Vikram Pandit the front-runner to be Citigroup's CEO

Citigroup Inc. (NYSE: C) may name Vikram Pandit, the former Morgan Stanley (NYSE: MS) executive who sold his hedge fund to the New York-based financial services giant for $800 million in July, as the company's new CEO this week, according to various media reports.

The leak of Pandit's front-runner status is an interesting one. Clearly, the beleaguered Wall Street firm thinks that his appointment as CEO is going to be criticized by shareholders, so it decided to "get ahead of the story."

The problem, it seems, may be with former Treasury Secretary Robert Rubin, who became chairman after Chuck Prince was ousted. Rubin doesn't want the job permanently, which raises the question of whether Citigroup will ask him to stick around for a while if Pandit becomes CEO, whether it names a new chairman or whether it gives Pandit both jobs from the start, according to the Wall Street Journal.

Citigroup is in a pickle.

Shareholders abhor a leadership vacuum, but want the next CEO to be someone with whom they have absolute confidence. But if CItigroup doesn't give Pandit both jobs or a clear path toward both jobs, there is a good chance that he will be hired away by a rival firm.