Emperor of Citigroup retires

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April 19, 2006|By NEW YORK TIMES NEWS SERVICE

New York -- Entering his office in Citigroup's Manhattan headquarters, Sanford I. Weill punched a few buttons on a computer before looking over his shoulder and smiling broadly. Asked if he had looked at Citigroup's stock price, he shrugged as if to suggest he could not help himself.

"It's up 35 cents; it's a good day," he noted.

For years, Weill and Citigroup were, for all intents and purposes, synonymous. During decades of deal making, he built one of the most influential financial institutions in the world. Yesterday, at the annual Citigroup shareholder meeting at Carnegie Hall, Weill, 73, crossed the stage and took his final bow as chairman.

Looking fit thanks to a new diet regime (exercise, no bread, no butter and, for good measure, no gin), a spirited and joking Weill insisted that while he intended to keep a close eye on the company and its stock price, he was ready to retire.

"I think it's now time for me to turn the page and go to the next chapter of my life," he said Monday. "I've hung around long enough as the chairman, and I think the company will be well served by having the chairman and the CEO being the same person."

Weill's successor, chief executive Charles O. Prince III, assumed the post of chairman yesterday.

A black-tie invitation-only party Monday night at the Metropolitan Museum of Art that drew about 350 of New York's political, financial and cultural elite was as much about Weill's charitable activities - for Carnegie Hall, the Joan and Sanford I. Weill Medical College of Cornell and a national education initiative - as his leadership of Citigroup.

The party also seemed to mark the passing of an era. Wall Street seems to be increasingly dominated by hedge funds and private-equity firms run by nameless, faceless yet powerful financiers. Weill, once a volatile and insecure boy from Brooklyn, is one of the last classic deal makers who broke many of the rules and rewrote history on Wall Street.

To some, Weill engineered a global financial-services behemoth with earnings last year of nearly $25 billion.

Weill's critics, however, see a company that became too big and unmanageable, with a win-at-all-costs culture that eventually came back to haunt it in the late 1990s as Citigroup became ensnared in the scandals surrounding Enron Corp., WorldCom Inc. and analyst research on Wall Street.

"We built a business model that is second to none; have the strongest balance sheet; the most customers; and we're in the most countries," Weill said, listing what he sees as Citigroup's strengths. "But there are lots of potential opportunity to take what has been built so far and grow it to the next level."

Sallie L. Krawcheck, Citigroup's chief financial officer, said that while she has appreciated Weill's advice, it is Prince's company now. "We do not want Citigroup to be the Museum of Sandy Weill," she said. "We are not going to spend the rest of our years asking what Sandy would have done."

By now, the story of how Weill rose to become one of the world's most powerful bankers is well known. After being ousted as president of American Express Co. in the mid-1980s, he began rebuilding his career at a down-and-out consumer lending outfit in Baltimore called Commercial Credit Corp.

Over time and through a series of quick and sometimes messy acquisitions, including Primerica and the Travelers insurance company, Weill and his team of deal makers cobbled together a financial-services behemoth.

The pinnacle of his career came in 1998, when Travelers merged with Citicorp, the largest global bank in the country, in a $70 billion deal.

Investors who got in on the ground floor when Weill took over Commercial Credit saw annual returns of 22 percent from 1986 to 2004. But in the eyes of Weill's critics, those returns came at a high price.

They criticized the reckless culture and loose controls within Citigroup, contending that it had become too big and unruly for Prince to manage. After a series of scandals overseas, the Federal Reserve took the unusual step early last year of telling Citigroup to forgo further deals until it could get its controls in order. That order was recently lifted.

Over the last two years, Weill has been toiling to finish his autobiography. With the help of a former Merrill Lynch analyst, Judah S. Kraushaar, the book, The Real Deal: My Life in Business and Philanthropy, is scheduled to be published in October.

"A lot of things that I rationalized that I was always right, I wanted this book to make sure it tells it in the right way," Weill said, "so Judah spoke to lots of people whose memories are different than mine."

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