Citigroup $C, a diversified financial services holding company, provides various financial products and services for consumers, corporations, governments, and institutions. Most shareholders do not vote because reading through 70 pages of the proxy is not worth the time for the small difference your vote will make. Below, I tell you how I am voting and why. If you have read these posts related to my portfolio for the last 22 years and trust my judgment (or you don’t want to take the time to read it), go immediately to see how I voted my ballot. Voting will take you only a minute or two and every vote counts.
Tag Archives | Citigroup
Citi reached an historic agreement to disclose wage data and adjust employee salaries in a company-wide effort to achieve gender pay equity. Arjuna Capital agreed to withdraw its gender pay shareholder resolution after the agreement.
Citigroup (Citi) and Arjuna Capital disclosed that Citi is taking steps to provide gender and ethnicity wage data and commit to closing the gap, making it the first U.S. bank to respond to shareholder concerns. In response to Citi’s steps, Arjuna Capital withdrew its gender pay shareholder proposal on Monday, January 15, 2018. Continue Reading →
Citigroup Inc. (Citi, NYSE: C), a diversified financial services holding company, provides various financial products and services for consumers, corporations, governments, and institutions worldwide. Citi is one of the stocks in my portfolio. ProxyDemocracy.org had collected the votes of three fund families when I checked and voted. Their annual meeting is coming up on April 25, 2017.
Citigroup Inc (NYSE:C, $C) is a diversified financial services holding company, provides various financial products and services for consumers, corporations, governments, and institutions worldwide. It operates through two segments, Citicorp and Citi Holdings. It is one of the stocks in my portfolio. Their annual meeting is coming up on April 26, 2016. ProxyDemocracy.org had collected the votes of zero funds when I checked. I voted AGAINST the pay plan, compensation committee, Michael L. Corbat who owns no shares, and the Omnibus Stock Plan. I voted FOR all other proposals, including the shareholder proposals. I voted with the Board’s recommendations 52% of the time. View Proxy Statement.
Citigroup Inc (C), which provides various financial products and services for consumers, corporations, governments, and institutions worldwide, is one of the stocks in my portfolio. Their annual meeting is coming up on 4/28/2015. ProxyDemocracy.org had the vote of three funds when I checked and voted on 4/21/2015. I voted with management 48% of the time and assigned Citigroup a proxy score of 48. Continue Reading →
I recently received an email from the AFL-CIO Reserve Fund urging a vote in favor (“FOR”) their shareholder resolutions asking Citigroup (C), Goldman Sachs (GS), JPMorgan (JPM), and Morgan Stanley (MS) to issue a report to shareholders disclosing the dollar amounts of government service golden parachutes – pay their senior executives will receive if they voluntarily resign to enter into government service.
The proposal is a good idea. I hope to be following up with posts on how I voted at Citigroup (C) and Goldman Sachs (GS). I do not own any shares of JPMorgan (JPM) or Morgan Stanley (MS). Below is the the AFL-CIO rationale for why “government service golden parachutes” do not serve the interests of shareholders. Continue Reading →
My wife and I don’t have the resources to or stock holdings to allow us to file 75 proxy access shareholder proposals, like New York City Comptroller Scott Stringer’s Boardroom Accountability Project. However, I have been writing about proxy access for 20 years and, together with Les Greenberg, filed the petition in 2002 with the SEC that many have credited with renewing interest in the subject. We hope our efforts, although small, contribute to making companies more democratic and profitable. Continue Reading →
Bank of America (BAC) shareholders can now look forward to nominating candidates to the Board of Directors in a deal negotiated by John Harrington, CEO of Harrington Investments, Inc., (HII) a socially responsible investment advisory firm based in Napa. The Bank adopted new “proxy access” bylaws reflecting changes driven by Harrington’s shareholder resolution. Continue Reading →
Update: Preliminary voting results indicate that our proxy access proposal got 39% of the vote. Yes, the proposal could have been worded to more closely conform to the Rule 14a-11 standards. Hopefully, Apple got the message and will propose a “best practices” revision of their articles and bylaws as needed for the 2016 annual meeting. If not, we’ll be back at that meeting with our own proxy access proposal.
