Sanford I. Weill, one of the most storied figures in modern finance, announced yesterday that he would be stepping down at the end of the year as chief executive of Citigroup Inc., the world's largest financial services company.
Named to succeed him was Charles O. Prince, 53, head of Citigroup's Salomon Smith Barney investment banking and securities operations. Robert B. Willumstad, 57, who is currently president of Citigroup, was named chief operating officer.
Although Weill will remain as chairman until the spring of 2006, the announcement ends months of speculation about when Weill, who is 70, would set up a line of succession.
In September, Prince took over Salomon Smith Barney after regulators began investigating the firm for conflicts of interest in its investment research.
Both Prince and Willumstad worked with Weill at Baltimore's Commercial Credit Corp. -- now CitiFinance -- the Baltimore consumer finance company that Weill leveraged into a financial colossus.
During an emotional meeting that industry analysts, reporters and Citigroup's more than 260,000 employees were able to hear on a Web cast, Weill emphasized that he would stay closely involved with the company.
Besides working with the board, he said he would call on government officials, work to expand the business overseas and do strategic planning.
Weill also said he would work closely with Prince and Willumstad until his retirement in 2006.
"I think I am mature enough to know not to get in the way of what they are going to do," Weill said in an interview after the meeting.
"Let there be no question that these will be the guys running the business."
And he suggested that they had better not make any big mistakes.
Sears deal
The management changes come a day after Weill announced Citigroup's latest transaction, the purchase of Sears, Roebuck and Co.'s credit card business for about $3 billion. The deal also will free up another $3 billion in capital Sears had committed to the card business.
"It's a very tough act to follow," said Prince. "There's never going to be another Sandy Weill. I am excited and I am terrified."
The changes also follow Citigroup's agreement in April to pay $400 million to settle charges that Salomon Smith Barney had provided misleading investment research.
Citigroup's payment was the largest part of a $1.4 billion settlement involving 10 investment banks, federal securities regulators and the New York state attorney general over investment research practices.
