Citigroup is replacing Sallie Krawcheck, the departing head of Citi-Smith Barney's wealth-management unit and its 14,983 advisors, with Mike Corbat. Krawcheck, who joined Citi in 2002, has been asked to stay on through year-end and then plans to "pursue other opportunities," Citi says in a press release.
Corbat, who's been with Citi for 25 years, and the newly appointed head of global banking for the institutional clients group, Edward Kelly, will report to John Havens, head of the institutional clients group and a former colleague of Pandit's at Morgan Stanley.
"The appointments of Mr. Corbat and Mr. Kelly will align their talents with the company's strategic goal of deepening its institutional and individual client relationships around the world," a Citi press release says. "The moves also will increase coordination between GWM and ICG, underscoring the company's priority to deliver the full benefits of the entire Citi franchise to its clients, extending beyond historic business lines."
Since Vikram Pandit became CEO in December 2007 after former CEO Charles Prince was forced out in November 2007, the company has been restructured, and several top executives have left.
"Mike is among Citi's strongest senior managers, leading the firm's efforts to provide best-in-class financial services to top-tier multi-national corporations and financial institutions," says Pandit. "I am confident that we will enhance Citi's already industry-leading position in this very attractive business."
He adds, "Sallie Krawcheck has been an invaluable asset to the firm and a true thought leader within the industry. She has an impeccable reputation and has represented Citi well with our top clients and key constituencies around the world. We thank Sallie for her years of dedication and contribution and are pleased that she will help ensure a smooth transition over the next three months."
In the second quarter of 2008, global wealth management increased sales by 4 percent, but the number of its advisors/bankers fell 4 percent to 14,983 from a year earlier. The unit has 674 offices and $1.7 trillion in assets under management; total AUM dropped 7 percent year over year.
Various press reports have explained that Krawcheck's planned departure is a direct result of Pandit's move to ask Krawcheck to take on a lesser role within global-wealth management. Krawcheck also had reportedly argued that clients should be compensated for losses tied to auction-rate securities and that Citi's hedge funds had hurt relations with clients. The two also may have sparred over whether or not advisors should be more focused on selling Citi products vs. a broader array of financial products and services.