Changes at Citi start with Bobby Druskin
The departure of Citi's expensive cost-cutter clears the way for new CEO Vikram Pandit to shape his own executive team.
NEW YORK (Fortune) -- The word from Citigroup that chief operating officer Robert "Bobby" Druskin, 60, will retire has got to be considered one of the least surprising events of the year.
This is the Citi executive whom for many months you have almost never read about, despite the fact that he has been charged with the crucial job of taming Citi's expenses and was also in the oxymoronic position of being the third-highest-paid fellow in the well-compensated Citi executive suite. Druskin made $15.7 million in 2006, compared to Chairman of the Executive Committee Robert Rubin's $17.3 million and CEO Charles "Chuck" Prince's $25 million.
Prince, as everyone knows in a big way, is now gone from Citi (C, Fortune 500). That cleared the way for Vikram Pandit to be named CEO. Druskin's departure must now be viewed as the first step in Pandit's forming an executive team of his own, a rational and vital task if this huge, unwieldy company is to be turned around. Druskin is an old Travelers and Citigroup hand, one of the many that former CEO Sandy Weill - and then Prince - depended on. A Pandit man he is not.
Trying to assess how Druskin, whose trademark is a near-white moustache, did in cost-cutting is like wading through molasses. According to a major announcement by Prince last spring, Druskin was driving a streamlining job that was projected to create annual savings of $2.1 billion in expenses this year and more than twice that by 2009.
But as Druskin was drumming away, Prince was buying companies, among them Pandit's hedge fund, Old Lane Partners. The acquisitions, of course, brought expenses with them, so the net effect on costs became a terribly uncertain matter.
But here's a fact to hang on, courtesy of a just-published American Banker list: At the end of June, Citi had 395,000 employees, up 13.6 percent from a year earlier. You don't think Citi's big? Second on the list was Bank of America, with 199,000 employees, just over half the Citi number. B of A had cut its employees by 1.3 percent during the year, which is a non-Citi way of drumming, no doubt about that.