Citigroup turmoil turns spotlight on Rubin

NEW YORK (Reuters) - Two senior Citigroup Inc executives are leaving amid big write-downs, but some investors reckon that Robert Rubin, the former U.S. Treasury Secretary and one of Citigroup's most senior executives, should be held more accountable.

Citi, which last week said it expects to post a 60 percent decline in third quarter earnings amid trading and loan losses, said late on Thursday that trading chief Thomas Maheras was leaving, as would co-head of fixed income Randy Barker. The company is expected to report results on Monday.

Maheras worked closely with Rubin and both were involved in the largest U.S. bank's decision several years ago to take more trading risk, according to a senior former employee.

As Citi wrestles with high expenses, some investors are questioning whether Rubin is worth his high price.

Rubin, chairman of the board's executive committee, received about $17.3 million of compensation and realized $12.1 million from exercising stock and option awards for 2006, making him one of the bank's five highest-paid employees.

"He's a consultant there. He's offering strategic suggestions. You don't pay someone as much money as he gets for just guidance. Citi has to justify that presence and, if they can't, that's a pretty easy line item to cut," said Ralph Cole, portfolio manager at Ferguson Wellman Capital Management in Portland, Oregon, which owns Citi shares.

Michael Hanretta, a spokesman at Citi, said: "Bob adds tremendous value and perspective at all levels of the company."

A call to Rubin's office was forwarded to Hanretta.

According to several former employees, Rubin's services are worth every penny, because he wins business, advises on broad strategic issues and knows how to navigate treacherous market conditions -- learned both in the Clinton Administration and before that as head of Goldman Sachs & Co.