Citigroup's new CEO has a lot to tackleOctober 16, 2012: 4:34 PM ET
Michael Corbat is shifting from running Citi's bad bank, to running one that is still in not great shape.
"He was extremely well rounded," says Andrew Doctoroff, a fellow Harvard student, who wrote about the then All-Ivy offensive lineman in The Harvard Crimson in 1982. "He kept his athletic prowess in perspective."
Even back then, the 6'3'', 230-pound Corbat had his sights on tackling investment banking. He's now landed in one of the biggest jobs on Wall Street, and perhaps the toughest.
On Tuesday, Citigroup (C) said Corbat, 52, would take over from Vikram Pandit as the firm's new CEO. Pandit brought Citi back from its near death experience, when it had to be bailed out twice by the government. It has since paid Uncle Sam back. But the bank has struggled to grow. Recently, Citi missed out on a boom in the mortgage market. What's more, Citi is still stuck with billions of dollars of assets that the bank says it no longer wants to own, but can't seem to figure out how to get rid of. The troubled assets have continued to drag down Citi's earnings.
"We have the right footprint and the right resources," Corbat told analysts on conference call on Tuesday afternoon. "It's up to us to make sure we use these properly."
Unlike Pandit, who was brought into the bank in a controversial acquisition shortly before being picked as CEO, Corbat is a lifer of the Citi organization. "He's had a broader range of roles leading up to the job than Pandit," says a former Citi executive who worked with Corbat. "He's a capable guy and a good salesman."
Corbat's first job was working for Salomon Brothers in Atlanta. But by 1987, he had been transferred to Solly's legendary New York office, which later became the subject of Michael Lewis' famous Wall Street book Liar's Poker. A debt specialist, Corbat rose to be the head of high-yield bonds and emerging markets at Solly, before the firm was merged in a series of acquisitions with Citibank to form Citigroup.
Sandy Weill, the former CEO of Citigroup, said that he knows Corbat well and thought Citi's board had made a good choice. "He has been a great manager for Citi in all of the important positions he has held," said Weill. "He is respected by the people within the company and he will be a good leader for the team in the future."
Since the Citigroup merger, Corbat has headed up a number of businesses at the firm, including corporate bank and its wealth management division, and has spent time in London and Hong Kong. Shortly after the financial crisis, Pandit named Corbat the head of Citi Holdings, the group of businesses, including subprime lending and the Salomon Smith Barney brokerage division, that bank was looking to get rid of. As head of that division, Corbat helped the firm dispose of $500 billion of unwanted assets in a little over three years. At the beginning of this year, he took over the firm's Europe, Middle East and Africa opperations.
"Pandit put Corbat in charge of the bad bank and the sense is that he did a good job with it," says an executive recruiter who has worked with Citi.
Corbat is a Connecticut native. He is listed as the owner of a 4-bedroom, 1-and-a-half-bath, 3,500 square foot Manhattan apartment on Central Park West. The apartment has a fireplace and exposed wood beams in the living room. But Corbat doesn't appear to live there. According to the real estate website Streeteasy, the apartment was rented out in March for $33,000 a month. Corbat also owns a 6,300-square-foot house in Wilson, Wyoming. That house was estimated to be worth $3.7 million in 2010, according to real estate website Trulia.
Pay seems to be part of the reason for Pandit's department. Earlier this year, shareholders voted to reject a $15 million pay package for the Citi's former CEO. Corbat said he will take $1.5 million as a base salary, plus a bonus to be determined later.