Citi Hires Help for Management Review: Report

Updated from 12:36 a.m. EDT

NEW YORK (TheStreet) -- Citigroup(C Quote) is being forced by U.S. regulators to hire outside consultants to consider whether the bank's current management is up to the job of leading the bank out of the financial crisis, a report says.

The bank has retained Egon Zehnder, a headhunter and board advisory consultant, to conduct a management review requested by the government after the stress tests on banks in May, the Financial Times reports, citing people close to the situation.

Forcing the bank to hire external help could raise questions about the long-term future of CEO Vikram Pandit, who is under fire from the Federal Deposit Insurance Corp., and other senior executives, the Financial Times notes. Citigroup has received about $45 billion in government aid to help keep it viable.

Citigroup has to present a plan about possible managerial changes to the board and regulators by the time it reports its third-quarter results in October, the newspaper says, citing people familiar with the matter.

Citigroup shook up its top ranks in July when it promoted Chief Financial Officer Edward "Ned" Kelly as vice chairman. Many feel Kelly is being groomed as an eventual successor to Pandit. John Gerspach, Citi's controller and chief accounting officer, was named to replace Kelly as financial chief.

Separately, the bank is planning to claim that energy trader Andrew Hall, who is due to receive compensation of $100 million this year, should be exempt from review by the Obama administration's pay czar, the New York Times reports.

Citigroup executives say Hall's compensation is exempt because it is part of a contract signed before the law establishing the review system was passed in February, the Times reports.

The claim comes as Kenneth Feinberg is set this week to begin formal reviews of the compensation packages of companies like Citigroup that received taxpayer assistance.

Hall, head of Citigroup's highly profitable Phibro commodity trading unit, was paid $100 million last year and under a contract signed in October is to make a similar amount this year, executives with knowledge of the contract said, the Times reports. The executives said no final decision on whether to seek an exemption has been made.

-- Reported by Joseph Woelfel in New York.