Citigroup's management upheaval is showing no signs of abating. The latest twist comes in the aftermath of the company's recent purchase of Old Lane Capital, run by former Morgan Stanley executive Vikram Pandit.
CNBC has learned that Pandit has emerged as one of the leading inside contenders to succeed CEO Chuck Prince. The other is Tom Maharas, the-co head of markets and investment banking.
The odd man out, people close to Citigroup say, is Michael Klein, Citigroup's long-time head of investment banking who is currently co-head of markets and banking with Maheras.
Sources tell CNBC that Klien has told people he’s already thinking about looking elsewhere for work, possibly leaving the bank for a top job at another company. Late last year in a management shakeup, Klein along with Maheras were elevated to the position of co heads of the corporate and investment banking unit of the giant financial firm, which runs the markets and banking operations for Citigroup.
CFO Sallie Krawcheck was moved to the company's wealth management unit following the ouster of Todd Thompson from that position. With Krawcheck moving to a less high profile job, and Thompson out, the betting on Wall Street and inside Citigroup was that Maheras and Klein were the front-runners to succeed Prince. But with Pandit joining the firm that equation has changed.
A spokesman for Citigroup declined to comment, but he did point out that Klein has been "very engaged" in several high-profile moves on the part of the big investment bank, namely the recently announced “green initiative” to spend $50 billion on environmental issues, and Citigroup's purchase of Nikko Cordial. Klein’s investment banking team is also a lead underwriter on Blackstone’s IPO.
That said, people tell CNBC that Klein wasn't happy with the company's purchase of Pandit's hedge fund, and not just because it cost Citigroup $600 million. It's also because of what the move did to Klein's chances to succeed Prince, who has come under increasing pressure from some investors to increase the company’s share price or possibly leave the firm.
All this doesn’t mean Klein is expected to leave immediately. In fact sources tell CNBC that if he does go, he will wait for the right position to open up at a major financial firm.