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InvestorVoice is using the Letters to the Company pages to provide details of shareholder proposals and management's response. That the Personnel and Compensation Committee of the Board of Directors limit the average individual compensation of senior management (those persons with whom the Committee is responsible for determining their compensation) to ONE HUNDRED TIMES the average compensation of the rest of the worldwide employees. Business and individual performance awards and discretionary awards must remain within this upper limit.
Proposal 5 – Shareholder ProposalAnthony J. Gilbert, P.O. Box 2376, 5360 E. Hwy 160, Pagosa Springs, CO 81147, beneficial owner of 3,745 shares, has submitted the following proposal for consideration at the annual meeting: Resolved: That the Personnel and Compensation Committee of the Board of Directors limit the average individual compensation of senior management (those persons with whom the Committee is responsible for determining their compensation) to ONE HUNDRED TIMES the average compensation of the rest of the worldwide employees. Business and individual performance awards and discretionary awards must remain within this upper limit. REASONS: “As a global leader in financial services, Citigroup should take the lead ineliminating the continued criticism of what is perceived across the entire client base, as well as by Congressmen, the Federal Reserve Chairman, Economists and Social Scientists, as excessive compensation for top management.” “These excessive compensation packages fail to align the interests of Senior Management with those of its clients, its franchise, other employees, or non-employee investors. These exorbitant pay packages do little to slow the exodus of talented employees from the Corporation. These pay packages do not relate to financial or stock performance. As one prominent observer said of the current pay system ‘with its envy-driven compensation mania, (it) has developed to a place where it brings out the absolute worst in good people’.” “The average CEO of a large public corporation makes 400 times the pay of his Company’s other employees, and that gap has quadrupled in less than 20 years. The last time in the history of our country when compensation levels between top management and all the other employees were near this level were in the late 1920’s. At that time the recipients were known as “robber barons”. That era did not come to a constructive conclusion, and many experts do not expect this time to be positive for our country either. In 2007, over 25 percent of the shares, and substantially more of the shareholders voted FOR this proposal. If you AGREE with this proposal, please vote FOR it on your Proxy Card. MANAGEMENT COMMENTCiti’s executive compensation program, described in the Compensation Discussion and Analysis section of this proxy statement and in the Senior Executive Compensation Guidelines, emphasizes pay for performance in a competitive marketplace for talent. To accomplish this goal, Citi must be able to provide competitive compensation commensurate with superior performance. Performance is measured at the individual level, the business unit level and company-wide, based on a variety of factors, including financial performance, risk management, customer satisfaction, compliance and controls, leadership and adherence to company values, including our Shared Responsibilities. When making incentive compensation decisions, the personnel and compensation committee of the board evaluates the performance and contribution of each individual executive it reviews and his or her business unit, seeks advice from an outside compensation consultant and reviews relevant market data. In October 2006, Citi’s board approved the Senior Executive Compensation Guidelines providing more detailed information about the factors considered when determining executive compensation. As disclosed in the guidelines, performance is measured by looking at the following factors: Business Practices Performance, Financial Performance and Strategic Performance. The metrics associated with each factor and their weighting may change from year to year. The proposal would require the board to establish an arbitrary cap on the total compensation of the CEO, thereby diminishing the significance of more pertinent factors, such as corporate and individual performance and marketplace compensation, which ordinarily and logically must be taken into account when making such decisions. Requiring Citi to limit the compensation of the CEO as proposed would place Citi at a substantial disadvantage in recruiting, motivating and retaining talented senior executives. Because adoption of the proposal would put Citi at a competitive disadvantage and Citi’s compensation programs address the concerns raised in the proposal, the board recommends that you vote against this proposal 5.
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