Vikram Pandit Success Story: From Indian-American Banker to Citigroup CEO
Born in 1957, Vikram Pandit is an Indian-American banker and investor. The 66-year-old was the Chief Executive Officer of Citigroup from 2007 to 2012. In his career as a banker Pandit has received several awards and is known for several of his notable achievements as well.
It was back in the year 2013 when Pandit had bagged Euromoney magazine’s Banker of The Year Award for executing one of the biggest and most complex bank restructuring in history, which saw troubled institutions returning to profits.
Pandit’s success prior to winning this award was at its peak. His contribution in International finance has served him well over the past decade. Pandit has solved complex problems and even today he would happily solve any complex algorithm. He has backed several companies and management that specialize in data sciences and financial technology as a savvy investor.
Early Life and Education: From Nagpur to Columbia University
Vikram Pandit was born in the Dhantoli locality of Nagpur, Maharashtra to an affluent Marathi family in 1957. His father, Shankar. B Pandit was an executive director at Sarabhai Chemicals in Baroda. Pandit had studied at Bishop Cotton School in Nagpur, and then he completed his schooling at the Dadar Parsee Youths Assembly High School in Dadar, Mumbai.
When Pandit was just 16 years old, Pandit moved to the United States where he attended Columbia University for his undergraduate program. It was in the year 1976 he earned his B.S.
Pandit has always been a brilliant student and has achieved several academic achievements as well. He is a member of the Board of Overseas of Columbia Business School and also a member of the Board of Visitors of the Columbia School of Engineering and Applied Science. He has earned BS and MS degrees in engineering from Columbia University and additionally received his PhD in Finance from Columbia back in 1986.
Entry Into The Financial World: Founding Old Lane LLC and Citigroup Journey
Pandit studied engineering but soon discovered his interest was in economics and finance. He has even published his own thesis the same year he received his PhD. It was in the year 2006 when Vikram Pandit along with Guru Ramakrishnan and John Havens had started their hedge fund company named Old Lane LLC. The company did not do well as it had faced trouble calculating net asset value which is a measure used in the hedge fund industry.
However, the company was revived by Citigroup after acquiring the company in 2007 for a whopping amount of $800 million. After this acquisition, the founders of Old Lane were also brought under the leadership of Citigroup.
Citigroup Journey
As mentioned earlier, he received his PhD in Finance from Columbia in 1986 which marks his interest in the financial industry. It was in the same year when he published a thesis involving a complex financial puzzle, titled ‘Asset prices in a heterogeneous consumer economy’. He taught economics at Columbia during his early professional career. Later, he joined Morgan Stanley and his contribution in the company was significant towards the electronic trading platform and prime brokerage division.
It was in the year 2006 when Pandit along with John Havens (former chairman of Citigroup spinoff, Napier Park Global Capital) and Guru Ramakrishnan started the hedge fund Old Lane LLC. Citi bought the company and Pandit was named CEO.
However, the journey was full of ups and downs when Pandit became the CEO. Citigroup had met with unexpected losses and declared to its Board of Directors that his salary should be only $1 with no bonus until and unless the company returns to profitability.
In Jan 2011 after working with a salary of $1 his annual base was raised to $1.75 million for the progress made by the Citi under his leadership. In 2011 itself the company had announced a retention award of $23.2 million to Pandit making him one of the highest paid CEOs. Citigroup overcame the financial crisis only because of the leadership of Pandit.
Leadership Style and Philosophy: Rewards, Punishments, and Crisis Management
Pandit always used the transactional theoretical framework to run the Citigroup company. During his tenure as the Chief Executive of the company, he used reward and punishment to achieve organizational goals. When he discovered that Citigroup had lost billions of dollars from subprime loss, Pandit was able to immediately replace the officer in charge of the operation.
Additionally, during the time of 2008 and 2009 financial crises, he had declared that his salary per year would be $1 with no bonus until and unless the company recorded profits. This was quite a brave decision from him and later on, he was able to put his company in a stable position for which he was awarded $23.3 million for retention.
Vikram Pandit has been a great achiever in his career helping several companies to overcome difficulties. He uses his superior intellectual superiority to achieve organizational goals. Being well-educated backs his decisions regarding top-level management.
Recognition and Awards: Padma Bhushan and Philanthropic Initiatives
Vikram Pandit serves as the director of the Institute of International Finance. Additionally, he was also on the board of NASDAQ OMX, which is the New York City Investment Fund, from the year 2000 to 2003. It was in the year 2008, Pandit was awarded the Padma Bhushan by the Government of India.
Pandit unexpectedly resigned as the CEO of Citigroup. But, he has never stopped working as he had teamed up with Daniel Kahneman a couple of years ago to launch a new Chicago-based consulting business. He has also backed CommonBond which is a Brooklyn-based venture that lends to MBA students and refinances debt.
Philanthropic Initiatives
Pandit always had the intention to do good for his company and whichever organization he worked for during his early career days. He proved that he is a selfless person when he helped his company Citigroup revive its profits. It was only because of his leadership skills and management skills the company survived the financial crisis in 2008/09 or else the company would have gone bankrupt and many employees would have lost their jobs.
It was in the year 2012 when he unexpectedly resigned as the CEO of Citigroup. But, even today he has not stopped working for the betterment of the common people. His bonding with numbers even today is at its peak and he is also backing companies and managements that specialize in data sciences and financial technology as a savvy investor.
Lessons from Vikram Pandit's Success: Determination, Career Path, and Teamwork
Vikram Pandit has proved that with proper education and with proper leadership skills anyone can lead a complex situation and ease them out. His journey from India’s school to being one of the highest-paid CEOs has been an inspiring story for entrepreneurs and leaders today. There are many things to learn from his journey, achievements, way of thinking and approach to a complex problem.
Being an engineering student, Pandit’s interest grew in economics and finance. He has done his PhD and then he moved on in the same field in the upcoming years. Identifying the right career path is very important which we have learnt from Vikram Pandit’s success story. He has always been determined and confident enough to bring positive changes for his organization.
He also believes that teamwork is important. His leadership skill tells us that he only likes to work with the best employees. Anyone who does not seem capable enough will get them removed.
Conclusion: The Inspiring Impact of Vikram Pandit's Journey
Vikram Pandit had realized his interests at an early age which was one of the reasons why he has done quite great in his career. His decisions have been proved to be risky but he always kept faith and was always determined to help the organizations he worked with.
He has solved several complex financial problems which have helped several organizations. The impact that he has created will be an inspiring story for many entrepreneurs and leaders in the upcoming years.