Prince clashes over banking plan
A Citigroup shareholder last night expressed concern about the bank's senior management following chief executive Charles Prince's decision to promote two new co-heads in place of Marjorie Magner, global head of consumer banking.
Magner, who was named the fifth most powerful woman in business last year by Fortune magazine, is leaving following reports of a disagreement with Prince over his plans to restructure the consumer banking operations.
She is being replaced by Steve Freiberg and Ajay Banga as co-heads of the bank's global consumer unit.
Thane Bublitz, who helps manage $66bn (€54bn) at Minneapolis-based Thrivent Financial, which owns 4.2 million Citigroup shares, told Bloomberg: "There's a concern that there aren't enough people at the top to fill in for people leaving. They're not the ones that would come to mind initially when thinking of companies with a deep bench."
Jeff Harte, an analyst at Sandler O'Neill & Partners, said in a report: "The new co-heads of global consumer illustrate Citigroup's depth of management talent. However, turnover in the last couple of years has been more than we would like and we fear it is beginning to weigh on morale. We hope to see more stability in senior management ranks as we move into 2006."
Magner's departure follows that of chief operating officer Bob Willumstad, who quit last month to pursue a chief executive role elsewhere. Both Magner and Willumstad worked with Prince's predecessor, Sandy Weill, for almost 20 years.
The latest promotions give Prince at least four executives in their 40s who report directly to him.
Harte said: "Magner's departure is disappointing, but hardly catastrophic. We expect the stock to come under pressure, as we believe investors thought highly of Magner and are concerned about management turnover. However, we expect any weakness to be modest and short-lived."
Magner will stay at the bank until October 1st and then pursue a career change outside the financial services industry.
Separately the bank has appointed Kevin Kessinger, currently president of consumer finance North America, to head of operations and technology, replacing Deborah Hopkins.
The bank said Hopkins will work with Prince to evaluate "international investment opportunities". At the same time Citigroup is forming a new 30-person operating committee to "consider strategic issues, and accelerate organisational decision making and implementation of initiatives".