It looks like Citigroup Inc. could soon have a new chairman, and maybe even a new CEO too. According to
The New York Times, federal banking regulators want to kick Winfried F. W. Bischoff out and bring in a new chair that can restore investors' trust.
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Is it any wonder that the federal government is pushing for a new chair? The bank has been bailed out twice by the
government, receiving more than
$300 billion in assistance. The pressure is on for
the bank to succeed, and with the amount of challenges still on the
table, investor support is needed and any uncertainty is not,
especially in a volatile marketplace.
According to the article, the leading candidate to take over for Bischoff and restore investor confidence is Richard Parsons, the chairman of Time Warner
Inc. and a Citigroup Inc. director. Yes, this is the same person who as the replacement of Gerald Levin as CEO inherited a troubled AOL Time Warner in 2001 and had to clean up the mess of the ill-fated megamerger of America Online and Time Warner. The article also states that the announcement that Parsons is taking over could come as early as next week.
There are also reports that question if Citigroup's CEO
Vikram Pandit will be able to maintain his position and if he is the next to potentially get booted. According to
The Wall Street Journal, Parsons said, "There's no truth" to rumors that Pandit's job is in jeopardy. Sounds vaguely familiar, as the same things were said about his predecessor, Chuck Prince.
Pandit, who was named CEO in December 2007 to replace the beleaguered Prince, has been hard at work, trimming back and spinning out as much as the bank can afford to, it seems -- but the company is still bleeding. Just the fact that Citigroup has entered into talks to sell a majority stake in its prized asset Smith Barney to Morgan Stanley for $2 billion to $3 billion demonstrates the restructuring and capital struggles the company is facing. Citigroup is anticipating a fourth-quarter
operating loss that could exceed $10 billion.
Meanwhile, influential directors such as Robert Rubin are leaving the ailing bank, with more, such as former AT&T Inc. chief C. Michael Armstrong, rumored to follow suit.
With fresh blood on the board, could a big boot be next for Pandit, who seems to have been appointed CEO at the wrong company at the wrong time? Or can Pandit save the ailing financial institution? It seems it will all depend on investors' confidence. - Maria Woehr
