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Citigroup Inc.388 Greenwich StreetNew York, NY 10013
March 16, 2016
Dear Stockholder:
We cordially invite you to attend Citi’s Annual Stockholders’ Meeting. The Annual Meeting will be held on Tuesday, April 26, 2016, at 9:00 am in The Grand Ballroom at the University of Miami, Student Center Complex, 1330 Miller Drive, Coral Gables, Florida. Directions to the 2016 Annual Meeting location are provided on pages 103 and 104 of this Proxy Statement.
At the Annual Meeting, stockholders will vote on a number of important matters. Please take the time to carefully read each of the proposals described in the attached Proxy Statement.
Thank you for your support of Citi.
Sincerely,
Michael E. O’NeillChairman of the Board
LETTER FROM THE BOARD OF DIRECTORS TO OUR STOCKHOLDERS
Operating the business in a decidedly challenging economic, political and social environment, the Citi management team delivered full-year net income of over $17 billion — our best annual profit since the financial crisis — and also reached a number of significant financial milestones. Importantly, our 2015 stress test submission received no objection from the Federal Reserve Board, enabling the firm to return a meaningful amount of capital to its shareholders. A comprehensive Resolution Plan was submitted to the Federal Reserve and the Federal Deposit Insurance Corporation, and we are awaiting their evaluation.
Shortly after Mike Corbat took on the CEO role three-and-a-half years ago, he presented a set of metrics to the Board that he felt the company should use in evaluating its performance. We agreed, and these targets, which management committed to achieve by the end of 2015, were publicly disclosed. As discussed and shown in the charts included in the Compensation Discussion and Analysis section of this proxy, the stated objectives were for the most part achieved, and our overall operating performance in 2015 was more than respectable when compared to those of our eight-firm peer group. We can be proud of what has been accomplished, but the management team and your directors recognize that further improvement in the firm’s financial performance is essential if our shareholders are to be appropriately rewarded.
In the context of the recent market turmoil and decline in bank stocks, including our own, it has obviously been difficult to celebrate the success of the turnaround in the firm’s performance that has occurred in the past three years. Clearly, investors are concerned about the sharp decline in commodity prices, the slowing economic expansion in the emerging markets, and the negative impact on bank profitability were interest rates to remain low for an extended period. We do not dismiss these concerns, but you should take comfort from the firm’s ample capital and liquidity and the fact that a great deal of time and effort has been devoted to building a sound and active risk management function. We are confident that Mike and his team are up to the task of guiding the firm through whatever challenges lie ahead.
The work of embedding a culture of ethical decision-making throughout the organization continued apace in 2015. The firm’s Mission and Value Proposition clearly defines the desired culture, articulates Citi’s purpose and broader role in society, and lays out the firm’s expectation for its employees in fulfilling its purpose and role. Revamped leadership standards, which better reflect our ethics and execution priorities, are an important factor in performance evaluation and compensation decisions. The Board’s Ethics and Culture Committee will continue to monitor management’s initiatives, as well as their implementation and results.
In recent years your directors have spent a considerable amount of time with management reviewing the company’s strategy and exploring alternatives. In the process of these reviews, our strategy has been further refined. The Board believes it builds on the firm’s distinct competitive advantages and provides important diversification benefits. Each of our Institutional and Consumer businesses is expected to generate half of the company’s net income, with half of that income generated in the U.S. and the other half sourced internationally. We operate through a unique international network that enables the firm to transact business in over 160 countries. We have a particular advantage in the emerging markets that are still projected to grow more quickly than the developed markets, including the United States, albeit with greater volatility. We believe we are on the right track and that your investment will be rewarded. Rest assured that we take very seriously our fiduciary obligation to you to ensure that the firm is operated with your interests at heart. We believe the Board, as constituted, has the requisite skills and experience to accomplish that objective.
A short synopsis of management’s Board-supported operating practices in executing the strategy seems in order. The management team has appropriately and adeptly exited businesses that did not and were unlikely to produce adequate returns on invested capital. Though much of the necessary simplification and streamlining of the firm has been accomplished, optimizing the company's portfolio of businesses and support functions is a never-ending process. As a matter of course, management will continue to monitor the performance and prospects of individual businesses, and, after thorough reviews, withdraw capital from those that are unlikely to meet the firm’s return expectations. At the same time, incremental capital will be invested in businesses where we have a competitive advantage and attractive long-term prospects even when such investments do not generate immediate returns (for example, the current investment in our credit card businesses). Lastly and crucially, the return of capital to you our shareholders continues to be a vital component of management’s execution priorities. In the existing and likely-to-continue slow growth
Citi 2016 Proxy Statementii
environment, there are not enough attractive investment opportunities in either our existing businesses or permissible new ventures to fully invest the capital being generated by the firm. Hence, capital return becomes the default course of action. Of course, it will be essential to continue to satisfy the Federal Reserve and other regulators that we are operating in a prudent manner in order to achieve our capital return objectives.
We remain convinced that the strategy we have adopted, and which our management team is executing, continues to be the one that will be the most accretive for our shareholders over time. However, as we have demonstrated in the past, should evidence mount that some of our key underlying assumptions have proven faulty, the Board, working with management, will make whatever mid-course corrections are required.
We believe in the mission of this iconic institution, and we are thankful to have your ongoing support as we work toward achieving our goals. Dialogue with shareholders is a fundamental feature of a healthy, well-governed organization, and we will continue to make it a priority. As always, you are encouraged to write with thoughts, concerns or suggestions to Citigroup Inc. Board of Directors c/o Rohan Weerasinghe, General Counsel and Corporate Secretary, 388 Greenwich Street, New York, New York, 10013.
2019 | Citigroup Inc. Notice of Annual Meeting and Proxy Statement | |
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March 6, 2019 Dear Shareholder: We cordially invite you to attend Citi’s 2019 Annual Meeting. The Annual Meeting will be held on Tuesday, April 16, 2019, at 9:00 a.m. at Citi’s Headquarters, 388 Greenwich Street, New York, New York 10013. Directions to the Annual Meeting location are provided in the Proxy Statement. At the Annual Meeting, shareholders will vote on a number of important matters. Please take the time to carefully read each of the proposals described in the Proxy Statement. Although I have served as a Citi Director for over a year, and represented the Board as independent counsel for the two prior years, the 2019 Annual Meeting will be my first as your Chair. I am deeply honored to assume this new role, and deeply grateful that my predecessor, Mike O’Neill, provided such a sterling example for me to emulate in the years ahead. Thank you for your support of Citi. |
Sincerely, |
John C. Dugan Chair of the Board |
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Letter from the Board of Directors to our Shareholders | |
“The Board and our Risk Committee engage deeply in the oversight of risk management practices ….always recognizing that, while Citi is in the business of taking risk, these risks must be understood, measured, monitored, and controlled.” | By most financial measures, 2018 for Citi was a year captured best by the phrase “steady progress.” Consistent with the goals set forth in our Investor Day presentation almost two years ago, and adjusting for the one-time impact of U.S. Tax Reform, the firm increased its net income by 14 percent; increased its earnings per share by 25 percent; reduced operating expenses by one percent, driving down the operating efficiency ratio to 57 percent; generated continued growth in loans and deposits; and perhaps most important, increased its return on tangible common equity (RoTCE) to 10.9 percent. While the lower effective tax rate resulting from U.S. Tax Reform contributed substantially to these results, Citi’s pre-tax earnings also increased modestly from the prior year. Despite this positive operating performance, Citi’s Total Shareholder Return (TSR) for 2018 disappointed, both absolutely and relative to peers. This was partly due to a general decline in bank share prices, exacerbated by an especially sharp decrease in December for banks with substantial market-making operations. While Citi’s share price and relative TSR rebounded in the first part of this year, your Board remains very focused on Citi improving its TSR in 2019 and the years ahead – and we believe the best way for the firm to do this is to continue its steady progress, especially through improvement of its return on tangible common equity. Management also made progress on the regulatory front last year, which we believe is critical to the firm’s success. Citi again achieved a successful result in the Federal Reserve’s annual Comprehensive Capital Analysis and Review (CCAR) stress test, enabling the return of over $18 billion of capital to common shareholders during the calendar year, while maintaining levels of regulatory capital well in excess of minimum requirements. In addition, Citi made headway on a range of heightened regulatory requirements that all large banks have faced in the wake of the financial crisis. Nevertheless, your Board will continue to pay close attention to – and expect management to make continued progress on – regulatory matters in 2019 and beyond. As it should be for a global firm like Citi, prudent risk management was top of mind for both management and the Board in 2018. Our three lines of defense – the business lines, the control functions, and internal audit – dove deeply and, where necessary, took proactive steps in critical risk areas such as Brexit, the potential fall-out from trade wars, evolving industry underwriting standards in leveraged lending, and the potential turn of the credit cycle. Cyber risk remains a crucial priority, and the firm has invested heavily to maintain state-of-the-art defenses and cyber resilience. The Board and our Risk Committee engage deeply in the oversight of risk management practices in these and other areas, always recognizing that, while Citi is in the business of taking risk, these risks must be understood, measured, monitored, and controlled. Much has been written about the ethical lapses that have damaged the reputation of the banking industry, including Citi, both during and after the financial crisis. We continue to believe that strong ethical standards and practices are critically important, which is why Citi, alone in the banking industry, maintains an Ethics and Culture Committee of the Board as one means to keep management striving to achieve best practices – not just at senior levels but throughout the organization. |
Citi 2019 Proxy Statement
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Citi also took firm stands in 2018 on several issues of real importance. On diversity and inclusion, we became the first financial services company to voluntarily disclose adjusted pay gaps between women and men in the United States, the U.K., and Germany, and between minorities and non-minorities in the U.S. – and then took concrete steps to eliminate those gaps. In response to the epidemic of gun violence in the U.S., we were the first bank to announce a Commercial Firearms Policy, which requires our retail sector clients to establish such best practices as background checks and age restrictions. And in our Sustainable Progress Initiative, the firm recorded $38.4 billion in transactions toward our 10-year, $100 billion Environmental Finance goal. The Board fully supported each of these measures. Finally, at our annual review of strategy, which we conduct each year at our July meeting, we will examine closely management’s plans to continue Citi’s path forward to achieve increased sustainable returns; address challenges from potential disruptors; improve our operations and technology; increase our efficiency; and continue to prudently manage risk. Our focus: continued steady progress toward Citi’s longer-term goal of a 16% RoTCE. Thank you for your ongoing support of Citi. Dialogue with shareholders is a fundamental feature of a well governed organization, and we will continue to make it a priority. Please write with any concerns or suggestions to: Citigroup Inc. Board of Directors, c/o Rohan Weerasinghe, General Counsel and Corporate Secretary, 388 Greenwich Street, New York, NY 10013. | ||||
Michael L. Corbat |
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S. Leslie Ireland |
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Gary M. Reiner Anthony M. Santomero | Diana L. Taylor James S. Turley | |||
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A WORD OF APPRECIATION | ||||
www.citigroup.com iii
Mike O’Neill, who retired in January, was a director for 10 years and Chairman of our Board for seven years. He was an outstanding leader who provided wise and effective oversight, and he assembled a diverse and talented Board. In addition, Franz Humer and Tony Santomero have reached our mandatory retirement age; each provided many important contributions to the Board. Thank you – from all of us – for your valuable perspectives and years of service to Citi. |
www.citigroup.com
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Citigroup Inc.388 Greenwich StreetNew York, NY 10013
Notice of Annual Meeting of Stockholders
Citigroup Inc.
388 Greenwich Street
New York, New York 10013
Dear Stockholder:
Citi’s Annual Stockholders’ Meeting will be held on Tuesday, April 26, 2016,16, 2019, at 9:00 am in The Grand Ballrooma.m. at the University of Miami, Student Center Complex, 1330 Miller Drive, Coral Gables, Florida.Citi’s Headquarters, 388 Greenwich Street, New York, New York. Directions to the 20162019 Annual Meeting location are provided on pages 103 and 104 page 126of this Proxy Statement. You will need an admission ticket or proof of ownership of Citi stock to enter the meeting. Live audio of the Annual Meeting will be webcast at www.citigroup.com.www.citigroup.com.
At the meeting, stockholders will be asked to:
1. | elect the directors listed in this proxy statement, |
2. | ratify the selection of Citi’s independent registered public accounting firm for 2019, |
3. | consider an advisory vote to approve Citi’s 2018 executive compensation, |
4. | approve the Citigroup 2019 Stock Incentive Plan, |
5. | act on certain stockholder proposals, and |
6. | consider any other business properly brought before the meeting, or any adjournment or postponement thereof, by or at the direction of the Board of Directors. |
The close of business on February 29, 2016 is the record date for determining stockholders entitled to vote at the Annual Meeting. A list of these stockholders will be available at Citi’s headquarters, 388 Greenwich Street, New York City, for at least 10 days before the Annual Meeting or any adjournment or postponement thereof.
Citi has utilized the Securities and Exchange Commission rule allowing companies to furnish proxy materials to its stockholders over the Internet. This process allows us to expedite our stockholders’ receipt of proxy materials, lower the costs of distribution, and reduce the environmental impact of our 2019 Annual Meeting.
In accordance with this rule, on or about March 16, 2016,6, 2019, we sent to those current stockholders who were stockholders at the close of business on February 29, 2016,19, 2019, a notice of the 20162019 Annual Meeting containing aNotice of Internet Availability of Proxy Materials(Notice). The Notice contains instructions on how to access our Proxy Statement and Annual Report and vote online. If you received a Notice and would like to receive a printed copy of our proxy materials from us instead of downloading a printable version from the Internet, please follow the instructions for requesting such materials included in the Notice.
Please vote by telephone, mobile phone, or Internet (instructions are on your proxy card, voter instruction form, or Notice, as applicable), so that your shares will be represented whether or not you attend the Annual Meeting. If you receive your materials by mail, please sign, date, and promptly return the enclosed proxy card in the enclosed envelope.
By order of the Board of Directors,
Rohan Weerasinghe
Corporate Secretary
March 6, 2019
www.citigroup.com
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(Intentionally Left Blank)
March 16, 2016Table of Contents
Citi 2016 Proxy Statementiv
CONTENTS
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13 | ||||
ABOUT THE 2019 ANNUAL MEETING | ||||
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Corporate Governance Materials | ||||
23 | ||||
Corporate Governance Guidelines | ||||
30 | ||||
Board Self-Assessment Process | 31 | |||
Board’s Role in Risk Oversight | ||||
40 | ||||
Code of Ethics for Financial Professionals | ||||
Qualifications | ||||
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Compensation Discussion and Analysis | ||||
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The Personnel and Compensation | ||||
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PROPOSAL 4: APPROVAL OF CITIGROUP | ||||
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Submission of Future Stockholder Proposals | ||||
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127 | ||||
Glossary | 127 | |||
Citigroup — Quantitative Scorecard Metric Details and Adjusted Results Reconciliations | 128 | |||
ANNEX B | 130 | |||
The Citigroup 2019 Stock Incentive Plan | 130 |
www.citigroup.com
10 |
Voting Items |
Proposal 1: Election of Directors(Pages 45-64) The Board recommends you voteFOReach nominee | |
Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm(Pages 70-71) | |
Proposal 3: Advisory Vote to Approve Citi’s 2018 Executive Compensation(Pages 72-109) | |
Proposal 4: Approve the Citigroup 2019 Stock Incentive Plan(Pages 110-118) | |
Stockholder Proposals 5-7(Pages 119-124) |
Meeting and Voting Information |
Date and Time April 16, 2019, 9:00 a.m. | ||||
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www.citigroup.com Votingv
PROXY STATEMENT HIGHLIGHTS
MEETING AND VOTING INFORMATION
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| Stockholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for each Director nominee and one vote for each of the other proposals to be voted on. |
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Admission |
BOARD AND CORPORATE GOVERNANCE HIGHLIGHTS
Director Nominees
Name | Age | Director | Principal | Other Current |
Michael L. Corbat | 55 | 2012 | Chief Executive Officer, Citigroup Inc. | None |
Ellen M. Costello | 61 | 2016 | Former President and CEO, BMO Financial Corporation, and Former U.S. Country Head, BMO Financial Group | • DH Corporation
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Duncan P. Hennes | 59 | 2013 | Co-Founder and Partner, Atrevida Partners, LLC | • Syncora Holdings, Ltd.
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Peter B. Henry | 46 | 2015 | Dean, New York University, Leonard N. Stern School of Business | None |
Franz B. Humer | 69 | 2012 | Former Chairman, Roche Holding Ltd | • Diageo plc (Chairman)
• Kite Pharmaceuticals
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Renée J. James | 51 | 2016 | Operating Executive, The Carlyle Group | • Oracle Corporation
• Sabre Corporation
• Vodafone Group Plc
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Eugene M. McQuade | 67 | 2015 | Former Vice Chairman, Citigroup Inc. and Former CEO, Citibank, N.A. | • XL Group plc (Chairman)
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Michael E. O’Neill | 69 | 2009 | Chairman, Citigroup Inc. | None |
Gary M. Reiner | 61 | 2013 | Operating Partner, General Atlantic LLC | • Hewlett-Packard Company
• Box Inc.
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www.citigroup.com 1
PROXY STATEMENT HIGHLIGHTS
Name | Age | Director | Principal | Other Current |
Judith Rodin | 71 | 2004 | President, Rockefeller Foundation | • Comcast Corporation
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Anthony M. Santomero | 69 | 2009 | Former President, Federal Reserve Bank of Philadelphia | • RenaissanceRe Holdings, Ltd.
• Penn Mutual Life Insurance Company
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Joan E. Spero | 71 | 2012 | Senior Research Scholar, Columbia University School of International and Public Affairs | • IBM
• International Paper
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Diana L. Taylor | 61 | 2009 | Vice Chair, Solera Capital LLC | • Brookfield Asset Management
• Sotheby’s
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William S. Thompson, Jr. | 70 | 2009 | Former CEO, Pacific Investment Management Company | None |
James S. Turley | 60 | 2013 | Former Chairman and CEO, Ernst & Young | • Emerson Electric Co.
• Intrexon Corporation
• Northrop Grumman Corporation
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Ernesto Zedillo Ponce de Leon | 64 | 2010 | Director, Center for the Study of Globalization and Professor in the Field of International Economics and Politics, Yale University | • Alcoa Inc.
• Procter & Gamble Company
• Grupo Prisa
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Summary of Director Nominees
The nominees for the Board of Directors each have the qualificationsqualifications and experience to approve and guide Citi’s strategy and to overseestrategy. The Board also oversees management’s execution of that strategic vision. Citi’s Board of Directors consists of individuals with the skills experience, and backgrounds necessary to oversee Citi’s efforts toward becoming a simpler, smaller, safer, and stronger financial institution,on delivering sustainable, client-led revenue growth while mitigating risk and operating within a complex financialfinancial and regulatory environment.
