It's Official, Richard Parsons to Be Citigroup Chairman

The rumors are over, Richard Parsons, the former chairman of Time Warner, will be Citigroup’s Chairman effective February 24.  According to The New York Times Bischoff said,

he would not stand for re-election and would retire later this year.    

The Times went on to say,

Regulators have pressed the struggling financial giant to shake up its board and replace Mr. Bischoff in an effort to regain investors’ trust. Staggered by losses, Citigroup has sought two financial lifelines from Washington. 

The issue gained new urgency last week, when Citigroup announced a drastic plan to split itself in two, effectively undoing the landmark merger that formed the company a decade ago. 

Be sure there is more management turmoil to come and the possibility of nationalization remains an option open to the new government. Let’s wait and see if real change can come under Parsons.

For more:

Crains   

Times online  

Telegraph UK  

Financial Times  

Hollywood Reporter     

Citi May Be Considering Replacing Chairman

According to the Wall Street Journal (sub req.) , who quoted unnamed sources, members of Citi’s C (NYSE) board are considering changing its chairman, Sir Win Bischoff.  According to the story,

The board wants closer oversight of the efforts of chief executive Vikram Pandit and his team…

 The Journal’s unnamed sources also speculated that Richard Parsons, chairman of Time Warner and a member of Citi’s board, is being considered as Bischoff’s replacement.  It would seem the bank could come up with a more judicious and appropriate candidate.  According to Felix Salmon on SeekingAlpha,

The one option being mulled right now — replacing Win Bischoff with Dick Parsons — is clearly taken straight from the deckchairs-on-the-Titanic playbook. Parsons, remember, is the man about whom Joe Nocera said that “all his professional life, he’s wanted to be seen as someone who never seems to break a sweat”. In any case, Bischoff isn’t the problem. The problem is that Vikram Pandit gave himself altogether too much time to get smaller, and then decided his best chance at salvation was to get bigger — by buying Wachovia. Now, it’s too late: the die has been cast. Will Citi buy Chevy Chase Bank? It really doesn’t make any difference either way.

While I do not find myself in complete agreement with Salmon’s overall sentiments, I do not find Parsons the right person for the challenge.  His allegiance to Pandit might actually serve as a hindrance to helping Pandit.  If the board replaces Sir Win they need to find someone who intends to go toe-to-toe with Pandit and his team. 

For more:  

The Deal.com (11/14 update)

Bloomberg

Biz Journal   

MarketWatch     

CEO Watch - Charles Prince, Citigroup

The die has been cast, Prince has resigned as CEO and Chairman of Citigroup. In his place, Former Secretary of the Treasury, Robert Rubin and current Citi board member has been made chairman. Sir Win Bischoff, chairman of Citi Europe and a Member of the Citi management and operating committees, was made interim CEO. Bischoff will remain interim CEO until a successor is found.

On top of the management changes Citigroup said it would take an additional $8 billion to $11 billion in write-downs related to mortgage-related securities. Hopefully, no more shoes will drop. Citi insists it will not reduce its dividend as was suggested by some analysts late last week.

Monday should help sort out exactly what is next with more updates on the changes and how Citi plans to deal with the situation in the short-term.

Stay tuned.

For more:

Citigroup Press Release
Deal Book
Independent UK
Australian Business (WSJ)
Bloomberg
Crains
MarketWatch