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Veteran Banker To Head Citigroup
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"We think it's best that the CEO isn't his or her own boss," said Daniel Pedrotty, director of the AFL-CIO's investment office.
Pandit said in an interview that he was chosen after a "very long, very complete process" by the board.
"They reviewed a lot of different attributes they thought were important for the job and they picked me," Pandit said in an interview last night.
"I bring to the table an experience of having run large complex businesses, understanding of financial markets, understanding of risk, understanding of clients, understanding of how to put capital to work and understanding of how to generate return for shareholders," he said.
Pandit spent 22 years at Morgan Stanley before leaving in 2005. He started a hedge fund, Old Lane Partners, that Citigroup purchased in April for an estimated $800 million. The acquisition was seen by some on Wall Street as a way to bring Pandit, a star banker, to Citigroup. Pandit became the head of Citigroup alternative investments and by October was promoted to head of both the investment banking and alternatives businesses.
Bischoff was chairman of the merchant bank Schroders before it was acquired by Citigroup in 2000. He was head of Citigroup's European operations before being named interim chief executive.
Rubin, in response to an analyst's question about why neither of the top two people at the firm had significant consumer banking experience, said Pandit had spoken "quite a bit" about realizing the full potential of the consumer business in an hour-long conversation with the board Tuesday morning.
"My own view is, we're in very, very good hands in terms of being able to strategically think that through and then work with the people who are there," Rubin said. "There are people in our place, as you know, who know an enormous amount about that business."
Jeffrey A. Sonnenfeld, a management professor at Yale University who routinely meets with Wall Street executives, said Pandit was a good choice for Citigroup.
"He's not versatile in all fields of finance, but he's smart enough and competent enough to understand them. . . . Every orchestra conductor doesn't have to beautifully play every instrument in the orchestra. He has to understand how they come together," he said. "Vikram Pandit certainly understands that."
Citigroup shares fell 4.3 percent, to $33.27, on a day when the Dow Jones industrial average fell about 2 percent.
Staff researcher Richard Drezen contributed to this report.