Independence | |
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Board Refreshment | |
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Diversity | |
Citi’s Board is committed to ensuring that it is composed of individuals whose backgrounds reflect thediversity represented by our employees, customers, and stakeholders. |
PROXY STATEMENT HIGHLIGHTS | 11 |
Director Nominees
Citi Committee Memberships* | ||||||||||||||
Name and Primary Qualifications | Age | Director Since | Principal Occupation and Other Current Public Company Directorships | A | EC | E | NGP | OT | PC | RM | ||||
Michael L. Corbat | 58 | 2012 | Chief Executive Officer, Citigroup Inc. | |||||||||||
Ellen M. Costello | 64 | 2016 | Former President and CEO, BMO Financial Corporation, and Former U. S. Country Head, BMO Financial Group Board: Diebold Nixdorf, Inc. | ⚫ | ⚫ | |||||||||
Barbara J. Desoer | 66 | CEO, Citibank, N. A.** Board: DaVita Inc. | ||||||||||||
John C. Dugan | 63 | 2017 | Chair, Citigroup Inc. | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ||||||
Duncan P. Hennes | 62 | 2013 | Co-Founder and Partner, Atrevida Partners, LLC Board: RenaissanceRe Holdings Ltd. | ⚫ | ⚫ | ⚫ | ||||||||
Peter B. Henry | 49 | 2015 | Dean Emeritus and W. R. Berkley Professor of Economics and Finance, New York University, Leonard N. Stern School of Business Board: Nike, Inc. | ⚫ | ⚫ | ⚫ | ||||||||
S. Leslie Ireland | 59 | 2017 | Former Assistant Secretary for Intelligence and Analysis, U.S. Department of the Treasury, and National Intelligence Manager for Threat Finance, Office of the Director of National Intelligence | ⚫ | ||||||||||
Lew W. (Jay) Jacobs, IV | 48 | 2018 | Former President and Managing Director, Pacific Investment Management Company LLC (PIMCO) | ⚫ | ⚫ | ⚫ | ||||||||
Renée J. James | 54 | 2016 | Chair and CEO, Ampere Computing, and Operating Executive, The Carlyle Group Boards: Oracle Corporation, Sabre Corporation, and Vodafone Group Plc | ⚫ | ⚫ | |||||||||
Eugene M. McQuade | 70 | 2015 | Former Vice Chairman, Citigroup Inc. and Former CEO, Citibank, N. A. | ⚫ | ||||||||||
Gary M. Reiner | 64 | 2013 | Operating Partner, General Atlantic LLC Boards: Hewlett Packard Enterprise Company and Box Inc. | ⚫ | ⚫ | ⚫ | ||||||||
Diana L. Taylor | 64 | 2009 | Former Superintendent of Banks, State of New York Boards: Brookfield Asset Management and Sotheby’s | ⚫ | ⚫ | ⚫ | ||||||||
James S. Turley | 63 | 2013 | Former Chairman and CEO, Ernst & Young Boards: Emerson Electric Co., Intrexon Corporation, and Northrop Grumman Corporation | ⚫ | ⚫ | ⚫ | ||||||||
Deborah C. Wright | 61 | 2017 | Managing Director of U.S. Jobs and Economic Opportunity, Rockefeller Foundation | ⚫ | ⚫ | |||||||||
Ernesto Zedillo Ponce de Leon | 67 | 2010 | Director, Center for the Study of Globalization and Professor in the Field of International Economics and Politics, Yale University Boards: Alcoa Corp. and Procter & Gamble Company | ⚫ | ⚫ | ⚫ |
* | Mr. Santomero will be retiring from the Board on April 1, 2019 and Mr. Humer will be retiring from the Board on April 16, 2019, both having reached the mandatory retirement age. Mr. Humer currently serves as the Chair of the Ethics and Culture Committee and Mr. Santomero serves as the Chair of the Risk Management Committee. The Board will appoint new Chairs for these Committees effective upon their retirements. |
** | Ms. Desoer will retire as CEO of Citibank, N.A. before the Annual Meeting. |
Qualifications |
Compensation | International Business or Economics | ||
Consumer Business and Financial Services | Legal Matters | ||
Corporate Affairs | Operations and Technology | ||
Corporate Governance | Regulatory and Compliance | ||
Financial Reporting | Risk Management | ||
Institutional Business |
A | Audit |
EC | Ethics and Culture |
E | Executive |
NGP | Nomination, Governance and Public Affairs |
OT | Operations and Technology |
PC | Personnel and Compensation |
RM | Risk Management |
Citi 2016 Proxy StatementTable of Contents2
12 | PROXY STATEMENT HIGHLIGHTS |
PROXY STATEMENT HIGHLIGHTS
Corporate Governance Highlights
Citi is active in ensuring its governance practices are at the leading edge of best practices. Highlights include:
Alignment with Stockholders | Compensation Governance | Adherence to Corporate Governance Best Practices | ||
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●Citi adopted Proxy Access
●Citi has an independent Chair
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●In 2019, Citi was the first financial institution to publicly disclose our unadjusted or “raw” pay gap for women and U.S. minorities; see page 76 of this Proxy Statement for further information |
●Names of
●Citi’s Nominees for Director include six women and three minorities ●Ongoing Board refreshment, with new independent Directors added in 2015, 2016, 2017 and 2018 and a new nominee included on the slate for the 2019 Annual Meeting ●All of Citi’s nominees have served fewer than 10 years |
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) HIGHLIGHTS | 13 |
Our Investor Engagement Program*
Summer Members of senior management conduct follow-up calls with investors regarding votes at the Annual Meeting and other governance issues. |
Fall Members of the Board and senior management conduct calls with investors for input on a variety of governance, compensation, and environmental and social matters, including climate risk. |
Winter Senior management continues to conduct engagement calls with investors regarding governance, compensation, and environmental and social matters. The Board reviews shareholder feedback from these conversations. |
Spring Members of the Board and senior management conduct conversations with our institutional investors in advance of the Annual Meeting to provide an opportunity for discussion of compensation, management and stockholder proposals, and other governance and annual meeting matters. | |
Annual Stockholders’ Meeting |
* | In the period following the 2018 Annual Meeting and prior to the issuance of the 2019 Proxy Statement, Citi engaged with investors regarding, among other topics, the following: executive compensation, climate change risk and disclosure including our work in response to the Taskforce on Climate-related Financial Disclosures (TCFD) Recommendations, gender pay equity, human and indigenous peoples’ rights, diversity and inclusion, board refreshment and governance, and certain stockholder proposals. For information about our engagement efforts in advance of the 2019 Annual Meeting, please see page 75 in this Proxy Statement. |
www.citigroup.com 3Environmental, Social and
Governance (ESG) Highlights
Citizenship and Sustainability Governance at Citi
BackThree Board-level committees have oversight responsibility for citizenship and sustainability-related activities and report to Contentsthe full Board on these topics. Management organizations provide strategic guidance and senior-level review on citizenship and sustainability topics.
ABOUT THE ANNUAL MEETING
Annual Meeting of Stockholders
Board of Directors | Senior Management | ||||||
Nomination, Governance and Public Affairs Committee | Ethics and Culture Committee | Risk Management Committee |
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Oversees citizenship and sustainability programs and company policies and procedures that impact citizenship and sustainability, including climate change, human rights and other issues; reviews engagement with major external stakeholders; and provides oversight of business practices |
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| Reviews Citi’s risk appetite framework, including reputational risk appetite, and reviews and approves key risk policies, including those focused on environmental and social risk |
14 | ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) HIGHLIGHTS |
Sustainability Framework
Our Sustainable Progress Strategy focuses on Climate Change, Sustainable Cities, and People and Communities, with our sustainability activities organized under three primary pillars:
Environmental Finance | Environmental & Social Risk Management (ESRM) | Operations & Supply Chain | |||||
$100 Billion Environmental Finance Goal focused on financing environmental and climate solutions | Collaborating with our clients to manage environmental and social risks and impacts associated with financed client activities | Managing our global facilities and supply chain to minimize direct impact, reduce costs, and reflect best practices |
Sustainable Progress Performance Highlights — 2018
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| InstitutedU.S. COMMERCIAL | Achieved2020 OPERATIONAL |
Implementing the TCFD Recommendations To pilot climate scenario analysis, Citi worked jointly with 15 other banks and the UN Environment Finance Initiative to develop new methodologies and tools for the assessment of transition and physical risks and opportunities within banks’ lending portfolios. Citi piloted the transition risk methodology on our North American oil and gas exploration and production portfolio and the transition and physical risk methodologies on our U.S. utilities portfolio. We shared our process and findings in our first climate disclosure report,Finance for a Climate-Resilient Future, published in November 2018. By voluntarily adopting the TCFD framework, Citi is working to better understand our own climate risks and help navigate the transition to a low-carbon economy. |
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● | Inclusion in DJSI World and North America indices since 2001 |
* | For more information about our environmental and social policies, please see Citi’s Environmental and Social Policy Framework at https://www.citigroup.com/citi/sustainability/data/Environmental-and-Social-Policy-Framework.pdf. |
Citi 2019 Proxy Statement
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) HIGHLIGHTS | 15 |
Citizenship Approach
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| Reporting transparently and learning through dialogue |
Maintaining a focus on ethical decision making and responsible business practices | Catalyzing innovation through strategic philanthropy and employee engagement |
Who is soliciting my vote?Citizenship Performance Highlights – 2018
Provided more than | CitiCHARITABLE GIVING | First in the industry to | ||
Engaged100,000 CITI | Citi Foundation invested | SetREPRESENTATION |
Recognition | |
● | World’s Best Bank for Corporate Responsibility - Euromoney Awards for Excellence 2018 |
● | Most Innovative Investment Bank for CSR - The Banker Investment Banking Awards 2018 |
● | Civic 50 - Recognized as one of the most community-minded companies in the U.S. |
● | 2018 Organizational Climate Leadership Award - Climate Leadership Conference |
● | 100% Score: Corporate Equality Index - Human Rights Campaign |
● | 2018 Bloomberg Gender-Equality Index |
The BoardUN Sustainable Development Goals: Citi Priorities
The United Nations Sustainable Development Goals (SDGs) are a set of Directors of Citigroup Inc. is soliciting your vote at the 2016 Annual Meeting of Citi’s stockholders.
Where and when will the Annual Meeting take place?
The Annual Meeting is scheduled to begin at 9:00 am17 global development goals for 2030. While our activities have an impact on April 26, 2016 in The Grand Ballroom at the Student Center Complexall of the Universitygoals, Citi is focused on seven SDGs where our core business and key initiatives can have the greatest impact. We highlight those efforts in our external reporting, including in our annual Global Citizenship Report and in a standalone report, entitledBanking on 2030: Citi & the Sustainable Development Goals.
www.citigroup.com
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About the facility. Live audio of the2019 Annual Meeting will be webcast at www.citigroup.com.
Why did I receive a one-page Notice in the mail regarding the Internet availability of proxy materials this year instead of a full set of proxy materials?
Q: | Who is soliciting my vote? |
A: | The Board of Directors of Citigroup Inc. is soliciting your vote at the 2019 Annual Meeting of Citi’s stockholders. |
Q: | Where and when will the 2019 Annual Meeting take place? |
A: | The Annual Meeting is scheduled to begin at 9:00 a.m. on April 16, 2019 at Citi’s Headquarters, 388 Greenwich Street, New York, New York. Directions to the 2019 Annual Meeting location are provided on page 126 of this Proxy Statement. Live audio of the 2019 Annual Meeting will be webcast at www.citigroup.com. |
Q: | Why did I receive a one-page Notice in the mail regarding the Internet availability of proxy materials this year instead of a full set of proxy materials? |
A: | Pursuant to rules adopted by the Securities and Exchange Commission (SEC), we have elected to mail to many of our stockholders aNotice of Internet Availability of the Proxy Materials (Notice) instead of a paper copy of the proxy materials. All stockholders receiving the Notice will have the ability to access the proxy materials over the Internet and receive a paper copy of the proxy materials by mail on request. Instructions on how to access the proxy materials over the Internet or to request a paper copy may be found in the Notice. In addition, the Notice contains instructions on how you may access proxy materials in printed form by mail or electronically on an ongoing basis. This process has allowed us to expedite our stockholders’ receipt of proxy materials, lower the costs of distribution, and reduce the environmental impact of our 2019 Annual Meeting.
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Q: | Why didn’t I receive a |
A: | We are providing some of our stockholders, including stockholders who have previously asked to receive paper copies of the proxy materials and some of our stockholders who are living outside of the United States, with paper copies of the proxy materials instead of a Notice. In addition, we are providing a Notice by e-mail to those stockholders who have previously elected delivery of the proxy materials electronically. Those stockholders should have received an e-mail containing a link to the website where those materials are available and a link to the proxy voting website. |
Q: | How can I access Citi’s proxy materials and Annual Report electronically? |
A: | This Proxy Statement and the If you are a stockholder of record, you can choose this option and save Citi the cost of producing and mailing these documents by following the instructions provided when you vote over the Internet. If you hold your Citi stock through a bank, broker, or other holder of record, please refer to the information provided by that entity for instructions on how to elect not to receive paper copies of future Proxy Statements and Annual Reports. If you choose not to receive paper copies of future Proxy Statements and Annual Reports, you will receive an e-mail message next year containing the Internet address to use to access Citi’s Proxy Statement and Annual Report. Your choice will remain in effect until you tell us otherwise or until your consent is deemed to be revoked under applicable law. You do not have to elect Internet access each year. To view, cancel, or change your enrollment |
Citi 2019 Proxy Statement
ABOUT THE 2019 ANNUAL MEETING | 17 |
Q: | What will I be voting on? | |||||||||||||||||||||||||||||||||||||||||||||||||||||
A: | Election of Directors (see pages An advisory vote to approve Citi’s An agenda will be distributed at the meeting. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Q: | How many votes do I have? | |||||||||||||||||||||||||||||||||||||||||||||||||||||
A: | You will have one vote for every share of Citi common stock you owned on February | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Q: | How many votes can be cast by all stockholders?
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A: | 2,340,491,298, consisting of one vote for each of Citi’s shares of common stock that were outstanding on the record date. There is no cumulative voting. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Q: | How many votes must be present to hold the meeting? | |||||||||||||||||||||||||||||||||||||||||||||||||||||
A: | To constitute a quorum to transact business at the 2019 Annual Meeting, the holders of a majority of the votes that can be cast, or | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Q: | Does any single stockholder control 5% or more of any class of Citi’s voting stock? | |||||||||||||||||||||||||||||||||||||||||||||||||||||
A: | Yes, there are two stockholders that each control more than 5%. According to a Schedule 13G Information Statement
deemed to For further information,see Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Q: | How do I vote? | |||||||||||||||||||||||||||||||||||||||||||||||||||||
A: | You can vote by proxy whether or not you attend the Annual Meeting. To vote by proxy, stockholders have a choice of voting over the Internet, by
citigroup.com |
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To reduce our administrative and postage costs, we ask that you vote If you are a record holder of Citi common stock, you may attend the 2019 Annual Meeting and vote in person. If you want to vote in person at the Annual Meeting, and you hold your Citi common stock through a securities broker (that is, in “street name”), you must obtain a proxy from your broker and bring that proxy to the Annual Meeting. | |||||||||||||||||||||||||||||||||||||||||||||||||
Q: | How do I get a printed proxy card?
