I never tried to manage my career....
If
ascendance to the top position of one of the world's largest and
pioneering financial organizations, that too in a country that would not
accept anything less than the best, is what one is looking for some
inspiration, then Vikram Pandit's career-graph would be one of the books
that aspirants can take a leaf out of. Pandit may not have ever
imagined that he would one day take over the reins of Citigroup when he
left for the USA to pursue higher studies; the modest aim would have
been to complete his education and then take up a career that would suit
his skills and knowledge. But he was destined for greater and more
significant things than settling down in an engineering job. So what he
did after completing his engineering (B.S. & M.S.) was, to explore
the world of business and finance (M.B.A. and Ph.D. in Finance). This
step would enable him in the future to join Morgan Stanley and get
acquainted with the world of financial services from close quarters,
gain enough expertise and confidence to float a hedge-fund company (Old
Lane LLC) with a couple of colleagues (from Morgan Stanley), creating
value and then selling it to Citigroup as well joining it (Citigroup) in
a leadership position, and ultimately moving to the top of the ladder.
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Early Years
Born
on 14 January, 1957, in Nagpur (India) into an affluent Maharashtrian
Brahmin family, Vikram Pandit was afforded the benefit of pursuing
higher education outside India. He had inherited erudition and
leadership from his father, Shankar B. Pandit, who was an executive
director at Sarabhai Chemicals in Baroda (Gujarat, India). So, it wasn't
any surprise when the young Vikram left for the US to pursue electrical
engineering right after finishing his schooling from the Dadar Parsee
Youths Assembly High School in Dadar, Mumbai (India). Choosing to go
abroad, across the far-seas when he was only 16 years of age – a tender
age when most Indians, with the exception of sportsmen and children of
businessmen accompanying their fathers on business trips (yes, they do),
even fret to venture out of their home-towns, was definitely
path-breaking which would also, in some instances, go down as a freakish
endeavour. This unique bent of mind was to lead to a few defining
decisions in his later life. More astonishing than the fact that he
completed his B.S. in a mere three years were the turn of events, rather
his career interests.
The Spark
After
completing his graduation, it is said that he taught economics at
Columbia, followed by a brief stint as a professor at the Brock
University at St. Catharine's, Canada. What drew him towards the world
of finances only he can tell; but one can safely assume that it were his
professorial stints in economics that perhaps helped him make up his
mind regarding the future course of his career. He joined Morgan
Stanley as an associate in 1983. He moved up the ranks in due course and
by 1990, he had become the managing director and head of US Equity
Syndicate unit of Morgan Stanley.
His
career progression at Morgan Stanley was so rapid that by 1994 he had
become MD and head of its worldwide institutional securities division.
Apart
from the fact that he was one of the first Indians to join Morgan
Stanley, more significant were his efforts in setting up some new
practices at the company. For instance, he was instrumental in building
Morgan Stanley's electronic trading and prime brokerage division. The
writing was on the wall that the time for his real ascendency had
arrived in 2000, when he was elevated to the post of president and chief
operating officer (COO) of the company's worldwide operations of the
institutional securities and investment banking businesses.
It
was the year 2005, and Vikram Pandit had been at Morgan Stanley for
more than two decades, and it was only understandable that he
contemplated moving on. Through the course of this eventful period he
had got a closer and inquisitive look at how the financial markets
worked in sync with the rest of the business world. It is here that the
confidence, and, hence the thought of floating his own financial
services firm sprouted in his mind. So, when he parted ways with Morgan
Stanley (2005), he sounded out a couple of his close colleagues at
Morgan Stanley on the same. The two colleagues who aspired for the
fruition of, more or less, the same vision, and who almost always seemed
to have worked at the same frequency that Pandit did, did not
deliberate much before saying yes to the idea. It was an obvious choice.
The Journey Thereafter
Thus,
the triumvirate of Vikram Pandit, John Havens, and Guru Ramakrishnan,
established the hedge fund company, 'Old Lane LLC,' in March 2006. The
fund was a richly rewarding one for the trio and, in not more than a
year from its inception, the fund was bought by Citi for a whopping $800
million, with the deal also bringing leadership positions at Citi for
both Pandit and Havens in 2007. Pandit was named chairman and CEO of
Citi Alternative Investments (CAI) unit, and very shortly after this
even led Citi's Institutional Clients Group.
Obviously
the leadership qualities were there for all to see. If the longevity,
the work that he put in, and the results of his efforts at Morgan
Stanley under various capacities had already established his work ethics
beyond any doubts, then his thought leadership was manifest in the
success of the hedge fund he had floated (with colleagues). Admittedly,
there were to be other crucial factors in Pandit's ultimate rise to the
CEO's position at Citigroup in only six months after his joining at
Citi. The company had reported some not so good results the previous
quarter (Q3), resulting in the resignation of Chuck Prince as its CEO.
