Citigroup (C): Firing Vikram Pandit

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Citigroup’s (C) CEO Vikram Pandit has cemented his reputation as the worst CEO of the new breed of men who replaced the remarkably careless and callous executives who ran Citi, Merrill Lynch (MER), AIG (AIG), and other financial colossi during the first part of the decade.

That makes the news that Citigroup is considering sacking its chairman Sir Win Bischoff all the more ironic. Bischoff is, by most accounts, an astonishingly bland man who helped the financial firm through some of its darkest days. His only fault is that he voted to put Pandit into his job. But, the rest of the bank’s board shares that distinction.

The non-executive chairman at most public companies has little or nothing to do with running day-to-day operations or else he would be named CEO. According to The Wall Street Journal, "The possible replacement of Sir Win comes as the New York company’s board is adopting an increasingly assertive stance toward overseeing Chief Executive Officer Vikram Pandit and his tightknit team of executives."

That would say quite loudly that Pandit is the issue and that the board is the tool to keep him from ruining a bank that his predecessor Charles Prince deeply wounded.

Pandit’s tenure has been marked by tens of billion of dollars in losses and bumbling in his attempts to decide which business units the bank should keep and which should go. He said at one point that he would cut Citi’s expense base by 20%. There is not much evidence to show that Pandit is even close to that goal.

Pandit was also the engineer of Citi’s failed bid to buy Wachovia, more evidence of his very modest competence.

Citt’s shares broke below $9 today for the first time since 1995. Its stock has underperformed those of JP Morgan (JPM), Wells Farge (WFC), and Bank of America (BAC) over the last year. The collapse of Citi’s market cap is a strong indication that Wall St. believes that the firm will have to be bought by one of its peers or enter into the kind of deal with the devil that AIG made with the federal government to save itself.

With so much that is so troubling happening on Pandit’s watch, he should be pushed out before any board member.

Douglas A. McIntyre