Citigroup (C) and shareowner activist James McRitchie, who publishes the popular website CorpGov.net, reached an agreement this week on a proxy access proposal that would allow shareowners to place their nominees directly on the corporate proxy. Continue Reading →
Citigroup Inc $C, is one of the stocks in my portfolio. Their annual meeting is coming up on 4/22/2014. ProxyDemocracy.org had collected the votes of no funds when I checked and voted on 4/15/2014. I voted with management 33% of the time. View Proxy Statement. Why an index with no links? That seems so basic. Perhaps Citi doesn’t want to make reading the proxy easy? Continue Reading →
The deadline for voting online is April 21st. My proposal, #8 on Citi’s proxy (page 97), would bring proxy access (page 40) to our company by allowing shareowners to place board nominees on Citi’s proxy. Don’t be fooled by Citi’s opposition statement, which calls the ownership thresholds “low.” In reality, 1% of Citi is huge; about $1.4B.
The largest shareowners at Citi, Vanguard and SSgA have never initiated an activist campaign but they might vote for candidates put forward by other investors. Public pensions are more likely to take the activist role and nominate candidates. The four largest public pension funds combined — CalPERS (35%), New York State Common (0.33%), CalSTRS (0.18%), and Florida SBA (0.17%) — would barely hold enough shares to nominate three board members directors under my proposal. Continue Reading →
Citigroup ($C) is one of the stocks in my portfolio. Their annual meeting is coming up on 4/24/2013. ProxyDemocracy.org had collected the votes of three funds when I checked on 4/21/2013. I voted with management 41% of the time. View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank are voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime)
I generally vote against pay packages where NEOs were paid above median in the previous year but make exceptions if warranted. According to Bebchuk, Lucian A. and Grinstein, Yaniv (The Growth of Executive Pay), aggregate compensation by public companies to NEOs increased from 5 percent of earnings in 1993-1995 to about 10 percent in 2001-2003. Continue Reading →
Climate Change Portfolio Exposure
Boston Common Asset Management has a proposal that will appear on the proxy of PNC Financial Services ($PNC) requesting that it report to shareowners on the greenhouse gas emissions resulting from its lending portfolio and its exposure to climate change risk in its lending, investing, and financing activities. Watch for your proxy. The annual meeting will be held on April 23, 2012. According to the proposal, Continue Reading →
Trillium Asset Management LLC, on behalf of the Benedictine Sisters of Mount St. Scholastica, along with the AFSCME Employees Pension Plan recently filed a shareholder proposal with Citigroup Inc. (NYSE: C, $C) asking the company’s board of directors to explore a possible separation of one or more of its business units. Continue Reading →
According to GMI, rising share prices helped drive a 15% pay hike for CEOs in 2011, with the average compensation package hitting $5.8M. That’s on top of a 28% pay rise in 2010. Inflation Continue Reading →
Citigroup (C) is one of the stocks in my portfolio. Their annual meeting is coming up on 4/17/2012. Voting ends 4/16 on Moxy Vote’s proxy voting platform, which listed recommendations from ten “good Continue Reading →
The Securities and Exchange Commission’s Director of the Division of Enforcement, Robert Khuzami, today made the following statement on the Citigroup case:
Last month, a federal district court declined to approve a consent judgment because, in its view, the underlying allegations were ‘unsupported by any proven or acknowledged facts.’ As a result, the court rejected a $285 Continue Reading →
Harrington Investments, Inc. (HII), a socially responsible investment advisory firm filed shareholder resolutions at Citigroup, Bank of America and JP Morgan Chase, calling for the adoption of principles to stem illicit financial transactions which is the result of government corruption and bribery, tax evasion, money laundering, illegal arms deals and the movement of money by drug cartels. (download resolution in pdf)
The resolutions also request that the banks support broad public policies aimed at creating greater accountability for the identification of criminal money by significant non-bank actors in the financial system.
“According to Global Financial Integrity (GFI), the U.S. financial sector, especially international bankers, are under increasing pressure from government regulators to respond to the growing illicit movement of money throughout the financial system,” said Harrington. “Shareholders, as principals, need to make sure that our agents, corporate executives and bank boards of directors, respond as responsible fiduciaries to protect our banks’ integrity and reputation by developing industry-wide standards.”
