• Jane Fraser is on a mission to bring Citigroup back to its former glory.
• Her strategy spans layoffs, hiring new leaders, and a multibillion-dollar firmwide initiative.
• Fraser still has a long way to go on several fronts.

When Jane Fraser took over Citi in March 2021, she inherited a bank saddled with regulatory problems and outdated technology that lagged behind its other household-name peers.

This year's market headwinds have been kind to Citi's stock price, which is up 33% year to date, but Fraser's overhaul has a long way to go. Banker R. Christopher Whalen wrote this week of the numerous drags on Citi's performance, including high-interest expenses, large funding costs, and undersized non-interest income.

"It is a big positive that the market following for Citi has improved, yet the financial performance remains a struggle," wrote Whalen. "Citi management clearly want to grow into new areas, but our basic question is where can Fraser realistically take the bank?"

It's not for lack of trying. Fraser has brought in several new executives to right the ship, including JPMorgan's Vis Raghavan, PwC's Tim Ryan, and Merrill Wealth Management's Andy Sieg. In September 2023, Sieg joined Citi to fix its ailing wealth business. Should he succeed – and should Fraser falter – he has a chance of becoming Citi's next CEO. Sieg has made many changes to the leadership ranks with four of his original 14 direct reports departing and a total of at least 33 senior executives leaving within his first year.

Citi has added to its leadership ranks, promoting 344 managing directors in early December, its largest class under Fraser. However, these promotions come at a tense time for employees. The bank has kicked off its grueling annual review process that rates employees from best to worst. These rankings influence who gets promoted and who loses their bonus— or worse. There is greater stress over the process than usual as the bank has laid off 7,000 employees this year and plans to cut 20,000 jobs by 2026.

Perhaps Fraser's biggest challenge is satisfying regulators who have rebuked the bank. In July, two regulators fined Citi $135.6 million for failing to make enough progress in fixing its data-management issues. The bank had agreed in 2020 to work on this problem and others, including poor risk controls, after paying $400 million in fines to the Federal Reserve and the Office of the Comptroller of the Currency. The OCC said in July that the bank had made "meaningful progress overall" but that the agency wanted to ensure Citi allocated enough resources to address the "persistent weaknesses" regarding data.

These new fines are despite Citi dedicating billions of dollars to a firmwide initiative to overhaul the bank's technology. To run this "Transformation" project, Fraser picked Citi consumer-bank veteran Anand Selva, naming him as COO in March 2023. Eight current and former employees told Business Insider that they were surprised by his appointment given that he had never held a leadership role in technology or compliance.

Since the July fines, Fraser has tapped Ryan, the bank's new tech head, to lead the data effort alongside Selva. Still, she has been dogged by questions regarding the Transformation's progress or lack thereof.

That said, Citi might get some breathing room under Donald Trump's second presidential term. Trump has signaled he would cut down on oversight. In a speech at the Economic Club of New York in September, he pledged that if reelected, he would eliminate 10 rules for each new rule.

In a research note, Mike Mayo, a Wells Fargo analyst, called Trump's win a "regulatory game changer." He told BI that Citi was still in "regulatory purgatory" but that the bank would likely face less scrutiny for its data-quality issues.

If so, it would go a long way toward Fraser's legacy.

Latest News

• Citi's annual review process is kicking off. Here's an inside look at its unpopular method.
• Citi promoted its largest class of managing directors under Jane Fraser. Check out the 344 names here.
• Citi needs a white knight. Donald Trump's 2nd term might provide one.

Inside Citi's Transformation

• This is who Jane Fraser is counting on to clean up Citi's regulatory mess
• Citi's regulatory nightmare still haunts CEO Jane Fraser
• Citi's Massive Transformation Team Is Failing to Fix Its Regulatory Woes

Citi Wealth's New Era

• Andy Sieg Could Be Citi's Next CEO If He Can Fix a Broken Wealth Business
• Citi Wealth's horrible tech is infuriating clients and employees and endangering its turnaround
• At Least 33 Senior Citi Wealth Execs Have Left Since Andy Sieg's Takeover
• Citi Wealth loses 17 bankers to BMO after Andy Sieg replaces the head of its fastest-growing business

• Citi rates its 200,000 employees on a forced curve that assesses peers from best to worst.
• These rankings influence who gets promoted and who loses their bonus — or worse.
• Managing directors told BI how the process works and why it can pit employees against each other.

Citigroup welcomed 344 new managing directors earlier this month, marking its biggest class in years. Behind the scenes, the promotion process can be political and fraught, pitting employees against each other, four current and former managing directors told Business Insider.

