Now that Prince is deposed, who would be king of Citi?

by Ryan Caione, November 20th, 2007, 6:59 am

It’s been two weeks since former Citigroup CEO Chuck Prince hastily left the firm after it revealed more than $10 billion in writedowns related to mortgage investments. In the meantime, the other big Wall Street firm with an opening at CEO, Merrill Lynch, hired John Thain from NYSE Euronext barely a fortnight after the position came open. Thain was near the top of Citi’s short list of candidates, but it is believed he chose Merrill over Citi because of its less-sprawling structure. You would think that seasoned executives in expensive suits and polished shoes would be lining up and down the sidewalk outside Citi’s Park Avenue headquarters for a chance to lead the largest financial services firm in the country. But they’re not.

Ideally, the job would have gone sometime in the future to Vikram Pandit, who heads Citi’s Institutional Clients Group, which encompasses its global banking and markets group, including Citigroup Global Markets. A 22-year veteran of Morgan Stanley, Pandit came to Citi earlier this year when the company acquired his private equity and hedge fund management company, Old Lane Partners. It is believed that Pandit was being groomed to be Prince’s successor, but because of the former CEO’s abrupt ouster those plans were scuttled.

Some blasts from the past who might be considered for the post include Bob Willumstad, former Citi president and current chairman of insurance giant AIG. He was the heir apparent to Citi’s larger-than-life former CEO Sandy Weill, but the job went to Prince instead. Willumstad may not want to return to the firm that dissed him, though. Also, some feel that his areas of expertise, consumer lending and insurance — the latter a business that Citi has exited — do not dovetail with the firm’s current needs.

Another possibility is John S. Reed who, along with Weill, oversaw the merger of Citicorp and Traveler’s that basically created Citigroup as we know it. (The two shared co-chairman and co-CEO titles at the combined firm, which became known as “The Ark” since it had two of every executive.) After Reed left Citi in a power struggle, he led the New York Stock Exchange in the interregnum between controversial former CEO Dick Grasso and Thain. However, both Willumstad and Reed are both in their 60s, and may be perceived as too old to undertake what could be a long and arduous rebuilding process.

BlackRock CEO Laurence Fink, who was passed over for the top spot at Merrill Lynch, is also in the mix, as are Citi’s Latin America chief Manuel Medina Mora, and Ajay Banga, who leads the company’s international consumer operations. One guy who won’t be making a comeback is Weill protégé Jamie Dimon, who left Citi after — you guessed it — a power struggle with his former boss, and now leads Citi rival JPMorgan Chase.

Meanwhile, chairman Robert Rubin, whom you might remember from the Clinton administration, and interim CEO Sir Win Bischoff (also chairman of Citi’s European operations) are holding down the fort as the holidays approach. Citi faces those billions in mortgage-related writedowns. The goose is getting fat. Given the breadth and complexity of the company’s corporate structure, not to mention its mortgage woes and the surprising lack of obvious candidates, there’s a chance that the corner office of Citi’s executive suite may not get a permanent tenant until 2008.