Citigroup, a major Wall Street bank, is facing controversy after it emerged that a key executive it hired with a lavish $50 million (about 70 billion won) package moved to the rival just after being effectively told to leave a previous job.
According to the Financial Times (FT) on the 29th (local time), just three days before Citigroup announced the hire of Vis Raghavan in 2024, JPMorgan Chase notified Raghavan of his dismissal. Executives judged that internal complaints about his overbearing management style and inappropriate remarks and behavior, which had persisted for years, had reached a breaking point.
At the time, JPMorgan planned to officially announce Raghavan's removal the following Monday. But over the weekend, Raghavan is said to have secretly contacted Citigroup and finalized his hiring. FT said, "On Monday morning, when Citigroup announced his hiring, his departure appeared not as a 'firing' but as a 'sudden move to a rival.'" At the time, Citigroup Chief Executive Officer Jane Fraser announced that Raghavan would be hired as the new bank president and emphasized it as "an example of attracting top talent." Citigroup was searching for the head of the investment bank institutional sector through an external headhunting firm, but Raghavan reportedly bypassed that process and negotiated directly with management.
At JPMorgan, Raghavan was a figure who sharply divided opinion. Over more than 20 years, he rose to become the sole head of the global investment bank institutional sector as a key figure credited with making the European investment banking business a success. He is assessed as having lifted the organization with strong drive and results.
On the other hand, steady criticism held that he was a "bullying-style leader," openly rebuking employees and using aggressive language. He underwent two internal investigations over these leadership issues. He also drew controversy for violating the anti-nepotism principle by hiring a family member. Because of these issues, JPMorgan once cut his pay, FT reported.
Despite the controversy, his performance within Citigroup is evaluated positively. Since taking office as Citigroup's bank president, he has reorganized the organization by hiring a large number of talent from rivals such as Goldman Sachs, and the Citi investment bank institutional sector recently posted record-high revenue. The share price also approached the highest level since the financial crisis.
Still, some in the financial industry voice concern. They question whether it is appropriate, while pushing for improvements in corporate culture, to discuss as a next chief executive officer candidate someone who was ousted from a previous post over leadership issues.
Citigroup said, "Raghavan is a leader with a proven track record," adding, "We decided to hire him after thorough internal vetting." Former colleagues from his previous workplace who requested anonymity said, "His attitude may temporarily soften, but ultimately the same problems will recur."