InvestorVoice is using the Letters to the Company pages to provide details of shareholder proposals and management's response. RESOLVED, that stockholders of Citigroup Inc. (“Citigroup”) request the board of directors to adopt a policy that provides shareholders the opportunity at each annual shareholder meeting to vote on an advisory resolution, proposed by management, to ratify the compensation of the named executive officers (“NEOs”) set forth in the proxy statement’s Summary Compensation Table (the “SCT”) and the accompanying narrative disclosure of material factors provided to understand the SCT (but not the Compensation Discussion and Analysis). The proposal submitted to stockholders should make... Readmore | InvestorVoice is using the Letters to the Company pages to provide details of shareholder proposals and management's response. Proposal 8 – Shareholder ProposalAmerican Federation of Labor and Congress of Industrial Organizations, 815 Sixteenth Street, N.W., Washington, DC 20006, beneficial owner of 3,200 shares, has submitted the following proposal for consideration at the annual meeting: Adopt Responsible Employment Principles Readmore | 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. Readmore | |
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Citigroup Shareholder Proposal 9 |
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InvestorVoice is using the Letters to the Company pages to provide details of shareholder proposals and management's response. RESOLVED, that stockholders of Citigroup Inc. (“Citigroup”) request the board of directors to adopt a policy that provides shareholders the opportunity at each annual shareholder meeting to vote on an advisory resolution, proposed by management, to ratify the compensation of the named executive officers (“NEOs”) set forth in the proxy statement’s Summary Compensation Table (the “SCT”) and the accompanying narrative disclosure of material factors provided to understand the SCT (but not the Compensation Discussion and Analysis). The proposal submitted to stockholders should make clear that the vote is non-binding and would not affect any compensation paid or awarded to any NEO.
Proposal 12 – Shareholder ProposalAmerican Federation of State, County and Municipal Employees, 1625 L Street, N.W., Washington DC 20036, beneficial owner of 107,155 shares; The Needmor Fund, 312 N. 63rd Street, Seattle, WA 98103, beneficial owner of 1,700 shares; Trillum Asset Management Corporation, c/o Richard Shorter, 711 Atlantic Avenue, Boston, MA 02111, beneficial owner of 1,500 shares; Linda R. Southers, Ph.D., 3216 Rustic River Cove, Austin, TX 78746, beneficial owner of 146 shares; Catholic Healthcare Partners, 615 Elsinore Place, Cincinnati, OH 45202, beneficial owner of 146,900 shares; State of Connecticut, Office of the Treasurer, 55 Elm Street, Hartford, Connecticut, 06106-1773 beneficial owner of 2,732,783 shares; Benedictine Sisters of Virginia, 9535 Linton Hall Road, Bristow, Virginia 20136, beneficial owner of 2,000 shares; Monasterio Pan de Vida, Apdo. Postal 105-3, Torreón, Coahuila. C.P. 27003, MEXICO, beneficial owner of 500 shares; Mount St. Scholastica, Benedictine Sisters, 801 S. 8th Street, Atchison, KS 66002, beneficial owner of 2985 shares; and Convent Academy of the Incarnate Word, 2930 South Alameda, Corpus Christi, TX 78404, beneficial owner of 70 shares have submitted the following proposal for consideration at the annual meeting:RESOLVED, that stockholders of Citigroup Inc. (“Citigroup”) request the board of directors to adopt a policy that provides shareholders the opportunity at each annual shareholder meeting to vote on an advisory resolution, proposed by management, to ratify the compensation of the named executive officers (“NEOs”) set forth in the proxy statement’s Summary Compensation Table (the “SCT”) and the accompanying narrative disclosure of material factors provided to understand the SCT (but not the Compensation Discussion and Analysis). The proposal submitted to stockholders should make clear that the vote is non-binding and would not affect any compensation paid or awarded to any NEO. SUPPORTING STATEMENTIn our view, senior executive compensation at Citigroup has not always been structured in ways that best serve stockholders’ interests. For example, in 2006 all five named executive officers were paid more than $78 million in total compensation. Additionally, Robert Rubin’s previous contract guaranteed him a bonus for the years 1999 to 2005.We believe that existing U.S. corporate governance arrangements, including SEC rules and stock exchange listing standards, do not provide stockholders with sufficient mechanisms for providing input to boards on senior executive compensation. In contrast to U.S. practice, in the United Kingdom, public companies allow stockholders to cast an advisory vote on the “directors’ remuneration report,” which discloses executive compensation. Such a vote isn’t binding, but gives shareholders a clear voice that could help shape senior executive compensation. A recent