Citigroup Bears Win With Parsons Exit
That decision comes just a over a week after CLSA bank analyst Mike Mayo called for Parson's ouster and a revamp of the bank's corporate governance.
For longtime Citi bear Mayo and others, the move may represent further progress for the bank as it moves on from the financial crisis.
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Citigroup will elect current board director Michael E. O'Neill as chairman at the company's April 17 annual meeting, with Parsons staying on until then, according to the press release. Previously, O'Neill was chief executive of Bank of Hawaii (BOH) .
Like Parsons, Citigroup directors Alain J.P. Belda and Timothy C. Collins also won't seek re-election to the company's board.
"Citi still faces a challenging environment, as do all the large banks, but the crisis is behind us. Given the strong position that Citi is in today, I have concluded that the time has come for me to take my leave," said Parsons in a statement. "In Mike O'Neill, the Board will have the perfect leader to enable it to continue providing the oversight and guidance America's global bank deserves."
CLSA highlighted O'Neill as a possible replacement for Parsons, in addition to ex-Bank of New York CEO, Robert Kelly and ex Wells Fargo CEO Dick Kovacevich - signaling that an announcement would represent a positive change for Citigroup. Prior to joining Citigroup as a director in 2009, O'Neill was credited for turning around Bank of Hawaii.
Parsons has been chairman of Citigroup since 2009, overseeing the bank's post-crisis restructuring, which has focused on asset sales from its CitiHoldings unit as a way to repay government bailout funds, raise capital and target international growth prospects, in an effort that bodes well for a 2012 dividend boost .
In his resignation statement, Parsons noted the overhaul of Citigroup's board since the financial crisis. "New members now make up the majority of the Board, including some of the most talented and experienced leaders in the financial industry," said Parsons.
Critics like Mayo argued that Parsons wasn't the correct choice as chairman because of his long tenure at the bank prior to its near collapse. Mayo also believes Citigroup should address accounting policies that are too aggressive and change its auditor, KPMG, which has been with the firm since 1969.