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Citigroup's Prince selects his inner circle

Citigroup Inc chief executive officer Charles Prince, whom Sanford Weill picked over other top lieutenants to succeed him in running the world's biggest financial services company, is assembling an inner circle of his own.

Prince, 55, yesterday promoted Steve Freiberg and Ajay Banga as co-heads of Citigroup's global consumer unit, replacing Marjorie Magner, who resigned. The promotions, which follow Prince's decision a year ago to swap the duties of retail brokerage head Sallie Krawcheck and chief financial officer Todd Thomson, give Prince at least four 40-something executives who report directly to him.

"There are a large number of people here who have the potential to be CEO someday," Prince said in an interview. "We can continue to move the next generation into positions of leadership where they can be tested in ways that can extend their careers even further." Magner, 56, like Prince and chief operating officer Robert Willumstad, worked alongside Weill for almost 20 years. When Willumstad, 60, announced last month that he would leave New York-based Citigroup to pursue a CEO job elsewhere, Prince said he wouldn't be replaced.

With the departures of Willumstad and now Magner, Prince loses more than 60 years of combined experience in consumer banking, Citigroup's most profitable business.

"There's a concern that there aren't enough people at the top to fill in for people leaving," said Thane Bublitz, who helps manage US$66 billion at Minneapolis-based Thrivent Financial for Lutherans, which owns 4.2 million Citigroup shares.

"They're not one of the ones that would come to mind initially when thinking of companies with a deep bench," he said.

Weill, 72, ceded the CEO post in October 2003 to Prince, who had spent most of his career as the company's general counsel.

Weill, who remains chairman of Citigroup, considered leaving this year before pledging last month to remain until his contract expires next year.

Prince ousted vice chairman Deryck Maughan, asset-management head Thomas Jones and Peter Scaturro, who ran the private bank, last year after regulators shut down the company's private-banking arm in Japan for failing to police money-laundering and fraud.

Willumstad and Magner left jobs at Chemical Bank in New York in 1987 to join Weill at Commercial Credit Co, and remained at his side even as former colleagues such as Jay Fishman, Jamie Dimon and Jeffrey Lane landed CEO jobs outside the company, and Prince was tapped as Citigroup's next CEO.

Magner will depart on Oct. 1 to pursue interests in the music or entertainment industry, academia and philanthropy. She said neither Willumstad's departure nor Prince's decision to keep the COO post vacant played a role in her decision.

A May 31 accident, in which Magner was struck by taxi cab on the corner of 71st Street and Third Avenue in Manhattan, left Magner with a broken leg -- and time to evaluate her life and career.

Magner will be replaced by Banga, 45, and Freiberg, 48. The business, which includes 3,415 retail branches, credit cards and consumer loans, accounted for 58 percent of Citigroup's revenue in the first half of this year. Citigroup's consumer business earned US$11.9 billion last year, more than Wal-Mart Stores Inc.
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