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By February, one of Wall Street’s largest banks will finally have a female CEO.
Jane Fraser will take over the top role at Citigroup early next year, the banking giant said on Thursday, replacing retiring CEO Michael Corbat and shattering one of the most enduring glass ceilings in finance. Until now, no woman has ever run a major Wall Street bank—despite the ascendance of many qualified executives more than a decade ago, as Fortune’s Claire Zillman reported last year.
By taking over Citigroup—the country’s fourth-largest bank, with $103 billion in annual revenue, and No. 31 on the 2020 Fortune 500—Fraser will definitively crash through that barrier. She will also join the relatively thin but growing ranks of women running Fortune 500 companies. That number will be at 38 next week, when Linda Rendle takes over Clorox. If nothing changes before February, Fraser will become the 39th woman running a Fortune 500 company, a new all-time high.
It is an expected, if unprecedented, transition: Last October, Corbat named Fraser as his No. 2 and heir apparent, promoting her to president of Citigroup and head of its massive global consumer banking operations.
“I have worked with Jane for many years and am proud to have her succeed me. With her leadership, experience, and values, I know she will make an outstanding CEO,” Corbat said in a statement Thursday.
Corbat became CEO in 2012, when Citigroup was still struggling to recover from near-failure during the 2008 crisis, and said Thursday he is “extremely proud of what we have accomplished in the past eight years. We completed our transformation from the financial crisis and emerged a simpler, safer, and stronger institution.”
Citigroup chairman John C. Dugan also praised Fraser’s “deep experience across our lines of business and regions,” and said the board is “highly confident in her. Jane’s ability to think strategically and also operate a business are a unique combination that will serve our company well.”
Fraser has shown that ability across several business lines in her 16 years at Citi, where she oversaw the bank’s strategy and M&A during the crisis, then ran its private bank, and then overhauled its troubled mortgage unit as CEO of its U.S. commercial and consumer banking. Prior to becoming president and global consumer banking CEO last year, she ran Citi’s Latin American region for four years.
The Edinburgh native has spent 2020 overseeing many of the bank’s efforts to navigate the coronavirus pandemic and financial downturn. “People do look for leadership at a time like this. Being a woman has real power and strength to it,” Fraser told Fortune’s Zillman in May. “I can be much more vulnerable in certain areas, talking more about the human dimensions of this than some of my male colleagues feel comfortable [with], and I don’t feel that’s in any way soft or weaker.”
In a statement Thursday, Fraser said that her priorities for Citi are to “invest in our infrastructure, risk management, and controls to ensure that we operate in a safe and sound manner and serve our clients and customers with excellence.” She was not immediately available for interviews, according to a Citigroup spokesperson.
Citi’s gender turnaround
The news of her promotion was greeted with public enthusiasm by fellow top Wall Street executives. “Congratulations to Jane Fraser, the next CEO of @citi and a pioneer in becoming the first woman to lead a major U.S. bank,” Goldman Sachs CEO David Solomon wrote on Instagram. (He was also cheering on an alumna of his company, where Fraser started her career.)
“Great news for the company and for women everywhere! A big and fantastic moment,” Cathy Bessant, Bank of America’s chief operating officer and an executive who brushed that glass ceiling when Wells Fargo was searching for a new CEO last year, wrote on Twitter.
While all big banks have struggled to make their top ranks less male-dominated, Fraser’s promotion underlines an especially remarkable turnaround for Citi during Corbat’s tenure. When he became CEO, the only woman reporting to him was his chief of staff. In early 2013, after his first major organizational shakeup of Citigroup, all 13 executives reporting directly to him were men. “Male dominance is an age-old feature of big banks’ executive suites, but it appears to be particularly acute at Citigroup, which now counts only one woman among its 24-member operating committee,” I reported for American Banker at the time.
But since then, Corbat has worked to improve his company’s gender track record and (under some shareholder pressure) to address its pay gap. Today, six of his 16 direct reports are women and Citigroup’s board of directors is nearly at gender parity. As Fraser joins the board, effective immediately, 47% of its directors are women, and 19% are what the bank calls “diverse.”
Under Corbat, Citi also set targets to increase representation within Citigroup’s senior levels. The bank now is aiming to have at least 40% of jobs in the “assistant vice president through managing director levels” occupied by women globally, and 8% occupied by Black employees in the U.S., by the end of 2021.
“Where our industry has fallen short before is the organic, sustainable piece of it,” Corbat said at a Fortune CEO Initiative forum last year. “I think we’ve been okay at bringing women and minorities into the firm, but I don’t think we’ve created the environment that creates the sustainability of them wanting to be there.”
Citigroup’s shares rose slightly in Thursday morning trading before slipping back.