Heather Lowe, Legal Counsel and Director of Government Affairs for Washington, D.C. non-profit advocacy group Global Financial Integrity, commented that “These resolutions are all about reducing the risk that illicit funds even get to the banks, and if they do, making it easier for banks to identify the bad actors. They are based on recommendations put forward Continue Reading →
CalPERS. A report from consultant Wilshire Associates found that activist involvement by CalPERS increased returns at many of the 142 “Focus List” companies. Prior to the pension’s involvement, the companies’ returns averaged 83.3% below their various benchmarks; afterward they yielded returns 12.7% above the benchmarks. Although the cumulative 12.7% is not as high as past results, their corporate governance program still much more than pays for itself. From the report:
Most investment resources in the industry continue to be focused on identifying small misvaluations in publicly traded stocks. This is, perhaps, unfortunate since investors are not earning a satisfactory return on the manager fees and brokerage costs they pay, given the evidence showing that the public stock markets are fairly efficiently priced. However, the evidence is equally clear that many corporate assets are poorly managed and that resources spent on identifying and rectifying those cases can create substantial opportunity and premium returns for active shareholders.
CalPERS announced several actions to address concerns raised by the City of Bell salary controversy, including:
- Posting audit reviews of public agency membership and payroll data submitted to the retirement system
- Highlighting significant findings of public agency reviews and regularly report them to the CalPERS Board
- Establishing procedures and guidelines for CalPERS working-level staff to notify supervisors and senior management of unusually high compensation and salary increases such as those that occurred in Bell
In addition, CalPERS helped establish the Public Employee Compensation and Benefits Task Force, which includes CalPERS staff and representatives public employer organizations, League of California Cities, California State Association of Counties, employee and labor organizations, legislative staff and other, focusing on:
- Options for providing greater public disclosure of public employee compensation, benefits, and other information related to total employee compensation and benefits
- Options regarding caps on total compensation that can be considered for retirement purposes
- Options for mitigating the impact of excessive salaries on the retirement costs of a public employee’s previous public employers and other public agencies in the same liability risk pool
CalPERS had previously announced plans to review the compensation of CalPERS-covered employees who earn $400,000 or more per year in salary. Phase two of the review will look at CalPERS member salaries of $245,000 per year and above.
On September 7, 2010, from 6:00 p.m. – 7:30 p.m., the Sacramento Central Labor Council and PERSWatch.net will host a “CalPERS Candidates’ Forum,” moderated by the League of Women Voters of Sacramento County. The forum will be held in the CalSTRS Boardroom at 100 Waterfront Place in West Sacramento, next to the pyramid. We’re trying to arrange for free parking but haven’t confirmed that yet. This is your opportunity to meet and question the candidates. A video of the forum will be archived on the CalPERS website.
Citigroup. Nice item by David Reilly in the WSJ (Citigroup’s Paltry Debt Penalty, 8/17/10) He sides with U.S. District Judge Ellen Segal Huvelle who refused the SEC’s proposed $75 million settlement with Citigroup over the bank’s failure in 2007 to disclose sub-prime mortgage risks. Goldman Sachs recently paid $550 million for a lesser offense but the SEC only wants $75 million from Citigroup. Why go after only two Citigroup executives for the paltry sums of $100,000 and $80,000 and why should shareowners pay for the execs alleged missteps?
The problem is Citigroup shareholders, under current rules, couldn’t necessarily oversee their company. That is partly due to the difficulty in challenging board directors… For shareholders to be held accountable, the SEC has to let them act more like owners.
Unfortunately, even under the SEC’s most probable proxy access rules shareowners may just have a better view of wrong doing and their money sliding away, since even under the best of circumstances they will only get to nominate 1/4 of the board.
Climate Change. With extreme weather mounting and Congress dithering, WRI report outlines what we can do now to reduce GHGs. The summary, “Everything You Need to Know About Global Warming in 5 Minutes,” by Boston investment manager Jeremy Grantham of GMO does a great job of ticking off the causes, consequences, and controversies surrounding climate change. (The Go-Getter Approach to Climate Change, 17 August 2010, MurninghanPost.com.
