Citigroup CEO saga gets more interesting

June 8, 2009 | By Jim Kim

It may be on again. Bloomberg reports that Citigroup is poised to go ahead with an exchange offer that will result in a much stronger capital position but also leave the government with a 35 percent stake. The exchange offer was delayed last week amid reports that Sheila Bair, of the FDIC, and Citigroup CEO Vikram Pandit were engaged in something of a power struggle.

The media held that Bair wanted him out. There is likely a lot more to the story. In any case, the latest from Bloomberg is that Pandit and his fellow execs may have outmaneuvered her a bit by gaining the support of Treasury Secretary Timothy Geithner, who thinks a big change in management might be destabilizing at this point. He also might think that Pandit's turnaround plans ought to be given a chance. The stakes couldn't be higher. While Pandit hasn't had a lot of retail bank experience, that alone doesn't mean he is doomed to fail.

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