Monday, January 22, 2007

Citigroup DEMOTES Krawcheck

That's how the headlines should read regarding the reshuffling of the deck chairs at Citigroup (C) (details here) that features the removal of Sallie Krawcheck from the highest ranks of Citigroup management as CFO, back to the job she held two years prior, head of the company's brokerage and private-banking unit.

Chuck Prince, the CEO of Citi whose own employment outlook is in doubt is quoted as saying, "From an operating standpoint, it's clearly a substantial step up from what she had before.... Anyone who thinks this is not a promotion is missing the boat." Whoa, what a disgrace. Prince is just another celeb type with no shame, who lives in his 7 or 8 figure reality and thinks he can justify anything and fool anyone. Truly sad.

This isn't at all a dig at Krawcheck who actually has an enormous amount of respect and admiration at Citi. Prince is not honest enough to admit a few very important things: That he didn't let and develop Krawcheck shine even more as his CFO, and that he allowed Krawcheck's successor at Smith Barney to screw things up. Krawcheck, by all accounts, seems happy to go back to Smith Barney and the employees there are happy to have her back, but it's Prince who can't admit that he needs to remove star power from the highest ranks and effectively demote her to fix a big problem.

It's striking how in the space of a few generations integrity is gone. Sure, you can argue that Walter Wriston's era 30 years before was simpler and quite different compared to today, but it sure didn't seem that way when it was actually happening and Prince wouldn't be collecting his big pay package were it not for what guys like Wriston built. Wriston and his ilk were men of power and distinction - distinction for having at least a shed of decency and integrity.

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