Cooperatives. If sustainable technologies are about the what of the living economy, local and shared ownership designs are about the who: who will own the productive capacity of the nation, who will control it, and who will benefit from the wealth created. Minwind Energy is an example of shared ownership, an emerging, broad category of ownership design in which ownership is shared among individuals (as in cooperatives or employee-owned firms) or between individuals and a community organization (as in a community land trust, where families own their homes while a nonprofit owns the land they stand on). (A Different Kind of Ownership Society, via Yes! Magazine, Marjorie Kelly and Shanna Ratner, 8/3/10)
Corporate Governance. It is no longer realistic to look to government to rectify problems caused in the private sector, or to simply ignore such problems and their broader consequences. We all need to look for innovative ways to avoid such problems, such as using the governance process to do so. (Why Corporate Governance Matters to Everyone, Marty Robins, The Huffington Report, 8/17/10)
With the specter of dramatic regulatory changes hovering over them, U.S. public companies have been acting aggressively to streamline corporate governance practices and establish their executive compensation priorities, according to Shearman & Sterling’s eighth annual Corporate Governance Surveys of the 100 largest U.S. public companies. Key corporate governance findings include:
- Majority voting in uncontested director elections has been implemented in some form by 82 of the 100 largest companies, up from 75 last year and from just 11 as recently as 2006.
- Despite amendments to NYSE Rule 452 implemented last year (eliminating broker discretionary voting in director elections), no director standing for reelection at one of the 100 largest companies failed to receive majority support this year.
- The number of Top 100 Companies at which the CEO is the only member of the board of directors who is not independent increased significantly, rising to 59 this year from 49 last year.
- The number of Top 100 Companies with classified boards, of which there were 54 in 2004, declined to only 20, and of those 20, more than one-third were either in the process of declassifying their boards or received approval from their shareholders this year to do so.
- Seventy-one companies disclose they maintain an executive compensation clawback policy (an increase from 56 companies in 2009 and 35 in 2007 — representing a 103% increase in four years). This will become increasingly significant, as the new Dodd-Frank Act mandates clawbacks if a material restatement would have affected the amount received.
- There was a decrease in the overall number of compensation-related shareholder proposals; however, advisory say-on-pay policies continued to be the most prevalent proposal. In addition, the survey suggests that companies cannot assume that their say-on-pay advisory resolutions will pass. For example, three public companies (including one Top 100 Company) failed to win majority support in the 2010 proxy season.
Economy. Biflation, generally defined as inflation and deflation occurring simultaneously in different parts of the economy—specifically, rising prices for commodities that trade in global markets and falling prices for things bought with credit domestically, like homes and automobiles. (Is ‘Biflation’ Real?, Newsweek, 8/16/10)
Electronic Board Meetings. Despite the obvious advantages of using technology and moving to electronic meeting management, few companies have achieved buy-in and taken board meetings to an electronic platform. Some have, however – and South Jersey Industries (SJI) is one such early adopter. (Best practice: establishing an electronic meeting management process, Corporate Secretary, 8/17/10)
Global Corporate Citizenship. Prof. Surinder Pal Singh outlines how global corporate citizenship rests on four pillars: values; value protection; value creation; and evaluation. These four pillars not only underpin the long-term success and sustainability of individual companies, but are also a major factor in contributing to broader social and economic progress in the countries and communities in which these companies operate. Along with good governance on the part of governments, they offer one of our greatest hopes for a more prosperous, just and sustainable world. (The Concept of Corporate Citizenship in a Global Environment, Political Wag, 8/17/10)
As the US markets continue to debate whether we are still in a recession, on the road to recovery, or headed for a double recession, the Indian government is busy imposing regulations to boost corporate philanthropy and social responsibility. In an economy that continues to post steady growth despite upheavals across Europe and the U.S., India Inc. is increasingly facing scrutiny for its role—or notable absence—in the social and environmental growth of the country. (Forcing CSR in India: Is Regulation the Answer?, The CSR Blog, 8/16/10)
Green Chemistry. Two California departments within Cal/EPA are working to identify “chemicals of concern” in consumer products. Eventually, they will push companies to substitute less toxic chemicals and maybe even ban some of those that are killing us now.
Greenest Campuses. 162 American colleges and universities rated by the Sierra Club. Also includes first steps on Chinese campuses.
