address the bank’s problems. Mark DeCambre wrote a story that appeared in today’s New York Post entitled CEO STRESSED OUT, TREASURY’S TEST MAY FORCE OUSTER OF CITI’S PANDIT. According to the story,

… sources tell The Post that regulators think they might have to make the bold move of removing Pandit to signal Washington is taking as hard a line with the banks as it did with General Motors when it effectively ousted GM CEO Rick Wagoner.

While DeCambre may be correct, I suspect Pandit will keep his position for awhile. The risks of changing him right now while his tenure has been so short may actually make the situation worse. Time will tell. Stay tuned.

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