Prince has faced questions about his leadership from the day he was tapped in July 2003 to replace Sanford "Sandy" Weill as Citigroup's chief executive. So far, he appears to have the
backing of his board and of Robert Rubin, the former U.S. Treasury Secretary who chairs Citigroup's executive committee.
But a $6.5 billion write-down of mortgages, leveraged loans and other debt should leave Citigroup short this year of Prince's goal of boosting revenue faster than expenses. The
bank also faces potential subprime exposure through tens of billions of dollars of structured investment vehicles.
Citigroup shares trade below where they were when Prince took over.
"If I'm in my job for four years and don't deliver, I get shown the door," said StoneRidge's Killian.
No Internal Successor
Prince has a safety valve of sorts in that Citigroup does not have a clear internal successor should he leave. By contrast, Bear Stearns President Alan Schwartz is considered a logical successor for Cayne at the Wall Street investment bank, and Countrywide Chief Operating Officer David Sambol could succeed Mozilo at the largest U.S. mortgage lender.
Cayne appears to have allayed some concerns after striking an investment pact with China's CITIC Securities.
Mozilo, in contrast, faces calls from some investors to resign after presiding over a $1.2 billion third-quarter loss and pocketing more than $100 million in the last year from stock awards. The U.S. Securities and Exchange Commission has opened an informal inquiry into his trading.
Sonnenfeld, the Yale professor, said CEOs can be excused for sagging performance. He said Cisco Systems' board, for example, left John Chambers in charge because it "recognized the whole industry was intoxicated with cyberspace" before a 90 percent drop in its stock price from 2000 to 2002.
"There will be a lot of pressure to come up with a retirement package for Cayne," Sonnenfeld said. "People have been stalking Prince since he took over. At Countrywide, I actually think the SEC investigation is going to be more critical than anything else."