Updated from 10:15 a.m. EST
said Monday that John S. Reed, 61, will retire as chairman and co-chief executive, marking a transition that puts his counterpart, Sanford I. Weill, 66, in control of the financial-services giant.
Reed will step down at the annual shareholders meeting on April 18.
Weill, who has his own plans to retire, will work with the board to groom a successor within two years, Citigroup said.
Shares of Citigroup rose 1 3/8, or 3%, to close at 49 3/8 Monday.
"The dual CEO role has never proven that it works," said Diana Yates, an analyst at
who rates the stock an accumulate. "But I think (the retirement) is a positive. They've got clear leadership." Her firm has done no underwriting for Citigroup.
The announcement comes less than a week after Citigroup's chief financial officer, Heidi Miller, unexpectedly defected to Priceline.com, the online bidding business. Citicorp said that it expects to fill that office quickly.
"Does this say there's something coming down the pike?" Yates asked. "Is it going to be something big? The company will say, 'We've been involved in merger activity; we'll continue to be in merger activity.' But with more merger activity it's a wildcard as to who will take over."
David Berry, an analyst at
Keefe, Bruyette & Woods
, said he was not completely surprised by the news. "But I think that is a succession process that Weill wasn't interested in doing until now," he said. "It does highlight that Sandy will not be running Citigroup forever." Berry rates the stock a market performer and his firm has done no underwriting for Citigroup.
"I think you could see someone come up from one of the bigger businesses from within the franchise," said Berry, suggesting someone in his or her late 40s or early 50s. "Rubin was pretty clear when he joined the company that he did not want to become CEO. I take him on his word. But maybe he'll have to do a little more."
Robert Rubin, the former Treasury secretary who joined Citigroup in October, reiterated his opposition to taking the top job in a conference call with investors Monday. "I will remain very actively involved," he said, but added, "I will not be CEO."
The company would not say whom it would be considering to succeed Weill as chief executive officer.
Rubin joined Citigroup as the chairman of the executive committee of the board. He immediately extinguished hopes that he would lead the financial organization by saying he "absolutely won't be the CEO of anything."
Reed has served for 35 years at Citibank, rising to chief executive of Citicorp, and became the co-chief executive with Weill upon the merger of Citicorp and Travelers Group in 1998.
"My decision was a deliberate one that I have discussed fully with the board, and I leave the company knowing we have put into place a truly outstanding management team and a sound strategy that will serve as the foundation for our future growth,'' Reed said in a statement.