By David Benoit

When Citigroup Inc. named Michael Corbat chief executive in 2012, everyone was surprised. Including him.

He had recently moved to London for what he believed was his last job, running the bank's operations in Europe, the Middle East and Africa. He had told his wife, Donna, he was a few years away from retirement.

Then CEO Vikram Pandit quit just after a board meeting. Directors, anxious about the bank's recovery from the financial crisis, called on Mr. Corbat, who had developed a reputation as a fix-it man. The announcement the following morning stunned the financial world in its abruptness.

"I'm kind of the Monday morning 'go figure it out' CEO," Mr. Corbat said.

Mr. Corbat, 60, was never the prototype of a big bank CEO. He rarely spoke about himself and didn't draw the spotlight. Yet he is credited with strengthening the nation's third-biggest bank, simplifying its operations and improving its results even as profits and the share price lagged behind rivals and a series of new crises emerged, including recent regulatory scrutiny.

Unlike his immediate predecessors, Mr. Corbat left on his own terms. He succeeded in giving his successor, Jane Fraser, a carefully-orchestrated transfer of power when he retired in February after more than 37 years at the bank, the only place he ever worked.

Before his final day, Mr. Corbat spoke to The Wall Street Journal about Citigroup's crises, leadership lessons and legacies of his eight-year tenure. Questions and answers have been edited for clarity and length.

WSJ: When you look back at your time as CEO, what will you tell people you accomplished?

Mr. Corbat: I inherited my position at a very interesting time. It was really coming out of the financial crisis. We had gone through a tremendous amount of restructuring, a lot of which I had led, and I think the question was could we restore the pride in the organization. Could we really go back and reassert strong customer relationships and customer dominance and could we gain share? And could we do those things responsibly? I think we were able to tick all those boxes. There have been some ups and downs along the way, but I absolutely think we have done that.

WSJ: Was there a moment in those early days where you questioned what you got yourself into?

Mr. Corbat: I went into it eyes wide open. I won't say there were big surprises. But I think, realistically, the challenges that were there, weren't necessarily the ones externally that were thought about.

WSJ: What do you mean by that?

Mr. Corbat: When you go through crises, I don't care what crisis it is, the natural inclination is to become inward-focused. You become inwardly focused around survival. You become inwardly focused on 'what does this mean for me.' We had to break that.

At the heart of everything we do are our clients. I appointed myself our chief client officer to really represent and exemplify the voice of the client and our interaction with the client. My peak client meeting year was over 400 in 2019. So in general, I'm kind of doing two client meetings a day. I think that really changes the nature of the organization when the organization sees its leader, or its leaders, out there representing it. And, by the way, selfishly, it's a privileged seat. You get to meet great people. You get phenomenal insight. You get competitor insight. You get to see what's working and what's not. And then you get to bring those things back into the organization.

WSJ: One of those big crises was in 2014 when you failed the government's stress test for bank safety. What did you learn from that?

Mr. Corbat: Your paper has written about it; it was disappointing. It was painful. But to move to 2016 and to be the only firm that passes the "living will" test. And to pass it when the skeptics had said Citi's this firm that's too large to manage or too complex to manage and they'll never pass it.

So taking those things and turning them from challenges to opportunities. By the way, at the end of the day, that's business. Life, business is a series of ups and downs. You learn a lot more from your failures and challenges than you probably learn from your successes.

WSJ: Last year, Citigroup accidentally sent a group of Revlon bondholders a $900 million payment, and several of them refused to send you the money back. What was your reaction when you found out?

Mr. Corbat: I think there's always frustration with those. In the case of Revlon, it was an error, and they are never simple. When you go through the whole schematic and the reasons as to why it happened, it's not simply that a single person hit a wrong button. It's a series of things that happened along the way. As part of that, we are in the midst of a complete changeover of those systems. And you would always go back and say, woulda, coulda we gone faster? I think the answer is it would have been really hard if not impossible to move it faster. But you can always question those things. I think it's unfortunate.

WSJ: Before CEOs making socially conscious statements became commonplace, you were out there speaking about guns and other issues. What was behind that?

Mr. Corbat: The Charlottesville event was, in some ways for me, a bit of a watershed moment. We absolutely condemned it. I remember having a conversation about putting out a note to our people and, candidly at the time, naively, I kind of pushed back. I said, "Really? Did our people really think that we may be in a different position than we are on this?" And, "We really need to speak out on this?" And the answer was yes. And we did it. And I saw the institution come back and really take a deep breath and feel good. The fact that we took that voice and reaffirmed it with our people and our clients was important.

From that point, if you want to call it the aha moment, it was selectively with things where we felt, one, our voice could make a difference, and, two, we wanted to reaffirm appropriately who we are and what we stand for, we would probe ourselves to use that voice. It's been around immigration, climate, guns and our push toward racial equity.

WSJ: You are being succeeded by the first woman to run a Wall Street bank, and your CFO was Mark Mason, among the highest-ranking Black men on Wall Street. Was that important to you?

Mr. Corbat: I think it's critical. I think a lot of the shortcomings and big challenges in the [2008-09 financial] crisis stem from a lack of diversity. They stem from that lack of diversity of voices in the room and opinion and important inputs. My team went from no women to six, including Jane.

One of the things we've always talked about is you've got to create the continuum. It's not just about recruiting the new class...but it's about retention and at the end, having people in leadership that people can aspire to. I think one of the legacies is we've publicly and consciously pushed ourselves. We've been out there and I think as a result, we've moved the firm. And, again, nobody is where they want to be, but I feel really good about where we are.

WSJ: What are you most proud of?

Mr. Corbat: I guess I would have to say Jane's ascendancy. I was one of the people who hired Jane. I interviewed Jane. I've been in and around at the decision points, so-to-speak, in terms of most of her job moves and in terms of preparing her for this. The fact that we can do this, and by the way, not do this because Jane is a female, but to do this because Jane is the most qualified person within our institution and we can put our hand on our heart and say that. I don't think you're going to get anyone within our firm to say otherwise or anyone who has spent time with her.

WSJ: What led up to your Labor Day weekend decision to retire?

Mr. Corbat: It was a conversation that had started over a year before that with the board. Covid, obviously, caused everybody to hit a pause. As we went through the summer, Jane and I were spending a lot of time together, it just became more and more obvious to me that she was ready. Well, I'm not sure anybody is truly ready, because you don't know what you don't know. But with her, the way she thought. Her engagements with people. The way she was thinking about the business. Her approach to strategy.

As I thought about it, when you get to the fourth quarter, it was going to be about budgeting and planning and a lot about what exiting from Covid would look and feel like. I looked at that window and I said, one I think she's ready, two, there's a lot of things that need to happen and if I don't do this transition now, realistically it pushes it out a year. And I wanted to make sure, because I didn't have it, that Jane was absolutely and the firm was absolutely afforded the best transition she could have.

WSJ: Your wife, Donna, has often been by your side at events like the World Economic Forum in Davos or shareholder meetings, where we don't often see significant others. What has that meant to you?

Mr. Corbat: I was very fortunate that she was willing to dive in and take that role on. She often would travel with me, which, in many cases, was the highlight for the people there, not me. She's kind of the star of most things in life, which is fine. I can honestly say without her, it wouldn't have been as fun and wouldn't have been as rewarding.

WSJ: Was there a piece of advice you remember from her?

Mr. Corbat: Right away she told me 'If you aren't going to make a difference, don't take the job.'

WSJ: What do you do next?

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03-19-21 0714ET