One of the big news events coming out of banking and finance was the resignation of the academic hedge fund guy Vikram Pandit who was leading a global consumer bank. Transparency and openness to shareholders is something that Wall Street firms are not accused of. The Vikram Pandit 'resignation' just goes to show how the truth is kept from the public. The good thing is that it has actually come out on in this case.
There have been conflicting reports about the reason behind Pandit's departure and why it came about now. But there is no denying the fact that Citi's troubles existed long before Pandit came to the firm. Some of Pandit's moves did not bode well for Citi with him not listening to head of wealth management at the time Sallie Krawcheck being a prime example.
It made for an unceremonious end for Pandit with Citi's new chairman Michael O'Neill orchestrating the resignation for months. The fact of the matter is that Citigroup has made progress since Pandit took over and the financial crisis hit. A lot of the troubles can't be blamed on the CEO, but investors were not sad to see him go as the stock was up two percent.
CEO succession planning is generally not that effective among these companies, anyway. Unless Citi knows what it is doing, the abrupt Vikram Pandit resignation means that the firm made a bad decision hiring him and buying his hedge fund Old Lane Partners for $800 million.
It was a move that was made by chairman Michael O'Neill who was passed over for the CEO job in 2007 for Pandit. The New York Times has a great piece on how it all went down with Pandit not having a clue of what was to happen to him at day's end on October 15.
Pandit has been looked upon as a huge success story in his country of origin India. The sudden resignation that has become so controversial is definitely disappointing given the genius that Pandit has been for so long.