Behind Citi's reshuffle, an invincible Prince

NEW YORK (Fortune) -- In the midst of yet another management shakeup at Citigroup - these stretch across the landscape like a very long freight train crossing Kansas - there is one statement to focus on. That is the declaration of Citigroup (Charts, Fortune 500) executive Robert Rubin (made to The New York Times) that he would bet $100 that Citi's Charles "Chuck" Prince will still be the company's CEO five years from now.

Never mind that $100 is small change to Rubin; Citi paid him $17 million last year. The point is that Rubin does not frivolously offer to make bets, of any magnitude. He made his early fame as an arbitrageur at Goldman Sachs, and he is a master of probabilities. Beyond that, he is a member of Citi's board and knows its opinions. If he is saying that Prince will be CEO five years from now, you can darn well believe that he expects that to be the case.

Citigroup CEO Charles Prince's job is as tough now as it has ever been.

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So the mystery about Citigroup gets back to the company's board, a group including a raft of big-name CEOs (one of them Fortune's ultimate boss, Time Warner CEO Richard Parsons). What does this board know that the world doesn't? Why does it stick with Prince, 57, when Citi remains a place of endless negative surprises and a stock that doesn't move? Shareholder criticism of Prince has been strong, and often vitriolic, for ages - though, importantly, none of it comes from the largest owner, Prince Awaleed of Saudi Arabia.

Yet Citi's board remains invincibly loyal. One paradoxical explanation could be the extraordinary complexity of Citigroup's business. The job of running it may simply be beyond the ability of any person to handle, so maybe the board is telling itself that it should just stick with Prince, since who else do they know who could do a better job?

Here is what Prince himself, then general counsel of Citi, said about the complexity of the management job some six years ago. He thought then - as Fortune reported in an April, 2001 article - that no company had ever bitten off the mouthful that Citi was pursuing. Said Prince: "You've got five or six or seven businesses - credit cards to mortgages to personal loans to investment banking to commercial insurance. They relate in important ways, but they're different. And they're all over the place. No one has ever had a company as broad in geographic scope" - the reach then was 101 countries and it is now higher - "as broad in product set, and as deep in size."

Since then Citi has pared way down in insurance. But the worlds of mortgages and investment banking have grown infinitely more complex, as can be seen from the fact that Citi - one more casualty of this year's credit crisis - is set to announce third-quarter earnings that will be down 60% from a year ago. No, the Citi job has not grown less of a challenge in the last six years. By every indicator, the job of CEO is tougher today than it's ever been.

So does that mean that perhaps Citi should face reality by splitting itself into several companies, each more manageable? Some shareholders have been pushing that remedy for moons. But again this is a board that remarkably - even astonishingly - doesn't budge from where it is: One monster company, run by a man who still gets the directors' unalloyed support, no matter how many critics think he does not deserve it.