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A: | If you received a Notice instead of the printed materials, there are three ways for stockholders to request a proxy card and a full set of materials at no | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Requesting a proxy card
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Q: | Can I change my vote? |
A: | Yes. Just send in a new proxy card or voter instruction form with a later date, cast a new vote by telephone or Internet, or send a written notice of revocation to Citi’s Corporate Secretary, Rohan Weerasinghe, at
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Q: | What if I don’t vote for some of the matters listed on my proxy card? |
A: | If you return a signed proxy card without indicating voting instructions, your shares will be voted in accordance with the Board’s recommendation
2019 Annual Meeting?” |
Q: | Can my shares held in street name be voted if I don’t return my voter instruction card and don’t attend the 2019 Annual Meeting? |
A: | If you don’t vote your shares held in street name, your broker can vote your shares on matters that the New York Stock Exchange (NYSE) has ruled discretionary. Discretionary Items. KPMG’s appointment is a discretionary item. NYSE member brokers who do not receive instructions from Non-discretionary Items. Brokers will not be able to vote your shares on the election of Directors, the advisory vote to approve Citi’s If your shares are registered directly in your name, not in the name of a bank or broker, you must vote your shares or your vote will not be counted.Please vote your proxy so your vote can be counted. |
Citi 2019 Proxy Statement
ABOUT THE 2019 ANNUAL MEETING | 19 |
Q: | If I hold shares through Citigroup’s employee |
A: | If you hold shares of common stock through Citigroup’s employee
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ABOUT THE ANNUAL MEETING
If a nominee for Director is not re-elected by the required vote, he or she will remain in The result of the votes on an advisory vote www.citigroup.com In 2006, the Board adopted a The Q: What vote is required, and how will my votes be counted, to elect Directors and to adopt the other proposals? A: The following chart describes the proposals to be considered at the meeting, the vote required to elect Directors and to adopt each of the other proposals, and the manner in which votes will be counted: Proposal Voting Options Vote Required to Adopt
the ProposalEffect of
AbstentionsEffect of
“Broker
Non-Votes”(1)Election of Directors For, against, or abstain on each nominee A nominee for Director will be elected if the votes cast for such nominee exceed the votes cast against such nominee. No effect No effect Ratification of KPMG For, against, or abstain The affirmative vote of a majority of the shares of common stock represented at the Annual Meeting and entitled to vote thereon. Treated as votes against Brokers have discretion to vote Advisory vote to approve Citi’s 2018 executive compensation For, against, or abstain The affirmative vote of a majority of the shares of common stock represented at the Annual Meeting and entitled to vote thereon. Treated as votes against No effect The Citigroup 2019 Stock Incentive Plan For, against, or abstain The affirmative vote of a majority of the shares of common stock represented at the Annual Meeting and entitled to vote thereon. Treated as votes against No effect Three stockholder proposals For, against, or abstain The affirmative vote of a majority of the shares of common stock represented at the Annual Meeting and entitled to vote thereon. Treated as votes against No effect (1) A broker non-vote generally occurs when a broker is not permitted to vote on a matter without instructions from a customer having beneficial ownership in the securities and has not received such instructions. Broker non-votes will not be counted as shares entitled to vote on the relevant proposal. ProposalVoting OptionsVote Required to Adopt theProposalEffect ofAbstentionsEffect of“BrokerNon-Votes”(1)Election of Directors.For, against, orabstain on eachnominee.A nominee for Director will beelected if the votes cast for suchnominee exceed the votes castagainst such nominee.No effect.No effect.Ratification of KPMG.For, against, orabstain.The affirmative vote of a majorityof the shares of common stockrepresented at the Annual Meetingand entitled to vote thereon.Treated as votesagainst.Brokers havediscretion tovote.Advisory vote toapprove Citi’s 2015executive compensation.For, against, orabstain.The affirmative vote of a majorityof the shares of common stockrepresented at the Annual Meetingand entitled to vote thereon.Treated as votesagainst.No effect.Approval of additionalauthorized shares underthe Citigroup 2014 StockIncentive Plan.For, against, orabstain.The affirmative vote of a majorityof the shares of common stockrepresented at the Annual Meetingand entitled to vote thereon.Treated as votesagainst.No effect.Approval of theAmended and Restated2011 Citigroup Executive Performance Plan.For, against, orabstain.The affirmative vote of a majorityof the shares of common stockrepresented at the Annual Meetingand entitled to vote thereon.Treated as votesagainst.No effect.Five stockholderproposals.For, against, orabstain.The affirmative vote of a majorityof the shares of common stockrepresented at the Annual Meetingand entitled to vote thereon.Treated as votesagainst.No effect.(1)A broker non-vote generally occurs when a broker is not permitted to vote on a matter without instructions from a customer having beneficial ownership in the securities and has not received such instructions. Broker non-votes will not be counted as shares entitled to vote on the proposal.officeoffice until a successor is elected and qualifiedqualified or until his or her earlier resignation or removal. Citi’s By-laws provide that in the event a Director nominee is not re-elected, such Director shall offer to resign from his or her position as a Director. Unless the Board decides to reject the offer or to postpone the effective date of the offer, the resignation shall become effective 60 days after the date of the election.to approveon Citi’s 20152018 executive compensation is not binding on the Board, whether or not the resolution is passed under the voting standards described above. In evaluating the stockholder vote on the advisory resolution, the Board will consider the voting results in their entirety.20 ABOUT THE 2019 ANNUAL MEETING Q: Is my vote confidential?A: confidentialconfidential voting policy as a part of its Corporate Governance Guidelines. Under the policy, except as necessary to meet applicable legal requirements or as otherwise described below, all votes, whether submitted by proxies, ballots, Internet voting, telephone voting, or otherwise are kept confidentialconfidential for registered stockholders who request confidentialconfidential treatment. If you are a registered stockholder and would like your vote kept confidential,confidential, please check the appropriate box on the proxy card or follow the instructions when submitting your vote by telephone, mobile phone, or by the Internet. If you hold your shares in “street name” or through an employee benefitbenefit plan or stock incentive plan, your vote already receives confidentialconfidential treatment and you do not need to request confidentialconfidential treatment in order to maintain the confidentialityconfidentiality of your vote.confidentialconfidential voting policy will not apply in the event of a proxy contest or other solicitation based on an opposition Proxy Statement and in certain other limited circumstances. For further details regarding this policy, please see the Corporate Governance Guidelines, available on Citi’s website www.citigroup.com.at www.citigroup.com.Citi 2016 Proxy Statement8
Q: | Could other matters be decided at the 2019 Annual Meeting? |
A: | We don’t know of any |
Q: | What happens if the meeting is postponed or adjourned? |
A: | Your proxy will still be good and may be voted at the postponed or adjourned meeting. You will still be able to change or revoke your proxy until it is voted. |
Citi 2019 Proxy Statement
ABOUT THE 2019 ANNUAL MEETING | 21 |
Q: | Do I need a ticket to attend the 2019 Annual Meeting? NEW ADMISSION PROCEDURES |
A: | Yes, you will need an admission ticket or proof of ownership of Citi common stock to enter the Annual Meeting. Starting this year, we have streamlined the admission process for entry into the 2019 Annual Meeting. To promote an efficient admission process, we encourage all of our stockholders attending the meeting to pre-register and bring an admission ticket with them. Tickets can be printed by accessing Shareholder Meeting Registration at www.proxyvote.com and following the instructions provided (you will need the 16-digit Control Number included on your proxy card, voter instruction form or Notice of Internet Availability of Proxy Materials). If you are unable to print your ticket, please call Shareholder Meeting Registration Phone Support (toll free) at 1-844-318-0137 or (international toll call) at 1-925-331-6070 for assistance. When you arrive at the Annual Meeting, you alternative documentation listed below. If you arrive at the meeting without an admission ticket, we will admit you only if we are able to verify that you are a Citi stockholder. If you hold your shares in a joint account, both owners can be admitted to the Annual Meeting provided that proof of joint ownership is given. Due to space limitations, Citi will not be able to accommodate guests at the Annual Meeting. |
Record Stockholder | Street Name Holder | Proxy for Record Stockholder | Proxy for Street Name Holder | |
One of the following: ●A printed admission ticket available online by clicking “Register for Meeting” link at www.proxyvote.com
| One of the following:
●Notice of Internet Availability of Proxy Materials ●Voting Instruction form from your bank or broker ●A recent brokerage statement or letter from a bank or broker | ●Valid, written legal proxy naming you, ANDEither ●Notice of Internet Availability of Proxy Materials Or●Proxy Card | ●Valid and assignable written legal proxy naming you, ANDEither ●Notice of Internet Availability of Proxy Materials ●Voting Instruction form from the Or●A recent brokerage statement or letter from a bank or broker |
www.citigroup.com
CORPORATE GOVERNANCE
Citigroup Inc. (Citigroup, Citi, or the Company) continually strives to maintain the highest standards of ethical conduct: reporting results with accuracy and transparency and maintaining full compliance with the laws, rules, and regulations that govern Citi’s businesses. Citi is active in ensuring its governance practices are at the leading edge of best practices. Below is a compilation of Citi’s Corporate Governance initiatives:
Ethics and Culture Committee By-laws provide that if Citi
●87% of Citi’s ●Majority vote standard for uncontested Director elections; and ●In 2019, we were the | |||
Stockholder Rights | ●In 2019, the Board, taking into account the result of the
●Proxy access by-law; and ●Stockholders may act by written consent. | ||
Executive Compensation | ●Strong executive compensation governance practices, including clawback policies and a requirement that executive officers must hold a substantial amount of vested Citi common stock for at least one year after they cease being executive officers; ●Stock ownership commitment for the Board
Members of Citi’s Board of Directors and Citi’s executive | ||
Political Activity | ●Political Activities Statement (formerly Citi’s Political Contributions and Lobbying Statement) includes significant disclosure about our lobbying practices and oversight. The
●Transparency on practices around political contributions and trade and business associations through: ➢a ➢requiring trade and business associations to which Citi pays dues to attest that no portion of such payments is used for independent expenditures; and ➢listing the names of our significant trade and |
Citi 2019 Proxy Statement
CORPORATE GOVERNANCE | 23 |
Corporate Governance Materials Available on Citi’s Website
In addition to our Corporate Governance Guidelines, other information relating to corporate governance at Citi is available in the Corporate Governance section of our website at www.citigroup.com. Click on “About Us” and then “Corporate Governance.”
www.citigroup.com/citi/ investor/corporate_ governance.html | ●Audit Committee Charter ●Ethics and Culture Committee Charter ●Nomination, Governance and Public Affairs Committee Charter ●Operations and Technology Committee Charter ●Personnel and Compensation Committee Charter ●Risk Management Committee Charter ●Code of Conduct ●Code of Ethics for Financial Professionals ●Citi’s Compensation Philosophy ●By-laws and Restated Certificate of Incorporation ●Corporate Political Activities Statement ●Global Citizenship Report ●Banking on 2030: Citi & the Sustainable Development Goals ●Environmental and Social Policy Framework ●Finance for a Climate-Resilient Future: Citi’s TCFD Report ●Statement on Human Rights ●Citi’s U.K. Modern Slavery Act Statement ●A list of our 2018 Political Contributions and the |
Citi stockholders may obtain printed copies of these documents by writing to Citigroup Inc., Corporate Governance, 388 Greenwich Street, 17th Floor, New York, New York 10013.
If you received these materials by mail, you should have also received Citi’s Annual Report to Stockholders for 2018 with them. The 2018 Annual Report is also available on Citi’s website at www.citigroup.com. We urge you to read these documents carefully. In accordance with the SEC’s rules, the Five-Year Performance Graph appears in the 2018 Annual Report on Form 10-K, which is included in Citi’s Annual Report to Stockholders for 2018.
Corporate Governance Guidelines
Citi’s Corporate Governance Guidelines (the Guidelines) embody many of our long-standing practices, policies, and procedures, which are the foundation of our commitment to best practices. The Guidelines are reviewed at least annually, and revised as necessary, to continue to reflect best practices. The full text of the Guidelines, as approved by the Board, is set forth on Citi’s website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Corporate Governance Guidelines.” The Guidelines outline the responsibilities, operations, qualifications, and composition of the Board.
Director Independence
Our goal is that at least two-thirds of the members of the Board be independent. Descriptions of our independence criteria and the results of the Board’s independence determinations are set forth below.
Board Committees
The Guidelines require that all members of the following committees of the Board: Audit; Nomination, Governance and Public Affairs; and Personnel and Compensation be independent. Committee members are appointed by the Board upon the recommendation of the Nomination, Governance and Public Affairs Committee. Committee membership and Chairs are rotated periodically. The Board and each Committee have the power to hire and fire independent legal, financial, or other advisors, as they may deem necessary, without consulting or obtaining the approval of management.
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24 | CORPORATE GOVERNANCE |
Additional Board Service
The number of other for-profit public or non-public company boards on which a Director may serve is subject to a case-by-case review by the Nomination, Governance and Public Affairs Committee, in order to ensure that each Director is able to devote sufficient time to performing his or her duties as a Director. Interlocking directorates are prohibited (inside Directors and executive officers of Citi may not sit on boards of companies where a Citi outside Director is an executive officer).
Change in Status or Responsibilities
If a Director has a substantial change in professional responsibilities, occupation, or business association, he or she is required to notify the Nomination, Governance and Public Affairs Committee and to offer his or her resignation from the Board. The Nomination, Governance and Public Affairs Committee will evaluate the facts and circumstances and make a recommendation to the Board whether to accept the resignation or request that the Director continue to serve on the Board. If a Director assumes a significant role in a not-for-profit entity, he or she is asked to notify the Nomination, Governance and Public Affairs Committee.
Attendance at Meetings
Directors are expected to attend Board meetings and meetings of the Committees on which they serve and the Annual Meeting of stockholders. All of the Directors then in office attended Citi’s 2018 Annual Meeting.
Evaluation of Board Performance
The Nomination, Governance and Public Affairs Committee nominates one of the members of the Board to serve as Chair of the Board on an annual basis. The Nomination, Governance and Public Affairs Committee also conducts an annual review of Board performance in which the full Board participates, and each standing committee (except for the Executive Committee) conducts its own self-evaluation. As part of the self-evaluation, the Board engages in an examination of its own performance of its obligations with regards to such matters as regulatory requirements, strategic and financial oversight, oversight of risk management, executive compensation, succession planning, and governance matters, among many other topics. The committees evaluate their performance against the requirements of their charters and other aspects of their responsibilities. The full Board and each committee then discuss the results of their respective self-evaluations in executive session, highlighting actions to be taken in response to the discussion. SeeBoard Self-Assessment Processon page 31 for further information.
Directors Access to Senior Management and Director Orientation
Directors have full and free access to senior management and other employees of Citi. New Directors are provided with an orientation program to familiarize them with Citi’s businesses, regions, and functions as well as its legal, compliance, regulatory, and risk profile. Citi provides educational sessions on a variety of topics throughout the year for all members of the Board. These sessions are designed to allow Directors to, for example, develop a deeper understanding of a business issue or a complex financial product.
Succession Planning
The Board reviews the Personnel and Compensation Committee’s report on the performance of senior executives in order to ensure that they are providing the highest quality leadership for Citi. The Board also works with the Nomination, Governance and Public Affairs Committee to evaluate potential successors to the Chief Executive Officer (CEO). With respect to regular succession of the CEO and senior management, Citi’s Board evaluates internal, and, when appropriate, external candidates. To find external candidates, Citi seeks input from the members of the Board and senior management and/or from recruiting firms. To develop internal candidates, Citi engages in
Citi 2019 Proxy Statement
CORPORATE GOVERNANCE | 25 |
a number of practices, formal and informal, designed to familiarize the Board with Citi’s talent pool. The formal process involves an annual talent review conducted by senior management at which the Board studies the most promising members of senior management. The Board learns about each person’s experience, skills, areas of expertise, accomplishments, and goals. This review is conducted at a regularly scheduled Board meeting on an annual basis. In addition, members of senior management are periodically asked to make presentations to the Board at Board meetings and Board strategy sessions. These presentations are made by senior managers of the various business units as well as those who serve in corporate functions. The purpose of the formal review and other interaction is to ensure that Board members are familiar with the talent pool inside and outside Citi from which the Board would be able to choose successors to the CEO and evaluate succession for other senior managers as necessary from time to time.
Charitable Contributions
If a Director, or an immediate family member who shares the Director’s household, serves as a director, trustee, or executive officer of a foundation, university, or other not-for-profit organization, and such entity receives contributions from Citi and/or the Citi Foundation, such contributions must be reported to the Nomination, Governance and Public Affairs Committee at least annually.
Insider Investments and Transactions
Members of Citi’s Board of Directors and Citi’s executive officers (i.e., Section 16 Insiders) are not permitted to hedge their Citi securities or to pledge their Citi securities as collateral for a loan. The Guidelines restrict certain financial transactions between Citi and its subsidiaries on the one hand and Directors, senior management, and their immediate family members on the other. Personal loans from Citi or its subsidiaries to Citi’s Directors and its most senior executives, or immediate family members who share any such person’s household, are prohibited, except for margin loans to employees of a broker-dealer subsidiary of Citi, mortgage loans, home equity loans, consumer loans, credit cards, and overdraft checking privileges, all made on market terms in the ordinary course of business. SeeCertain Transactions and Relationships, Compensation Committee Interlocks, and Insider Participationon pages 38-39 of this Proxy Statement.
The Guidelines prohibit investments or transactions by Citi or its executive officers and those immediate family members who share an executive officer’s household in a partnership or other privately held entity in which an outside Director is a principal, or in a publicly traded company in which an outside Director owns or controls more than a 10% interest. Directors and those immediate family members who share the Director’s household are not permitted to receive initial public offering allocations. Directors and their immediate family members may participate in Citi-sponsored investment activities, provided they are offered on the same terms as those offered to similarly situated non-affiliated persons. Under certain circumstances, or with the approval of the appropriate committee, members of senior management may participate in certain Citi-sponsored investment opportunities. Finally, there is a prohibition on certain investments by Directors and executive officers in third-party entities when the opportunity comes solely as a result of their position with Citi.
The Board has adopted categorical standards to assist the Board in evaluating the independence of each of its Directors. The categorical standards, which are set forth below, describe various types of relationships that could potentially exist between a Director or an immediate family member of a Director and Citi, and set thresholds at which such relationships would be deemed to be material. Provided that no relationship or transaction exists that would disqualify a Director under the categorical standards and no other relationships or transactions exist of a type not specifically mentioned in the categorical standards that, in the Board’s opinion, taking into account all facts and circumstances, would impair a Director’s ability to exercise his or her independent judgment, the Board will deem such person to be independent.
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26 | CORPORATE GOVERNANCE |
The Board and the Nomination, Governance and Public Affairs Committee reviewed certain information obtained from Directors’ responses to a questionnaire asking about their relationships with Citi, and those of their immediate family members and primary business or charitable affiliations and other potential conflicts of interest, as well as certain data collected by Citi’s businesses related to transactions, relationships, or arrangements between Citi on the one hand and a Director, immediate family member of a Director, or a primary business or charitable affiliation of a Director, on the other. The Board reviewed certain relationships or transactions between the Directors or immediate family members of the Directors or their primary business or charitable affiliations and Citi and determined that the relationships or transactions complied with the Corporate Governance Guidelines and the related categorical standards. The Board also determined that, applying the Guidelines and standards, which are intended to comply with the NYSE corporate governance rules, and all other applicable laws, rules, and regulations, each of the following Director nominees standing for re-election and current board members is independent:
●Ellen M. Costello | ●Lew W. (Jay) Jacobs, IV | ●James S. Turley | ||
●John C. Dugan | ●Renée J. James | ●Deborah C. Wright | ||
●Duncan P. Hennes | ●Eugene M. McQuade | ●Ernesto Zedillo Ponce de Leon | ||
●Peter B. Henry | ●Gary M. Reiner | |||
●S. Leslie Ireland | ●Diana L. Taylor | |||
The Board has determined that Mr. McQuade is independent because he retired from employment in May 2015, over three years ago. The Board has determined that Michael L. Corbat and Barbara Desoer are not independent. Mr. Corbat is our Chief Executive Officer and Ms. Desoer is the Chief Executive Officer of Citibank, N.A., our largest banking subsidiary. Ms. Desoer is scheduled to retire as the Chief Executive Officer of Citibank, N.A. before Citi’s 2019 Annual Meeting.
Independence Standards
To be considered independent, a Director must meet the following categorical standards as adopted by our Board and reflected in our Corporate Governance Guidelines. In addition, there are other independence standards under NYSE corporate governance rules that apply to all directors and certain independence standards under SEC, Internal Revenue Code (IRC), and Federal Deposit Insurance Corporation (FDIC) rules that apply to specific committees.
Categorical Standards
Advisory, Consulting and Employment Arrangements
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The Board has determined that Michael L. Corbat and Eugene M. McQuade are not independent. Mr. Corbat is our Chief Executive Officer and Mr. McQuade previously served as the Chief Executive Officer of Citibank, N.A., our largest banking subsidiary.
Independence Standards
To be considered independent, a Director must meet the following categorical standards as adopted by our Board and reflected in our Corporate Governance Guidelines. In addition, there are other independence standards under NYSE corporate governance rules that apply to all directors and certain independence standards under SEC and FDIC rules that apply to specific committees.
Categorical Standards
➤During any 12-month period within the last three years, neither a Director nor any immediate family memberImmediate Family Member of a Director shall have received from the Company, directly or indirectly, any compensation, fees or benefits in an amount greatermore than $120,000 in direct compensation from Citi, other than amounts paid (a) pursuant to the Company’sCiti’s Amended and Restated Compensation Plan for Non-Employee Directors, (b) pursuant to a pension or (b)other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service) or (c) to an immediate family memberImmediate Family Member of a Director who is a non-executive employee of the CompanyCiti or one of its affiliated legal entities.
➤subsidiaries.● In addition, no member of the Audit Committee normay accept a direct or indirect consulting, advisory or other compensatory fee from Citi or one of its subsidiaries, other than (a) fees for service as a member of the Board of Directors of Citi or one of its subsidiaries (including committees thereof) or (b) receipt of fixed amounts of compensation under a Citi retirement plan, including deferred compensation, for prior service with Citi, provided that such compensation is not contingent in any immediate family member who shares such individual’s household, nor any entity in which an Audit Committee member is a partner, member or executive officer shall, within the last three years, have received any payment for accounting, consulting, legal, investment banking or financial advisory services provided to the Company.way on continued service.
