Citigroup Board Appoints New President and Retains Separate Position from Executive Director

NEW YORK (Reuters) – The Citigroup Inc. Board of DirectorsC.N) appointed one of its independent members to the position of Chairman of the Board on Monday, this position being divorced from the current managing director, Mike Corbat.

John C. Dugan, 63, a former bank regulator and a former Citigroup board lawyer who became a director of Citigroup last year, will succeed Mike O'Neill on Jan. 1, the company said. O'Neill recently reached the age of 72 and was scheduled to leave in April.

Corbat, 58, had not asked to be considered president after concluding that the current separation of Citigroup's position from his management position was preferable, said one familiar with his point of view. Corbat and O'Neill had discussed the issue over the past year, said the person, who declined to talk about private conversations.

As chairman, O'Neill led the directors to appoint Corbat as CEO in October 2012, when the board dismissed Vikram Pandit.

The managers of the Citigroup group's major bank, JPMorgan Chase & Co (JPM.N) and Bank of America Corp (BAC.N) also act as chairman of their board. But shareholders have challenged this dual mission, saying that board chairmen should be independent of the company's executives they are responsible for overseeing.

The change of management of Citigroup 's board of directors comes as the bank, the third largest US bank in terms of assets, struggles to catch up with the financial performance of its peers after suffering huge losses. during the 2007-2008 financial crisis, took government bailouts and had to sell assets. [L2N1WQ25R]

Corbat is pushing the bank to achieve the financial goals for 2020 that he had set last year after missing the goals that he had set in 2013.

In Citigroup's statement, Dugan said, "I am confident in the ability of Mike Corbat and his team to continue to improve returns for its shareholders."

Corbat said: "Citi and our shareholders have been well served by an independent chairman."

Dugan began advising Citigroup's board of directors in 2015 when he was a lawyer in Washington at Covington & Burling, where he headed the firm's financial institution group.

Dugan was the currency controller from 2005 to 2010. The US government agency supervises the national banks and the federal branches of foreign banks. After graduating from law school at Harvard Law School in 1981, Dugan held various government positions in Washington and Covington & Burling from 1993 to 2005.

O'Neill's decision to leave a few months earlier will allow Dugan to lead the Board of Directors in making executive compensation decisions for 2018 and will share its views on shareholder issues in anticipation of Citigroup's annual meeting in April.