In Wall Street parlance, to be fired or forced out of a job as punishment for a blunder is known as being "shot."
To many close to the shake-up at Citigroup, the shot fired last week at James Dimon fits a pattern: Those standing in the way of the former Citicorp's conservative, methodical model for corporate banking have become targets-and now those targets are getting out of the way.
The latest evidence of the former Citicorp's power in shaping the company came Monday, when Citigroup confirmed the resignation of Steven Black, global head of equities at its Salomon Smith Barney Inc. unit and Mr. Dimon's right-hand man.
With Mr. Black's departure, Arthur Hyde and Robert DiFazio, co-heads of global stock sales and trading at Salomon, will report directly to Michael A. Carpenter, the new head of Salomon Smith Barney.
Sources say Mr. Black was not forced out, but decided to leave shortly after hearing of Mr. Dimon's resignation Nov. 1. Mr. Black also is considering following Mr. Dimon to a new job.
"People are responding emotionally," one source said. "If it were me, I wouldn't mind hitching my star to a guy like Dimon."
Mr. Black's resignation is the latest suggestion that Salomon employees are finding their clout in the combined firm ebbing to new lows against the corporate bank of the former Citicorp.
"I'm beginning to think the very process at Citibank is going to grind down Salomon," said David Berry, a banking analyst with Keefe, Bruyette & Woods. "The culture of Citibank is strong, powerful but not all good. It's somewhat bureaucratic and full of internal tension or politics. It's always been that way, but it seems to work for them."
Part of the former Citibank's strength is its strong, unified management, lead by CEO John S. Reed. Travelers, by contrast, has always allowed its divisions autonomy, Mr. Berry said, and has yet to "digest" its Smith Barney and Salomon units.
Citibank's powerful style has led to frustration for freewheeling Salomon bankers, who are "warming the phones" with job inquiries, according to one New York banking headhunter. And those who have left are taking their clients with them.
"Our business at Salomon was about relationships," said a Salomon banker who left to join a rival firm in the fall. "And I'm on the phone almost everyday with clients I had at Salomon."
Among those who already have made an exit are Michael J. Carr, former co-head or mergers and acquisitions, who went to Goldman Sachs & Co. in August. Frank Yeary, a top telecommunications banker and Conrad Bringsjord, another M&A banker, left this summer.
Jack Morris, a spokesman for Citigroup, did not return phone calls seeking comment. But at the Securities Industry Association conference in Boca Raton, Fla. last week, Citigroup co-CEO Sanford I. Weill seemed to embrace the investment bank
"I'm an entrepreneur," he said at a press conference. "I'm not a memo writer."
Nevertheless, in describing his vision for Citigroup's corporate business Mr. Weill said he wanted the combined group to offer products to the 1,700 global firms Citigroup served.
The remarks signaled that Salomon's first priority would not be its own clients but Citicorp's blue-chip client base, Salomon insiders and other observers said. And Salomon's primary businesses-aggressive trading and serving upper-middle-market firms and credit-challenged customers-will be de-emphasized.
"The 'Liar's Poker' aspect of Salomon has been wound down," Mr. Berry said, referring to Michael Lewis' best-selling memoir. "Carpenter is a process guy. Both Carpenter and Menezes are of the Citibank mold."
The rising dominance of former Citicorp bankers also has debunked a major assumption about the merger: that Travelers Group Inc. was, in essence, buying Citicorp, and that Citicorp's Mr. Reed was taking a back seat to Mr. Weill.
Travelers' dominance "was the popular view when the heads of every major line of business at Citigroup turned out to be Travelers people," Mr. Berry said.
"A large part of the merger was to get Travelers DNA into Citibank, the analyst added. Now it's clear it's going to go both ways."
Diane Glossman, an analyst with Lehman Brothers, said she does not believe that the shake-up is a necessarily bad sign for Citigroup. The former management was "standing in the way of creating a well-oiled business," she said. "Under these two individuals it appears things will get done."
But Ms. Glossman appears to be one of a shrinking number of voices who believe the merger is on the way to becoming a smooth-running business. One key participant in high-level Citigroup management talks said executives were trying to merge the corporate bank with "30,000-foot answers."
"Somebody's got to do something," the source said. "There is absolutely no detailed planning down in the dirt at the client level. ...The honeymoon has got to end, and it has to happen sooner rather than later."
Analysts as well as Citigroup insiders said a charismatic leader needs to step forward. Unfortunately, there are no front-runners. Of those who remain in top positions, only Mr. Weill is considered up to the task.
As one former Salomon executive put it:
"Big investment banks are led rather than managed. Clients demand involvement by the top echelon of the firm. Deryck, Sandy, Jamie understand it. Reed doesn't have a clue."