Citigroup Inc. said Sunday Chairman and Chief Executive Charles Prince, beset by the company's billions of dollars in losses from investing in bad debt, has retired and is being replaced as chairman by former Treasury Secretary Robert Rubin.
In an announcement following an emergency meeting of Citi's board, the nation's largest
banking company also said Sir Win Bischoff, chairman of Citi Europe and a Member of the Citi management and operating committees, would serve as interim CEO.
Prince's resignation, which was secured at an emergency meeting of the Citi board Sunday, was expected after the nation's largest banking company revealed it had to write down billions of dollars in bad debt. He joined former Merrill Lynch & Co. CEO Stan O'Neal, who resigned from the investment bank last month, as the highest-profile casualties of the debt crisis that has cost billions at other financial institutions as well.
The Wall Street Journal, which had early word of Prince's departure in its online edition, also said Citi would also be announcing that it would take an additional $8 billion to $11 billion in writedowns. It has already said it was writing down $6.5 billion in assets. The company did not mention any writedowns in its statement.
To know more about Robert Rubin
When Robert Rubin joined Citigroup Inc. in 1999, he said he never wanted to lead the nation's largest financial institution.
Rubin, Treasury secretary under President Bill Clinton, was named to the chairman's office at Citi a year after the financial services company was formed through the combination of Travelers Group and Citibank. At a packed auditorium at Citi's midtown Manhattan headquarters, Rubin walked from behind a curtain to a standing ovation by employees thinking he might one day lead the new company.
Now he finds himself not only leading the company after CEO Chuck Prince resigned, but contending with massive writedowns triggered by the summer's credit turmoil. Rubin said he will search "as expeditiously as possible" for someone to take the CEO role.
And, as interim CEO, Citigroup's board looked to Europe for leadership. Sir Win Bischoff, the London-based chairman of Citi's European operations, has been put in charge with leading the company until a replacement for Prince can be found.
Bischoff came to Citigroup after leading Schroders PLC, one of Britain's oldest investment banks that was sold to Citi in 2000. The European operations of Citi's investment bank has been among the company's most profitable units.
Both men find themselves as unlikely leaders of a company considered to be one of the most innovative in the industry. Bischoff, 66, was seen likely retiring within the next few years and had settled into a more hands-off role in the day-to-day operations of Citi's European operations. Rubin, 69, also was not seen taking a greater role at the company.
Short-listed as likely successors to Prince are a few well-known names on Wall Street, including John Thain, the current CEO of NYSE Euronext, who was a former chief operating officer at Goldman Sachs Group Inc. Also considered to be in contention is Dick Parsons, chief executive of Time Warner Group Inc. and a board member of Citigroup.
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