Citi 2019 Proxy Statement
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Business RelationshipsCORPORATE GOVERNANCE 27
Charitable Contributions➤● All business relationships, lending relationships, deposit and other banking relationships between the Company and a Director’s primary business affiliationaffiliation or the primary business affiliationaffiliation of an immediate family member of a Director must be made in the ordinary course of business and on substantially the same terms as those prevailing at the time for comparable transactions with non-affiliatednon-affiliated persons.➤● In addition, the aggregate amount of payments for property or services in any of the last three fiscalfiscal years by the Company to, and to the Company from, any company of which a Director is an executive officerofficer or employee or where an immediate family member of a Director is an executive officer,officer, must not exceed the greater of $1 million or 2% of such other company’s consolidated gross revenues in any single fiscalfiscal year.➤● Loans may be made or maintained by the Company to a Director’s primary business affiliationaffiliation or the primary business affiliationaffiliation of an immediate family member of a Director, only if the loan:loan (i) is made in the ordinary course of business of the Company or one of its subsidiaries, is of a type that is generally made available to other customers, and is on market terms, or terms that are no more favorable than those offered to other customers; (ii) complies with applicable law, including the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley), Regulation O of the Board of Governors of the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC) Guidelines; (iii) when made does not involve more than the normal risk of collectability or present other unfavorable features; and (iv) is not classifiedclassified by the Company as Substandard (II) or worse, as defineddefined by the OfficeOffice of the Comptroller of the Currency in its “Rating Credit Risk” Comptroller’s Handbook.
Annual contributions in any of the last three calendar years from the Company and/or the Citi Foundation to a charitable organization of which a Director, or an immediate family member who shares the Director’s household, serves as a Director, trustee, or executive officer (other than the Citi Foundation and other charitable organizations sponsored by the Company) may not exceed the greater of $250,000 or 10% of the charitable organization’s annual consolidated gross revenue.
Employment/Affiliations
● | A Director shall not: |
BOARD DIVERSITY
Diversity is among the critical factors that the Nomination, Governance and Public Affairs Committee considers when evaluating the composition of the Board. For a company like Citi, which operates in more than 100 countries around the globe, diversity includes race, ethnicity, and gender as well as the diversity of the communities and geographies in which Citi operates. Included in the qualifications for Directors listed in the Company’s Corporate Governance Guidelines is “whether the candidate has special skills, expertise and background that would complement the attributes of the existing Directors, taking into consideration the diverse communities and geographies in which the Company operates.” Citi’s Board is committed to ensuring that it is composed of individuals whose backgrounds reflect the diversity represented by our employees, customers, and stakeholders. The candidates nominated for election at Citi’s 2019 Annual Meeting exemplify that diversity: six nominees are women and three nominees are African-American or Hispanic. In addition, each Director candidate contributes to the Board’s overall diversity by providing a variety of perspectives, personal and professional experiences, and backgrounds, as well as other characteristics, such as global and international business experience. The Board believes that the current nominees reflect an appropriate diversity of gender, age, race, geographical background, and experience and is committed to continuing to consider diversity issues in evaluating the composition of the Board.
Citi has a robust Director Education Program that begins with an orientation for newly appointed Directors, providing two days of in-depth training covering all aspects of our business, including coverage of Citi’s institutional and consumer businesses; financial reporting; an overview of the Company’s risk management, audit, compliance, and legal functions; and an overview of Citi’s primary banking subsidiary, Citibank, N.A. There is also a continuing education program, which includes presentations focusing on industry, regulatory and governance topics and presentations from the various lines of our business on emerging issues or strategic initiatives to provide our Directors with the opportunity to expand their insight into Citi’s business operations and activities. Directors also have access to external programming and seminars to supplement their Citi-provided education.
Citi 2019 Proxy Statement
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Annual Board Self-Evaluations* The Board conducts annual evaluations through the use of a written questionnaire that covers a broad range of matters relating to governance, meetings, materials, and other agenda topics, including Strategic Planning, Corporate Oversight, Succession Planning, Conduct and Culture, Risk Management Oversight, Regulatory Requirements, and Management Compensation. | |||||||
Summary of the Citi’s Corporate Governance
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BOARD’S ROLE IN RISK OVERSIGHT
The Board oversees Citi’s global risk management framework.
Risk Management Committee ●approves Citi’s Risk Governance Framework ●reviews and approves risk management ●consults with management on the effectiveness of risk identification, measurement, and monitoring processes, and the adequacy of staffing and action plans ●provides oversight of, among others, matters related to Citi’s Comprehensive Capital Analysis and Review (CCAR) practices, Resolution and Recovery Planning, and cybersecurity | ||||
Chief Risk Officer ●delivers risk report at regularly scheduled Board ●responsible for Global Risk Management ●responsible for an integrated effort to identify, assess, and manage risks ●reports to
●reports at least twice annually to the | Board Committees: Audit Committee ●provides oversight of compliance risk, Ethics and Culture Committee ●provides oversight of Nomination, Governance and Public Affairs Committee ●provides oversight of reputational issues and Operations and Technology Committee ●provides oversight of cybersecurity as well as privacy and data security Personnel and Compensation Committee ●provides oversight of incentive compensation | |||
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At each regularly scheduled Board meeting, the Board receives a risk report from the Chief Risk Officer with respect to the Company’s approach to management of major risks, including management’s risk mitigation efforts, where appropriate. Global Risk Management, led by the Chief Risk Officer, is a company-wide function that is responsible for an integrated effort to identify, assess, and manage risks that may affect Citi’s ability to execute on its corporate strategy and fulfill its business objectives. The Board’s role is to oversee this effort.
The Risk Management Committee enhances the Board’s oversight of risk management. The Committee’s role is one of oversight, recognizing that management is responsible for executing Citi’s risk management policies.
Board’s Role in Cybersecurity Oversight
The Board of Directors provides oversight of management’s efforts to address cybersecurity risk. The Board and various Committees receive periodic reports and engage in discussions throughout the year on the effectiveness of Citi’s overall cybersecurity program, exploring Citi’s inherent risks, the road map for addressing these risks, and Citi’s progress in doing so. Board members receive contemporaneous reporting on any significant cyber events that may occur—which includes efforts at response, discussions of legal obligations, and the status of outreach to regulators—and provides guidance to management as appropriate.
Committees of the Board of Directors
The following are the Volcker Rule of the Dodd-Frank Act.
COMMITTEES OF THE BOARD OF DIRECTORS
The standing committees of the Board of Directors:
Audit Committee Members: Ellen M. Costello Committee Meetings 21 Charter: The Audit Committee Charter, as adopted by the Board, is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Citigroup Board of | Committee Roles and Responsibilities: The Audit Committee ●the integrity of Citigroup’s consolidated ●the performance of the internal audit function (“Internal Audit”); ●the annual independent integrated audit of Citigroup’s consolidated ●policy standards and guidelines for risk assessment and risk management; ●Citigroup’s compliance with legal and regulatory requirements, including Citigroup’s disclosure controls and procedures; and ●the The Board has determined that each of Ms. Costello and Messrs. |
Citi 2019 Proxy Statement
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Ethics and Culture Committee Members: Peter B. Henry Committee Meetings 4 Charter: The | Committee Roles and Responsibilities: The Ethics and Culture Committee Professionals and approves any waivers to either Code. The |
Members: John C. Dugan (Chair) Committee Meetings None | Committee Roles and Responsibilities: The Executive Committee acts on behalf of the Board if a matter requires Board action before a meeting of the full Board can be held. |
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Nomination, Governance and Public Affairs Committee Members: John C. Dugan Committee Meetings in 2018: 10 Charter: The Nomination, Governance and Public Affairs Committee Charter, as adopted by the Board, is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Citigroup Board of Directors’ Committee Charters.” | Committee Roles and Responsibilities: The Nomination, Governance and Public Affairs Committee is responsible for identifying individuals
Board the Corporate Governance Guidelines and monitoring Citi’s compliance with these policies and practices and the Guidelines. The Committee is responsible for reviewing and approving all related party transactions involving a Director or an immediate family member of a Director and any related party transaction involving an executive The Committee, as part of the Board’s executive succession planning process,
The Board has determined that, in addition to being independent according to the Board’s independence standards as set out in its Corporate Governance Guidelines, each of the members of the Nomination, Governance and Public Affairs Committee is independent according to the corporate governance rules of the NYSE. |
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CORPORATE GOVERNANCE | 35 |
Operations and Technology Committee Members: S. Leslie Ireland Committee Meetings 5 Charter: The | Committee Roles and Responsibilities: The Operations and Technology Committee |
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Personnel and Compensation Committee Members: John C. Dugan Committee Meetings 13 Charter: The Personnel and Compensation Committee Charter is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Citigroup Board of Directors’ Committee Charters.” | Committee Roles and Responsibilities: The Personnel and Compensation Committee has been delegated broad authority to oversee compensation of employees of the Company and its subsidiaries and The Committee annually reviews and discusses the Compensation Discussion and Analysis required to be included in the Company’s Proxy Statement with management, and, if appropriate, recommends to the Board that the Compensation Discussion and Analysis be included. Additionally, the Committee reviews and
approves the overall goals of Citi’s material incentive compensation programs, including as expressed through Citi’s Compensation Philosophy, and provides oversight for Citi’s incentive compensation programs so that they both (i) appropriately balance risk and The Committee has the power to hire and The Board has determined that in addition to being independent according to the Board’s independence standards as set out in its Corporate Governance Guidelines, each of the members of the Personnel and Compensation Committee is independent according to the corporate governance rules of the NYSE. Each of such Directors is a “non-employee Director,” as |
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Risk Management Committee Members: Ellen M. Costello Committee Meetings 13 Charter: The | Committee Roles and Responsibilities: The Risk Management Committee The Risk Management Committee
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Audit | Ethics and Culture | Executive | Nomination, Governance and Public Affairs | Operations and Technology | Personnel and Compensation | Risk Management | |
Michael L. Corbat | |||||||
Ellen M. Costello | ● | ● | |||||
John C. Dugan | ● | ● | ● | ● | ● | ||
Duncan P. Hennes | ● | ● | ● | ||||
Peter B. Henry | ● | ● | ● | ||||
Franz B. Humer | ● | ● | ● | ||||
S. Leslie Ireland | ● | ||||||
Lew W. (Jay) Jacobs, IV | ● | ● | ● | ||||
Renée J. James | ● | ● | |||||
Eugene M. McQuade | ● | ||||||
Gary M. Reiner | ● | ● | ● | ||||
Anthony M. Santomero | ● | ● | ● | ||||
Diana L. Taylor | ● | ● | ● | ||||
James S. Turley | ● | ● | ● | ||||
Deborah C. Wright | ● | ● | |||||
Ernesto Zedillo Ponce de Leon | ● | ● | ● | ||||
●committee member ●committee chair | |||||||
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INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
There are no legal proceedings to which any Director, officer, or principal stockholder, or any affiliate thereof, is a party adverse to Citi or has a material interest adverse to Citi.
CERTAIN TRANSACTIONS AND RELATIONSHIPS, COMPENSATION COMMITTEE INTERLOCKS, AND INSIDER PARTICIPATION
The Board has adopted a policy setting forth procedures for the review, approval, and monitoring of transactions involving Citi and related persons (Directors and executive officers or their immediate family members). A copy of Citi’s Policy on Related Party Transactions is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Citi Policies.” Under the policy, the Nomination, Governance and Public Affairs Committee is responsible for reviewing and approving all related party transactions involving Directors or an immediate family member of a Director.
Involvement in Certain Legal Proceedings
There are no legal proceedings to which any Director, officer, or The Vanguard Group (which owns more than 5% of Citi’s common stock), or any affiliate thereof, is a party adverse to Citi or in which any such person has a material interest adverse to Citi. In lieu of participating in class action settlements of claims entered into by Citi and other banks relating to alleged manipulation of the foreign exchange market, and which received final court approval in 2018, numerous BlackRock funds and other plaintiffs filed a complaint in U.S. District Court for the Southern District of New York on November 7, 2018 against Citi and 15 other banks. In this action, plaintiffs assert that defendants conspired to manipulate the foreign exchange market between 2003 and 2013. BlackRock, Inc. owns more than 5% of Citi’s common stock.
Certain Transactions and Relationships, Compensation Committee Interlocks, and Insider Participation
The Board has adopted a policy setting forth procedures for the review, approval, and monitoring of transactions involving Citi and related persons (Directors, Senior Managers, 5% stockholders, Immediate Family Member or Primary Business Affiliations). A copy of Citi’s Policy on Related Party Transactions is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Citi Policies.” Under the policy, the Nomination, Governance and Public Affairs Committee is responsible for reviewing and approving all related party transactions involving related persons. Directors may not participate in any discussion or approval of a related party transaction in which he or she or any member of his or her immediate family is a related person, except that the Director must provide all material information concerning the related party transaction to the Nomination, Governance and Public Affairs Committee. The Nomination, Governance and Public Affairs Committee is also responsible for reviewing and approving all related party transactions valued at more than $50 million involving an executive officer or an Immediate Family Member of an executive officer. The Transaction Review Committee, composed of Citi’s President, General Counsel, Chief Financial Officer, Chief Compliance Officer, Chief Risk Officer, and Head of Human Resources, is responsible for reviewing and approving all related party transactions valued at less than $50 million involving an executive officer or an Immediate Family Member of an executive officer. The policy also contains a list of categories of transactions involving related persons that the Director must provide all material information concerning the related party transaction to the Nomination, Governance and Public Affairs Committee. The Nomination, Governance and Public Affairs Committee is also responsible for reviewing and approving all related party transactions valued at more than $50 million involving an executive officer or an immediate family member of an executive officer. The Transaction Review Committee, comprised of the Chief Financial Officer, Chief Risk Officer, General Counsel, Chief Compliance Officer, and the Head of Public Affairs, is responsible for reviewing and approving all related party transactions valued at less than $50 million involving an executive officer or an immediate family member of an executive officer. The policy also contains a list of categories of transactions involving Directors or executive officers, or their immediate family members who are pre-approved under the policy, and therefore need not be brought to the Nomination, Governance and Public Affairs Committee or the Transaction Review Committee for approval.
The Nomination, Governance and Public Affairs Committee and the Transaction Review Committee will review the following information when assessing a related party transaction:
● | the terms of such transaction; |
● | the related person’s interest in the transaction; |
● | the purpose and timing of the transaction; |
● | whether Citi is a party to the transaction, and if not, the nature of Citi’s participation in the transaction;
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● | if the transaction involves the sale of an asset, a description of the asset, including date acquired and cost basis; |
● | information concerning potential counterparties in the transaction; |
● | the approximate dollar value of the transaction and the approximate dollar value of the related person’s interest in the transaction; |
● | a description of any provisions or limitations imposed as a result of entering into the proposed transaction; |
● | whether the proposed transaction includes any potential reputational risk issues that may arise as a result of, or in connection with, the proposed transaction; and |
● | any other relevant information regarding the transaction. |
Based on information contained in a Schedule 13G filed with the SEC, BlackRock and Vanguard reported that they beneficially owned 5% or more of the outstanding shares of Citi’s common stock as of December 31, 2018 — see Stock Ownership — Owners of More than 5% of Citi Common Stock in this Proxy Statement on page 44. During 2018, our subsidiaries provided ordinary course lending, trading, and other financial services to BlackRock and Vanguard and their respective affiliates and clients. These transactions were entered into on an arm’s length
Citi 2019 Proxy Statement
Based on information contained in a Schedule 13G filed with the SEC, BlackRock and Vanguard reported that they beneficially owned 5% or more of the outstanding shares of Citi’s common stock as of December 31, 2015, see Stock Ownership — Owners of More than 5% of Citi Common Stock in this Proxy Statement on page 26. During 2015, our subsidiaries provided ordinary course lending, trading, and other financial services to BlackRock and Vanguard and their respective affiliates and clients. These transactions were entered into on an arm’s length basis and contain customary terms and conditions and were on substantially the same terms as comparable transactions with unrelated third parties.
Citi has established funds in which employees have invested. In addition, certain of our executive officers have from time to time invested their personal funds directly, or directed that funds for which they act in a fiduciary capacity be invested, in funds arranged by Citi’s subsidiaries on the same terms and conditions as the other outside investors in these funds, who are not our executive officers, or employees. Other than certain “grandfathered” investments, in accordance with Sarbanes-Oxley and the Citi Corporate Governance Guidelines, executive officers may invest in certain Citi-sponsored investment opportunities only under certain circumstances and with the approval of the appropriate committee.
Citigroup Capital Partners II, L.P. and Citigroup Venture Capital International Growth Partnership II, L.P. are funds that were formed in 2006 and 2007, respectively. They invest either directly or via a master fund in private equity investments. Citi matches each dollar invested by an employee with an additional two-dollar commitment to each fund, or feeder fund, in which an employee has invested. Citi’s match is made by a loan to the fund. Each eligible employee, subject to vesting, receives the benefit of any increase in the value of the fund attributable to the loan made by Citi, less the interest paid by the fund on the loan, as well as any increase in the value of the fund attributable to the employee’s own investment. In accordance with the funds’ offering memoranda, executive officers are not eligible to participate in the funds on a leveraged basis.
The following distributions exceeding $120,000 with respect to investments in Citigroup Capital Partners II, L.P. and Citigroup Venture Capital International Growth Partnership II, L.P. were made to executive officers in 2015:
| Citigroup Capital | ||
Michael Corbat | $ | 143,418 | |
James Cowles | $ | 339,585 | |
James Forese | $ | 286,836 | |
Manuel Medina-Mora* | $ | 226,390 |
| Citigroup Venture | ||
James Cowles | $ | 708,536 | |
James Forese | $ | 314,905 | |
Manuel Medina-Mora* | $ | 629,809 | |
William Mills | $ | 314,905 |
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CORPORATE GOVERNANCE
basis and contain customary terms and conditions and were on substantially the same terms as comparable transactions with unrelated third parties. Acciones y Valores Banamex, S.A. de C.V., Servicios Corporativos de Finanzas, S.A. de C.V., and Grupo Financiero Citibanamex, S.A. de C.V. (“Citibanamex”) entered into an agreement with BlackRock, Inc. and certain of its affiliates pursuant to which BlackRock would acquire the asset management business of Citibanamex in Mexico. The transaction includes the sale of Impulsora de Fondos Banamex, S.A. de C.V., (“Impulsora”) legal vehicle, and its advisory role for 52 mutual funds and certain managed account relationships, and certain intellectual property and vendor contracts required to operate the business. The closing for this transaction occurred in September 2018. Consideration for the sale consisted of $350 million and certain future payments if defined targets are met. In connection with the closing, Citibanamex and BlackRock also entered into a long-term distribution agreement to offer BlackRock asset management products to Citibanamex clients in Mexico. The agreement provides a framework under which Citibanamex would distribute BlackRock products in Mexico and includes terms relating to pricing, preferential access, and product support. The Nomination, Governance and Public Affairs Committee reviewed the terms of the sale and approved the transaction in accordance with the Related Party Transaction Policy. Based on information contained in a Schedule 13G filed with the SEC, BlackRock reported that it beneficially owns more than 5% of Citi’s common stock.
Citi has established funds in which employees have invested. In addition, certain of our executive officers have from time to time invested their personal funds directly, or directed that funds for which they act in a fiduciary capacity be invested, in funds arranged by Citi’s subsidiaries on the same terms and conditions as the other outside investors in these funds, who are not our executive officers, or employees. Other than certain “grandfathered” investments, in accordance with Sarbanes-Oxley and the Citi Corporate Governance Guidelines, executive officers may invest in certain Citi-sponsored investment opportunities only under certain circumstances and with the approval of the appropriate committee. In 2018, there were no distributions from the funds that require disclosure.
