"Vis Raghavan is the best person to clear out Citi's complacent bankers"
As a banker who recently left Citi, I would like to put in a word of support for Vis Raghavan, the head of the investment bank. Despite complaints that he's paid too much and is upsetting the apple cart by hiring-in new people, I think Vis is the best thing to happen to Citi for a long time.
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Vis wasn't always the most popular person at JPMorgan, but many people there had a lot of respect for him. Vis cleared out people at JPMorgan who needed to be fired, and he was given the autonomy to do so. That kind of thing is actually quite rare in big organizations. When it happens, it will always piss people off.
Citi, meanwhile, has become full of bankers who are coasting. In the absence of someone like Vis, who's willing to make unpopular decisions, Citi had spent the past few years trying to manage costs by underpaying. - I know people there at director and even managing director level who've received bonuses of $30k-$70k for several years running. That's the kind of bonus you pay an analyst.
Citi had been hoping that these people would just walk away. Some of them have worked for the bank for 15 years or more and would be expensive to pay severance too. The hope was that the analyst bonuses would encourage them to leave of their own accords.
In normal times that might work. In these times, it doesn't. There's nowhere to go, and so they've stayed. They're demoralised and it's contagious. They don't do the work they're supposed to do; they don't hold the meetings we expected; they push their work onto other people. Once you've been paid a $50k bonus as a director one year, and you haven't walked, you know that you'll get that again.
A lot of people at Citi would love for Vis Ragavan to take a firmer stance in clearing out Citi's bankers. What's really needed is a voluntary redundancy program to clear out these people. They need a package that's good, but not that good. If the dead wood at Citi leaves, morale will improve dramatically there. Vis needs to repeat what he did at JPMorgan.
Xabier Romero is a pseudonym
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