Citi evaluates employees on a forced curve, requiring managers to rank them from best to worst using a four-level scale with a certain percentage in each bucket. This system means there's a finite number of top ratings, so employees could exceed all the requirements of their role and still receive a middling grade, said the employees, who spoke on the condition of anonymity.

"We are a company filled with hardworking, achievement-oriented colleagues and we embrace meritocracy," a Citi spokesperson told BI in a written statement. "Our process aims to ensure that colleagues across Citi are held to consistent standards and are assessed by those who have the most direct knowledge of their contributions."

Over the years, the percentage ranges for each bracket have shifted slightly. A managing director said this year each business line could assign top ratings of 1 ("exemplary") and 2 ("exceeds expectations") to 5% to 10% and 15% to 30% of staff, respectively. The lion's share of employees — 50% to 65% — are labeled as "valued contributors." The remaining 3% to 7% who receive a 4 rating ("needs improvement") may face consequences such as being put on a performance improvement plan or losing bonus eligibility.

"It creates an air of distrust inside of cultures and a lot of anxiety for employees that are high performers but may not be recognized for the work they do," John Frehse, a senior managing director at the management consultancy Ankura, said about the ranking practice.

The same morning the new class of managing directors was announced, Citi held a virtual town hall for employees. During the Q&A session, human resources addressed an employee's written question that noted the forced distribution system could be unfair to small, high-performing teams. Sara Wechter, Citi's head of human resources, replied that there was no forced bell curve.

A senior Citi executive familiar with the process told BI that Citi's curve is not forced as it uses brackets rather than fixed percentages.

"We have guidelines associated with ratings, which is different from a forced curve," he said.

That reasoning is of little comfort to employees BI spoke to who assign those ratings.

"They are playing with words," said a managing director in the wealth division. "We were mandated to strictly follow the prescribed curve."

This season's annual reviews, which began last week, play a key role in bonus allocations and promotions, including to managing director.

They come at a tense time for Citi's workforce. As part of CEO Jane Fraser's mission to turn around the bank, Citi has laid off 7,000 employees and divested from several businesses. The overhaul isn't over, with the bank planning to cut 20,000 jobs from its workforce of more than 200,000 employees by 2026. Amid these changes, the managing director said there's more anxiety about the review process and uncertainty about bonuses.

Here's how Citi's forced curve works

Grading on a forced curve is not unique to Citi. The practice, otherwise known as stack ranking, was popularized in the 1980s when General Electric's former CEO Jack Welch used it to cut bottom performers. However, this "rank and yank" tactic has fallen out of fashion with many major companies such as Microsoft and Amazon. Most banks engage in some form of stack ranking but the details differ, such as how strictly they adhere to a curve or the grading criteria they use. Morgan Stanley uses a five-point scale. Goldman Sachs has changed its system several times and, beginning in 2020, it's used a three-level system.

"Good companies try to distinguish between the higher and lower performers and do that in terms of how people get raises, what their total compensation would be," said Anthony Nyberg, a professor of management at the Darla Moore School of Business at the University of South Carolina.

Citi employees receive two main ratings with each one graded on a curve, two ex-managing directors said. The two criteria are the "what," which measures an employee's results, such as revenue metrics, and the "how," which evaluates their approach and leadership abilities. This means employees get a combination score such as 1-2.

While it is not a hard and fast rule, Citi employees are usually expected to earn top ratings for two to three consecutive years to receive a promotion, so the review process puts aspiring directors and managing directors under enormous pressure, three of the managing directors told BI.

Direct managers submit their ratings for review before having a so-called "calibration" meeting with their fellow managers, the top manager of their business unit, and an HR representative, the two former executives said. At these meetings, direct managers review an employee's scores and make a case for why the employee deserves a coveted 1 or 2.

After these calibration meetings, the top manager makes the final call on rankings. The outcome often disappoints managers and their reports, who may have never worked directly with the decision-maker, the managing directors said.

The senior executive said that small teams of three or four employees can secure exemptions to the curve. As for large teams with high performers, he said there might be exceptions on a year-to-year basis but he wasn't aware of any ever happening.

MDs said the process pits employees against each other

The evaluation process was described as contentious and stressful by the current and former managing directors, all of whom were responsible for rating employees. The calibration meetings were especially heated, with managers butting heads over which employees received the limited high ratings.

Given the number of top rankings is fixed, managers were typically unwilling to budge on the 1s and 2s they were allotted, even if another manager argued they had more high performers. "No one was like, 'You can take mine,'" said one of the ex-managing directors, who left Citi this year. "We fought."