In 2018, Citi performed corporate banking and securities brokerage services in the ordinary course of our business for certain organizations in which some of our Directors are officers or directors. In addition, in the ordinary course of business, Citi may use the products or services of organizations in which some of our Directors are officers or directors.
The persons listed on page 98 of this Proxy Statement are the current members of the Personnel and Compensation Committee. No current or former member of the Personnel and Compensation Committee was a part of a “compensation committee interlock” during fiscal year 2018 as described under SEC rules. In addition, none of our executive officers served as a director or member of the compensation committee of another entity that would constitute a “compensation committee interlock.” No member of the Personnel and Compensation Committee had any material interest in a transaction with Citi or is a current or former officer of Citi, and no member of the Personnel and Compensation Committee is a current employee of Citi or any of its subsidiaries. In addition, no member of the Board, or any immediate family member of the Board, engaged FW Cook for any compensation-related services in 2018.
Mr. Corbat has entered into an Aircraft Time Sharing Agreement with Citigroup Inc. that allows him to reimburse Citi for the cost of his personal use of corporate aircraft based on the aggregate incremental cost of the flight to Citi. Aggregate incremental cost is calculated based on a cost-per-flight-hour charge developed by a nationally recognized and independent service or, if higher, the charge allowed under Federal Aviation Regulation 91.501(d). Mr. Corbat reimbursed Citi $223,132 related to his personal use of corporate aircraft during 2018.
An adult child of Mr. Humer, a Director, has been employed by Citi since 2010 and is currently employed by Citi’s Institutional Clients Group. He received 2018 compensation of $951,239. A sibling of Sara Wechter, the Head of Human Resources, has been employed by Citi since 2008, first as an intern and then, beginning in 2010, as a full-time employee. She is employed by the Consumer Banking Group and received 2018 compensation of $479,139. An adult child of John Gerspach, Citi’s former CFO, has been employed by Citi since 2009 and is currently employed in Citi’s Compliance Group. He received 2018 compensation of $154,765. The compensation for these employees was established by Citi in accordance with its employment and compensation practices applicable to employees with equivalent qualifications and responsibilities and holding similar positions. These individuals do not have an interest in the employment relationship of, nor do they share a household with, their respective family members who are employees of Citi.
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In 2015, Citi performed corporate banking and securities brokerage services in the ordinary course of our business for certain organizations in which some of our Directors are officers or directors. In addition, in the ordinary course of business, Citi may use the products or services of organizations in which some of our Directors are officers or directors.
The persons listed on page 76 of this Proxy Statement are the current members of the Personnel and Compensation Committee. No current or former member of the Personnel and Compensation Committee was a part of a “compensation committee interlock” during fiscal year 2015 as described under SEC rules. In addition, none of our executive officers served as a director or member of the compensation committee of another entity that would constitute a “compensation committee interlock.” No member of the Personnel and Compensation Committee had any material interest in a transaction with Citi or is a current or former officer of Citi, and no member of the Personnel and Compensation Committee is a current employee of Citi or any of its subsidiaries. In addition, no member of the Board, or any immediate family member of the Board, engaged Cook & Co. for any compensation-related services in 2015.
Mr. Corbat has entered into an Aircraft Time Sharing Agreement with Citiflight, Inc. (a subsidiary of Citigroup Inc.) that allows him to reimburse Citi for the cost of his personal use of corporate aircraft based on the aggregate incremental cost of the flight to Citi. Aggregate incremental cost is calculated based on a cost-per-flight-hour charge developed by a nationally recognized and independent service or, if higher, the charge allowed under Federal Aviation Regulation 91.501(d). Mr. Corbat reimbursed Citi $140,077 related to his personal use of corporate aircraft during 2015.
For a portion of 2015, Mr. McQuade served as the Vice Chairman of Citigroup Inc. Mr. McQuade received approximately $176,164 as compensation for his service as the Vice Chairman of Citigroup from January 1, 2015 to May 1, 2015. Mr. McQuade’s compensation relates solely to his service as an employee and not as a director of Citigroup. His compensation for his service as a director is reported in the Director Compensation Table on pages 47-50 of this Proxy Statement. In 2015, certain previously awarded shares granted to Mr. McQuade when he was an employee of Citigroup vested; this included Performance Share Units and Capital Accumulation Program Awards. On February 19, 2013, Mr. McQuade received from Citi an award of Performance Share Units in a target award of 47,801.15. Based on adjustments due to performance conditions described in the Compensation Discussion and Analysis section of this Proxy Statement, Mr. McQuade was entitled to receive 32,456.98 Performance Share Units on February 19, 2016, when the share units vested. Performance Share Units are paid in cash and Mr. McQuade received a cash payment of $1,315,270 for the share units on February 19, 2016. On February 18, 2014, Mr. McQuade received from Citi an award of Performance Share Units in a target award of 44,398.36. Those share units are scheduled to vest on December 31, 2016. During his employment at Citi, Mr. McQuade also received shares of Citi common stock awarded under the Capital Accumulation Program. Approximately 40,242 shares vested on January 20, 2016, representing the deferred portion of Mr. McQuade’s annual incentive awards for 2011, 2012, and 2013 which was awarded to him under the Capital Accumulation Program. These shares are reported in the Beneficial Ownership Table on page 25 of this Proxy Statement. Mr. McQuade has 34,149 unvested shares remaining from his Capital Accumulation Program Awards. These unvested shares remain subject to fluctuations in Citi’s common stock price as well as the Citi Clawbacks. In addition, Mr. McQuade was granted 100,000 Stock Options in 2011 at a grant price of $49.10, which vested in three equal installments. The expiration date for the Stock Options is February 14, 2017. The Stock Options are reported on page 25 of this Proxy Statement.
An adult child of Mr. Humer, a Director, is employed by Citi’s Institutional Clients Group and received 2015 compensation of $751,082. An adult child of John Gerspach, Citi’s CFO, is employed in Citi’s Compliance function and received 2015 compensation of $129,000. The compensation for these employees was established by Citi in accordance with its employment and compensation practices applicable to employees with equivalent qualifications and responsibilities and holding similar positions. Mr. Humer and Mr. Gerspach do not have a material interest in the employment relationship nor share a household with their respective family members who are employees of Citi.
INDEBTEDNESS
Other than certain “grandfathered” margin loans, in accordance with Sarbanes-Oxley and the Citi Corporate Governance Guidelines, no margin loans may be made to any executive officer unless such person is an employee of a broker-dealer subsidiary of Citi and such loan is made in the ordinary course of business.
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40 CORPORATE GOVERNANCE Certain transactions in excess of $120,000 involving loans, deposits, credit cards, and sales of commercial paper, certificates of deposit, and other money market instruments and certain other banking transactions occurred during 2015 between Citibank, N.A. and other Citi banking subsidiaries on the one hand and certain Directors or executive officers of Citi, members of their immediate families, corporations or organizations of which any of them is an executive officer or partner or of which any of them is the beneficial owner of 10% or more of any class of securities, or associates of the Directors, the executive officers or their family members on the other. The transactions were made in the ordinary course of business on substantially the same terms, including interest rates and collateral, that prevailed at the time for comparable transactions with other persons not related to the lender and did not involve more than the normal risk of collectability or present other unfavorable features. Personal loans made to any Director or an executive officer must comply with Sarbanes-Oxley, Regulation O and the Corporate Governance Guidelines, and must be made in the ordinary course of business.BUSINESS PRACTICES COMMITTEESThe business practices committees for each of Citi’s businesses and regions review business activities, sales practices, product design, potential conflicts of interest, and other franchise or reputational risk issues escalated to these committees. The business practices committee at the corporate level reviews issues escalated by a business practices committee at the business or regional level that may present franchise, reputational and/or systemic risks. All reviews by the business practices committees are conducted with due consideration of the context and facts presented to the committees.The business practices committees, which are comprised of our most senior executives, provide the guidance necessary for Citi’s
Other than certain “grandfathered” margin loans, in accordance with Sarbanes-Oxley and the Citi Corporate Governance Guidelines, no margin loans may be made to any executive officer unless such person is an employee of a broker-dealer subsidiary of Citi and such loan is made in the ordinary course of business.
Certain transactions in excess of $120,000 involving loans, deposits, credit cards, and sales of commercial paper, certificates of deposit, and other money market instruments and certain other banking transactions occurred during 2018 between Citibank, N.A. and other Citi banking subsidiaries on the one hand, and certain Directors or executive officers of Citi, members of their immediate families, corporations or organizations of which any of them is an executive officer or partner or of which any of them is the beneficial owner of 10% or more of any class of securities, or associates of the Directors, the executive officers or their family members, on the other. The transactions were made in the ordinary course of business on substantially the same terms, including interest rates and collateral, that prevailed at the time for comparable transactions with other persons not related to the lender and did not involve more than the normal risk of collectability or present other unfavorable features. Personal loans made to any Director or an executive officer must comply with Sarbanes-Oxley, Regulation O, and the Corporate Governance Guidelines, and must be made in the ordinary course of business.
The business practices committees, which are composed of our most senior executives, provide the guidance necessary for Citi's business practices to meet the highest standards of professionalism, integrity, and ethical behavior consistent with Citi’s Mission and Value Proposition. The business practices committees for the corporate level and each of Citi’s businesses and regions review business activities, transactions, sales practices, product design, potential conflicts of interest, and other franchise or reputational risk issues escalated to these committees.
Business practices concerns may be raised through a variety of sources, including business practices working groups, other in-business committees, or the control functions. Relevant issues from the business practices committees are reported on a regular basis to the Nomination, Governance and Public Affairs Committee of the Board.
At Citi, our mission is to serve as a trusted partner to our clients by responsibly providing financial services that enable growth and economic progress.
We foster a culture of ethics through our governance framework, programs and efforts that embed our culture and expectations for behavior throughout the organization, and collaboration with key stakeholders outside Citi to improve Citi’s and the banking industry’s culture.
Governance over Culture
The cornerstone of our approach to culture is our governance framework, which begins with a strong “tone from the top” starting with the Citigroup Board of Directors. In 2014, Citi’s Board established a standing Ethics and Culture Committee of the Board to oversee senior management’s ongoing efforts to foster a culture of ethics throughout Citi. For more information, please see the Ethics and Culture Committee Charter, which is set forth on Citi’s website at www.citigroup.com.
Citi 2019 Proxy Statement
CORPORATE GOVERNANCE | 41 |
With oversight from the Ethics and Culture Committee, senior management has undertaken a number of efforts in support of Citi’s culture, including developing Citi’s Mission and Value Proposition and Leadership Standards. On an ongoing basis, the Ethics and Culture Committee remains responsible for overseeing senior management’s efforts to reinforce and enhance a culture of ethics within Citi, which includes:
● | Overseeing efforts to enhance and communicate Citi’s Mission and Value |
● | Reviewing and assessing Citi’s culture to |
● | Reviewing Citi’s Code of
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Programs and Efforts that Embed Culture
To promote ethical conduct and enhance Citi’s culture, Citi focuses on empowering individuals by establishing global policies, programs, and processes that embed our values throughout the organization and guide and support our employees in making ethical decisions and adhering to Citi’s standards of conduct. Under the oversight of and with input and feedback from the Ethics and Culture Committee, senior management has prioritized a number of efforts to further embed our values and conduct expectations into the organization. The following are a few examples of our programs and associated efforts to set, reinforce, and embed our culture at Citi:
● | Communications and |
● | Embedding the |
● | Training of employees on key culture-related themes, including on our Code of Conduct, ethical decision-making, and |
Code of Ethics for Financial Professionals
The Citi Code of Ethics for Financial Professionals applies to Citi’s Chief Executive Officer (Principal Executive Officer), Chief Financial Officer (Principal Financial Officer), Controller (Principal Accounting Officer), and all finance professionals and administrative staff in a finance role, including Controllers, Finance & Risk Shared Services, Finance and Risk Infrastructure, Financial Planning & Analysis and Strategy, Treasury, Tax, M&A, Investor Relations, and the Regional/Business teams. Citi expects all of its employees to act in accordance with the highest standards of personal and professional integrity in all aspects of their activities, to comply with all applicable laws, rules, and regulations, to deter wrongdoing, and abide by the Citi Code of Conduct and other policies and procedures adopted by Citi that govern the conduct of its employees. The Code of Ethics for Financial Professionals is intended to supplement the Citi Code of Conduct. A copy of the Code of Ethics for Financial Professionals is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Code of Ethics for Financial Professionals.” We will disclose amendments to, or waivers from, the Code of Ethics for Financial Professionals, if any, on our website.
Citi expects employees to raise concerns or questions regarding ethics, discrimination or harassment matters, and to promptly report suspected violations of law, regulation, rule, or breaches of Citi policy, procedure, standard, or the Citi Code of Conduct. Citi offers several channels by which employees and others may report ethical concerns, including concerns about accounting, internal controls, or auditing matters. We provide a global Ethics Hotline, a toll-free number that is available 24 hours a day, seven days a week, 365 days a year, and is staffed by live operators who can connect to translators to accommodate multiple languages.
www.citigroup.com
ETHICS HOTLINE
Citi expects employees to raise concerns or questions regarding ethics, discrimination or harassment matters, and to promptly report suspected violations of these and other applicable laws, regulations, Citi policies, procedures or standards. Citi offers several channels by which employees and others may report ethical concerns, including, without limitation, concerns about accounting, internal controls or auditing matters. We provide a global Ethics Hotline, a toll-free number that is available 24 hours a day, seven days a week, 365 days a year, and is staffed by live operators who can connect to translators to accommodate multiple languages.
www.citigroup.com 23
42 CORPORATE GOVERNANCE
Calls to the Ethics Hotline are received by a third-party vendor, located in the United States, which reports the calls to the Citi Ethics Office for handling. Ethical concerns may also be reported through a dedicated e-mail address, multilingual website submission, fax line, and conventional mailing address. Any individual may also raise a concern by accessing Citi’s public-facing corporate website. Individuals may choose to remain anonymous to the extent permitted by applicable laws and regulations. We prohibit retaliatory actions against anyone who raises concerns or questions in good faith, or who participates in a subsequent investigation of such concerns. The Ethics Office reports on concerns it receives via the Citi Ethics Hotline to the Audit Committees of the Board of Directors of Citigroup Inc. and Citibank, N.A. on a quarterly basis.
The Board has adopted a Code of Conduct, which provides an overview of the laws, regulations, and Citi policies and procedures applicable to the activities of Citi, and sets forth Citi’s Mission and Value Proposition, as well as the standards of ethics and professional behavior expected of employees and representatives of Citi. The Code of Conduct applies to every director, officer, and employee of Citi and its consolidated subsidiaries. All Citi employees, directors, and officers are required to read and comply with the Code of Conduct. In addition, other persons performing services for Citi may be subject to the Code of Conduct by contract or other agreement. The Code of Conduct is publicly available in multiple languages at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Code of Conduct.”
Stockholders or other interested parties who wish to communicate with a member or members of the Board, including the Chair or the non-management Directors as a group, may do so by addressing their correspondence to the Board member or members, c/o the Corporate Secretary, Rohan Weerasinghe, Citigroup Inc., 388 Greenwich Street, New York, NY 10013. The Board of Directors has approved a process pursuant to which the office of the Corporate Secretary will review and forward correspondence to the appropriate person or persons for response.
Citi 2019 Proxy Statement
Calls to the Ethics Hotline are received by a third-party vendor, located in the United States, which reports the calls to the Citi Ethics Office for handling. Ethical concerns may also be reported through a dedicated e-mail address, multi-lingual website submission, fax line, and conventional mailing address. Any individual may also raise a concern by accessing Citi’s public-facing corporate website. Individuals may choose to remain anonymous to the extent permitted by applicable laws and regulations. We prohibit retaliatory actions against anyone who raises concerns or questions in good faith, or who participates in a subsequent investigation of such concerns.
CODE OF CONDUCT
The Board has adopted a Code of Conduct, which provides an overview of the laws, regulations and Citi policies and procedures applicable to the activities of Citi, and sets forth the standards of ethics and professional behavior expected of employees and representatives of Citi. The Code of Conduct applies to every Director, officer and employee of Citi and its consolidated subsidiaries. All Citi employees, directors, and officers are required to read and comply with the Code of Conduct. In addition, other persons performing services for Citi may be subject to the Code of Conduct by contract or other agreement. The Code of Conduct is publicly available in multiple languages at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Code of Conduct.”
COMMUNICATIONS WITH THE BOARD
Stockholders or other interested parties who wish to communicate with a member or members of the Board, including the Chairman or the non-management Directors as a group, may do so by addressing their correspondence to the Board member or members, c/o the Corporate Secretary, Citigroup Inc., 388 Greenwich Street, New York, NY 10013. The Board of Directors has approved a process pursuant to which the office of the Corporate Secretary will review and forward correspondence to the appropriate person or persons for response.
Citi 2016 Proxy Statement24
STOCK OWNERSHIP
Citi has long encouraged stock ownership by its Directors, officers and employees to align their interests with the long-term interests of stockholders. The Board and executive officers are subject to a stock ownership commitment, which requires these individuals to maintain a minimum ownership level of Citigroup stock. Executive officers are required to retain at least 75% of the equity awarded to them as incentive compensation (net of amounts required to pay taxes and option exercise prices) as long as they are executive officers. In addition, a stock holding period applies after the executive officer leaves Citi or is no longer an executive officer. He or she must retain, for one year after ending executive officer status, 50% of the shares previously subject to the stock ownership commitment. Directors are similarly required to retain at least 75% of the net equity awarded to them, further aligning their interests with stockholders. The Board may revise the terms of the stock ownership commitment from time to time to reflect legal and business developments warranting a change. In addition, Directors and executive officers
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Citi has long encouraged stock ownership by its Directors, officers, and employees to align their interests with the long-term interests of stockholders. The Board and executive officers are subject to a stock ownership commitment, which requires these individuals to maintain a minimum ownership level of Citigroup stock. Executive officers are required to retain at least 75% of the equity awarded to them as incentive compensation (net of amounts required to pay taxes and option exercise prices) as long as they are executive officers. In addition, a stock holding period applies after the executive officer leaves Citi, or is no longer an executive officer. He or she must retain, for one year after ending executive officer status, 50% of the shares previously subject to the stock ownership commitment. Directors are similarly required to retain at least 75% of the net equity awarded to them, further aligning their interests with stockholders. The Board may revise the terms of the stock ownership commitment from time to time to reflect legal and business developments warranting a change. In addition, Directors and executive officers may not enter into hedging transactions in respect of Citi’s common stock or other securities issued by Citi, including securities granted by the Company to the Director or executive officer as part of his or her compensation and securities purchased or acquired by the Director or executive officer in a non-compensatory transaction.
The following table shows the beneficial ownership of Citi common stock by our Directors, nominee, named executive officers, current CFO, and Directors and executive officers as a group at February 23, 2019. For purposes of this table, “beneficial ownership” is determined in accordance with Rule 13d-3 under the Exchange Act, pursuant to which a person, or group of persons, is deemed to have “beneficial ownership” of any shares of common stock that such person has the right to acquire within 60 days of the date of determination.
