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Vikram Pandit Ousts Investment Banking Chief

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by Felix Salmon
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Mar 17 2008 12:00am EDT

Vikram Pandit Ousts Investment Banking Chief

Today is a great day to bury news if you're an investment bank which isn't directly caught up in the Bear Stearns collapse. After being forced to bail out his own alternative-investments unit, Vikram has now promoted the head of that unit, his BFF John Havens, to run the entire Citigroup investment bank. Michael Klein, who was co-CEO of the investment bank and recently received a $13.8 million "retention" award, is now a non-executive chairman of the bank's Institutional Clients Group, whatever that means. (I think it means spending a lot of time on airplanes, while not worrying about the nuts and bolts of how things get done.)

It's worth recalling Dear John Thain's advice to Pandit:

End the war on morale. Really. Do I really have to point to examples? Naming old co-workers to key roles? Acquiring hedge funds that haven't even raised money (well, $150MM)? Buying an odd-fitting shop comprised of former colleagues and giving them the same seat at the table as a large, much more established, group already operating within the firm? Siding with your old shop in a dispute, and agreeing to a worse deal (paying the other shop's expenses!) than if the original trade has just been pushed through (and destroying value for third parties whose money you are supposed to be managing)? Seriously?

Pandit seems to have no respect for any of the Citi employees he became the boss of when he took over as CEO. Which bodes ill for his ability to lead from the front in his attempts to regain Citi's former stature.

Update: Eric Dash is more sympathetic to Pandit, and has less sympathy for Klein.

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