Citigroup CEO Jane Fraser named board chair, consolidating leadership role
Oct 23 – Citigroup (C.N) announced on Wednesday that CEO Jane Fraser has been elected as chair of the board of directors, taking on a dual role that combines executive management with board leadership. Fraser, who became Citi’s CEO in 2021, now joins a growing list of major U.S. banks where the CEO also serves as board chair, including JPMorgan Chase (JPM.N), Goldman Sachs (GS.N), and Bank of America (BAC.N).
Fraser succeeds John Dugan, who has served as chair since 2019 and will assume the role of lead independent director. To ensure “leadership continuity,” the board approved a one-time equity award of $25 million, set to vest fully within five years, according to the filing.
Performance and leadership highlights
Citi’s board cited Fraser’s accomplishments as CEO as justification for the dual role. Key achievements include divesting international businesses, hiring new executives, simplifying the bank’s organizational structure, and advancing regulatory compliance efforts.
“This move reflects the bank’s performance improvement, which is directly tied to Fraser’s track record as CEO,” the filing stated.
The announcement follows a similar move at Wells Fargo (WFC.N) nearly three months ago, where CEO Charlie Scharf was also appointed board chair and awarded $30 million in restricted shares and stock options.
Governance considerations
The combination of CEO and board chair roles has previously drawn scrutiny from proxy advisers, who have argued that separating the positions strengthens corporate governance. Last year, both Goldman Sachs and Bank of America rejected such proposals. Analysts at Wells Fargo noted that “its new CEO pay continues a long tradition of paying in excess – or at least before proper performance,” but maintained that Citi remains a top pick.
Historical data highlights that between 2000 and 2009, Citi CEOs were among the highest-paid in the banking sector, despite a 92% drop in shares during that period.
Market perspective
Wells Fargo currently holds an ‘overweight’ rating on Citi, with a price target of $125, compared to a Wall Street median of $115, according to LSEG data. Citi declined to comment further on the board decision when approached by Reuters.
In statements, John Dugan remarked, “Citi is in a fundamentally different place than it was when these roles were separated.” Fraser added that the bank has demonstrated its ability to grow returns for shareholders, signaling confidence in the consolidated leadership structure.
