Dog Bites Man!

"An outside review of Citigroup Inc.'s management team has concluded that it is generally in good shape but that some shuffling of senior executives might be needed, according to people familiar with the matter. The review, conducted this summer for Citigroup's board by recruiting and consulting firm Egon Zehnder International [EZI],was triggered by the government's stress tests of top banks last spring. ... The [FDIC], which has had concerns about the qualifications of Chief Executive Vikram Pandit [VP] and his top management team, required Citigroup to hire an outside firm to perform the review. In a sign of the sensitivity about the report inside the company, the document hasn't been circulated in electronic form and is printed on paper that can't be photocopied. ... The report provided less-favorable assessments of at least two of Mr. Pandit's lieutenants, Vice Chairman Lewis Kaden and Chief Adminstrative Office Don Callahan, the people said. ... Citigroup's board met Tuesday morning to start discussing the findings and how to respond to them. ... The company has to inform regulators this month about [EZI's] findings and how the board is responding to them, these people said. The FDIC is likely to treat the management review as one factor in a broad assessment of Citigroup's financial health. ... The report's encouraging tone is a departure from the frustration that some analysts, investors and Citigroup executives have expressed about Mr. Pandit's leadership since he became CEO is December 2007. Among the complaints is that Mr. Pandit relies too much on a small cadre of advisers, according to people familar with the matter", David Enrich and Joann Lublin at the WSJ, 8 October 2009, link: http://online.wsj.com/article/SB125493943292571139.html.

"The [FDIC] is questioning the generally positive conclusions in a government-mandated review of Citigroup's top management, according to people familar with the situation. Some officials at the agency have expressed doubts about the rigor of the report, which was based partly on interviews with Citigroup executives who were asked to rate the effectiveness of their colleagues, these people said. ... The review was completed last week, and Citigroup's board began discussing this week whether to make any management changes in response to the report. The FDIC began sifting through the findings this week. ... FDIC officials vetoed a consulting firm that the bank had initially porposed for the job. After vetoing the consulting firm favored by Citi, FDIC officials sent Citi 'a list of approved firms acceptable to them,' and one was [EZI], one informed individual said. ... One person close to the agency described the outside report as 'a total whitewashing.' Some agency officials also are having second thoughts about the qualifications of [EZI], which largely runs executive searches for clients", my emphasis, David Enrich & Randall Smith at the WSJ, 9 October 2009, link: http://online.wsj.com/article/SB125504371565574655.html.

Another orchestrated farce like the stress tests. Man bites dog is news, that Citigroup's hired guns find Pandit is doing a decent job should surprise no one. Will Citigroup file the report as an attachment to a Form 8-K? If not, why not?

What wrong with a whitewash? Did the FDIC scream about Zimbabwe Ben's stress tests? For the record, Citigroup never approached me to do the review.