The managers took issue with other aspects of the grading process. By implementing a curve on the team level, employees were sometimes compared to others with vastly disparate roles or responsibilities. Two of the ex-managing directors described some of the grading criteria as nebulous. For instance, they said, for employees with non-revenue-generating roles, the "what" score is effectively up to the manager's discretion.

Frehse told BI that the biggest flaw with stacked ranking is that performance reviews are inherently subjective.

"Stack ranking is inaccurate from the start," he said. "You're either only looking at the quantitative side, forgetting about the other side, or you're looking at both. And we know that the qualitative side is flawed and subjective."

Frehse said that leaves room for employees to believe favoritism is at work. Three of the managing directors told BI that they believed internal politics played a role in how employees were ranked and which managers received top ratings for their direct reports.

"When you use such a system, it tells you you can't trust different managers to be good managers," said one of the former managing directors.

The senior executive said that the many calibration meetings he attended were productive.

"It's just a way to get together, get out of the silos, and make sure that there's fairness and perspective that goes beyond your own team," he said.

While he maintained that he had not seen hostile calibration meetings, he said that some conversations could get heated.

"This is a very human thing when you have finite anything, and obviously we have finite compensation," he said. "Of course, people are aware of that, but I don't think it's a flaw in the design. I think that's just part of being human."

At its best, stacked ranking should reduce anxiety among employees, Nyberg said.

"People get very upset when things appear to be arbitrary, and the ranking system should actually reduce some of that as long as people can believe that you're doing those rankings in some sort of objective way," he said.

However, it's hard for employees to trust the system if they lose trust in their employers, which often happens after layoffs, Nyberg said.

"It's that contract between the organization and the employees starts to feel really violated that way, and then that permeates everything about it," he said, "then you wouldn't believe anything they say."

• Citigroup appointed a new class of managing directors last week.
• Five new MDs share their best career advice and reflect on their rise at Citi.
• They also touched on how the bank's sweeping transformation has affected their jobs.

Last week, Citigroup announced a new class of managing directors, some of whom have been with the bank since it had a red umbrella logo — a byproduct of its merger with insurance giant Travelers in the late 1990s.

Anyone who has worked at Citi for a long time has seen plenty of changes. The global bank did away with the umbrella logo in 2007, just before a series of job cuts and other reorganization efforts took hold at the height of the financial crisis. In recent years, Citi has also exited many of its consumer banking operations, among other changes, as part of a transformation effort led by CEO Jane Fraser.

Since taking the top job in 2021, Fraser has vowed to modernize and simplify the bank, including by removing layers of bureaucracy and strengthening Citi's risk controls and technology systems. She has announced plans to cut 20,000 jobs over the next five years.

Managing directors, the bank's highest rank below the C-suite, are the people who will be tasked with helping bring Fraser's vision for the bank's future to life and navigating complex headwinds that arise along the way.

Business Insider interviewed five members of the 2024 MD class who have been at the bank for the majority of their careers. They spoke via email about a range of topics, from their first day at Citi to the changes they've seen at the bank over the decades, and how Fraser's transformation efforts have impacted their jobs. They also shared their advice to the next generation of talent in the industry.

Here are their words of wisdom, edited for length and clarity:

Bridget Griffin

• Chief Administrative Officer for Global Risk Review, New York
• Joined Citi in 2007

Describe your current role.

I am the chief administrative officer (CAO) of global risk review, responsible for leading the pillars of business management, regulatory & audit engagement, board reporting, controls & issue management, governance, and infrastructure & strategic projects.

What would you say is the biggest change at the bank/your field since you joined?

What stands out most is how much the bank — and the way we work — has evolved over time. When I joined, the iconic red umbrella stood out front and wood-paneled offices reflected a more traditional era. Today, modern, open workspaces reflect how much has changed. Through all of the change, it's the people who make it work – coming together, adapting and finding a way forward. That sense of community is what has kept me at the bank all these years.

What is one nugget of wisdom you'd give to the next generation of talent?

Stay confident in what you bring to the table, but humble enough to recognize areas where you can grow — and curious enough to turn them into opportunities. Early in my career, I pursued an internal transfer to Hong Kong with Citi to deepen my understanding of Asia, a region I realized I knew little about. That decision not only broadened my perspective but also led to incredible experiences that shaped both my career and personal growth.

What is the biggest impact the bank's transformation has had on your approach to your job?

The transformation has empowered me to question complexity and advocate for simplicity. I feel more confident challenging processes or decisions that seem overly complicated, focusing instead on practical solutions. This perspective has helped me contribute to a culture that values clarity and purposeful action.

