American Express chief executive seen as Vikram Pandit’s replacementNovember 25th, 2008 - 4:14 pm ICT by IANS
New York, Nov 25 (IANS) American Express chief executive Kenneth Chenault is among those being considered to replace Vikram Pandit, the Indian American chief of Citigroup Inc - the banking giant that Sunday received a massive bailout package from the US government.Federal officials did not “push” for the immediate ouster of Pandit as part of the pact with Citigroup but the Wall Street Journal indicated in a front page report that he was not insulated completely and that several names were being touted as his replacement.
“One name that Wall Street executives have mentioned as possible replacement is American Express Co. chief executive Kenneth Chenault,” the newspaper said.
While finalising the $20-billion bailout package announced Sunday, Pandit, who was named Citigroup choief executive last year, did get some temporary relief as federal officials did not ask for his ouster.
But they did debate the structure of the plan during which there was some disagreement on whether Pandit was at fault for the company’s problems, the news paper said, quoting people familiar with the developments.
Firing Pandit at this stage would send a wrong signal and would only further destabilize the situation, the officials felt.
Meanwhile, even as stocks of the Citigroup improved by more than 50 percent Monday due to the bailout package, federal authorities asked top executives of the banking gaint to pull up their socks and put the house in order.
The government made it clear during its weekend negotiations that it expects the company to continue to reduce its appetite for risk and to seriously weigh more drastic actions, including possibly breaking up the company, news report said.
“This is a reprieve, but it’s not a complete pardon,” an unnamed Citigroup official was quoted as saying. “Nobody’s confused about that.”
Having received a breather, the Journal said Pandit will now be under intense pressure to take major steps to stabilize the company.
“He faces a board of directors, clients and shareholders who remain nervous about Citigroup’s stability, and government regulators who seem prepared to keep the company on a tight leash.”
Since becoming chief executive last December, Pandit has embraced Citigroup’s existing structure, resisting calls to dismantle the sprawling global enterprise, the journal said.
Early this month, he had announced massive job cut of 53,000 people, besides a reduction in its expenses by about one-fourth by next year.