Proxy Plumbing. The Shareholder Communications Coalition consisting of the Business Roundtable, National Association of Corporate Directors, National Investor Relations Institute, Society of Corporate Secretaries and Governance Professionals, and the Securities Transfer Association prepared a PowerPoint presentation to explain its recommendations for reforming the proxy voting and shareholder communications rules. “This presentation document is intended to help public companies, investors, and other interested parties understand how the proxy system can be improved to benefit all stakeholders.” This is an important initial assessment of feedback on the SEC’s proxy plumbing concept release. I suspect I will disagree with several parts but I heartily endorse their call to:
- Do away with the VIF and replace it with a proxy card.
- Pass voting authority directly to beneficial owners.
- Enable beneficial owners to transfer their proxy authority back to their brokers or bank (e.g. client directed voting) or to another third-party.
Research in Progress. Stanford’s Rock Center for Corporate Governance and the Corporate Secretary’s organization are conducting a survey “to get some hard data and research on what companies are actually doing and hopefully figure out once and for all what elements of governance reform actually lead to improvements and which do not.”
SEC. Rebecca Files finds that cooperation with the SEC through forthright disclosure of a restatement (e.g., disclosures reported in a timely and visible manner) increases the likelihood of being sanctioned, perhaps because it improves the SEC’s ability to build a successful case against the firm. However, both cooperation and forthright disclosures are rewarded by the SEC through lower monetary penalties. (SEC Enforcement: Does Forthright Disclosure and Cooperation Really Matter?, SSRN, 7/14/10)
The SEC settled its suit with New Jersey over securities fraud by issuing a cease-and-desist order, which the state accepted without admitting or denying the findings. No penalties were imposed. According to the SEC NJ claimed it had been properly funding public workers’ pensions when they had not. The SEC has a special unit looking into more public pension disclosures. (Pension Fraud by New Jersey Is Cited by S.E.C., NYTimes, 8/19/10)
The S.E.C. said the fraud began in 2001, when New Jersey increased retirement benefits for teachers and general state employees. New Jersey did not have the money to put behind the new benefits, but every year after that, the state treasurer certified that the pensions were being funded according to the plan.
The SEC finally confirmed they will consider adopting proxy access rules on 8/25. Still no word on threshold, holding period, small issuer exemption. next Wednesday, August 25th at an open Commission meeting. No word on how the big question marks – the ownership threshold and holding period – will be resolved. Sunshine notice. The U.S. Chamber of Commerce has retained Eugene Scalia, the son of U.S. Supreme Court Justice Antonin Scalia, to review the forthcoming SEC rules for a potential legal challenge. (SEC Plan to Pry Open Corporate Boards May Face Challenge, Bloomberg, 8/11/10) J. W. Verret of the George Mason University School of Law has already proposed more than a dozen way to circumvent the law in his paper Defending Against Shareholder Proxy Access: Delaware’s Future Reviewing Company Defenses in the Era of Dodd-Frank.
Shareowner Engagement. With the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, power has shifted to shareholders. The 2011 proxy season is a game-changer as the rules require boards to seek shareholder support for compensation programs and even directorship candidates. (Directors, Do You have a Shareholder Engagement Program?, Karen Kane Consulting, 8/12/10)
United States Proxy Exchange (USPX). The USPX is a non-government organization dedicated to facilitating shareowner rights, primarily through the proxy process. They are structured as a chamber of commerce but unlike a typical chamber of commerce—which represents corporate executives—the USPX represents shareowners. Membership includes both institutional investors and sophisticated retail investors—many of whom have finance, corporate or legal expertise from their careers. Together, they work to promote an environment where engaged shareowners create value through the corporations they own. Check out their new website. Please join me; sign up for membership.
ProxyDemocracy.org was very helpful, with several funds reporting their votes in advance. Also very helpful was CalPERS’ site, which provided reasons for their votes. I voted for most of the directors, along with most of the funds who reported voting in advance on ProxyDemocracy. However, I joined with CalPERS in withholding my vote from the following two, since I found CalPERS’ reasons compelling:
Director Andrew N. Liveris – I joined with CalPERS in voting against Liveris, since he served as members of the audit and risk committee prior to the financial crisis when there was a failure to ensure appropriate corporate governance practices pertaining to risk management were in place. Additionally, Mr. Liveris is a current CEO while serving on an excessive number of public company boards.
