Citigroup Names Parsons Chairman

Updated from 5:05 p.m. EST

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Citigroup (C Quote) on late Wednesday named its lead independent director Richard Parsons to succeed Sir Win Bischoff as its new chairman of the board.

Parsons, 60, the former CEO and chairman of Time Warner (TWX Quote) and Dime Bancorp, will succeed Bischoff as of Feb. 23. Bischoff, 66, will not stand for re-election on the company's board and will retire later this year, Citi said.

Regulators have called for the replacement of Bischoff in light of the company's precarious position. Citi was among the first banks to received preferred equity investments through the Troubled Assets Relief Program, or TARP, but was forced to get a second bailout in late November as investor fears mounted regarding the viability of the company.

Bischoff was elected to chairman of the board in late 2007 after former CEO and chairman Charles Prince was forced to resign. Vikram Pandit succeeded Prince as CEO.

The news comes less than a week after Citi announced, in conjunction with a huge fourth-quarter loss, that it was splitting its businesses into two firms -- Citicorp, encompassing the bank's core assets, and Citi Holdings, which will house mostly unwanted assets and units it is looking to unload.

But some question whether Parsons is the right man for the job of chairman, given that he is a longtime Citi director who has been part of the decision-making process at the bank. Earlier this month, senior adviser and director Robert Rubin resigned from the board and his responsibilities. Critics speculated that more board shake-ups were necessary.