Supriya Ramamurthy

• Head of Balcon and Rate Sales, US Personal Banking, New York
• Joined Citi in 2002

Describe your current role.

I am part of the USPB organization and work in the branded cards and lending team. I manage the on-card lending products.

Describe your very first day.

I joined Citi as a Management Associate in Sydney, Australia. It had been a super competitive, intense eight-round interview process before I finally made it to that first day. So, I was certainly excited but frankly also very relieved!

What is one nugget of wisdom you'd give to the next generation of talent?

Invest time and energy in establishing and building relationships within the firm and outside. Regardless of how fast the earth spins on its axis and how much AI and new inventions change our lives, ultimately it is people who will make all the difference.

What is the biggest impact the bank's transformation has had on your approach to your job?

I think the firm's overall transformation mantra has trickled down to every level in the organization and has led to a renewed commitment and focus on efficiencies and simplification. If I look at my own business, for example, over the past 18 months my team, my cross functional partners and I have been very focused on modernizing our legacy operating models.

John Hogue

• Head of Design and User Experience for Citi Wealth, Singapore
• Joined Citi in 1992

Describe your current role.

I recently took on a new role leading design & UX for Citi's services business. Our team is responsible for defining, creating, and implementing a simple and seamless user experience strategy for our large corporate clients.

What would you say is the biggest change at the bank/your field since you joined?

It's been said many times before that the 'C' in Citi stands for change, and that has been true throughout my career. One thing that has remained constant is a culture that promotes collaboration, innovation, and technology to improve the client experience.

What is one nugget of wisdom you'd give to the next generation of talent?

I've been fortunate to have a non-linear career at Citi, and I think it goes back to my feelings of being curious and wanting to learn how everything works. I always recommend to our new associates to know where you want to go, but have the courage to explore, experiment, and embrace unexpected opportunities in your Citi journey.

What is the biggest impact the bank's transformation has had on your approach to your job?

I see the impacts of our transformation as not one big thing, but an accumulation of improvements that you look back on and think, "We really have made a lot of progress." The organization is much leaner, which means that alignment and decision-making happen much faster.

Juan Francisco Orrego Echeverri

• Director, Operations, Know Your Customer Operations, Costa Rica
• Joined Citi in 1998

Describe your current role.

I am based in Costa Rica and lead our global services, markets & banking KYC operations team, responsible for serving over 50,000 client entities spanning 20 industries within these business lines to safeguard against money laundering risk.

Describe your very first day at Citi.

Wow, that was 26 years ago! I remember feeling a mix of excitement and anticipation. Joining such a large organization, I was filled with questions about what the future might hold — whether it would be a place where I could grow, develop, learn, and truly build a career.

What would you say is the biggest change at the bank/your field since then?

One of the most significant changes I have experienced was the decision to exit consumer banking in multiple geographies. It was a bold and highly strategic move with tremendous impact. Ultimately, it was made to ensure the best returns for our stakeholders, deliver greater value to our clients and create new opportunities for us as employees to grow.

What is one nugget of wisdom you'd give to the next generation of talent?

There are two pieces of advice I once received that I now share with anyone seeking advice or guidance. First: "To grow you need two basic things: Being fluent in English and having mobility." I had to embrace both — something I didn't know before — and I can now consider myself fluent in English (I am native Spanish speaker). I also had the chance to move to a different country. Both experiences undoubtedly contributed significantly to my development and growth at Citi.

Second, a simple yet powerful message: "People like you, people trust you." These two insights have been incredibly impactful in shaping my decisions and supporting my career growth at Citi.

Yoanna Darwin

• Asia South Treasury and Trade Solutions for Corporate, Commercial & Public Sector, Indonesia
• Joined Citi in 2001

Describe your current role.

I'm the country head of treasury & trade solutions (TTS); corporate, commercial & public sector sales for Indonesia, a business unit in Citi that offers integrated payment, liquidity management, trade, and working capital solutions to institutional clients across the globe.

Describe your very first day at Citi.

I arrived for my first official day at Citi as management associate back on July 17, 2001. I did not know what my day would look like. What will I be doing in the office? What is the working culture? Do I look professional enough? So many things crossed my mind at that time. And I remember feeling relief when I ended my first day just fine.

What is one nugget of wisdom you'd give to the next generation of talent?

There is no instant way to move up your career ladder. You have to earn it. Make a habit to create goals for each stage of your life. Put yourself in the driver's seat and drive in your own way towards the goals. Make a stop here and there, if you need to, so that you can look back, appreciate every step of the process, and find ways to improve and be better.