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Weill Leaves Corner Office, Not The Building

This article is more than 10 years old.

After pouring his all into Citigroup, Sanford I. Weill Sanford I. Weill finally said when.

223709 Sanford Weill Citigroup
Citigroup Charles O. Prince Charles O. Prince Robert Willumstad Robert Willumstad

Though he will leave the corner office, Weill, the embodiment of Citigroup through thick and thin, isn't walking out the door. At a spry 70, he will remain chairman until 2006 and has put in place an experienced internal team to follow through on his vision. "There's no question that Chuck and Bob will run the company," said Weill. "I'm grown-up enough to not get in the way." But Weill joked that he will be watching them from the chairman's office: "They better not screw up."

"It's going to be a different world for us," said Prince. However, Willumstad noted that, "There will be no change in philosophy or attitude."

It would take some serious effort to put a major dent in the still growing franchise that recently struck a deal for the credit card unit of Sears after picking up credit services for Home Depot . Through constant strategic expansion, Weill has transformed the former Commercial Credit franchise (now CitiFinancial) into one of the world's largest and most powerful companies, controlling more than $1 trillion in assets.

Shareholders, including Weill and his 22.4 million shares (0.43% of the company), have done well by his leadership. Total compounded return since Commercial Credit's October 1986 initial public offering stood at 3,488% at Tuesday's close of $46.83. Shares of Citigroup fell $1.47, or 3.14%, to $45.36 following the news.

Over the same 17-year period, the S&P 500 stock index has appreciated 315% and shares of General Electric advanced 1,210%. While Citigroup lags the 20,365% appreciation of Microsoft over the same period, the board is now giving even more back to shareholders. On Monday, Citigroup raised its annual dividend 75% to $1.40 per share from 80 cents per share.

Despite Weill and Citigroup's munificence for shareholders, the last two years have brought Citigroup's loyalty and honesty towards its customers into question. Even while announcing record earnings, the company has been the center of regulatory probes concerning Enron , WorldCom and the Wall Street settlement. At $440 million, Citigroup paid the lion's share of the $1.4 billion settlement and its recently purchased Associates First Capital group (now part of CitiFinancial) was smacked with one of the largest-ever predatory lending settlements last fall.

Weill, whose net worth exceeds $1 billion, saw his own reputation sullied by association and directly through allegations that he influenced former telecom analyst Jack Grubman in order to secure a spot in the AT&T Wireless IPO.

In response, Weill was one of the most visible and vocal Wall Street executives on corporate reform. He shook up the company's operating structure last summer and later brought in Sallie Krawchek to head up the recharged, consumer-focused Smith Barney operations. He also made statements against interlocking boards by stepping down from directorships at AT&T and United Technologies . And, in February, Citigroup revealed that Weill, unlike many other Wall Street executives, would forego an annual bonus due to the criticism surrounding inflated chief executive compensation.

The rest of this year, as we predicted (sort of) in December, will serve as Weill's farewell tour for business associates and employees. But shareholders, whom Weill served as chief executive for so many years, can take solace in the fact that Weill will still be minding the shop.

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