Citi’s CEO Situation Similar To Many CEO Departures

Last week’s abrupt and unexpected resignation by Citigroup CEO Vikram Pandit, was undoubtedly thoroughly vetted and planned by the financial company’s board of directors.  A New York Times report Thursday revealed details of Mr. Pandit’s immediate resignation, which was one of three options given to him by the board.  Pandit’s other options were to resign at the end of the year or be fired immediately without cause.  According to workplace authority John A. Challenger, CEO of global outplacement firm Challenger, Gray & Christmas, Inc., which tracks CEO turnover monthly, the New York Times story provides a rare glimpse into what is a common occurrence for the nation’s CEOs.  “Resignations and retirements are the most commonly cited reason for CEO departures, accounting for half of the 891 CEO changes we tracked through September.  However, as the Pandit situation demonstrates, the large majority of these exits are, in reality, outright terminations masked as personal choices for the CEOs to step down, resign or retire,” said Challenger.  “Companies and outgoing CEOs tend to throw a veil over the real reasons for departures, as they may impact one or both parties’ reputation, earnings potential, or stature within their respective communities.”  Did Pandit make the best choice in selecting his exit option?  Why do companies and CEOs often keep the real reason for departure hidden?  With the details of Pandit’s ousting revealed, will either Pandit or Citigroup suffer any damage?

Click here for a copy of the September CEO report.

 

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