Hire Wire Jan 30 2012

Parsons May Step Down from Citi

By suzanne kapner

Richard D. Parsons, who as chairman of Citigroup Inc. helped steer the bank through its near-death experience in the financial crisis, is considering stepping down after three years in the post, said people familiar with the situation.

The 63-year-old Parsons is expected to decide by early March, these people said.

Regardless of his decision, Citigroup is expected to keep separate the posts of chairman and chief executive, these people said.

A spokesman for Parsons referred questions to Citigroup. A bank spokeswoman declined to comment.

Parsons, who became chairman in 2009 and has been a Citigroup director since 1996, has said he would remain until the New York company was on solid ground.

Bad bets on mortgages and other securities nearly sank Citigroup in 2008 and forced the bank to accept tens of billions of dollars in U.S. aid. In 2011, Citigroup had a profit of $11.3 billion, though it still faces the same pressures all commercial and investment banks are confronting. Citigroup shares are down 36% in the past year.

With Citigroup out of the woods, Parsons is said to want to focus on other interests. He is a senior adviser to Providence Equity Partners LLC, a private-equity firm that focuses on the media industry, and is a jazz aficionado.

Also making it easier for Parsons to go: Citigroup Chief Executive Vikram Pandit, who took over from Charles O. "Chuck" Prince III in 2007, has gained more commercial-banking experience and has earned the respect of the company's directors, people familiar with the matter said.

"We like what Citi is doing," said Michael Yoshikami, chief executive and founder of YCMNet Advisors, a Walnut Creek, Calif., asset-management firm.

Still, the board isn't expected to make Pandit, 55, chairman if Parsons steps down.

Regulators have urged companies to keep the posts separate to promote boardroom independence.

In contrast, James Dimon of J.P. Morgan Chase & Co., John Stumpf of Wells Fargo & Co., Lloyd Blankfein of Goldman Sachs Group Inc. and James Gorman of Morgan Stanley are chairman and CEO at their respective companies.

Parsons is best known for his stewardship of Time Warner Inc. as chairman and chief executive after the media company's much-criticized 2000 merger with America Online Inc.

At Citigroup, Parsons's move to chairman initially was criticized by some investors and regulators because he had been a director long before the bank stumbled. The criticism quieted as Parsons worked behind the scenes with regulators to erase ill will and rebuild confidence in Citigroup's strategy.

Just two other Citigroup directors remain from before the financial crisis. They could soon step aside, too, people familiar with the situation said. The two directors, Alain J.P. Belda, a managing director of Warburg Pincus LLC, and Judith Rodin, president of the Rockefeller Foundation, couldn't be reached for comment.

Citigroup's 13-member board now includes longtime bankers and regulators such as Michael E. O'Neill, former chairman and CEO of Bank of Hawaii Corp., and Anthony M. Santomero, former president of the Federal Reserve Bank of Philadelphia. Messrs. O'Neill and Santomero are considered possible successors to Parsons, people familiar with the situation said.

Neither man has been offered the job, and it isn't clear whether they would accept it, these people said.

O'Neill's duties at Citigroup expanded last year, when he was named chairman of Citibank N.A., the company's deposit-taking subsidiary. He also is a member of the board's personnel and compensation committee, executive committee and the committee that oversees Citi Holdings.

Citi Holdings has $269 billion in assets that the company is trying to sell or wind down.

Santomero is on the board's executive committee, as well as its audit, risk-management and finance committees.


This story first appeared on WSJ.com.




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