Sanford Weill, one of the most storied figures in modern finance, announced on Wednesday that he would be stepping down as chief executive of Citigroup Inc, the financial colossus he erected, at the end of the year.
Although he will remain as chairman until the spring of 2006, the announcement ends months of speculation about when Weill, who is 70, would set up a line of succession at Citigroup, the world's largest financial services company.
Charles Prince, 53, was named as Weill's successor. Prince had been tapped last September to take over Citigroup's Salomon Smith Barney investment banking and securities operations after regulators began investigating the firm for conflicts of interest in its investment research.
And Robert Willumstad, 57, who is currently president of Citigroup, was named chief operating officer.
Still, Weill will remain very much a power at the company. During an emotional meeting that industry analysts, reporters and Citigroup's more than 260,000 employees were able to hear on a Webcast, Weill emphasized that he would stay closely involved with the company.
Besides working with the board, he said he would call on government officials, work to expand the business overseas and do strategic planning.
Weill also said he would work closely with Prince and Willumstad until his retirement in 2006.
"I think I am mature enough to know not to get in the way of what they are going to do," Weill said in an interview after the meeting. "Let there be no question that these will be the guys running the business."
And he suggested that they had better not make any big mistakes.
The management changes come a day after Weill announced Citigroup's latest transaction, the purchase of Sears, Roebuck and Co's credit card business for about US$3 billion.
"It's a very tough act to follow," Prince said. "There's never going to be another Sandy Weill. I am excited and I am terrified."
The changes also follow Citigroup's agreement in April to pay US$400 million to settle charges that Salomon Smith Barney had provided misleading investment research.
Citigroup's payment was the largest individual part of a US$1.4 billion settlement involving 10 investment banks, federal securities regulators and the New York state attorney general over investment research practices.
In a reflection of securities regulators' concerns about the possibility of conflicts of interest at Citigroup, the settlement barred Weill from communicating with his firm's stock analysts about the companies they cover, unless a lawyer is present.
Analysts said that while Weill will still be a presence at the company, the announcement on Wednesday was indeed a clear transition of leadership at Citigroup.
"He can time his own exit, and I don't think he is making a partial exit," said Robert Albertson, principal and chief strategist at Sandler O'Neill & Partners.