Who the heck is that??? I hope he knows what he's doing.
Pandit was within Citi’s ranks, running a hedge fund that Citi bought in early 2007 and doing various other things.
Pandit was pushed up the ladder to be CEO because he was seen as the guy who could take the sort of action necessary to fix the problems that could since Citi the fastest. Some directors had their reservations about Pandit, because he has no experience with consumer banking, and about half of Citi’s revenues come from consumer banking operations, credit cards, etc.
Pandit started changing minds very quickly when he consolidated a bunch of SIV’s and Level 3 assets, coming clean about what the liabilities were. Then he started bringing in more external capital (from Kuwait and Saudi Arabia as well as Asian investors), announced the huge layoff, etc.
Cutting the dividend on the common had to be the next move. Citi needs to conserve cash, and slashing the common is one of the fastest ways to do this.
So far, he appears to know what he’s doing. It isn’t easy, it isn’t without detractors, but it is necessary. When he’s done, Citi is going to be a much smaller, simpler operation. Most likely, we’re going to see Citi split between the corporate debt/M&A/etc operations and the consumer banking operations. They could see off either piece, but I’d expect them to sell off the consumer side right now, because it isn’t broken and they’d get a higher valuation on the consumer operation than they’d get if they put the corporate side up for sale.