Today's Wall Street Journal offered some rather specific examples of Chuck Prince's failure to lead or manage the overly-large, diverse financial services mess that we know as Citigroup.
Most of the article details the curious and extravagant behaviors of Todd Thomson, the recently departed head of the firm's wealth-management unit. By the way, in his eagerness and persistence to find something that Sallie Crawcheck might be able to do, he claims to have fired Thomson because he needed to get Crawcheck into that job immediately. No telling whether her junior analyst skills will be any more relevant to running Citi's wealth management group than they were for her as the company's ineffective CFO.
But, back to Thomson. Yesterday's Journal article, discussed in this post, here, described a China business trip from which Thomson returned early, with a 'non-Citi person,' stranding the Citi staffers he had flown over on the corporate jet. Today, we learn that person was non other than CNBC's leading on-air-head staffer, Maria Bartiromo. Sounds like a pretty cozy world up there at altitude, doesn't it?
Further, the Journal piece divulges that Thomson planned to spend $5MM of his unit's budget to feature Ms. Bartiromo and Robert Redford as hosts on a new television series to air on Redford's Sundance Channel.
How did Prince let things get so out of hand? According to the article, the firm's CEO has silently fretted over Thomson's spending and management of the Citi wealth management unit for some time. But, he did nothing until recently. Even the firm's largest individual shareholder, Prince Alwaleed, expressed dissatisfaction with the firm's expense growth.
What I find additionally remarkable, in addition to Prince's inability to execute on fundamentals like expense management, and to be allowed by his board to bumble this issue for so many years, is the lack of judgment of Thomson, a senior executive whom Prince left in place for so long.
Thomson had preceded Crawcheck as CFO, under the Weill regime which built the current, unwieldy structure that Citigroup operates. Along with extravagant spending on marketing and infrastructure for his wealth management unit, Thomson seems to have believed that hobnobbing with, or was it dating, CNBC's Ms. Bartiromo, and including her in luncheons with clients in the Far East, would add value to his unit.
My point is, Bartiromo is among the least capable of the many female anchors and reporters on CNBC. Unlike Becky Quick, Michelle Caruso-Cabrera, or Erin Burnett, all of whom demonstrate an on-air ability to hold intelligent, probing and useful dialogue spontaneously with interviewees, Bartiromo can be frequently seen squinting to read her teleprompter, so that she knows what she's supposed to ask next. She rarely, if ever, asks an intelligent or germane, follow-on question of an interviewee. Like Sue Herera and Liz Claman, Bartiromo seems more infatuated with her interview subjects than capable of providing any independent thought or critical questions.
You'd think that if Thomson wanted to impress his wealthy clientele, he'd have brought a better-qualified financial media personality than Ms. Bartiromo.
It doesn't say much for Thomson's judgment, or Prince's, for letting him function in an uncontrolled manner for so long.
Why is the exodus at Citi stopping with Thomson? Why aren't Crawcheck and Prince following him out the door? Can anyone truly claim that the loss of all three of these senior executives would actually further impair Citi's continuing inferior total return performance for its shareholders?
In the interests of Citigroup's ability to earn consistently superior total returns for its shareholders, and based upon my research findings, I think its board needs to consider large-scale housecleaning at the senior management level. The current management is focused on the wrong things, and inept at motivating the diverse company to execute on its plans. How much worse could they do with the current regime?
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