Director Judith Rodin – Like Liveris, he served as members of the audit and risk committee prior to the financial crisis when there was a failure to ensure appropriate corporate governance practices pertaining to risk management were in place.
Along with most of the funds, I voted to ratify the auditors, support the omnibus stock plan, and approve TARP repayment shares. I voted against the Advisory Vote to Ratify Named Executive Officers’ Compensation, since CalPERS believes the company does not adequately disclose the process by which executive compensation is determined.
Along with most of the funds, I voted to Amend NOL Rights Plan (NOL Pill). Generally, I vote against such plans, but CalPERS believes the poison pill is in shareowner best interest. Additionally, the company has indicated the adoption is not for anti-takeover purposes.
I joined with the funds to Approve Reverse Stock Split. I voted with most of the funds in favor of Affirm Political Non-Partisanship, a proposal by Evelyn Y. Davis. CalPERS voted against it. They believe the proposal is unnecessary because Citigroup indicates it adheres to all state and federal regulations on this matter. That doesn’t seem like a convincing reason to me but I’m not very firm in my support. In glancing at the proposal, it may well be that everything in the resolution is already covered by law. If so, it does no harm to vote in favor of it.
Along with most of the funds, I voted in favor of all the shareowner proposals. Report on Political Contributions, by the Firefighters’ Pension System of the City of Kansas City. CalPERS believes this proposal poses no long-term harm to the company. According to MoxyVote.com, the Center for Political Accountability also supports this proposal.
Report on Collateral in Derivatives Trading, by the Sisters of Charity of St. Elizabeth. CalPERS believes this proposal poses no long-term harm to the company. It seems to me this has the potential to reduce risk. That’s better than posing no long-term harm. In fact, if shareowners had listened to the Sisters of Charity and members of the Interfaith Center on Corporate Responsibility there is a good chance we would have missed the Great Recession. See this 2008 press release about ICCR sounding the alarm for 15 years. Why weren’t shareowners and management listening? Rev. Seamus Finn, director, Justice, Peace & Integrity of Creation, Missionary Oblates of Mary Immaculate and an ICCR board member, said:
The U.S. government controls over a quarter of outstanding Citigroup shares today. It has an extraordinary opportunity here to send a clear message to Wall Street that more derivatives disclosure is vital. Even more to the point, the Treasury Department really has no choice other than to support our resolution since a failure to do so would directly undercut its campaign for critical financial reform.
ICCR Executive Director Laura Berry said:
To adopt an inconsistent posture at this critical juncture on derivatives disclosure would be disastrous both in terms of how Wall Street reads the signals from Washington and how seriously Congress sees the Obama Administration as being in its support of vital financial services reform. (Shareholders: Treasury Should be Consistent on Capitol Hill and on Wall Street by Voting Citi Shares for More Derivatives Disclosure, press release, 4/16/2010)
Ability to Call Special Meetings, by William Steiner. CalPERS believes shareowners should be able to call special meetings. So do I. I’ve even submitted proposals myself on this issue and, like William Steiner, I often work with John Chevedden on these submissions.
Proposal Regarding Stock Retention, by AFL-CIO. CalPERS is a firm supporter of stock ownership guidelines that require executives to satisfy minimum levels of ownership after leaving the company. It should be noted the proposal mandates that executives hold 75% of their equity awards for two years after retirement or termination. CalPERS prefers that guideline specifics be designed and implemented through the company’s Independent Compensation Committee. I favor holding most equity awards until after retirement.
Shareholder Proposal Regarding the Reimbursement of Expenses in a Contested Election, by AFSCME. CalPERS believes this proposal poses no long-term harm to the company and would be a benefit to shareowners. I think this proposal could increase the ability of shareowners to have additional influence on nomination and election of directors.
I voted using MoxyVote.com. I you agree or disagree with my votes, you can leave comments here on CorpGov.net or on my wall at MoxyVote, search James McRitchie. If you use ProxyDemocracy, keep in mind that you can post how you’ve voted or any other advice regarding a company right on the site. For and example, see the bottom of the Citigroup page. When it becomes technologically feasible, it would be great if sites like MoxyVote and ProxyDemocracy can tell users who sponsored each resolution. Having to look that information up on the proxy takes an extra minute or so. Just as many will vote with various funds because of their “brand” reputation, we will also vote based on the brand of the sponsor.