study of executive compensation in the U.K. before and after the adoption of the shareholder advisory vote there found that CEO cash and total compensation became more sensitive to negative operating performance after the vote’s adoption. (Sudhakar Balachandran et al., “Solving the Executive Compensation Problem through Shareholder Votes? Evidence from the U.K.” (Oct. 2007).)Currently U.S. stock exchange listing standards require shareholder approval of equity-based compensation plans; those plans, however, set general parameters and accord the compensation committee substantial discretion in making awards and establishing performance thresholds for a particular year. Shareholders do not have any mechanism for providing ongoing feedback on the application of those general standards to individual pay packages. Similarly, performance criteria submitted for shareholder approval to allow a company to deduct compensation in excess of $1 million are broad and do not constrain compensation committees in setting performance targets for particular senior executives. Withholding votes from compensation committee members who are standing for reelection is a blunt and insufficient instrument for registering dissatisfaction with the way in which the committee has administered compensation plans and policies in the previous year.Accordingly, we urge Citigroup’s board to allow stockholders to express their opinion about senior executive compensation by establishing an annual referendum process. The results of such a vote could provide Citigroup with useful information about stockholders’ views on the company’s senior executive compensation, as reported each year, and would facilitate constructive dialogue between stockholders and the board.We urge stockholders to vote for this proposal. MANAGEMENT COMMENTCiti has in place a comprehensive, performance based executive compensation program. Citi’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. The personnel and compensation committee, which is composed entirely of independent directors, none of whom has an interest in the compensation decisions the committee makes, oversees Citi’s executive compensation. Citi and the personnel and compensation committee continually monitor the executive compensation program and adopt changes to reflect the dynamic, global marketplace in which Citi competes for talent. Citi will continue to emphasize pay-for-performance and equity based incentive programs that reward executives for results that are consistent with stockholder interests and require them to retain ownership of the vast majority of Citi stock they receive as compensation.In conformance with SEC rules, the CD&A supplements Citi’s compensation disclosures by setting forth Citi’s approach and philosophy with respect to executive compensation. The CD&A, along with the Senior Executive Compensation Guidelines, fully and fairly disclose the relevant details of Citi’s executive compensation, so stockholders can evaluate Citi’s approach to rewarding its executives. Stockholders can and do communicate their views about Citi’s compensation decisions directly to the personnel and compensation committee by letters and emails and at the Annual Meeting, in addition to communication through meetings that management holds with investors.Accordingly, the proposal is unnecessary and the vote would be ineffective as a way to communicate shareholder concerns about compensation. The advisory vote on compensation would be held at the Annual Meeting, which necessarily takes place months after the compensation decisions respecting senior executives have been made. The timing of these compensation decisions cannot be changed because of constraints imposed by the tax laws and the competitive marketplace. Certainly no one would suggest that the compensation decisions Citi made and communicated to its senior executives be changed retroactively; and there would in any event be significant legal and competitive issues with trying to do so. And a shareholder advisory vote at the Annual Meeting about the prior year’s compensation would provide no reliable guidance to the board about the decisions it has to make for the current year. Indeed, an advisory vote on compensation would not provide any meaningful guidance at all to the board about any of the compensation decisions it has to make, for any year. No one could tell whether an advisory vote disapproving the compensation decisions, should that occur, reflected shareholder concerns about one or a few named executive officers, or all of them; whether the vote represented dissatisfaction with one element of compensation— salary, bonus or equity awards — or all of them, and if so in what way; or whether the vote reflected shareholder desire for changes in certain aspects of the compensation system or a desire for an entirely different approach to compensation, and if so, what that approach should be. Citi has two million shareholders. It is virtually inevitable that these shareholders will have differing views on all of these and