Regulators put pressure on Citigroup to replace its chief financial officer only weeks before his surprise departure, according to a Financial Times report. The newspaper saw parts of a document that it said confirmed investors’ belief that the replacement of Ned Kelly by Citi veteran John Gerspach in July after fewer than four months in the job had been triggered by regulators. It said it also emphasised the extent of the authorities’ involvement in the internal workings of Citi, which recently ceded a 34 per cent stake to the government. In the late-June agreement with its main regulators – the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation – Citi said that it would consider whether to replace its chief financial officer before October. “Citigroup will initiate a process that will result in a decision on (a) whether the CFO for Citigroup…can be more effectively utilised in other Citigroup responsibilities,” the agreement states. “And (b) if so, on replacements by a person…with relevant financial, accounting or other experience acceptable to the agencies, with the results publicly announced by…publication of Citigroup’s third quarter 2009 earnings [in October].” People near to the situation said that Kelly tendered his resignation on hearing of the agreement, prompting Citi to offer him another role and to promote Gerspach.
Regulators Plied Pressure on Citi to Replace CFO
Replacement of Ned Kelly by John Gerspach in July spurred by regulators.
August 19, 2009