BENEFICIAL OWNERSHIP TABLE
Name | Common Stock Beneficially Owned Excluding Options(1) | Options Exercisable Within 60 days | Owned by or Tenant in Common with Family Member, Trust, or Mutual Fund(2) | Total Beneficial Ownership(3) | Receipt Deferred(4) | Total Ownership(5) | |||||
Stephen Bird | 170,674 | — | 95,000 | 265,674 | 120,952 | 386,626 | |||||
Michael L. Corbat | 325,778 | — | 1,781 | 327,559 | 273,968 | 601,527 | |||||
Ellen M. Costello | 15,885 | — | — | 15,885 | 2,402 | 18,287 | |||||
Barbara J. Desoer | 44,754 | — | — | 44,754 | 80,222 | 124,976 | |||||
John D. Dugan | 2,516 | — | — | 2,516 | 2,402 | 4,918 | |||||
James A. Forese | 361,856 | — | — | 361,856 | 221,764 | 583,620 | |||||
Jane Nind Fraser | 37,687 | — | — | 37,687 | 99,297 | 136,984 | |||||
John Gerspach* | 152,183 | — | 125,601 | 277,784 | 125,878 | 403,662 | |||||
Duncan P. Hennes | 15,624 | — | — | 15,624 | 2,402 | 18,026 | |||||
Peter B. Henry | 18,287 | — | — | 18,287 | 2,402 | 20,689 | |||||
Franz B. Humer | 23,206 | — | — | 23,206 | 600 | 23,806 | |||||
S. Leslie Ireland | 2,566 | — | — | 2,566 | 2,402 | 4,968 | |||||
Lew W. (Jay) Jacobs, IV | 1,037 | — | 1,179 | 2,216 | 2,402 | 4,618 | |||||
Renée J. James | 8,926 | — | — | 8,926 | 2,402 | 11,328 | |||||
Mark Mason** | 276 | — | — | 276 | 60,928 | 61,204 | |||||
Eugene M. McQuade | 126,279 | — | 3,098 | 129,377 | 2,402 | 131,779 | |||||
Gary M. Reiner | 28,544 | — | — | 28,544 | 2,402 | 30,946 | |||||
Anthony M. Santomero | 38,159 | — | — | 38,159 | 600 | 38,759 | |||||
Diana L. Taylor | 31,619 | — | — | 31,619 | 2,402 | 34,021 | |||||
James S. Turley | 16,750 | — | — | 16,750 | 2,402 | 19,152 | |||||
Deborah C. Wright | 4,693 | — | — | 4,693 | 2,402 | 7,095 | |||||
Ernesto Zedillo Ponce de Leon | 30,209 | — | — | 30,209 | 2,402 | 32,611 | |||||
Total (29 Directors and | |||||||||||
Executive Officers | |||||||||||
as a group) | 1,663,290 | — | 422,513 | 2,085,803 | 1,424,879 | 3,510,682 |
* | Retired as Chief Financial Officer on February 22, 2019. |
** | Chief Financial Officer as of February 23, 2019. |
www.citigroup.com
44 | STOCK OWNERSHIP |
(1) | The stock reported for certain Directors in this column includes deferred common stock, which is fully vested and which the Director or
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(2) | Stock held as a tenant-in-common with a family member or trust, owned by a family member, held by a trust for which the Director or executive officer is a trustee but not a beneficiary, or held by a mutual fund which invests substantially all of
(3) | At February | At February
(4) | Amounts represent Directors’ deferred common stock. The deferred common stock becomes distributable approximately on the second anniversary of the date of grant; however, if a Director retired or resigned from the Board during the year when the award was granted, the Director would forfeit a pro rata portion of the award. Amounts also |
(5) | Total Ownership reflects the amount represented in the Section | |
Mr. Reiner also owns 485 depositary shares of Citi’s 5.9% Fixed Rate/Floating Rate Noncumulative Preferred Stock, Series B, which represents 0.065% of such series of preferred stock.
OWNERS OF MORE THAN 5% OF CITI COMMON STOCK
Name and Address of Beneficial Owner | Beneficial Ownership | Percent of Class | ||
BlackRock, Inc.(a) | ||||
55 East 52nd Street, New York, NY 10055 | 172,569,709 | 7.1% | ||
The Vanguard Group, Inc.(b) | ||||
100 Vanguard Blvd., Malvern, PA 19355 | 179,143,858 | 7.33% |
(a) | Based on the Schedule 13G filed with the SEC on February 11, 2019 by BlackRock, Inc. and certain subsidiaries, BlackRock reported that it had sole voting power over 150,855,815 shares and had sole dispositive power over 172,569,709 shares. The Schedule 13G states that the | ||
(b) | Based on
The |
Citi 2019 Proxy Statement
The one-year term of all of Citi’s Directors expires
45 |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires Citi’s Section 16 officers and Directors, and persons who own more than 10% of a registered class of Citi’s equity securities, to file reports of ownership and changes in ownership with the SEC and the NYSE, and to furnish Citi with copies of the forms. Based on its review of the forms it received, or written representations from reporting persons, Citi believes that, during 2018, each of its Section 16 officers and Directors complied with all such filing requirements.
Proposal 1: Election of Directors
The Board has nominated all of the current Directors for re-election at the 2019 Annual Meeting, except for Mr. Humer and Mr. Santomero, who will not stand for re-election to the Board having reached the retirement age under Citi’s Corporate Governance Guidelines. Directors are not eligible to stand for re-election after reaching the age of 72. Mr. O’Neill retired from the Board on January 1, 2019 having reached the retirement age. Mr. Santomero will retire from the Board on April 1, 2019 and Mr. Humer will retire from the Board on April 16, 2019. Mr. Jacobs was elected by the Board in June 2018. Mr. Jacobs was identified as a potential Director by Egon Zehnder, the Board’s nominating consultant and by a retired Board member. In addition, the Board has nominated Ms. Desoer for election to the Board at the 2019 Annual Meeting. Ms. Desoer was recommended as a candidate for election to the Citigroup Board by her fellow directors on the Citibank Board, all of whom are members of Citi’s Board. If elected, each nominee will hold office until the 2020 Annual Meeting or until his or her successor is elected and qualified.
Director Criteria and Nomination Process
The Nomination, Governance and Public Affairs Committee considers all qualified candidates identified by members of the Nomination, Governance and Public Affairs Committee, by other members of the Board, by senior management, and by security holders. During 2018, the Committee engaged Egon Zehnder to assist in identifying and evaluating potential nominees. Stockholders who would like to propose a Director candidate for consideration by the Nomination, Governance and Public Affairs Committee may do so by submitting the candidate’s name, résumé, and biographical information to the attention of the Corporate Secretary, Rohan Weerasinghe, Citigroup Inc., 388 Greenwich Street, New York, New York 10013. All proposals for nominations received by the Corporate Secretary will be presented to the Committee for its consideration.
In considering the composition of the Board of Directors, the Nomination, Governance and Public Affairs Committee inventories the categories of risks faced by Citi, given its size, business mix, and geographical presence, and seeks to identify candidates with the skills and experience necessary to enable the Board of Directors to provide proper oversight of those risks. The Nomination, Governance and Public Affairs Committee also takes Director tenure into consideration when making Director nomination decisions and believes that it is desirable to maintain a mix of longer-tenured, experienced Directors and newer Directors with fresh perspectives. The Nomination, Governance and Public Affairs Committee and the Board also believe that longer-tenured, experienced Directors are a significant strength of the Board, given the large size of our Company, the breadth of our product offerings, and the international scope of our organization. The Board’s composition, and the individuals nominated for consideration by stockholders, are the result of careful consideration by the Committee of the correspondence between the risk inventory and skills and experience of the Board members and candidates. In addition to the ability
www.citigroup.com
DIRECTOR CRITERIA AND NOMINATION PROCESS
The Nomination, Governance and Public Affairs Committee considers all qualified candidates identified by members of the Nomination, Governance and Public Affairs Committee, by other members of the Board, by senior management and by security holders. During 2015, the Committee engaged Egon Zehnder to assist in identifying and evaluating potential nominees. Stockholders who would like to propose a Director candidate for consideration by the Nomination, Governance and Public Affairs Committee may do so by submitting the candidate’s name, résumé and biographical information to the attention of the Corporate Secretary, Citigroup Inc., 388 Greenwich Street, New York, NY 10013. All proposals for nominations received by the Corporate Secretary will be presented to the Committee for its consideration.
The Nomination, Governance and Public Affairs Committee reviews each candidate’s biographical information and assesses each candidate’s independence, skills and expertise
46 | PROPOSAL 1: ELECTION OF DIRECTORS |
to assist the Board in its oversight of a particular risk or risks, as more fully described in each nominee’s biography, the members of the Board are assessed based on a variety of factors, including the following criteria, which have been developed by the Nomination, Governance and Public Affairs Committee and approved by the Board:
● | Whether the candidate has exhibited behavior that indicates he or she is committed to the highest ethical standards; |
● | Whether the candidate has had business, governmental, |
● | Whether the candidate has special skills, expertise and background that would complement the attributes of the existing Directors, taking into consideration the diverse communities and geographies in which the Company operates; |
● | Whether the candidate has the |
● | Whether the candidate has achieved prominence in his or her business, governmental, or professional activities and has built a reputation that demonstrates the ability to make the kind of important and sensitive judgments that the Board is called upon to make; |
● | Whether the candidate will effectively, consistently, and appropriately take into account and balance the legitimate interests and concerns of all of the Company’s stockholders and other stakeholders in reaching decisions, rather than advancing the interests of a particular constituency; |
● | Whether the candidate possesses a willingness to challenge management while working constructively as part of a team in an environment of collegiality and trust; and |
● | Whether the candidate will be able to devote |
Application of these factors involves the exercise of judgment by the Nomination, Governance and Public Affairs Committee and the Board.
Based on its assessment of each candidate’s independence, skills and qualifications and the criteria described above, the Nomination, Governance and Public Affairs Committee will make recommendations regarding potential Director candidates to the Board.
The Nomination, Governance and Public Affairs Committee follows the same process and uses the same criteria for evaluating candidates proposed by stockholders, members of the Board of Directors, and members of senior management. For the 2019 Annual Meeting, Citi did not receive notice from any stockholders regarding a nomination to the Board of Directors.
The nominees for the Board of Directors each have the qualifications and experience to approve and guide Citi’s strategy and to oversee management’s execution of that strategic vision. Citi’s Board of Directors consists of individuals with the skills, experience, and backgrounds necessary to oversee Citi’s efforts toward becoming a simpler, smaller, safer, and stronger financial institution, while mitigating risk and operating within a complex financial and regulatory environment.
The nominees listed below are leaders in business, the financial community, and academia because of their intellectual acumen and analytic skills, strategic vision, ability to lead and inspire others to work with them, and records of outstanding accomplishments over a period of decades. Each has been chosen to stand for election in part because of his or her ability and willingness to ask difficult questions, understand Citi’s unique challenges, and evaluate the strategies proposed by management, as well as their implementation.
Citi 2019 Proxy Statement
www.citigroup.com 27
PROPOSAL 1: ELECTION OF DIRECTORS Application of these factors involves the exercise of judgment by the Nomination, Governance and Public Affairs Committee and the Board.Based on its assessment of each candidate’s independence, skills and qualifications and the criteria described above, the Nomination, Governance and Public Affairs Committee will make recommendations regarding potential Director candidates to the Board.The Nomination, Governance and Public Affairs Committee follows the same process and uses the same criteria for evaluating candidates proposed by stockholders, members of the Board of Directors and members of senior management. For the 2016 Annual Meeting, Citi did not receive notice from any stockholders regarding a nomination to the Board of Directors.DIRECTOR QUALIFICATIONSThe nominees for the Board of Directors each have the qualifications and experience to approve and guide Citi’s strategy and to oversee management’s execution of that strategic vision. Citi’s Board of Directors consists of individuals with the skills, experience and backgrounds necessary to oversee Citi’s efforts toward becoming a simpler, smaller, safer, and stronger financial institution, while mitigating risk and operating within a complex financial and regulatory environment.The nominees listed below are leaders in business, the financial community, and academia because of their intellectual acumen and analytic skills, strategic vision, ability to lead and inspire others to work with them, and records of outstanding accomplishments over a period of decades. Each has been chosen to stand for election in part because of his or her ability and willingness to ask difficult questions, understand Citi’s unique challenges, and evaluate the strategies proposed by management, as well as their implementation.Each of the nominees has a long record of professional integrity, a dedication to his or her profession and community, a strong work ethic that includes coming fully prepared to meetings and being willing to spend the time and effort needed to fulfill professional obligations, the ability to maintain a collegial environment, and the experience of having served as a Board member of a sophisticated global company.Many of our nominees are either current or former chief executive officers or chairmen of other large international corporations or have experience operating large, complex academic, governmental or philanthropic institutions or departments. As such, they have a deep understanding of, and extensive experience in, many of the areas that are outlined below as being of critical importance to Citi’s proper operation and success. For the purposes of its analysis, the Board has determined that nominees who have served as a chief executive officer or a chairman of a major corporation or large, complex institution have extensive experience with financial47
Each of the nominees has a long record of professional integrity, a dedication to his or her profession and community, a strong work ethic that includes a commitment to coming fully prepared to meetings and being willing to spend the time and effort needed to fulfill professional obligations and the ability to maintain a collegial environment.
Many of our nominees are either current or former chief executive officers or chairs of other large international corporations or have experience operating large, complex academic or governmental departments. As such, they have a deep understanding of, and extensive experience in, many of the areas that are outlined below as being of critical importance to Citi’s proper operation and success. For the purposes of its analysis, the Board has determined that nominees who have served as a chief executive officer or a chair of a major corporation or large, complex institution have extensive experience with financial statement preparation, compensation determinations, regulatory compliance (if their businesses are or were regulated), corporate governance, public affairs, and legal matters.
In evaluating the composition of the Board, the Nomination, Governance and Public Affairs Committee seeks to find and retain individuals who, in addition to having the qualifications set forth in Citi’s Corporate Governance Guidelines, have the skills, experience and abilities necessary to meet Citi’s unique needs as a highly regulated financial services company with operations in the corporate and consumer businesses are or were regulated), corporate governance, public affairs, and legal matters.
In evaluating the composition of the Board, the Nomination, Governance and Public Affairs Committee seeks to find and retain individuals who, in addition to having the qualifications set forth in Citi’s Corporate Governance Guidelines, have the skills, experience and abilities necessary to meet Citi’s unique needs as a highly regulated financial services company with operations in the corporate and consumer business within the United States and more than 100 countries around the globe. The Committee has determined it is critically important to Citi’s proper operation and success that its Board has, in addition to the qualities described above, expertise and experience in the following areas:
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With more than 200 million customer accounts, Citi
Citi’s reputation is a vital asset in building trust with its clients and other stakeholders, and Citi makes every effort to communicate its corporate values to its stockholders and clients, its achievements in the areas of corporate social responsibility, sustainability, and philanthropy, and its efforts to improve the communities in which we live and work. Members of the Board with experience in the areas of corporate affairs, philanthropy, community development, communications, and corporate social responsibility assist management by reviewing Citi’s policies and programs that relate to significant public issues, including environmental, social and governance factors, as well as by reviewing Citi’s relationships with external stakeholders and issues that impact Citi’s reputation. |
www.citigroup.com
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Citi has a long history as a technology innovator—Citibank, N.A. was one of the first banks to offer automatic teller machines for its customers during the 1970s. Since then, Citi has continued to leverage new technologies to deliver enhanced products and services to its clients and customers such as online banking, mobile and tablet banking, and mobile check deposit. In addition, Citi deploys new technology and platform innovations to gather, process, analyze, and provide information to execute transactions and meet the needs of its clients and customers. In this context, Citi must be able to access reliable data to ensure that it complies with regulatory requirements, including anti-money laundering and sanctions, and to meet other information security and control objectives. Citi must ensure that its operations are efficient and there is a continuous focus on enhancing productivity to meet its operational and strategic goals. The Board must include members who have knowledge and experience in technology, including such technology-centric issues as cybersecurity, data privacy and data management, and the changing supervisory and regulatory technology landscape. Members of the Board must be qualified to provide oversight of the development and maintenance of Citi’s technology platforms; Citi’s compliance with regulatory requirements; Citi’s operational efficiency and productivity strategies; the operations and reliability of Citi’s systems; and the protection of client and customer data. Citi and its subsidiaries are regulated and supervised by numerous regulatory agencies, both domestically and internationally, including in the U.S. the Federal Reserve Board, the Office of the Comptroller of the Currency, the FDIC, the Consumer Financial Protection Bureau, and state banking and insurance departments, as well as international financial services authorities. Having Directors with experience interacting with regulators or operating businesses subject to extensive regulation is important to furthering Citi’s continued compliance with its many regulatory requirements and fostering productive relationships with its regulators. Several of Citi’s Board members have experience with ethics and compliance and building an effective, values-based ethics and compliance program. Risk management is a critical function of a complex global financial services company and its proper supervision requires Board members with sophisticated risk management skills and experience. Directors provide oversight of the Company’s risk management framework, including the significant policies, procedures, and practices used in managing credit, market, and certain other risks, including liquidity, capital, and balance sheet risks, as well as capital markets risks, and review recommendations by management regarding risk mitigation. Given increased cybersecurity threats, Citi’s Board must have members who have sufficient experience to enable them to oversee management’s efforts to monitor, detect and prevent cyber threats to Citi. Citi’s Board must include members with risk expertise to assist Citi in its efforts to properly identify, measure, monitor, report, analyze, and control or mitigate risk. www.citigroup.comPROPOSAL 1: ELECTION OF DIRECTORS 49 •Legal Matters. In addition to the regulatory supervision described below, Citi is subject to myriad laws and regulations and is party to various legal actions and regulatory proceedings. Citi’s Board has an important oversight function with respect to compliance with applicable requirements, monitors the progress of legal proceedings, and evaluates major settlements. Citi’s Board must include members with experience in complying with regulatory requirements, as well as understanding complex litigation and litigation strategies. •Operations and Technology. Citi has a long history as a technology innovator — Citibank, N.A. was one of the first banks to offer automatic teller machines for its customers during the 1970s. Since then, Citi has expanded its technology to include such products as online banking; mobile and tablet banking; mobile check deposit; eBills; and Popmoney®. Financial institutions rely on gathering, processing, analyzing, and providing information in order to meet the needs of their customers, and, for Citi, it is crucial to be at the forefront of technology innovations. Citi must be able to use and protect its data and must be able to access its data to ensure that it complies with regulatory requirements including anti-money laundering, sanctions, and other security issues. In addition, Citi must ensure that its operations are efficient, enhancing productivity to meet our strategic goals. The Board must include members that have knowledge and experience in technology, including such technology-driven issues as privacy and cybersecurity, data management, and the changing supervisory and regulatory technology landscape, as well as customer-friendly technology, and operations. Members of the Board provide oversight of Citi’s technology initiatives to service its consumer and institutional clients; the maintenance of Citi’s technology platforms; Citi’s compliance with regulatory requirements; Citi’s efficiency and productivity strategies; and the use and protection of customer data. •Regulatory Compliance. Citi and its subsidiaries are regulated and supervised by numerous regulatory agencies, both domestically and internationally, including in the U.S. the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Consumer Financial Protection Bureau, state banking and insurance departments, as well as international financial services authorities. Having Directors with experience interacting with regulators or operating businesses subject to extensive regulation is important to furthering Citi’s continued compliance with its many regulatory requirements and fostering productive relationships with its regulators. •Risk Management. Risk management is a critical function of a complex global financial services company and its proper supervision requires Board members with sophisticated risk management skills and experience. Directors provide oversight of the Company’s risk management framework, including the significant policies, procedures and practices used in managing credit, market and certain other risks, and review recommendations by management regarding risk mitigation. Citi’s Board must include members with risk expertise to assist Citi in its efforts to properly identify, measure, monitor, report, analyze, and control or mitigate risk.
