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Former FDIC Chairman Sheila Bair on Vikram Pandit’s resignation as CEO of Citigroup and whether the bank should be broken up.
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-- that come out of that but yes the question now becomes.
Should Citi the nation's third largest bank break up shed assets however you want to describe it and how much of the decision to push up Pandit.
Had to perhaps do with regulators let's bring in one of the top banking regulators during the financial crisis Sheila Bair.
Former FDIC chairman on the phone from DC thank you for your client knows she'll I don't know -- -- you've spoken to people out -- but I haven't heard anybody asking you.
Right -- about your your gut reaction when you heard Vikram Pandit was out.
Well my gut reaction was this system for a dead doing their job.
They have situated Sergey mentioned on your show earlier.
The issue here returns are down.
-- around 90% -- since he took over.
He had lost the confidence of shareholders -- a 55% -- that he should not receive compensation so.
I hate you no way I'd take -- -- they would deport said that they were you know pleased with.
What he's done in this kind of transitional period that they wanted to head in his leadership in either direction and he voluntarily agree with debt and stepped down.
One thing I would like to -- correct that I heard on nearly a program this statement that he saved.
Cities from bankruptcy -- the government to three bailout -- -- from bankruptcy I don't want to they should be in Haiti completion of.
What you know what you're absolutely right in fact it that the bailout was -- hundreds of millions of dollars not to mention the 200 -- Billion and back -- and -- all kinds of support which India not a -- would have gotten if there were porno.
Belated -- -- and Dodd-Frank now clearly says this slackening happening TM and so I think.
All the ethnic institutions that particularly he has the need to show the government at that they can be resolved and the bankruptcy process.
Without hurting the rest of us they can't make that determination.
They should be broken up but that's that in dud -- now that applies to all of them.
Okay they shouldn't be broken up specific tonight is your biggest -- -- charted due to I managed city too big to fail.
Well I think that's said that his determination that it remain they have gotten smaller I think one of the anything that they need to do particularly sensitivity of the universal banks as well they need -- simplified rationalize cervical structure they get.
Thousands of legal -- right now it's very difficult to map.
They're legal remedies to their business clients that you wanted to break them up an orderly way it'd be hard to attitude -- -- they're very complex legal structure.
And that also it -- the ability of management to understand what's going on.
And -- -- literally true large institution easily thicket of venom they need to simplify their legal structures and -- on papers business.
She -- you just mention Dodd-Frank how much of his ouster do you believe had to do with Dodd-Frank or -- Reuters.
I don't think it has anything particular that I think this is set forth the board doing its job I think you've got period period -- -- performance she's got a lot of lack of confidence from shareholders.
This is what we're just what you do their most important job mr.
-- -- CEO that has the confidence of the board of the competent to this year holder has the right mix of qualifications.
To manage at large complex a petition at this time.
Do you think -- have.
Do you think that Citi would have consulted with regulators at all before this decision.
Debt I I can't speak to that I that would certainly there's been that they would -- -- -- and campus that is typically as a courtesy best to have don't get -- Analyst very curious yes -- -- countless problems which we did have a -- years ago which we don't have anymore.
The course of the one considers that -- making decisions about management.
Certainly.
-- regulated institutions.
The regulation is the one factor and it is in deciding who should be in charge of the leadership these organizations started of the board decides not -- recommend besides.
This this is a question as well that we wanted to bring up and that is compensation now I I believe -- get what you can get in this world if if people wanna be angry get angry to board that rubber -- some of these plants but.
At least perform that we put up the the compensation and how it broke down for Vikram Pandit a lot of money mean there were a couple years he took a single dollar.
And -- apparently was kind of whining about it and and they were some people.
At other business networks today we're saying you know what she really tough job hit yeah okay cry us a river.
He got 260 million -- or want -- in total compensation.
In fact the previous management bought out his hedge fund called old lane partners and then shut it down in 2008 so I look at -- -- -- say.
Come on people and and I don't mean to beat up on on any individual it's just that.
Not only did he refused to talk to most of the media but he is the only CEO who who oddly enough ran away from the adopt must -- He saw me -- -- -- like pried open an elevator door and ran away.
He also couldn't tell Neil Cavuto during an interview wants whether he likes chocolate or Vanilla ice cream better like make a decision but -- humidity is something like that but.
What's it when you hear people say hey had a tough job over the past five years.
And then this superimpose that over the compensation and not to mention how to -- performed over five years.
With you -- CEO.
Well he did have a -- job it's it's safe secure kept job -- any of these large complex those situations which -- which is why.
I did not like eventually when it was made in debt I think it was not one this is not a job you'd ever very well qualified for he worked at Morgan Stanley.
Reading -- fairly small shop and then he started on hedge fund which -- told the city issued notice it quite generous price -- -- those several months later.
So it was.
Get this these were his qualifications surround -- of one of the largest commercial banks in the world they were not good qualifications.
He did never had experience running a large complex substitution.
And his past record duties was -- quite mixed so.
Look you know it we're all big boys and girls and he got a lot from honey over the five years he -- -- here.
And I think shareholders have a right to expect some bad performance an improvement in.
You know -- believe they've been getting incrementally a little better -- I think you know.
They need strategic direction they would find who they are in the direction they're going to go to supposed to just -- -- at different businesses and graphical base here critical that there that they need -- strategic direction focus I think that's what you're -- from the -- -- and it if that's what it striving Mike O'Neal then why is that a -- thing at this stage maker recent decision that there international operations where their valuable franchise this will be their strategic direction.
That's their prerogative if they decided that that's not a bad thing that's -- good thing.
And it's a good thing for the stock today which was down has reversed and is now up I have to percent Sheila -- former FTSE chairman thank you so much for joining us you and thanks for never running away from Sheila -- never ran away from it expects -- -- It's -- -- took off pried open an elevator -- and ran -- closing bell ringing in the.
