Citigroup Shuffling Deck Chairs

Considering the state of affairs at Citigroup (C), movement in its management team is not unrealistic — this company has been among the hardest hit banks by the credit crisis and ongoing recession.

Clearly, after Citigroup received $45 billion in aid from the government in the fall of 2008 (part being converted to a 34% equity stake in the bank), pressure has definitely increased for its CEO, Vikram Pandit, to improve operations and return the entity to profitability and improve operations, which has resulted in some instability in the executive management ranks.

Even though the U.S. government is one of the largest shareholders, we would not expect these changes to be the result of it flexing its voting potential, but we suspect a close eye is being kept on the situation.

What has resulted are the following shuffles:

The current chairman of Citi Holdings (since March) and Citigroup’s former chief financial officer Gary Crittenden is out.

Edward Kelly (56) is in as vice chairman of Citigroup. In his new position, Mr. Kelly will be responsible for strategy and mergers and acquisitions. Previously, Mr. Kelly served as chief financial officer since March 2009.

John Gerspach (56) is also in as the third individual to hold chief financial office this year. Previously, Mr. Gerspach served as controller and chief accounting officer at Citi.

And finally Eugene McQuade (60) is in as CEO of Citibank NA (C’s primary banking subsidiary). Most recently, Mr. McQuade served as vice chairman of Merrill Lynch and president of Merrill Lynch Banks, but left the position in February 2009, a month after the investment bank was acquired by Bank of America Corp (BAC).

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