Sandy Weill Leaves Citigroup

Citigroup’s chairman Sanford “Sandy” Weill will hold his last shareholders’ meeting tomorrow at Carnegie Hall in New York. This isn’t a surprise, having been announced about two and a half years ago. Charles Prince, his protégé, takes over. Mr. Prince has some large shoes to fill.

Mr. Weill started on Wall Street ages ago with Bear Stearns, not as a hot-shot MBA (which may not even have existed at the time) but as a $150 a month runner back in 1955. He had his own brokerage by 1960, in partnership with a few others, called Carter, Berlind, Potoma & Weill. With Weill at the helm from 1965 on, it wound up as the second biggest brokerage by 1979 as Shearson Loeb Rhoades; only Merrill Lynch was bigger. When he sold it to American Express in 1981, he got about $930 million worth of stock.

He continued as a wheeler-dealer throughout the go-go 1980s. When he convinced President Clinton to repeal the Glass-Steagall Act that barred banks from doing business on Wall Street, he did the country a great service and also set the stage for building Citigroup into what it is today.

However, that isn’t to say that Mr. Weill has been a White Knight. Argentinean debt cost Citi over $2 billion, Enron and WorldCom more than doubled that, and Citi has paid Eliot Spitzer (New York’s crusading attorney general and gubernatorial candidate) more than any other firm to settle cases. It suffered a year-long ban on acquisitions imposed by the Fed.

As CEO, Mr. Weill did right by the shareholders, though, and that is all that matters to Wall Street, no matter how much one might wish it otherwise. While he was CEO, Citigroup shares nearly tripled in value. Mr. Prince, who took over as CEO in October 2003 and who will be chairman after tomorrow, hasn’t managed to move the stock at all. Whether it is a case of the man making the times or the times making the man is hard to say. What is certain is Mr. Weill goes out a “colossus” as one analyst said. Neither good nor bad, but extremely significant and influential.

© Copyright 2006 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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