Vault’s Verdict

OUR SURVEY SAYS

Giant steps

You can't get around it: "Citi is a giant." Because of this, the culture is "large," "bureaucratic" and "in flux." And this makes it "critical to be flexible, adaptable to constant change and good at networking." Still, the organization is "friendly," "professional," "supportive" and "energetic," and the firm's "main asset is its people." One insider admits, "It is great to work with very talented people who are accessible and willing to share their knowledge with you" even if "the culture can be very political" in some parts of the company. It also helps to "be willing to sacrifice for the good of the firm." Then again, the culture "varies based on the underlying business unit."

As versatile as things sometimes are at Citi, you should probably try not to apply those ideals to your dress within the office. It is, in many ways, a "traditional work environment" that promotes dress that's "at least business casual" (although "suits and ties are worn by some every day"). Also keep in mind that there's "not a big emphasis on flexible work schedules," and "long hours are common" (although it does "depend on the work you do"). Even if you're not in the office, it looks like the firm makes sure you're always connected. One insider says, "We are offered remote access and BlackBerries to be connected even if we're out of the office or traveling." But "mostly, if you get your work done, you're free to leave." One insider adds, "I feel like I work a lot of hours, but I also have interesting work to keep me engaged and happy here."

Compensation seems to be pretty engaging for respondents as well. Insiders rate their salaries highly, and perks are extensive - "snacks throughout the day," a "relocation allowance," "meals after 8 p.m.," a "sign-on bonus," "company discounts in gyms" and "free access to most museums in NYC for employees and guests." In addition, "some sites have on-site gym and child care facilities for employees." Time off is also "generous."

January 2009: Big trouble in China banking?

Citigroup will shutter its China-based private banking division and make the operation part of its consumer banking group, insiders told Reuters.  Citi, however, said that private banking services will remain on its menu.  Meanwhile, the news agency reported that many employees currently working within the private banking unit will be relocated to the firm's consumer banking area.

November 2008: Bring on the deep cuts

Despite the $25 billion in bailout money Citi received from the U.S. government, the firm announced that after four consecutive quarters of losses, the firm would cut an additional 52,000 jobs (in addition to the 23,000 it had already sacked before the announcement).

October 2008: An ongoing battle

Just days after Citigroup's proposal to buy Wachovia's banking operations for $2.2 billion in stock, Wachovia found another suitor—one that would buy its entire operations.  In early October 2008, Wells Fargo agreed to acquire Wachovia Corporation for $15.1 billion in stock, usurping the earlier offer by Citigroup.  The Wells Fargo deal included Wachovia's brokerage and asset management units, which were excluded in Citi's proposal.  Although the new acquisition was approved by shareholders of Wachovia and Wells Fargo, Citi has said it had an exclusive deal with Wachovia, and the Federal Deposit Insurance Corp. and other regulators initially appeared to favor the Citigroup deal.

Less than a week after the Wells Fargo offer went public, a judge with the New York State Supreme Court issued a temporary edict preventing Wachovia from "negotiating, entering into or consummating any transaction" involving an acquisition or merger with any other bank than Citi.  An official hearing regarding the legality of the Wells offer was scheduled for October 7th, but a day before the hearing, Citi filed a suit seeking $60 billion in damages from Wells Fargo and Wachovia for obstructing its transaction.  This, in turn, prompted the Federal Reserve to get involved, and the Fed successfully brought Wells Fargo and Citi to the negotiating table to agree to stop their battling until October 8th, when litigation and negotiation was slated to begin again. But when October 8th came around, Citi and Wells Fargo decided to lengthen their truce until the morning of October 10th.

Again, in another early announcement, on the afternoon of October 9th, Citi said that it was dropping out of the running for Wachovia but added that it was going ahead with its $60 billion lawsuit against Wells Fargo.  "We stood by while others walked away," Citi said in statement. "Now, our shareholders have been unjustly and illegally deprived of the opportunity the transaction created."  Neither Wells Fargo nor Wachovia made any immediate comments on Citi's announcement.

October 2008: A gift from Hank (and Uncle Sam)

Citigroup found out that it will receive $25 billion from the U.S. Treasury in an effort to recapitalize the markets.  U.S. Treasury Secretary Henry Paulson announced that the Treasury would inject a total of $250 billion into U.S. banks in order to help restore confidence to the markets. Paulson said, "The needs of our economy require that our financial institutions not take this new capital to hoard it, but to deploy it." With the injection, the U.S. followed in the footsteps of some European countries, which announced similar moves earlier in the week designed to help thaw their credit markets.

