(Reuters) - Sanford “Sandy” Weill admitted that the planning process that led to the choice of Charles Prince to succeed him as chief executive of Citigroup Inc (C.N) was flawed, according to an article in Friday’s Financial Times.
Weill said he and Citigroup’s board should have fostered a competition among top managers for the post, rather than awarding Prince the job in July 2003. The men had worked together for 17 years.
Prince began running the largest U.S. bank at the end of Sept 2003, and succeeded Weill as chairman in April 2006.
But Prince resigned under pressure in Nov 2007 as expenses mounted and Citigroup began to suffer well over $40 billion of losses and write-downs, largely tied to subprime mortgages.
“I certainly have responsibility for working with the board in devising a plan of succession and I would not give myself very good grades on that,” Weill told the newspaper. “I thought I was doing the right thing but it did not turn out to be, did it?”
Weill did not mention Prince by name. He also said he was “naive” to believe that potential candidates who did not win the top job would stay on.
Many top executives in fact did leave under Prince, including Chief Operating Officer Robert Willumstad and consumer banking chief Marjorie Magner in 2005. Prince ousted another top executive, wealth management chief Todd Thomson, in early 2007.
A dearth of top talent was one reason Prince paid an estimated $800 million last year for Old Lane Partners LP, a hedge fund firm run by Vikram Pandit, now Citigroup’s chief executive.
New York-based Citigroup said this month it may restructure Old Lane, after many investors asked to withdraw their money.
Reporting by Jonathan Stempel in Bangalore; Editing by Derek Caney