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A month after the departure of former Citigroup CEO Charles Prince, the company named Vikram Pandit as their new chief executive officer. Acting CEO Win Bischoff, was named as nonexecutive chairman of the company also.

Pandit came on board with Citigroup (C) when the company bought his hedge fund, Old Lane Partners earlier this year for about $800 million. He used to be an executive with Morgan Stanley (MS), heading up investment banking and capital markets for them, one of the largest jobs on Wall Street.

In a statement about his installment as CEO, Pandit said, "I will work closely with Win, Bob and Citi's board and management to assure that our strategy, structure, scale and diversification position the company for growth. Simplifying the company's organizational structure and aligning our businesses and resources with appropriate goals and economic realities will be among our initial priorities."

There was some big disappointment from some quarters over the appointment of Pandit, as William Smith, CEO of SAM Advisors, a Citi stock holder, said, "It's disappointing. Pandit is probably a decent manager, but he is a segment manager. He is not a CEO. Win Bischoff is an absolute disgrace. He has absolutely no reason to be even near the chairmanship."

While Pandit has had the experience of running units and divisions, he's never been CEO of the company, and there's concern he may not be able to handle the complexity of Citigroup.

I think there's another side to this as well, and that is whether anybody that understood the issues would want the job. For someone with CEO experience, this is a thankless task, and the potential to harm their reputation. Turning around companies with these types of problems don't happen overnight, and sometimes the problems are so ingrained it can take years; years which investors aren't willing to wait for.

For Pandit, he probably has nothing to lose in that if he's not able to do something fairly quickly, he could always go back to running divisions or units that he has proven success with.

On the other hand, if he succeeds, he only has upside for his own career, and could probably almost name the job he wanted in the future. For him, there really is no downside. That's the reason someone with his background and past had to be chosen. It's something to think about when you're offered advancement in the future.

This all started when Citigroup disclosed it would have losses up to $11 billion for the fourth quarter. On the basis of that performance, Charles Prince resigned from the company. Write-downs in the third quarter came to around $6.4 billion; of that $1.6 billion was from subprime mortgages.