Although
there appeared to be more than one contender for the vacant post,
Pandit's candidature had the endorsement of some of the senior men at
the company which tilted the decision in his favor. Consequently, Pandit
was made the CEO of Citigroup in December 2007, which appointment also
made him the youngest (at 51) CEO of Citigroup.
To
be sure, the path from here on in was not rosy at all for Pandit. The
company had slipped into a loss-making zone, resulting in making a dent
into investor confidence as well as the morale of the employees – which
can be expected when there is even a slight uncertainty as regards the
leadership, and the implications thereof.
Braving
such odds, Pandit scraped the first year of his rise to the top
position, although the company was still to get back to making profits.
Desperate circumstances require desperate, if not extraordinary,
efforts. While Citi's position back in 2008-09 cannot exactly be said to
be desperate, it was definitely in troubled waters. Pandit knew very
well that a complete over-turn of the situation was not possible
overnight. So, he thought could at least do things that can take some
burden off the company's enormous financial burden. And thus came about
his decision that, perhaps, was unparalleled in the modern industrial
era, irrespective of whether it had any bearing on the overall
performance of the company thereafter.
The
company's position had become precarious, resulting in it receiving
about $45 billion in Troubled Asset Relief Program (TARP) funds.
Sometime in 2009, he had informed the company's board of directors that
he should only be compensated with a salary of $1 per year, and no bonus
until the company returned to profitability. This was done for two
years during which period the company's efforts, and those of Pandit's
as well, bore fruit, and it recorded five consecutive quarterly profits.
In recognition of this progress made under Pandit, his annual salary
base was raised to $1.78 million, after two years of work at only $1 per
annum.
That
little aspect taken care of, Pandit went about the accomplishing the
more significant task of bringing the company onto the path of recovery
and, ultimately, profitability. The strategy he adopted would rely
heavily on Citi's historic strengths and unique competitive advantages
i.e. its global franchise, unique emerging market footprint, innovative
spirit and, the talented and diverse employee base.
Relying
on the company's core strength areas, Pandit focused on the
customer-centric services by embarking on the plank of 'Responsible
Finance,' much of whose origins stemmed from the irresponsible and
indiscriminate borrowing and lending in USA that had lead to the worst
economic crisis since the great depression of late 1920s and early
1930s. This meant that Citi had to be extremely committed in providing
choice, control and transparency to its clients, and managing risk
responsibly - thereby contributing to the economic growth of the
country.
The
strategy paid off fantastically for Citi which (as recounted earlier)
recorded profits for five consecutive quarters. From innovative
foreclosure prevention programs that kept more than 1,000,000 Americans
in their homes to a new and disciplined approach to risk management,
'Responsible Finance,' has truly been ingrained in the people through
Citi's practices and culture.
So,
what should be the reward for master-minding this turn-around in the
company's fortunes? A hike in salary and compensation would have been
the bare minimum for someone who had forsaken all but $2 of his salary
for two years. It is one of the worst mock-realities of our times that
someone whose commitment to the well-being of the company is
unquestioned, and one who has had to give much more for the revival of
the company's performance than just forsake his salary, finds that a
proposal by its board -to hike his salary & compensation to $15
million as just rewards for his efforts- is met with opposition from the
very share-holders whose investments and, in essence, wealth Pandit
strove to protect and add-value to. That the revival did not spur on the
market's confidence in the company, whose stock price took a beating
since he assumed CEO responsibility, is another matter altogether that
is best left to the speculators to explain.
As
if that wasn't enough, there is also heaps of criticism, whether or not
warranted is debatable, from many quarters, which Pandit either ignores
and goes about his work or responds in the only way he can – by
bringing in the results. In any case Pandit continued to put in his
efforts to carry forward the company towards its goal of complete
recovery, consolidation, and stability even in the face of market
fluctuations and prolonged uncertainty vis-à-vis the world's political
and economic scenarios that make the so-called 'Bubble,' ever-ready to
burst. But then there is a limit to everything – and so it was with
Pandit. However stoic a man is, when things start to boil over, and it
appears that all he did made for counted for nothing, then perhaps it is
time to move on. That is exactly what Pandit did and stepped down from
the CEOs post recently.
Other Associations
Beyond
his responsibilities at Citi, Vikram Pandit is also a part of the Board
of Columbia University, Columbia Business School, the Indian School of
Business, and Trinity School. He also serves as director of the
Institute of International Finance, and was on the board of NASDAQ OMX,
the New York City Investment Fund, from 2000 to 2003.
Family
Pandit is married to Swati. The couple has two children: son Rahul and daughter Maya.
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