Wouldn’t it be sweet if a CEO of a stricken financial/auto company bit the bullet and stepped down, taking full responsibility for the mess that he got the company into?
This morning I woke up to find myself (along with fellow taxpayers) a proud owner of Citigroup. How could that be, I wondered? Was I still dreaming?
It was Nov. 17 in a Town Hall meeting that Citigroup chief Vikram Pandit told employees: “We are entering 2009 in a strong position, much stronger that we entered in 2008.” He thanked staffers for doing “an outstanding job in the last 11 months.” Citi is “even better positioned for 2010,” said the rah-rah CEO who then predicted: “We will be the long term winner in this industry.” What a difference a week makes!
The only bummer during the session was when Vik got around to the part about slashing more than 50,000 people from the payroll: “The most difficult part of what we all have to do is telling a colleague that their talent may be needed elsewhere and not at Citi.” But, what the heck, Pandit was on top of “one of the greatest transformations in history.” [Citi, to its credit, has posted the town hall “podium copy speaking notes” on its website - link to PDF.]
A much chastened Pandit is singing a different tune today. Of the $20B federal bailout, Pandit appreciates “the tremendous effort by the government to assure market stability.” Citi, now humbly a ward of the U.S. government, will “continue to focus on opportunities and alternatives to further enhance the company’s overall position and value.”
Pandit is a new player on Team Citi. He took over for Chuck Prince, Sandy Weill’s hand-picked successor in Nov. 2007. Uncle Sam however should give the man from Mumbai no quarter. Citi's woes are not a bolt from the blue. The May 6 Wall Street Journal blasted Pandit’s cautious and deliberative approach to managing the bank. It reported Pandit faced “mounting pressure to show that a detail-obsessed ex-professor can turn around one of the world's largest and most troubled banks.”
In a week’s time, Citi has sunk from a bank said to be ready to take on the world in `09 to one that needs a lifeline from Uncle Sam. The Treasury and FDIC now guarantee $306B in Citi’s toxic assets.
By stepping down, Pandit would set a shining example to Corporate America. Citi needs a confident leader at the helm, one schooled in the arts of PR. It also requires a realistl CEO who will drop non-core operations, such as SmithBarney, to focus on winners. An outsider like “Neutron Jack” Welch comes to mind.
In Pandit's own words, his talent may be needed elsewhere, but not at Citi.