Vikram Pandit Falls on His Sword. But Who Can Save Citigroup? Vikram Pandit, chief executive officer of Citigroup Inc., speaks at the U.S. Export-Import Bank annual meeting in Washington, D.C., April 1, 2011. The stock market cheered the move, with shares of Citi rising 1.6% yesterday. A diverse group of commentators lauded Pandit's decision to step down (which they interpreted as Citi firing Pandit, rather than an actual resignation). Sheila Bair, chairwoman of the FDIC during the financial crisis, who criticized Pandit in her recent book, said of the change: I viewed his resignation as a positive. The board is doing its job, by opening up a new chapter for Citigroup . . . The bank's performance under Pandit was very bad. Citi's board is opening a potentially new direction, and should be commended. Investment banker and bank analyst Christopher Whalen wrote: "The departure of Vikram Pandit as CEO of Citigroup should come as a relief to the markets, regulators and customers - indeed, just about everybody besides the volatility junkies who like to trade this very liquid, very unstable stock." These critics point to Pandit's lack of experience in operations as one of the central reasons he was unable to turn the bank around. Indeed, the manner in which Pandit rose to the top echelons of Wall Street was unique and indicative of the transformation that the industry has gone through in the past several decades: Pandit received degrees in electrical engineering and a PhD in finance and spent time in academia before he got his first job on the street in 1983. This was the dawn of an age in which Wall Street would be increasingly dominated by math-savy "quants," who used their skills to game the markets and craft new complex financial instruments. Though Pandit was an experienced trader who was comfortable with the various new financial instruments that arrived on the scene over the past twenty years, he had little experience managing a complex institution like Citigroup. Pandit's critics also see him as a symbol of the corruption at the heart of Citigroup - it's close ties to Washington, which (in combination with its massive size) allowed the firm to take outsized bets while its creditors continued to assume the bank would be bailed out if anything went wrong. Pandit's champion at Citi was former Treasury Secretary Robert Rubin, who left the federal government in 1999 after advocating for the deregulation that many say contributed to the financial crisis less than a decade later. After leaving the government, Rubin became a director at Citigroup, and became friendly with Pandit around that same time. According to a profile of Pandit in New York magazine, in 2007, Rubin pushed for the bank to purchase Pandit's hedge fund - not for the fund itself (which was performing poorly) - but because Rubin wanted Pandit at Citi. According to the report: Rubin sold Pandit as the consummate problem-solver and a man who could see around corners . . . Pandit's pedantic style and reputation for risk-aversion dovetailed with the going mood, a balm for the go-go era of high risk that was battering the investment banks. MORE: Despite Good Earnings, Big Banks Far From Fixed Unfortunately for Citi shareholders, the bank clearly overpaid for the fund. The deal netted Pandit $165 million, even though Citi shut it down roughly a year after the purchase, taking huge losses. Meanwhile, Citi's financial situation took a turn for the worse. As the financial crisis deepened, bets that Citi had taken in the real estate market continued to sour and the bank was forced to turn time and again to the federal government for support - with the Treasury at one point owning a 27% stake in the firm. Pandit did his best to shore up the firm's balance sheet, selling off assets to raise capital and even taking a $1 salary in 2009 as a symbol of his commitment to returning the bank to health. And some market watchers gave Pandit credit for making the right moves to fix a beleaguered business that was hobbled by decisions made long before he arrived. CNBC host Jim Cramer said of Pandit's recent efforts: I saw a strategy developing that could bring the bank out of its morass, one that emphasized emerging markets and international growth while simultaneously getting control over the $100s of billions in bad loans that the company had made during the boom of the late 2000s, again not under Pandit's watch. Despite this progress, Pandit's failures proved too numerous for the board to abide. First and foremost, Citi's shares have plummetted 89% since he took the helm. Earlier this year, the Federal Reserve rejected a plan put forth by Pandit to buy back stock from investors. Then came a vote from shareholders to voice their displeasure at Pandit's $15 million salary in 2011. These failures aren't all Pandit's fault. The decline in stock price is mostly due to decisions that were made long before Pandit arrived on the scene. But if Pandit's critics are correct - that he was a symbol of an overly complicated Wall Street that was focused too much on profits from trading and cozy relationships with government - then perhaps Citi can slim down and refocus itself on repairing what analyst Mike Mayo called "one of the worst cultures in banking for the last few years, and the last decade." MORE: Citi's CEO Pay Revolt: Capitalism Is Back, Baby!