Citi 2016 Proxy Statement30
50 PROPOSAL 1: ELECTION OF DIRECTORS THE NOMINEESThe following tables give information — provided by the nominees — about their principal occupation, business experience, and other matters.Each nominee’s biography highlights his or her particular skills, qualifications and experience that support the conclusion of the Nomination, Governance and Public Affairs Committee that the nominee is extremely qualified
The following tables give information – provided by the nominees – about their principal occupation, business experience, and other matters.
Each nominee’s biography highlights his or her particular skills, qualifications, and experience that support the conclusion of the Nomination, Governance and Public Affairs Committee that the nominee is extremely qualified to serve on Citi’s Board.
Board Recommendation The Board of Directors recommends that you vote FOReach of the following nominees. |
BOARD RECOMMENDATION
Director of Citigroup Other Directorships: Previous Directorships within the last five years: Other Activities: |
Citi 2019 Proxy Statement
Director of Citigroup Director of Citibank, N.A. Other Directorships: Previous Directorships within the last five years: Ms. Costello is an accomplished financial services executive and through her prominent roles in the areas of Financial Services, Risk Management, Institutional and Consumer Businesses, Financial Reporting, Operations and Technology, and Regulatory and Compliance, has been nominated to serve on the Board. Because Citi PROPOSAL 1: ELECTION OF DIRECTORS 51
Record Date
Position, Principal Occupation, Business Experience and Directorships
Age: 64
since 2016
since 2016
Diebold Nixdorf, Inc.
DH CorporationName and Ageat Record DatePosition, Principal Occupation, Business Experience and DirectorshipsEllen M. Costello61Former President, Chief Executive Officer, BMO Financial Corporation and Former U.S. Country Head, BMO Financial Group•President and CEO, BMO Financial Corporation and U.S. Country Head, BMO Financial Group – 2011 to July 2013•Group Head, Personal and Commercial Banking, U.S. and President and Chief Executive Officer, BMO Harris Bank N.A., BMO Financial Group – 2006 to 2011•Vice Chairman and Head, Securitization and Credit Investment Management, Merchant Banking and Head of N.Y. Office, Capital Markets Group, BMO Financial Group – 2000 to 2006•Executive Vice President, Strategic Initiatives, Capital Markets Group, BMO Financial Group – 2000•Executive Vice President and Head, Global Treasury Group, BMO Financial Group – 1997 to 1999•Senior Vice President and Deputy Treasurer, Global Treasury Group, BMO Financial Group – 1995 to 1997•Managing Director and Regional Treasurer, Asia Pacific, Global Treasury Group, BMO Financial Group – 1993 to 1994•Managing Director and Head, North American Financial Product Sales, Global Treasury Group, BMO Financial Group – 1991 to 1993•Director of Citigroup since 2016•Director of Citibank, N.A. since 2016•Other Directorships: DH Corporation•Previous Directorships within the last five years: BMO Financial Corporation•
Chicago Council on Global Affairs (Board) and The United Way of Metropolitan Chicago (Board), Chicago Council on Global Affairs (Board), Economic Club of Chicago (Member)Skills and QualificationsMs. Costello is an experienced financial services executive and has been nominated to serve on the Board because of her extensive skills and experience in the areas of Financial Services, Risk Management, Institutional and Consumer Businesses, Financial Reporting and Regulatory Compliance. In her 30 years at BMO Financial Group, a Global Financial Institution, Ms. Costello acquired extensive experience in personal and commercial banking, wealth management and capital markets businesses in Canada, Asia and the U.S. In her roles in Global Treasury and Global Capital Markets, she gained experience in corporate, institutional and investment banking, securities, trading and asset management. As CEO of BMO Harris Bank N.A., Ms. Costello gained experience in personal and commercial banking, strategic planning, marketing, regulatory compliance, financial reporting and personnel matters. Additionally, as CEO, BMO Financial Corporation and U.S. Country Head, she gained further experience in regulatory compliance, including capital and resolution planning, risk management and governance. Her board service at DH Corporation gives her experience with global operations and financial technologies businesses. Ms. Costello’s extensive financial services background also adds significant value to Citi’s and Citibank’s relationships with various regulators and stakeholders.
Former U.S. Country Head, BMO Financial Group2016 Proxy Statement32Backis an international financial services company with both consumer and institutional businesses, having former banking executives with extensive banking experience, like Ms. Costello, as Board members enables the Board to Contentsprovide knowledgeable oversight to its business and regulatory activities. In her 30 years at BMO Financial Group, a global financial institution, Ms. Costello acquired extensive experience in personal and commercial banking, wealth management and capital markets businesses in Canada, Asia, and the U.S. In her roles in Global Treasury and Global Capital Markets, she gained experience in corporate, institutional and investment banking, securities, trading and asset management. As CEO of BMO Harris Bank N.A., Ms. Costello gained experience in personal and commercial banking, strategic planning, marketing, regulatory compliance, financial reporting, and personnel matters. Additionally, as CEO of BMO Financial Corporation and U.S. Country Head of BMO Financial Group, she gained further experience in regulatory compliance, including capital and resolution planning, risk management, and governance. Her prior board service at DH Corporation and her current board service at Diebold Nixdorf provide her with experience in global operations and financial technologies businesses. Ms. Costello’s extensive financial services background also adds significant value to Citi’s and Citibank’s relationships with various regulators and stakeholders.Consumer Business and Financial Services Financial Reporting Operations and Technology Risk Management
www.citigroup.com
New Nominee Other Directorships: Previous Directorships within the last five years: Other Activities:52 PROPOSAL 1: ELECTION OF DIRECTORS
Record Date
Position, Principal Occupation, Business Experience and Directorships
Age: 66Name and Ageat Record DatePosition, Principal Occupation, Business Experience and DirectorshipsDuncan P. Hennes59Co-Founder and PartnerAtrevida Partners, LLC•
DaVita Inc.
None
Board of Visitors of the University of California, Berkeley (Member)Co-Founder and Partner, Atrevida Partners, LLC – June 2007 to Present•Co-Founder and Partner, Promontory Financial Group – 2000 to 2006•Chief Executive Officer, Soros Fund Management – 1999 to 2000•Executive Vice President/Treasurer, Bankers Trust Company – 1987 to 1999•Audit Manager, Arthur Andersen & Co. – 1979 to 1987•Director of Citigroup since 2013•Director of Citibank, N.A. since 2013•Other Directorships: Syncora Holdings, Ltd.•Previous Directorships within the last five years: None•Other Activities: Freeman & Co. (Advisory Board)Skills and QualificationsMr. Hennes is an experienced financial services professional and has been nominated to serve on the Board because of his extensive experience and expertise in the areas of Financial Services, Risk Management, Financial Reporting, Institutional Business, Regulatory Compliance, and Corporate Affairs. In his role as the Co-Founder of Atrevida Partners, LLC and his prior experience at Promontory Financial Group and Bankers Trust Corporation, he has gained extensive experience in financial services, regulatory compliance, corporate and investment banking, and securities and trading. While at Bankers Trust Corporation, Mr. Hennes was Chairman of Oversight Partners I, the consortium of 14 firms that participated in the equity recapitalization of Long-Term Capital Management. As the Chairman of Oversight Partners I, Mr. Hennes gained experience in credit and risk management, and personnel matters. Additionally, in his role as CEO of Soros Fund Management, Mr. Hennes gained experience in investing, operational infrastructure, and trading, including arbitrage activities. Mr. Hennes’s experience as a Certified Public Accountant has also given him audit, financial reporting, and risk management expertise.www.citigroup.com 33BackMs. Desoer has been nominated to Contentsserve on the Board because of her significant insight into the financial services industry, including client services, and extensive expertise in financial management, risk management and the management of regulatory issues at large financial institutions. She has over 40 years of large bank experience, as the CEO of Citibank, N.A. for five years and a 35-year career at Bank of America, serving in such roles as the President of Bank of America Home Loans and as a Global Technology & Operations Executive. Ms. Desoer’s knowledge of and experience in the financial services industries qualifies her to serve on Citi’s Board. Her primary qualifications are in the following areas: Consumer Business and Financial Services through her roles at Citibank, N.A. and Bank of America; Operations and Technology experience while serving as a Global Technology & Operations Executive at the Bank of America where she enabled growth and innovation through technology; Regulatory and Compliance through her service as the CEO of Citibank, N.A. and previously as the head of Citi’s Anti-Money Laundering Program; and Risk Management through her oversight of Citi’s Comprehensive Capital Analysis and Review Process and serving on Citibank’s Risk Management Committee. Ms. Desoer will be a significant asset to Citi’s Board because of her expertise in financial regulation, leadership in the operations of a large global financial institution, and technology and management expertise.Consumer Business and Financial Services Operations and Technology Regulatory and Compliance Risk Management * Ms. Desoer will retire as CEO of Citibank, N.A. before the Annual Meeting.
Citi 2019 Proxy Statement
Director of Citigroup Other Directorships: Previous Directorships within the last five years: Other Activities:PROPOSAL 1: ELECTION OF DIRECTORS 53
Record Date
Position, Principal Occupation, Business Experience and Directorships
Age: 63
since 2017Name and Ageat Record DatePosition, Principal Occupation, Business Experience and DirectorshipsPeter B. Henry46DeanNew York University, Leonard N. Stern School of Business•
None
None
University of Michigan, “Michigan in Washington” program (Advisory Board)Dean, New York University, Leonard N. Stern School of Business – January 2010 to Present•Faculty Member, Stanford University – 1997 to 2009•Fellow, National Science Foundation – 1993 to 1996•Director of Citigroup since 2015•Director of Citibank, N.A. since 2015•Other Directorships: None*•Previous Directorships within the last five years: Kraft Foods Inc. and Kraft Foods Group, Inc. (split into two companies in October 2012)•Other Activities: British-American Business Council, Council on Foreign Relations (Board), National Bureau of Economic Research (Board), and the Economic Club of New York (Board)Skills and QualificationsDr. Henry, a leading academic and seasoned international economist, has been nominated to serve on the Board because of his extensive expertise in the areas of International Business and Economics, Financial Services, Risk Management, Financial Reporting, Consumer Business, Corporate Affairs, and Governance. As a renowned international economist, he shares important perspectives with the Board on emerging markets, which is a focus of Citi’s strategy. The experience he has gained in his role as Dean of the Leonard N. Stern School of Business enables him to provide an important perspective to the Board’s discussions on public affairs, financial and operational matters. As a former member of the Board of Kraft Foods Group, Inc. and its Audit and Governance Committees, Dr. Henry has gained valuable insights about the Consumer Business environment, financial reporting, and governance. Dr. Henry’s governmental advisory roles, including leadership of President Obama’s Transition Team’s review of international lending agencies and his service as an economic advisor to governments in developing and emerging markets, have given him valuable insights and perspectives on international business and financial services. Dr. Henry brings to the Board extensive experience in executive leadership at a large private university, including a robust understanding of the issues facing companies and governments in both mature and emerging markets around the world.
Citigroup Inc.*Dr. Henry has been nominated to serve on the Board of General Electric Company (“GE”). The shareowners of GE will vote on his election at their 2016 Annual Meeting.Corporate Governance Legal Matters Regulatory and Compliance Risk Management
www.citigroup.com
Citi 2016 Proxy Statement34
54 | PROPOSAL 1: ELECTION OF DIRECTORS |
Duncan P. Hennes Age: 62 | ||||||||||||||||||||||
Director of Citigroup
Skills and Qualifications
Primary Qualifications Compensation | Institutional Business | Regulatory and Compliance | Risk Management | |
Citi 2019 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS | 55 |
Peter B. Henry Age: 49 | ||||||||||||||||||||||
Director of Citigroup
Skills and Qualifications
Primary Qualifications Corporate Governance | Financial Reporting | Institutional Business | International Business or Economics | |
www.citigroup.com
56 | PROPOSAL 1: ELECTION OF DIRECTORS |
S. Leslie Ireland Age: 59 | ||||||||||||||||||||||
Director of Citigroup
Skills and Qualifications
Primary Qualifications Institutional Business | International Business or Economics | Operations and Technology | Risk Management | |
Citi 2019 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS | 57 |
Lew W. (Jay) Jacobs, IV Age: 48 | ||||||||||||||||||||||
Director of Citigroup
Skills and Qualifications Mr. Jacobs is an experienced financial services professional and has been nominated to serve on the Board because of his considerable expertise in the areas of Human Resources, Compensation, Financial Reporting, Institutional Business, and Risk Management. Citi
Primary Qualifications Compensation | Financial Reporting | Institutional Business | Risk Management | |
www.citigroup.com
Director of Citigroup Other Directorships: Previous Directorships within the last five years: Other Activities:58 PROPOSAL 1: ELECTION OF DIRECTORS
Record Date
Position, Principal Occupation, Business Experience and Directorships
Age: 54
since 2016Name and Ageat Record DatePosition, Principal Occupation, Business Experience, and DirectorshipsGary M. Reiner61Operating PartnerGeneral Atlantic LLC•
Oracle Corporation, Sabre Corporation and Vodafone Group Plc
VMware, Inc.
President’s National Security Telecommunications Advisory Committee (Chair) and University of Oregon (Trustee)Operating Partner, General Atlantic LLC – September 2010 to Present•Senior Vice President and Chief Information Officer, General Electric Company – 1996 to 2010•Partner, Boston Consulting Group – 1986 to 1991•Director of Citigroup since 2013•Director of Citibank, N.A. since 2013•Other Directorships: Hewlett-Packard Company and Box Inc.•Previous Directorships within the last five years: None•Other Activities: Norwalk Hospital (Member)Skills and QualificationsMr. Reiner is an experienced executive and has been nominated to serve on the Board because of his experience in the areas of Operations and Technology, Financial Reporting, Corporate Governance, and International and Consumer Business. In his current role as Operating Partner of General Atlantic LLC, he has continued to broaden his considerable expertise in technology and management. Through his tenure as Chief Information Officer at General Electric, Mr. Reiner gained extensive experience in the management of a large, complex, multi-national operation, developing technology innovations, strategic planning and marketing to an international consumer and institutional customer base. He also has significant experience in information technology through his many years of experience as a partner of Boston Consulting Group, where he focused on strategic issues for technology businesses. Mr. Reiner’s expertise as an innovative technology leader assists Citi in meeting the challenges of operating a financial services company in the 21st century. Through his service on the Hewlett Packard Board of Directors, Mr. Reiner has developed additional leadership and corporate governance expertise as the Chair of its Nominating, Governance and Social Responsibility Committee.
The Carlyle Groupwww.citigroup.com 39BackMs. James is a seasoned technology leader with large-scale, broad international operations experience. An accomplished operational executive, Ms. James has been nominated to Contentsserve on the Board because of her expertise in the areas of Technology, Risk Management, and International and Consumer Businesses. She is an accomplished technology executive with wide-ranging international experience managing large-scale, complex global operations. Through her 28-year career as a technology executive at Intel and in her current role as Chair and CEO of Ampere Computing, a private technology company, and her role as Operating Executive with the Media and Technology Practice at The Carlyle Group, as well as in her role as the Chair of the National Security Telecommunications Advisory Committee to the President of the United States, Ms. James developed extensive expertise in cybersecurity and emerging technologies. These skills are particularly important to Citi as a member of an industry facing cyber threats and as a company embracing innovation and new technologies. Through her career at Intel and her service on the boards of other prominent international companies (Oracle Corporation, Sabre Corporation, and Vodafone Group Plc), Ms. James has had executive experience with consumer risk management and corporate governance issues.Consumer Business and Financial Services International Business or Economics Operations and Technology Risk Management
Citi 2019 Proxy Statement
Director of Citigroup Inc. Director of Citibank, N.A. Other Directorships: Previous Directorships within the last five years: Other Activities:PROPOSAL 1: ELECTION OF DIRECTORS 59
Record Date
Position, Principal Occupation, Business Experience and Directorships
Age: 70
since 2015Name and Ageat Record DatePosition, Principal Occupation, Business Experience and DirectorshipsJudith Rodin71PresidentRockefeller Foundation•
since 2009
None
XL Group, Ltd. (Chairman)
Promontory Financial Group (Vice Chairman), a subsidiary of IBM, Boys and Girls Clubs of America (Governor), American Ireland Fund (Director), and Catholic Charities of New York (Chairman)President, Rockefeller Foundation – March 2005 to Present•President Emerita, University of Pennsylvania – 2004 to Present•President, University of Pennsylvania – 1994 to 2004•Provost, Yale University – 1992 to 1994•Director of Citigroup since 2004•Other Directorships: Comcast Corporation•Previous Directorships within the last five years: AMR Corporation•Other Activities: World Trade Memorial Foundation (Director), Carnegie Hall (Director), Laureate Education, Inc. (Director), White House Project (Member), Council on Foreign Relations (Member), and National Academy of Sciences Institute of Medicine (Member)Skills and QualificationsDr. Rodin is an experienced leader in the not-for-profit sector and has been nominated to serve on the Board because of her skills and experience in the areas of Corporate Affairs, Corporate Governance, Compensation, Financial Reporting, Risk Management and Legal Matters. Through her current role as the President of the Rockefeller Foundation, and her previous positions as President of the University of Pennsylvania from 1994 until her retirement in 2004, and as Provost of Yale University from 1992 to 1994, together with her service as a member of the Comcast Audit Committee, Dr. Rodin has had extensive experience in the areas of corporate affairs, financial reporting, risk management and legal matters. As the President of the University of Pennsylvania, which was the largest private employer in Philadelphia, as Chair of the Compensation Committee of Comcast Corporation, and as a Director of Comcast Corporation and Laureate Education, Inc., Dr. Rodin has had extensive experience with compensation matters. Her service as a Director of the World Trade Memorial Foundation, and of Carnegie Hall, as an honorary Director of the Brookings Institution, a member of the Council on Foreign Relations, a member of the Institute of Medicine, and a member of the New York City Commission for Economic Opportunity has deepened her understanding of corporate affairs on local and global scales.
