Sandy Weill’s successor at Citigroup, Charles Prince, has proved he can cut the deals, but he still has to convince the sceptics.Ever since Sandy Weill announced in July that Charles Prince will replace him as chief executive of Citigroup, many have worried he will haunt his successor like the ghost of Hamlet’s father.
Naturally it’s hard to believe Mr Weill will step down graciously as promised first in January, when he hands the CEO reins to Mr Prince, and then in 2006 when he gives up the chairman’s office. Mr Weill will be remembered as the great 20th century dealmaker with an ego that often matched the legend.
Had all of this happened pre-Enron, anyone standing in Mr Prince’s shoes probably wouldn’t have stood there for long. But these are different times. Charles Prince is inheriting the CEO crown precisely because he’s proved as adroit in the office of New York’s attorney general Eliot Spitzer as Mr Weill has proved in turning other bank CEOs into takeover toast. Even Mr Spitzer expressed admiration for Mr Prince’s negotiating skills and co-operative spirit, telling one reporter that Mr Prince made himself available 24 hours a day.
Mr Prince has been twice rewarded. Last year he was given the keys to the corporate and global investment bank even though he was an unknown among investment banking luminaries. There’s been no talk as yet of who will replace him now that Mr Prince is assuming his second and much greater reward – the keys to the Citi kingdom. Citi will have to name a replacement soon because both jobs are clearly too big for one person to run. At the moment, though, investors are preoccupied with a more pressing worry: Mr Prince is no Sandy.
That’s the main reason Citi shares fell 3% the day the succession was announced. How much of Sandy’s vision has Mr Prince, the consensus-sensitive lawyer, absorbed in his years with his boss? Some bankers say we may lose some of the Sandy vision but not the execution skills. Mr Prince has certainly proved he has deal execution skills par-excellence, having worked on most major deals with Sandy through the years. He’ll need those skills more than ever as he struggles to preserve his boss’s larger-than life legacy.
Wall Street remains surrounded by a swarm of litigation lawyers and regulators still have their knives out. The Securities and Exchange Commission, for instance, has just backed a long-cherished goal of US investor advocates – giving shareholders scope to nominate their own director candidates on corporate boards. If that squeaks through, it would mean a future where the Weills of the world would be constrained in naming their successors and ruling with the freedom many take for granted.
Power sharing, transparency, consensus, best practice – these are the mantras of the future US corporate leaders. Which is why Mr Prince is probably the perfect choice. His biggest challenge will be debunking the Sandy myth that says the Citi empire will crumble like the Roman Empire under any other leader. Sandy’s legacy will rest on how well he ultimately prepared Citi to survive without him.
