Mayo Says 'Sell Citi'

David Hilder, an analyst at Bear Stearns, was more optimistic, saying the changes were necessary since the writedowns "showed clearly that Citigroup's senior management either lacked the understanding or the ability to quickly change the risk profile of its investment bank in a market disruption such as occurred in July and August," according to a note.

Still, he cautioned that if Pandit was not successful in his new role that Citi would likely have to resort to more drastic steps.

"Although we believe this is short of the more significant senior management change that some investors had been hoping for, we view it as a potentially positive step," wrote Hilder, who rates the stock outperform. "We believe that if Mr. Pandit does not succeed in producing a better combination of lower volatility and at least a peer-average return on capital from the investment bank, Citigroup's board will conclude that a more significant change, at the CEO level, is required." He rates the company at outperform.

Other analysts praised Prince's management changes.

"Mr. Prince took the appropriate actions," writes Richard Bove, an analyst at Punk Ziegel who rates the stock sell. "He reinforced the concept of accountability by doing so. While he is being criticized for just about everything one can imagine, he continues to make the right moves as CEO."

>To order reprints of this article, click here: Reprints