"I get the new reality......

and I'll make sure Citi gets it as well," so said Vikram Pandit, Citicorp CEO, when he canceled the order for a new company jet just a few months ago. Now we learn that his office and that of his lieutenants is being remodeled at a cost of millions of dollars. This has alarmed most of the media and, if you read only the headlines, it does sound over the top for the company that Citi has become.

But looking below the headline, one learns that the headlined cost of $10,000,000 is based on an estimate by an unidentified source, who has tripled the Citicorp estimate of $3,200,000. Then, if Citi's statement on the matter is to be believed, “Senior executives in our corporate headquarters are moving from two floors to smaller, simpler offices on a single floor,” the company’s statement said. “Based on estimates made when the project was initiated, we expect to generate savings in the next few years well in excess of the project costs.” The statement goes on to claim that there will be a $20,000,000 savings over the life of the lease. If the statement is true, there are sound business judgements being made in this case.

It is true that there will be a sub-zero refrigerator, “premium grade” millwork, blast-proof window film and "soft seating" installed. That is somewhat over the top but when one looks at past Citigroup offices with their fireplaces, zen gardens and fish tanks, the planned offices seem somewhat declasse.

Let's get back to Pandit's claim of getting the new reality. He does not yet understand the fish bowl in which he and the company are operating. He needs to be more open. He needs to understand that the public has a very different view of the world and the accoutrements that should fall to corporate bigwigs than he does. The media needs material that people will read or watch or hear. Corporate greed is the hot topic of early 2009; anything smelling of that will be broadcast to the world immediately. The details and reasons for spending money do not matter. The media wants the headline that will grab the audience. Pandit needs to do a much better job of explaining in advance how he is spending our money.