The financial sector is abuzz in the wake of Vikram Pandit's abrupt… (Spencer Platt/Getty Images )
NEW YORK — Vikram Pandit's sudden exit as Citigroup Inc.'s chief executive has Wall Street speculating about the "real story" behind the shake-up at the country's third-largest bank.
Among the questions: Was Pandit ousted? Did he and Citi's board clash over his pay, his management or the bank's strategy?
Or was Pandit's departure all part of the plan? Some viewed the former hedge-fund manager and financial scholar as a placeholder who would stabilize the lumbering behemoth until its fortunes improved. Citi did report stronger-than-expected earnings Monday.
Citi, so far, isn't saying. Either way, some analysts see the swiftness of Pandit's exit — coupled with the immediate departure of John Havens, president and chief operating officer — as odd, if not troubling.
“It’s definitely a negative to run things that way,” Erik Oja, a bank analyst at S&P Capital IQ, said in an interview.
Morningstar analyst Jim Sinegal said the company should have had a clear succession plan and a longer transition.
"Furthermore, sudden executive departures are often indicative of larger problems," Sinegal said in a note. "We currently believe the announcement represents a major setback on Citigroup's road to full recovery."
Bank analyst Mike Mayo of Credit Agricole Securities said in his own note that the executives stepped "down in a manner that reflects poor corporate governance."
Citigroup has come a long way since the financial crisis, analysts say. Under Pandit — whose tenure began in December 2007, months before the crisis intensified with the downfall of Bear Stearns and Lehman Bros. — Citi's earnings and capital levels have improved.
“He can declare victory and go home,” banking analyst Nancy Bush said of Pandit. Citi on Monday reported earnings in the first "non-crisis quarter" in a long time, she said.
“It’s been five years," added Oja of S&P Capital IQ. "It’s time to get a professional banker in there now that survival is not an immediate issue. Even a year ago things looked really bad, in terms of mortgages and legacy costs."
Analysts had competing theories over whether Pandit was forced out and, if so, over what.
Shortly after Citi announced Pandit's departure Tuesday morning, Oja speculated that he may have clashed with the board over compensation. Pandit received total compensation (including cash bonus and stock awards) of $15 million in 2011.
His replacement, Michael Corbat, a 29-year veteran of Citi, could please Pandit's critics who thought Citi should be run by a long-time banker.
"There were a lot of people who were looking to see him go,” Oja said of Pandit. "He’s not a professional banker.”
Investors appeared pleased with the shake-up. Citi's stock was up 48 cents, or 1.3%, to $37.14 in midday trading on Wall Street.