NEW YORK (Reuters) –
Citigroup Inc (C.N) named former Time Warner Inc (TWX.N) Chief Executive Richard Parsons as its chairman, the latest high-level personnel change to shake a U.S. bank clobbered by the credit crunch.
Parsons, 60, has been a director since 1996, a period marked by rapid growth followed by a precipitous decline. He succeeds Sir Win Bischoff, 66, who will retire from Citigroup later this year.
Bischoff, a top executive at the bank in Europe, was seen as a surprise choice when he was brought in as chairman of the bank in December 2007. Critics widely viewed him as ineffective, failing to take charge of a board that needed greater direction to address the bank's problems.
He became chairman when Vikram Pandit was named chief executive after briefly serving as acting chief executive in the weeks after Charles "Chuck" Prince resigned.
Bischoff's departure was considered a near certainty, following an $18.72 billion net loss in 2008, including $8.29 billion in the fourth quarter.
"(T)he last 15 months have not been the easiest of my 44 years in banking," Bischoff said in a memo to employees.
He said he had "always envisioned a limited tenure."
Parsons said in a statement that further board departures were anticipated, adding he will reconstitute the board's membership "as quickly as possible."
Parsons is an independent chairman. His appointment signals that the board may assert tighter oversight, said Jay Lorsch, a professor at Harvard Business School.
"Financial companies, especially Citigroup, have a complex set of problems and boards need leadership to figure out what needs to be done," Lorsch said.
Parsons previously served as chief executive and chairman at Time Warner from 2002 through 2007 and chairman in 2008.
He stabilized the company after its 2000 merger with America Online, widely considered among the most disastrous corporate marriages in history and smoothed over in-fighting among different divisions.
But in his 5-1/2 years running the company, shares dropped 12.4 percent, while the Standard & Poor's 500 (.SPX) rose 34.6 percent, Reuters data show.
Parsons has also been chairman and chief executive officer of Dime Bancorp Inc, and has advised President Barack Obama.
RIGHTING THE SHIP
Citigroup's losses have stemmed from tens of billions of dollars of writedowns on everything from subprime mortgage bonds to loans funding leveraged buyouts.
Executives have struggled to right the ship and the bank last week said it will move assets it wants to sell or wind down into a separate unit. It also agreed to sell a controlling stake in its Smith Barney retail brokerage to Morgan Stanley (MS.N).
Bischoff will stay on the bank's board until its annual meeting later this year.
His departure follows the recent exit of former U.S. Treasury Secretary Robert Rubin, a senior counselor to the bank, who this month also said he does not plan to remain on the board.
Citigroup shares closed Wednesday up 87 cents, or 31.1 percent, at $3.67, amid broad gains in the banking sector. They remain down 88 percent from their 52-week high set last Feb 1. The bank announced the board changes after U.S. markets closed.
(Additional reporting by Yinka Adegoke and Juan Lagorio; editing by Carol Bishopric and Andre Grenon)