The Bullpen

Maria Bartiromo: Pandit Went Galt Because of All the Horrible Name-Calling

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I don’t know if Vikram Pandit wants to cite Maria Bartiromo in his list of reasons why he stepped down as head of Citigroup, but it certainly rings true as a general Wall Street titan complaint.

Let’s face it, we have an individual here who sold his hedge fund to Citi for $800 million, taking the CEO role five years ago, and then during the financial crisis agreeing to work for $1. Getting bashed and bashed and bashed again by the President, by the populists, and he probably just said to himself, “look, I’m done. If they’re not going to pay me commensurate with what some of my colleagues in banking are making, I can’t work for a dollar anymore.

It is to laugh.

Yes, we should all be grateful that the guy paid off for $800 million only worked for a dollar while he was busy eroding 88% of Citi’s stock price. He made $15 million last year, incidentally, once Citi “recovered.” But sure, I agree, Maria, getting called a fat cat from the relative squalor of a penthouse Manhattan apartment or a private jet is really too much for anyone to bear.

By the way, the “they” who decided not to pay Pandit at that “commensurate” level? They’re called shareholders, and given the 88% drop in value I’d say they have a right to be upset.

Tell you what, I’ll stop bashing bankers when they stop defrauding the citizenry. Legal bills and settlements are eating up the costs of banks even as they get away for pennies on the dollar relative to the damage they caused. All of this fraud weakens the US economy tremendously, constricting useful and productive purposes for the finance sector. Not to mention the abominable position this has put the country in economically. So when they stop all this, when they stay in their lane and stick to allocating capital rather than gambling with depositor funds and cashing in on implicit bailout guarantees, I’ll stop bashing.

I think it’s an even trade.

POSTSCRIPT: Let’s read what Sheila Bair has to say about Pandit:

I viewed his resignation as a positive. The board is doing its job, by opening up a new chapter for Citigroup. I take at face value what the board said about his departure. The Citi board is being responsible to shareholders. The bank’s performance under Pandit was very bad. Citi’s board is opening a potentially new direction, and should be commended.

Was Pandit’s compensation a problem for shareholders?

I think his departure expressed unhappiness with the way the shares were performing. He got a big payout when he sold his hedge fund to Citi, in excess of $200 million. Then within months it had to be closed. His pay as CEO was based on lackluster performance, and shareholders balked. Of all the big banks, Citi’s performance is the worst of the bunch. So the board is doing its job. It’s opening a new chapter. And they’ve chosen someone they’d had experience dealing with, and whose operating capabilities they’ve been able to assess.

Second that.

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David Dayen

David Dayen