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The front page of Thursday's Wall Street Journal features
an anonymously sourced story about a dispute among directors at
Citigroup Inc. Evidently some want to oust chairman Sir Win Bischoff,
but from the tone of the story, it appears as if they may not have
enough support to end his short tenure -- otherwise the story would
announce his ouster. The story also prompts questions, like who leaked
it? What do they have to gain? And what does this mean about CEO Vikram
Pandit's future?
Bischoff took the chairmanship a year ago when Pandit was tapped as CEO. Both men effectively replaced Chuck Prince, who was ousted over massive loses associated with mortgage troubles. The honeymoon period for Citi and its new chiefs was short to nonexistent, given the worsening credit crisis. However, the relationship between board and senior management may have been particularly aggravated after Citi lost the bidding war with Wells Fargo & Co. for troubled Charlotte-based bank Wachovia Corp. The disgruntled board member who spoke to the Journal may have different motives. If he lacks support from others, he may have floated the story to gauge or even rouse shareholder support for the idea. If he gets shareholder support, the rest of the board may follow. Of course, tensions on Citi's board may go deeper than just Bischoff. While the Journal story doesn't touch on Pandit's future, the media has been questioning it since the bank lost the Wachovia battle. Additionally, the Journal story has riled commentators to again question Pandit's future. For example, Douglas McIntyre of 24/7 Wall St. wrote:
Then there is the case of Richard Parsons, the former Time Warner Inc. CEO and chairman, Citi director and Obama insider. The Journal leaker mentioned Parsons as a possible successor to Bischoff. Parsons then followed up in a Bloomberg interview Thursday expressing his support for Pandit, but made no reference to Bischoff. Parsons, who has run a thrift, is known for his unflinching calmness, as noted by the Financial Times' columnist John Gapper:
Clearly, a cool, Obama-like head may be exactly what Citigroup needs right now (and the ties to the new administration, which, after all, sort of owns Citi, can't hurt either). At the very least, Parsons might restore some order to a board, which the Journal story, by its very existence, suggests he's lost control of. - Matthew Wurtzel See story from The Wall Street Journal Matthew Wurtzel is the editor of Dealscape CategoriesComments![]()
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Pandit, came on board, got a $117 million in his pocket for Old Lane Partners that was soon put to death. Do you think the Board should have had ANY CLUE AT THAT POINT?
Oh yeah, Dick Parsons, sure is doing a great job as CEO, don't ya think? Let's now make him Citi Chairman an see how rapidly he can bankrupt this once great bank.
I'm sure the combined "talents" of both Mr. Pandit and Mr. Parsons will be an unstopable force!! God help Citi.