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 Citigroup Inc. (NYSE: C) CEO Vikram Pandit and Bank of America Corp.'s (NYSE:BAC) Ken Lewis have a lot in common these days. Both CEOs may have to raise more capital depending on stress test results. Now both are begging the government to keep their jobs. The difference between Lewis' (who American Banker happened to name Banker of the Year) situation and Pandit's (who Portfolio named one of the top 20 worst CEOs) is that BofA shareholders may beat the government to the punch.Unlike some Bank of America shareholders, Citigroup shareholders need the government's 36% stake to oust Pandit. "I would expect to see changes in a couple of months including seeing Pandit ousted," Rich Ferlauto, director of corporate governance and pension interest at AFSCME, or American Federation of State, County and Municipal Employees, AFL-CIO, told Dealscape. "I'm not sure the shareholders could be any more hurt at this point. We did a vote no campaign [similar to the proxy against BofA's Lewis] against the risk committee at the shareholder meeting, and the vote hasn't been revealed ... but we are going to need the government's 36% to get what we want." AFSCME represents 1.6 million people in public plans that own a 3% interest in the bank. APSCME's Ferlauto believes Pandit is responsible for shareholders losses at Citi and are trying to oust him. Ferlauto says Pandit is responsible for shareholders losses. He stated: "I think he had his chance to make a mark. I'm not sure he was the right person. ... He did not move fast enough. He thought through his vision, but he didn't execute it. It wasn't until the fall that he made a move and if he had done it six months before Citi could have sold those assets at a value." Then there was the whole Wachovia and Chevy Chase acquisition strategy, Ferlauto continued. "They blew that transaction and we still don't know if they have the right risk management." Of course, shareholders have varying opinions of whether Pandit should be ousted. CtW Investment Group owns a 0.25% stake in Citigroup, but is not seeking Pandit's removal. CtW's Michael Garland wrote in an e-mail: "Citi's problems are the result of excessive and irresponsible risks taken by the CEO, and permitted by the board, in the face of mounting concerns with the housing bubble in 2005 to 2007. When those failures and their consequences became apparent, Citi replaced its CEO (Prince). So Pandit does not bear the brunt of the responsibility for Citi's woes. Moreover, the Citi board has taken some actions. First, replacing its CEO. Second, adding four or five new directors. Having said that, directors responsible for risk oversight during the failures are still on the board and did face opposition votes at the annual meeting. By contrast, Lewis, with the support of his compliant board, bears overwhelming responsibility for BoA's failures. And the board has taken no steps to either replace Lewis or strengthen its own exposed failures." However, CtW is seeking Lewis' removal and has joined with other shareholders including Jonathan Finger of Finger Interests Number One Ltd. in a proxy against Lewis, claiming that he wasn't protecting shareholders' interests when he agreed to buy Merrill Lynch& Co. Lewis allegedly was strong-armed by the government into buying Merrill Lynch with no due diligence and forced to disclose as little as possible to shareholders. In the aftermath of the Merrill deal, Bank of America was forced to slash the dividend (due to government pressure) on its common stock to preserve capital, further raising the ire of shareholders, according to DealBook. CtW Investment Group and Finger have spoken in detail to Dealscape about why they believe Lewis should be ousted and the results will be played out after their annual shareholder meeting on April 29. (See the videos and posts below for more.) There is speculation who would replace Pandit. Those mentioned in reports include Ned Kelly, chief financial officer (who interestingly enough ran the earnings call); Gary Crittenden, his predecessor and chairman of the division containing Citi's noncore assets; or, it's been said, Jerry Grundhofer, one of Citigroup's four new board members. AFSCME's Ferlauto says he can't endorse anyone, but he believes the right person for the job is "someone with deep retail experience and turnaround experience, and Parsons or Kelly could fill that role." - Maria Woehr Also see: Citigroup's Pandit takes more heat BofA's shareholders react to Lewis' testimony
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Pandit certainly needs the boot and ASAP please !!
Remember, he is the guy that sold Citi a hedge fund (when they were "good" things) for $600 mil (he personally put $127 mil in HIS own pocket) and then as CEO had to terminate the fund for a $800 mil loss just 6-7 months later. Now that's great leadership.
Parsons is as bad if not worse than Pandit. Just look at his track record at Time Warner. Under his "leadership" the enterprise fell apart. The AOL deal was his brainchild. What a great move !!
And the best, he is now an advisor to President Obama. Now you know where the President is getting some of his "great" financial ideas from.
Citi is in desperate need of a banker with a proven track record of real accomplishments and strong leadership qualities.
Sorry, but those traits are absent from both Pandit and Parsons.Let's not repeat the same mistake again, it will kill C !!!!!!