The board of Citigroup Inc (C.N) on Monday named one of its independent members to be its new chairman, keeping the post separate from current Chief Executive Officer Mike Corbat.
John C. Dugan, 63, a former bank regulator and former lawyer to the Citigroup board who became a Citigroup director last year, will succeed Mike O’Neill on Jan. 1, the company said. O’Neill recently reached the board’s retirement age of 72 and was due to leave in April.
Corbat, 58, had not asked to be considered chairman after concluding that Citigroup’s current separation of the post from his management job is best, a person familiar with his view said. Corbat and O’Neill had discussed the question over the past year, said the person, who declined to be quoted talking about the private conversations.
As chairman, O’Neill led directors to name Corbat as CEO in October 2012 when the board dismissed Vikram Pandit from the job.
The CEOs of Citigroup big bank rivals JPMorgan Chase & Co (JPM.N) and Bank of America Corp (BAC.N) also serve as chairmen of their boards. But the dual assignments have been challenged by shareholders who believe board chairmen should be independent of the company executives they are assigned to oversee.
The change in the leadership of the Citigroup board comes as the bank, the third-biggest U.S. bank by assets, struggles to catch up with the financial performance of its peers after it suffered massive losses in the 2007-2008 financial crisis, took government bailouts and had to sell assets.
Corbat is pushing the bank to reach 2020 financial targets he laid out last year after missing targets he set in 2013.
In the statement from Citigroup, Dugan said, “I am confident in Mike Corbat and his team’s ability to continue to improve returns for its shareholders.”
Corbat said, “Citi and our shareholders have been well served by having an independent chairman.”
Dugan began advising the Citigroup board in 2015 while he was a Washington lawyer at Covington & Burling, where he headed the law firm’s financial institutions group
Dugan was Comptroller of the Currency from 2005 to 2010. The U.S. government agency supervises national banks and federal branches of foreign banks. After graduating in 1981 from Harvard Law School, Dugan had worked in a variety of government posts in Washington and at Covington & Burling from 1993 to 2005.
O’Neill’s decision to leave a few months early will allow Dugan to lead the board as it makes decisions on executive pay for 2018 and sets views on shareholder issues ahead of the Citigroup annual meeting in April.