Sanford Weill on Wednesday said he will step down as Citigroup Inc.'s C.N chief executive, relinquishing power to a longtime lieutenant after building the world's No. 1 financial services company.
Ending years of speculation about Weill's successor, Citigroup said Charles Prince, 53, will become CEO by Jan. 1. He has run Citigroup's corporate and investment bank since September, and had been the company's top lawyer.
Weill, known as "Sandy," turned 70 in March and will remain chairman until Citigroup's 2006 annual meeting.
Citigroup also named Robert Willumstad, 57, chief operating officer. Willumstad has run Citigroup's huge global consumer business since December 2000 and has been Citigroup president since January 2002. He will replace Michael Masin, who has been a Citigroup vice chairman and will be a consultant through 2005.
Robert Rubin, the former U.S. Treasury Secretary, will remain chairman of Citigroup's executive committee.
The changes come after Citigroup in April agreed to pay $400 million, more than any other Wall Street bank, to settle allegations it issued biased stock research. The penalty was less than one-tenth Citigroup's $4.3 billion second-quarter net profit.
Regulators unearthed e-mails in which Weill asked star analyst Jack Grubman to reconsider his rating on AT&T Corp. T.N as Citigroup sought the phone company's investment banking business, which it won. Weill and other bank officials have been subpoenaed by the U.S. Securities and Exchange Commission over how analysts and bankers are supervised.
"If Sandy Weill expected anything untoward in the near future with respect to any outstanding regulatory issues, it's not likely he would have agreed to step down," said money manager Michael Holland, who has known Weill for more than 20 years and runs Holland & Co., which owns Citigroup shares.
BIG ROLE
Weill created Citigroup in 1998 by merging his Travelers Group Inc. with Citicorp. He has since overseen several big purchases, including Sears Roebuck & Co.'s S.N credit card portfolio on Tuesday. A day earlier, Citigroup boosted its annual dividend 75 percent to $1.40 per share.
Analysts expect the Brooklyn, New York-born Weill, who has worked on Wall Street since the 1950s and owns 22.4 million Citigroup shares, to retain a big role at the company. That's a prospect Weill, who is also Carnegie Hall's chairman, seems to relish.
"Hopefully, I can still contribute in the future in the areas where Chuck or Bob would want me to help," he said in a conference call. "I don't think that my brain is going to go dead this afternoon or next week."
Prince and Willumstad, with long personal ties to Weill, were widely considered logical choices for top Citigroup jobs.
"Chuck Prince has done well at (the corporate and investment bank) but he's not as well known on the Street, and it will take time to get more comfortable with him," said Steve Wharton, who helps invest $60 billion for Loomis Sayles & Co. in New York and owns Citigroup shares. "Sandy has a tremendous track record and will be sorely missed" as CEO, he added.
In the conference call, Prince and Willumstad tried to play down Weill's departure. Citigroup has $1.2 trillion of assets, operates in more than 100 countries, and underwrites more stock and bond offerings than any other bank.
"I don't think you're going to see a change in philosophy or attitude prospectively," Willumstad said.
Prince, though, said: "Most of us never thought of Citigroup without Sandy."
Citigroup shares closed on the New York Stock Exchange at $45.52, down $1.31, or 2.8 percent.
GOVERNANCE
The splitting of the chairman and CEO roles is good corporate governance, said James McGlynn, who helps invest $6 billion for Summit Investment Partners in Cincinnati and owns Citigroup shares.
"It's like having two pilots on a plane; one is definitely in charge, but the other is there to give advice," he said.
Weill began running his own show in 1960 as a co-founder of the brokerage Carter, Berlind, Potoma & Weill. He joked in the conference call that he hasn't really had a vacation since.
He also added, referring to Prince and Willumstad: "Let there be no question that ... these will be the guys running the business, and they better not screw up."
Ending years of speculation about Weill's successor, Citigroup said Charles Prince, 53, will become CEO by Jan. 1. He has run Citigroup's corporate and investment bank since September, and had been the company's top lawyer.
Weill, known as "Sandy," turned 70 in March and will remain chairman until Citigroup's 2006 annual meeting.
Citigroup also named Robert Willumstad, 57, chief operating officer. Willumstad has run Citigroup's huge global consumer business since December 2000 and has been Citigroup president since January 2002. He will replace Michael Masin, who has been a Citigroup vice chairman and will be a consultant through 2005.
Robert Rubin, the former U.S. Treasury Secretary, will remain chairman of Citigroup's executive committee.
The changes come after Citigroup in April agreed to pay $400 million, more than any other Wall Street bank, to settle allegations it issued biased stock research. The penalty was less than one-tenth Citigroup's $4.3 billion second-quarter net profit.
Regulators unearthed e-mails in which Weill asked star analyst Jack Grubman to reconsider his rating on AT&T Corp. T.N as Citigroup sought the phone company's investment banking business, which it won. Weill and other bank officials have been subpoenaed by the U.S. Securities and Exchange Commission over how analysts and bankers are supervised.
"If Sandy Weill expected anything untoward in the near future with respect to any outstanding regulatory issues, it's not likely he would have agreed to step down," said money manager Michael Holland, who has known Weill for more than 20 years and runs Holland & Co., which owns Citigroup shares.
BIG ROLE
Weill created Citigroup in 1998 by merging his Travelers Group Inc. with Citicorp. He has since overseen several big purchases, including Sears Roebuck & Co.'s S.N credit card portfolio on Tuesday. A day earlier, Citigroup boosted its annual dividend 75 percent to $1.40 per share.
Analysts expect the Brooklyn, New York-born Weill, who has worked on Wall Street since the 1950s and owns 22.4 million Citigroup shares, to retain a big role at the company. That's a prospect Weill, who is also Carnegie Hall's chairman, seems to relish.
"Hopefully, I can still contribute in the future in the areas where Chuck or Bob would want me to help," he said in a conference call. "I don't think that my brain is going to go dead this afternoon or next week."
Prince and Willumstad, with long personal ties to Weill, were widely considered logical choices for top Citigroup jobs.
"Chuck Prince has done well at (the corporate and investment bank) but he's not as well known on the Street, and it will take time to get more comfortable with him," said Steve Wharton, who helps invest $60 billion for Loomis Sayles & Co. in New York and owns Citigroup shares. "Sandy has a tremendous track record and will be sorely missed" as CEO, he added.
In the conference call, Prince and Willumstad tried to play down Weill's departure. Citigroup has $1.2 trillion of assets, operates in more than 100 countries, and underwrites more stock and bond offerings than any other bank.
"I don't think you're going to see a change in philosophy or attitude prospectively," Willumstad said.
Prince, though, said: "Most of us never thought of Citigroup without Sandy."
Citigroup shares closed on the New York Stock Exchange at $45.52, down $1.31, or 2.8 percent.
GOVERNANCE
The splitting of the chairman and CEO roles is good corporate governance, said James McGlynn, who helps invest $6 billion for Summit Investment Partners in Cincinnati and owns Citigroup shares.
"It's like having two pilots on a plane; one is definitely in charge, but the other is there to give advice," he said.
Weill began running his own show in 1960 as a co-founder of the brokerage Carter, Berlind, Potoma & Weill. He joked in the conference call that he hasn't really had a vacation since.
He also added, referring to Prince and Willumstad: "Let there be no question that ... these will be the guys running the business, and they better not screw up."
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