Citigroup stunned observers Monday when it named Sallie Krawcheck CFO and head of strategy. As of November 5, she will replace Todd Thomson, who will step into Krawcheck’s current slot as head of Smith Barney.
Krawcheck’s promotion makes her “the highest-ranking female executive on Wall Street,” according to The New York Times. The case for that epithet is especially strong in light of last week’ resignation by Dina Dublon as CFO of JPMorgan Chase.
The move set up Krawcheck, 39, and Thomson, 43, as the apparent heirs of the top slot at the bank. “By dint of age and talent, both executives are legitimate contenders for chief executive and chief operating officer,” Charles Prince, Citibank’s current chief executive officer, told brokers during a conference call Monday, according to the Times.
Still, Krawcheck’s lack of experience as a corporate finance executive made her appointment something of a surprise. “The selection of Ms. Krawcheck is a bit of a shock for a number of reasons,” said Richard Bove, an analyst with Punk, Ziegel & Co. in a research note, according to Reuters. “She has a superb reputation and is believed to have turned Smith Barney around. However, she has never been a comptroller, treasurer, or CFO anywhere else. Her entire business experience is in the securities industry.”
Krawcheck has served as chairman and CEO of Smith Barney, Citigroup’s private-client wealth management and equity research unit, since 2002, and is a member of the Citigroup management committee. She is credited with setting up Smith Barney’s independent-research operation and buttressing the firm’s network of financial consultants.
That was no small feat, given that she took over a research operation that had been beset by conflict-of-interest investigations by New York Attorney General Eliot Spitzer and the National Association of Securities Dealers.
Before joining Citigroup, Krawcheck was a highly rated securities analyst covering the brokerage and insurance industries at Sanford C. Bernstein. She eventually rose to chairman and CEO of the independent research firm. Before joining Bernstein, she worked as an associate in corporate finance at Donaldson, Lufkin & Jenrette Inc.
Thomson has served as Citigroup’s CFO and head of strategy since 2000, where he was responsible for overseeing financial reporting, treasury, tax, investor relations, operations and technology, mergers and acquisitions, and strategic planning.
Citing analysts, the Times reported that the executive moves were triggered by Thomson’s desire to lead one of the bank’s operating divisions in order to put him in better position to be considered for the chief executive job.