other compensation issues. That is why these compensation decisions are properly left to the independent directors on the board’s personnel and compensation committee, with full disclosure to the stockholders of the results and the principles that were followed. This is a particularly compelling point for a company, like Citi, that has adopted majority voting for the election of directors, providing full accountability for the board to the stockholders. In addition, the proposal could well result in the shifting of decision-making authority regarding compensation from the board members — who have fiduciary duties to the stockholders, and who the stockholders can vote for or against every year — to people who owe no such duties to the stockholders and whom the stockholders cannot vote of out office — namely, the proxy committees at a few large institutions and the proxy advisory firms. The fact that the vote is advisory in form does not negate this point: the adverse impact of a “no” vote on compensation could lead companies to clear proposed compensation in advance with these entities, as is apparently the case in other countries that are the model for this proposal. The proponent urges adoption of the advisory vote proposal based on its asserted success in the United Kingdom. However the advisory vote process in both the UK and Australia is mandated by law and applies to all public companies. The vast majority of U.S. companies do not have an advisory vote on compensation. Therefore, the proposal would subject Citi to an advisory vote requirement without any assurance that other public companies, particularly our industry peers, would be subject to a similar requirement. The proposal, if adopted by Citi, but not widely applied to all U.S. public companies, could significantly hinder Citi’s ability to attract and/or retain top talent because the advisory vote requirement could result in putting their compensation at Citi at risk in a way that it would not be at risk at other companies. Adoption of the proposal could therefore put Citi at a competitive disadvantage vis-à-vis our competitors whose compensation reports are not subject to an advisory vote and negatively affect stockholder value. If it were desirable to have stockholders vote in an advisory capacity on executive compensation, it should be done within a legal and regulatory framework that is developed after full analysis of the public policy and economic issues involved, and on a uniform basis for all public companies, as in the UK and Australia. A uniform legal and regulatory framework would reduce the chance that any company would be at a competitive disadvantage. Legislation to accomplish this result is pending in the US Congress. The development of that legal and regulatory framework would provide an opportunity to deal with such questions as the international competitive impact of adopting an advisory vote requirement, whether the advisory vote process would work in the United States where shareholding is more dispersed than in other countries, how companies would be expected to assess the meaning of the vote given the number of topics covered in the CD&A (see the CD&A on page 36 of this proxy statement) the practical and legal issues around discussing compensation decisions with stockholders in advance of annual meetings and many other significant issues. Citi makes every effort to be responsive to concerns expressed by our stockholders by engaging in dialogues, participating in issuer/ investor work groups and adopting polices or initiatives responsive to stockholder concerns when we felt it was in the best interest of all stockholders. In fact, in the past year Citi adopted a by-law amendment allowing stockholders holding at least 25% of Citi’s outstanding common stock to call a special meeting and agreed to post its political giving on its website in response to stockholder proposals. Last year Citi eliminated the super-majority provisions contained in its charter, adopted a confidential voting policy and adopted a policy on recouping unearned compensation all in response to proposals submitted by stockholders. Citi also actively participated in a joint effort involving trade union pension funds and public companies to explore majority voting for directors and with another such group to explore various issues relating to executive compensation. We encourage our stockholders to communicate with management and the board of directors. Any stockholder wishing to communicate with management, the board of directors or an individual director should send a request to the Corporate Secretary as described in this proxy statement.Because the proposal is unnecessary, will not accomplish its asserted goals, could put Citi at a competitive disadvantage, and at best is premature, and because Citi’s existing compensation and corporate governance policies and programs meet the objectives on which the proposal is based, the board recommends that you vote against this proposal 12.
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