Sallie Krawcheck may have spoken up one too many times.
After a series of disagreements with senior managers at
Citigroup Inc., including chief executive Vikram Pandit, the New York-based company announced last week that Ms. Krawcheck, head of its wealth management group — which includes the private bank and Smith Barney brokerage unit — will be leaving
Citigroup at the end of the year.
She was offered a new senior-level consulting position but chose to leave instead.
As part of the changes, the new head of wealth management, Michael Corbat, is now reporting to John Havens, who runs the institutional business.
Ms. Krawcheck was reportedly concerned about the conflicts created from mixing the retail business with the institutional side, and pushed for maintaining a true open architecture platform as the firm looks to expand sales of its own alternative investments.
She was not available for comment.
"I hope [Mr.] Pandit doesn't favor compromising that [open architecture] in any way," said an East Coast Smith Barney broker who asked not to be identified.
Ms. Krawcheck, 43, was a "strong advocate" for the Smith Barney sales force, the broker added.
The restructuring follows another management shuffle announced in March in which Citigroup took steps to integrate the management of Smith Barney and the private banking operation.
Ms. Krawcheck's clashes with other members of Citigroup's management were well-known.
Details of one such battle — her efforts at getting the firm to give back more money to investors in failed hedge funds — ended up in The Wall Street Journal in April. The paper described the fight as a "battle royal" between Ms. Krawcheck and senior management.
Brokers at the firm also give Ms. Krawcheck credit for fixing an unpopular compensation plan that went into effect last year.
Mr. Pandit, who took over Citigroup last December, is also seen as wanting his own people in place.
Ms. Krawcheck's "mistake was being hired by [former Citigroup CEO] Sandy Weill," said a West Coast representative at Smith Barney who asked not to be identified.
Not everyone had praise for Ms. Krawcheck.
"I think [her departure] is really about her role as chief financial officer" at the company from 2004 until last January, said one source, a former Smith Barney manager who asked not to be identified.
Like other CFOs at major brokerage firms, Ms. Krawcheck wasn't able to effectively gauge the risk Citigroup was taking, this source said. Mr. Weill hired Ms. Krawcheck from Sanford C. Bernstein & Co. Inc. of New York in 2002 to revamp Citigroup's research effort in the wake of the industrywide scandal involving conflicts of interest among research analysts. In that capacity, she ran Smith Barney until becoming CFO.
E-mail Dan Jamieson at [email protected].
