Citigroup CEO to resign

After months of speculation, Citigroup Chairman Sanford I. Weill announced Wednesday that he was giving up his job as chief executive.

The nation’s largest bank said Charles O. Prince, 53, would succeed Weill as Citigroup’s CEO by the end of this year.

Weill, 70, won’t be going far, however. While relinquishing the CEO title, he’ll remain chairman of the board until the 2006 annual meeting, Citigroup said.

The change in leadership comes at a challenging time for Citigroup and other major financial institutions. Citigroup has been defending itself against allegations of conflicts of interest in investment banking, mishandling of initial stock offerings and misleading the public in its dealings with Enron and WorldCom.

Wall Street

Ford beats estimates

Ford Motor Co.’s profit fell nearly 27 percent in the second quarter but still beat Wall Street expectations as the automaker continues to slash costs.

Before the market opened Wednesday, the world’s second-largest automaker said it earned $417 million, or 22 cents a share, in the April-June period versus a profit of $570 million, or 29 cents a share, a year earlier.

The consensus estimate on Wall Street was earnings of 19 cents a share.

Technology

IBM earnings soar

IBM Corp. announced Wednesday that its second-quarter earnings rose significantly and matched Wall Street’s expectations, driven largely by strong growth in the technology services division.

From April through June, IBM had net earnings of $1.7 billion, or 97 cents per share, up from $56 million, or 3 cents per share, in the comparable period last year. Last year’s figures were dragged down by $1.4 billion in one-time charges.

Online trading

E-Trade to start fee refund program

Online brokerage E-Trade Group Inc. said Wednesday it would begin giving customers half of its mutual fund fees later this year in a groundbreaking move likely to focus more attention on investment costs.

E-Trade’s planned discounts may jar the brokerage industry, which collects billions of dollars annually for distributing and administering mutual funds.

E-Trade’s offer will be particularly rewarding for wealthy investors. The Menlo-Park based company estimated that a $500,000 mutual fund investment generates about $2,000 annually in so-called “12b-1” and “shareholder service agreement” fees.

Under its plan, E-Trade will return $1,000 of those fees to the hypothetical account owner. The payments will be made every six months.

Merger

Buffett offer put on hold

Even as the proxies were being tallied Wednesday on Berkshire Hathaway’s $1.7 billion bid for Clayton Homes Inc., shareholders agreed to postpone the vote for two weeks in hopes of getting a better offer.

Two unidentified shareholders holding about 9 percent of the manufactured home company’s stock pushed the issue as the proxy vote count was under way, said Clayton Homes president and CEO Kevin Clayton.

He said company officials had several conversations with Berkshire Hathaway CEO Warren Buffett about the issue in recent days. In consideration of the delay, Clayton Homes directors agreed to pay Berkshire Hathaway $5 million by Thursday.