Robert Rubin, the former Treasury secretary who has been sharply criticized over his role in the financial turmoil at Citigroup Inc., resigned as senior counselor and will depart from the board when his term ends in April.
The departure was called a retirement by the New York company, which has suffered $20 billion in losses over the past year and got a government bailout of at least $45 billion. Citigroup's troubles cast an awkward spotlight on Mr. Rubin, who has received $115 million in pay since 1999, excluding stock options.
While Mr. Rubin has defended his performance since joining Citigroup in 1999, insisting that the bank's problems resulted from the wider turmoil in the financial system and not failures by Citigroup, he is "tired of it," a person familiar with the matter said.
"This is not a decision that I have come to lightly," Mr. Rubin said in a statement. "But as I enter my 70s and with all that is now in place at Citi, I believe the time has come for me to make these changes."
Chief Executive Vikram Pandit praised Mr. Rubin's "invaluable" contributions to the company over the past decade.
Mr. Rubin, 70, intends to "deepen his involvement in outside activities and organizations to which he has been strongly committed," the New York company said in a press release Friday.
"My great regret is that I and so many of us who have been involved in this industry for so long did not recognize the serious possibility of the extreme circumstances that the financial system faces today," Mr. Rubin said in a letter to Mr. Pandit.
Mr. Rubin, who served at the Treasury's helm from 1995 to 1999 under President Clinton, has faced criticism from investors including Smith Asset Management's William Smith for collecting more than $150 million in pay in a decade while failing to steer Citigroup away from subprime mortgage securities.
The investments led to four straight quarterly losses and prompted Citi to turn to the government for a rescue package.
Citigroup, the biggest bank recipient of U.S. bailout funds, completed an agreement for a $20 billion government investment, on top of an earlier $25 billion injection and a U.S. guarantee on $306 billion in troubled assets.
Mr. Rubin's departure is "not a huge surprise," said Michael Holland, the chairman and founder of Holland & Co., a New York firm that oversees $4 billion of assets. "It's been a challenged situation for a long period of time."
Mr. Pandit, 51, is cutting 52,000 jobs worldwide and expects "major challenges" to continue into 2009, he said Dec. 31.
In the letter to Mr. Pandit, Mr. Rubin said he had "great respect for you and the job you have been doing in addressing the most difficult financial markets since the 1930s."
He continued, "There is still a great deal to do, but I have great confidence that Citi will meet the long-term challenges ahead." Citi's shares fell 5.7% Friday.