February 2008: Rock on

Citi became the exclusive credit card partner of music giant Live Nation, creating an exclusive "Private Pass" program that will give cardholders access to presale concert tickets, box seats, premium seating, exclusive merchandise and VIP artist events. Live Nation will benefit from exposure to Citi's 150 million U.S. credit card holders, and as part of the deal Citi will also receive marketing perks like venue naming rights, branding rights at concerts and a special partnership with Live Nation's new ticketing operation.

January 2008: More write-downs and job losses

While the world’s banks were reporting dramatic write-downs and losses, Citi’s write-downs of $15 billion fell below analyst expectations of $22 billion. Still, the firm was forced to announce it would cut another additional 4,200 jobs, and that its ultimate total number of layoffs could be close to between 20,000 and 24,000.  Citi laid off about 17,000 people in April 2007 in anticipation of losses in the second half of the year.

February 2009: TARP spending breakdown

Citi posted its initial progress report regarding its use of the funds from the U.S. government’s Troubled Asset Relief Program.  During the fourth quarter of 2008, of the $45 billion it received, Citi said it lent $36.5 billion, including $1 billion in student loans and $2.5 billion in business and personal loans. Citi also increased credit lines and opened new credit card accounts.  Most of the funds, though, were ironically allocated toward the very thing that got the company into trouble: the housing market.  Citi spent $27.5 billion to buying mortgages in the secondary market during the last three months of 2008.

Also in February 2009, the U.S. Treasury said it would boost its stake in Citi from 8 percent to 36 percent, converting $25 billion of its preferred stock into common equity.  The move freed up some much needed capital for Citi—the bank doesn’t have to pay dividends on the common stock unlike it did on the preferred.  It also significantly diluted existing shareholders’ stake in Citi by nearly 75 percent.

According to Citi CEO Vikram Pandit in a statement, the swap “has one goal —to increase our tangible common equity.† He added, “While we believe Tier 1 capital remains the most important measure of the financial strength of banks, we recognize that the markets also view tangible common equity as an important measure.† Coinciding with the announcement, Citi agreed to make several changes, including changing the makeup of its board to include a majority of independent directors.

February 2009: Dollar days

Citigroup CEO Vikram Pandit said he had offered to take a US$1 salary and no bonus until the bank gets back on solid financial ground, noting that he understands “the new reality†and “will make sure Citi gets it as well.† The announcement came amid President Obama and other lawmakers slamming Citi and other banks for giving exorbitant bonus payments to top executives while simultaneously accepting federal bailout funding.

January 2009: Selling Smith Barney

Citi agreed to combine its Smith Barney brokerage unit with New York-based Morgan Stanley’s brokerage division, in effect selling a 51 percent majority stake in the joint venture for US$2.7 billion.  It was reported that Morgan Stanley is expected to acquire full control in phases over the next five years.

January 2009: Divide and conquer?

Citi revealed that it was splitting into two operating units, Citicorp and Citi Holdings Inc.   The former would continue to provide traditional retail and investment banking services, while the latter would oversee what remained of the group’s high-risk investments (many had already been sold off).  Citi itself remained as the parent company, but potential spin offs and mergers from either of the units were not ruled out as possibilities.  In fact, the two operating units were divided so that Citicorp remained the core bank, while Citi Holdings encompassed the saleable assets.  Along with the restructuring, Citi announced its fifth consecutive quarterly loss, as it booked a loss of $8.29 billion for the fourth quarter 2008.

Look who’s on top

Vikram Pandit became the chief executive of Citigroup in December 2007, replacing interim chief executive Sir Winfried Bischoff, who became chairman of the board as well as remaining chief executive of Citigroup in Europe.  Pandit succeeded Chuck Prince (Charles O. Prince III), who had taken his post in 2003 amid some shareholder frustration that Citi’s stock prices weren’t matching those of its peers.  Pandit’s job has not been easy, taking the helm of the world’s largest banking and financial services group during the worst financial crisis the world has seen in modern times.

Pandit joined Citi just after the global banking group purchased Old Lane Partner, the hedge fund that Pandit set up after leaving Morgan Stanley.  (On a side note, and unfortunately for Old Lane, after two years of “flat†returns that caused $200 million of write-downs in the first quarter 2008, Citi decided to close the hedge fund.)  At the time of his appointment, industry commentators noted that in the wake of the huge losses which the group was hit with under Prince, Pandit would have to address the firm’s risk management practices in order to win back the confidence of staff and investors.  Although Pandit lowered the bank’s costs and allowed reinvestments in growth in 2007, the following year was not so peachy.  In 2008, the firm infamously sought and won a massive United States Federal Reserve bailout of a whopping $45 billion.