Cramer: Behind the Citigroup shock
Jim Cramer | firstname.lastname@example.org
That's the word I am getting from the highest levels about the shocking move regarding now-former Citigroup CEO Vikram Pandit, who will now turn the reins over to Mike Corbat. The latter had run Citi Holdings and is a seasoned hand at the bank.
This move, which I am told was made Monday night, had nothing to do with compensation or personal ethics, and there was no "smoking gun." The board apparently just did not think that Pandit could take the company where it needed to go.
I am told that John Havens, who's been joined at the hip with Pandit from the days of their hedge fund before it was bought by Citigroup, resigned immediately.
This is shocking--shocking to those who know Pandit, and especially shocking because Citigroup has delivered its best quarter since he had taken over. It had the perfect mix of better net interest margin, good growth overseas, and improving global market share.
This has been accomplished, moreover, at a time when the emerging markets have been doing poorly. That makes it quite an achievement.
But it was not enough to save his job.
There are tons of questions here. If the board didn't like what Pandit had done, what did they want? He delivered a stupendous quarter. If Pandit wasn't the man for the job at this point, then what's the job? Is it to grow more domestically?
Did they not like the pace of the turn? How could they have waited until after the quarter?
We don't know a lot yet. We need to hear from Corbat. But I am satisfied that there was nothing untoward. I am just shocked that Citigroup had finally gotten it right and that this was followed by the board and Pandit parting ways.
Disclosure: Cramer has no positions in C.