The New Breed

(4 of 8)

A long-time Sandy Weill sidekick, Chuck Prince might have got a chance to run Citigroup in any event. But a progression of Citi scandals that began in the dotcom-bubble years with shady Enron dealings and stock touting for troubled telecoms quickened this lawyer's ascent. Prince, 54, landed the CEO job little more than a year ago. Since then, old improprieties have continued to surface, posing new p.r. nightmares-- including Citi's private-banking operation being banned from Japan just a few months ago for failing to guard against money laundering, among other things. To atone, Prince bowed deeply during a press conference in Tokyo. Then Citi's new boss came home and laid down the law during a recent conference call. "This will not continue while I'm in charge," he insisted, referring to the string of ethical breaches.

Prince is backing up his commitment by starting new training, communications and performance- review initiatives — and in the case of Japan, by firing some of the top executives that the legendary Weill had put in place before stepping aside as CEO. At stake is Citi's legacy-- not just as a profit machine ($18 billion in net income on revenues of $77 billion in 2003) and shareholder's delight (the stock has risen far faster than the market since 1986), but also as a dominant global bank that trades on its good reputation as much as on its capital and contacts. Prince calls the Citi brand "a precious thing," and told FORTUNE that "the celebration of financial results causes a few people at the edges" to stray. His challenge: to impose a new culture of ethics while maintaining the aggressiveness that led Citi to its global dominance. --By Daniel Kadlec

John Thain
NEW YORK STOCK EXCHANGE

For an idea of how different things are at the New York Stock Exchange these days, peek inside the office of CEO John Thain, the M.I.T. grad and former president of Goldman Sachs who had to be talked into taking the job after former CEO and chairman Richard Grasso's bitter departure amid an excessive-pay flap and charges of board cronyism. Grasso, a passionate stock-exchange lifer, famously littered his office with several hundred treasured mementos from the companies whose shares are traded at the exchange. The more clinical Thain, 49, displays mainly his own collection of modern art. But he's putting his stamp on more than the office walls. Thain calls restoring the Big Board's tarnished reputation job No. 1. Gone are all of the Wall Street insiders who once dominated the board and ran the exchange like a secretive, exclusive club. The conflicting duties of running the business while also regulating exchange members and listed companies have been separated. So have the roles of chairman (John Reed) and CEO. And Thain has introduced a new level of transparency in the area that got Grasso into so much trouble — executive pay, which has been drastically scaled back and made public. "We have an annual report that discloses much of what any public company must disclose"--and more than is required by law, Thain notes. His hope is that the companies that list with the Big Board, and many others, will follow his lead. --By Daniel Kadlec

Jamie Dimon
JPMORGAN CHASE

Jamie Dimon, the onetime heir apparent at Citigroup before being ousted in 1998, may yet have the last laugh. Dimon, 48, first engineered a monumental turnaround at Chicago-based Bank One-- pushing out top managers, slashing costs by $1.5 billion and helping to turn a $511 million loss in 2000 into a $3.5 billion annual profit three years later. Then he staged a triumphant return to New York City, when Bank One merged with JPMorgan Chase last year. In 2006 Dimon will become the merged firm's CEO, but he has already begun reshaping the institution in the trademark no-nonsense style he developed while at Citigroup. He has made key personnel changes in the investment-banking and bond areas, brought the bank's IT management in-house and initiated a risk-management review, while instilling his relentless bottom-line ethic throughout the business. It may take some time for Dimon to deliver the promised $3 billion of annual cost savings from the merger. But by melding his old bank's retail, credit-card and small-business strengths with JPMorgan Chase's investment-banking and asset-management prowess, Dimon has turned what some called Citigroup West into a colossus that can give Citi, as Dimon says, "a run for its money." --By Daniel Kadlec