Former Chief Executive Officer, Citibank, N.A.Citi 2016 Proxy Statement40BackMr. McQuade is an experienced financial services executive and has been nominated to Contentsserve on the Board because of his extensive skills and experience in the areas of Financial Services, Risk Management, Institutional and Consumer Businesses, Financial Reporting, Legal Matters, and Regulatory and Compliance. As the former Chief Executive Officer of Citibank, N.A., he has a deep understanding of all aspects of Citi’s institutional and consumer businesses and has managed Citibank’s capital structure, regulatory compliance, enterprise risk, and strategic planning. While a member of management, he provided oversight of Citi’s CCAR process, which enables him to significantly enhance the Board and the Risk Management Committee’s oversight of this process. Mr. McQuade has acquired valuable financial services knowledge and expertise through his service in management positions such as CEO, president, vice chairman, chief financial officer, and chief operating officer of several global, publicly traded financial institutions. He has developed broad experience in consumer banking and commercial banking through his previous experience at Bank of America, FleetBoston Financial, and Merrill Lynch. In addition, his prior board service at XL Group, Ltd. gives him greater insight into the oversight of global operations and regulated businesses. Mr. McQuade’s extensive financial services background also adds significant value to Citi’s and Citibank’s relationships with various regulators and stakeholders.Consumer Business and Financial Services Institutional Business Regulatory and Compliance Risk Management
www.citigroup.com
Director of Citigroup Other Directorships: Previous Directorships within the last five years: Other Activities:60 PROPOSAL 1: ELECTION OF DIRECTORS
Record Date
Position, Principal Occupation, Business Experience and Directorships
Age: 64
since 2013Name and Ageat Record DatePosition, Principal Occupation, Business Experience and DirectorshipsAnthony M. Santomero69Former PresidentFederal Reserve Bank of Philadelphia•
Hewlett Packard Enterprise Company and Box Inc.
None
NoneSenior Advisor, McKinsey & Company – 2006 to January 2008•President, Federal Reserve Bank of Philadelphia – 2000 to 2006•Richard K. Mellon Professor, Finance, The Wharton School at the University of Pennsylvania – 1984 to 2002•Director of Citigroup since 2009•Director of Citibank, N.A. since 2009•Other Directorships: RenaissanceRe Holdings, Ltd. and Penn Mutual Life Insurance Company•Previous Directorships within the last five years: B of A Fund Series Trust•Other Activities: Columbia Funds Series TrustSkills and QualificationsDr. Santomero is a seasoned economist and economic policy advisor and has been nominated to serve on the Board because of his extensive experience in the areas of Risk Management, Regulatory Compliance, Corporate Governance, and Financial Reporting. Among many other distinguished positions at which he had wide-ranging risk and regulatory experience, Dr. Santomero was most recently a Senior Advisor at McKinsey & Company, served as the President of the Federal Reserve Bank of Philadelphia from 2000 to 2006, and was Chair of the System’s Committee on Credit and Risk Management, and was a member of the Financial Services Policy Committee and the Payments System Policy Advisory Committee. As the Richard K. Mellon Professor of Finance at The Wharton School of the University of Pennsylvania and Deputy Dean of the School, Dr. Santomero’s particular focus was on issues related to managing risk at the firm level as well as ways to improve productivity and performance, while working closely with industry executives and practitioners to ensure that the research was informed by the operating realities and competitive demands facing industry participants as they pursue competitive excellence. Through his service on Citi’s Risk Management and Audit Committees as well as the Investment and Risk Management Committee of RenaissanceRe Holdings, he has deepened his risk management experience.
General Atlantic LLCwww.citigroup.com 41BackMr. Reiner is an experienced executive and has been nominated to Contentsserve on the Board because of his experience in the areas of Operations and Technology, Financial Reporting, Compensation, Corporate Governance, and International and Consumer Businesses. In his current role as Operating Partner of General Atlantic LLC, he has continued to broaden his considerable expertise in technology and management. Through his tenure as Chief Information Officer at General Electric, Mr. Reiner gained extensive experience in the management of a large, complex, multinational operation, developing technology innovations, strategic planning, and marketing to an international consumer and institutional customer base. He also has significant knowledge and insight in information technology through his many years of service as a partner of Boston Consulting Group, where he focused on strategic issues for technology businesses and in advising on cybersecurity issues. Mr. Reiner’s expertise as an innovative technology leader assists Citi in meeting the operational, technology, and cybersecurity challenges inherent in operating a financial services company in the 21st century. Through his service on the Hewlett Packard Board of Directors, Mr. Reiner has developed additional leadership and corporate governance expertise as the Chair of its Nominating, Governance and Social Responsibility Committee.Compensation Consumer Business and Financial Services International Business or Economics Operations and Technology
Citi 2019 Proxy Statement
Director of Citigroup Other Directorships: Previous Directorships within the last five years: Other Activities:PROPOSAL 1: ELECTION OF DIRECTORS 61
Record Date
Position, Principal Occupation, Business Experience and Directorships
Age: 64
since 2009Name and Ageat Record DatePosition, Principal Occupation, Business Experience and DirectorshipsJoan E. Spero71Senior Research ScholarColumbia University School of International and Public Affairs•
Brookfield Asset Management and Sotheby’s
Brookfield Office Properties
Accion (Chair), Columbia Business School (Board of Overseers), Girls Educational & Mentoring Services (GEMS) (Member), Hudson River Park Trust (Chair), Friends of Hudson River Park, Ideas42, International Women’s Health Coalition, Mailman School of Public Health (Board of Overseers), The After School Corporation (Member), The Economic Club of New York, Council on Foreign Relations (Member), and Hot Bread Kitchen (Board Chair)Senior Research Scholar, Columbia University School of International and Public Affairs – November 2010 to Present•Visiting Fellow at the Foundation Center – 2009 to 2010•President and CEO, Doris Duke Charitable Foundation – 1997 to 2008•Under Secretary of State, Economics, Business and Agricultural Affairs – 1993 to 1997•Executive Vice President, Corporate Affairs and Communications, American Express – 1991 to 1993•Senior Vice President and Treasurer, American Express – 1989 to 1991•Vice President, Corporate Affairs, American Express – 1983 to 1989•Vice President, Corporate Strategic Planning, American Express – 1981 to 1983•Director of Citigroup since 2012•Director of Citibank, N.A. since 2012•Other Directorships: IBM and International Paper•Previous Directorships within the last five years: ING Groep N.V.•Other Activities: Council of American Ambassadors (Member), Academy of Diplomacy (Member), American Philosophical Society (Member), Wisconsin Alumni Research Foundation (Trustee), International Center for Transitional Justice (Trustee), Columbia University (Trustee Emeritus), Amherst College (Trustee Emeritus), Council on Foreign Relations (Trustee Emeritus) and Brookings Institution (Trustee Emeritus)Skills and QualificationsMs. Spero has wide-ranging experience, having served as a senior government official, a financial services executive, an academic, a seasoned board member, and as a leader in the not-for-profit sector. She has been nominated to serve on the Board because of her Corporate Governance, Regulatory Compliance, International Business and Economics, Consumer Business, Financial Services, Corporate Affairs, Compensation, and Financial Reporting experience. Ms. Spero gained extensive regulatory compliance and international business experience during her tenure as U.S. Under Secretary of State for Economic, Business and Agricultural Affairs and U.S. Ambassador to the United Nations for Economic and Social Affairs. As an executive at American Express Company, including her roles as Executive Vice President of Corporate Affairs and Communications and as Senior Vice President and Treasurer, she developed expertise in financial services, consumer business and corporate affairs. As a current or former member of the Boards of Directors of IBM, International Paper, ING, Delta Airlines, and First Data Corporation, including her service on the Compensation and Audit Committees of IBM, the Governance Committee of International Paper, and the Public Policy and Environment Committee of International Paper, she gained extensive experience in corporate governance, consumer business, financial reporting, compensation, and corporate affairs. Her roles as the President of the Doris Duke Foundation, the visiting fellow at the Foundation Center, where she conducted research on the role of American Private Foundations in U.S. foreign policy and in the global system, and senior research scholar at Columbia University School of International and Public Affairs, where she researches and writes about international philanthropy and its role in the global system — as well as her other service in the non-profit sector — have given her extensive insights into corporate affairs matters.Citi 2016 Proxy Statement42BackMs. Taylor is an experienced financial services executive and regulator and has been nominated to Contentsserve on the Board because of her wide-ranging experience in the areas of Financial Services, Institutional Business, Regulatory and Compliance, Risk Management, Corporate Affairs, Compensation, Corporate Governance, and Legal Matters. Citi’s Board provides oversight of Citi’s banking businesses and regulatory relationship, areas where Ms. Taylor is highly skilled; it also provides oversight of Citi’s compensation programs and governance, including public affairs matters, where Ms. Taylor is able to use her valuable perspective to enhance the Board’s oversight. Ms. Taylor has broad bank regulatory and risk management experience, having served as the Superintendent of Banks for the New York State Banking Department. Her financial services and corporate business experience includes in-depth private equity, fund management, and investment banking experience as a Vice Chair at Solera Capital LLC and as a Managing Director of Wolfensohn Fund Management, L.P., a fund manager; and Founding Partner and President of M.R. Beal & Company, a full-service investment banking firm. Ms. Taylor also served as Chief Financial Officer of the Long Island Power Authority. In addition, through her work on the Sotheby’s Compensation Committee, the Brookfield Properties Governance Committee, as chair of Accion and the Hudson River Park Trust, and former chair of the New York Women’s Foundation and the YMCA of Greater New York, Ms. Taylor has gained additional knowledge in corporate affairs, corporate governance, financial reporting, compensation, and legal matters.Compensation Corporate Affairs Corporate Governance Regulatory and Compliance
www.citigroup.com
Director of Citigroup Director of Citibank, N.A. Other Directorships: Previous Directorships within the last five years: Other Activities:62 PROPOSAL 1: ELECTION OF DIRECTORS
Record Date
Position, Principal Occupation, Business Experience and Directorships
Age: 63
since 2013Name and Ageat Record DatePosition, Principal Occupation, Business Experience and DirectorshipsDiana L. Taylor61Vice ChairSolera Capital LLC•
since 2013
Emerson Electric Co., Intrexon Corporation and Northrop Grumman Corporation
None
Boy Scouts of America (Chairman), Boy Scouts of Greater St. Louis (Board Member), World Scout Foundation (Board Member), Theatre Forward (Board Member), Municipal Theatre Association of St. Louis (Board Member), and Forest Park Forever (Board Member)Vice Chair, Solera Capital LLC – July 2014 to Present•Managing Director, Wolfensohn Fund Management, L.P. – 2007 to 2014•Superintendent of Banks, State of New York – 2003 to 2007•Deputy Secretary, Governor Pataki, State of New York – 2002 to 2003•Chief Financial Officer, Long Island Power Authority – 2001 to 2002•Vice President, KeySpan Energy – 1999 to 2001•Assistant Secretary, Governor Pataki, State of New York – 1996 to 1999•Executive Vice President, Muriel Siebert & Company – 1993 to 1994•President, M.R. Beal & Company – 1988 to 1993 and 1995 to 1996•Director of Citigroup since 2009•Director of Citibank, N.A. since 2013•Other Directorships: Brookfield Asset Management and Sotheby’s•Previous Directorships within the last five years: Brookfield Office Properties•Other Activities: Accion (Chair), AMFAR, Columbia Business School (Board of Overseers), Dartmouth College (Trustee), Girls Educational & Mentoring Services (GEMS) (Member), Hudson River Park Trust (Chair), Friends of Hudson River Park, Ideas42, International Women’s Health Coalition, Mailman School of Public Health (Board of Overseers), Mayo Clinic (Member), The After School Corporation (Member), Economic Club of New York, and Council on Foreign Relations (Member)Skills and QualificationsMs. Taylor is an experienced financial services executive and regulator and has been nominated to serve on the Board because of her wide-ranging experience in the areas of Financial Services, Institutional Business, Regulatory Compliance, Risk Management, Corporate Affairs, Compensation, Corporate Governance, Financial Reporting, and Legal Matters. Ms. Taylor has extensive bank regulatory and risk management experience having served as the Superintendent of Banks for the New York State Banking Department. Her financial services and corporate business experience includes in-depth private equity, fund management, and investment banking experience as a Vice Chair at Solera Capital LLC and as a Managing Director of Wolfensohn Fund Management, L.P., a fund manager; Founding Partner and President of M.R. Beal & Company, a full service investment banking firm; and through various executive positions with Donaldson, Lufkin & Jenrette, Lehman Brothers Kuhn Loeb, Inc., and Smith Barney, Harris Upham & Co. Earlier in her career, Ms. Taylor served as Chief Financial Officer of the Long Island Power Authority. In addition, through her work on the Sotheby’s Compensation Committee, the Brookfield Properties Governance Committee, on the Compensation Committee of, and as a member of the Audit Committee of, the Dartmouth Board of Trustees, and as chair of Accion and the Hudson River Park Trust, and former chair of the New York Women’s Foundation, and the YMCA of Greater New York, Ms. Taylor has gained additional experience in corporate affairs, corporate governance, financial reporting, compensation, and legal matters.
Ernst & Youngwww.citigroup.com 43BackMr. Turley, the retired Global Chair and CEO of Ernst & Young, brings to ContentsCiti his insights and expertise from his exceptional career in the accounting profession, both in the U.S. and internationally, as well as his executive experience from leading a major public accounting firm. Mr. Turley has been nominated to serve on the Board because of his extensive knowledge and expertise in the areas of Financial Reporting, Legal Matters, Corporate Affairs, International Business, Regulatory and Compliance, and Risk Management. As Chair of the Audit Committee and a member of the Risk Management Committee, Mr. Turley adds significant value to the Board’s oversight of financial reporting, regulatory matters, compliance, internal audit, legal issues, and risk. Having served as Chair and CEO of Ernst & Young, he has developed significant expertise in the areas of compensation, litigation, and corporate affairs. Mr. Turley, the former Chairman of the Board of Catalyst, is recognized as a champion of diversity, having received the prestigious Crystal Leadership Award for his support of equal marketplace access for women and the groundbreaking programs he oversaw at Ernst & Young that enable the strategic development of women-owned businesses, and provides guidance to Citi on diversity matters as well.Financial Reporting International Business or Economics Regulatory and Compliance Risk Management
Citi 2019 Proxy Statement
Director of Citigroup Other Directorships: Previous Directorships within the last five years: Other Activities: Managing Director of U.S. Jobs and Economic Opportunity Rockefeller Foundation Ms. Wright is an experienced financial services executive and through her prominent roles in the areas of Financial Services, Consumer Business, Risk Management, Corporate Affairs, Financial Reporting, and Regulatory and Compliance, has been nominated to serve on the Board. As a highly regulated financial services company with an extensive consumer business and a commitment to community development, Citi PROPOSAL 1: ELECTION OF DIRECTORS 63
Record Date
Position, Principal Occupation, Business Experience and Directorships
Age: 61
since 2017Name and Age
None
Carver Bancorp, Inc., Time Warner Inc. and Voya Financial, Inc.at Record DatePosition, Principal Occupation, Business Experience and DirectorshipsWilliam S. Thompson, Jr.70Former Chief Executive OfficerPacific Investment Management Company (PIMCO)•Chief Executive Officer, PIMCO – 1993 to January 2009•Chairman, Salomon Brothers Asia Ltd. – 1991 to 1993•Salomon Brothers Inc. – 1975 to 1993•Director of Citigroup since 2009, Chairman, Personnel and Compensation Committee since 2014•Other Directorships: None•Previous Directorships within the last five years: None•Other Activities: Pacific Life Corporation, Pacific Symphony Orchestra (Life Director), Thompson Foundation for Autism (Chair), Thompson Family Foundation (President), University of Missouri (President’s Financial Advisory Council), and Orange County Community Foundation (Advisory Director)Skills and QualificationsMr. Thompson is an experienced financial services executive and has been nominated to serve on the Board of Directors because of his extensive experience in the areas of Financial Services, Corporate Governance, Financial Reporting, Compensation, Legal Matters, International Business, Institutional and Consumer Business, and Risk Management. As Chief Executive Officer of PIMCO from 1993 to 2009, Chairman of Salomon Brothers Asia Ltd. in Tokyo from 1991 to 1993, and head of Corporate Finance, Western Region and Head of Institutional Sales, Western Region, at Salomon Brothers, Mr. Thompson gained extensive financial services, and institutional, consumer and international business, skills and experience. As a former Chief Executive Officer, and through his service as a member of the Risk Management Committee, Personnel and Compensation Committee with Citi, and previously Lead Director of Pacific Life Corporation, Mr. Thompson developed extensive skills and experience in corporate governance, financial reporting, compensation, and legal matters.2016 Proxy Statement44Backbenefits from having Directors, like Ms. Wright, with distinguished careers in financial services and who are knowledgeable about, and committed to, Contentscommunity development. Ms. Wright’s experience as the former Chairman and Chief Executive Officer of Carver Bancorp, Inc. and Carver Federal Savings Bank, where she acquired significant experience in personal and commercial banking, strategic planning, marketing, regulatory compliance, financial reporting, and personnel matters, brings leadership qualities to Citi and demonstrates a practical understanding of organizations, processes, strategy, and risk management. She has valuable insight into corporate affairs through her current role as a Managing Director of U.S. Jobs and Economic Opportunity at The Rockefeller Foundation. Ms. Wright has also developed financial reporting experience as former Chair of the Audit and Finance Committee at Time Warner Inc. As a former board member of Voya Financial, Inc., and through her prior long-term service as a director of Kraft Foods Inc., she also brings the perspective and in-depth knowledge of overseeing firms that provide a wide variety of consumer products to customers.Consumer Business and Financial Services Financial Reporting Regulatory and Compliance Risk Management
www.citigroup.com
Director of Citigroup Other Directorships: Previous Directorships within the last five years: Other Activities:64 PROPOSAL 1: ELECTION OF DIRECTORS
Record Date
Position, Principal Occupation, Business Experience and Directorships
Ponce de Leon
Age: 67
since 2010Name and Ageat Record DatePosition, Principal Occupation, Business Experience and DirectorshipsJames S. Turley60Former Chairman and CEOErnst & Young•
Alcoa Corp. and Procter & Gamble Company
Grupo Prisa
BP (Member of International Advisory Board), Credit Suisse Research Institute (Advisor), The Group of Thirty (Member), Natural Resource Governance Institute (Chair of the Board), and Presidential Counselor of Laureate International UniversitiesChairman and CEO, Ernst & Young – 2001 to June 2013•Regional Managing Partner, Ernst & Young – 1994 to 2001•Director of Citigroup since 2013•Director of Citibank, N.A. since 2013•Other Directorships: Emerson Electric Co., Intrexon Corporation and Northrop Grumman Corporation•Previous Directorships within the last five years: None•Other Activities: Boy Scouts of America (Board Member), Boy Scouts of Greater St. Louis (Board Member), World Scout Foundation (Board Member), Committee for Economic Development (Trustee), Theatre Forward (Chair), and Municipal Theatre Association of St. Louis (Board Member)Skills and QualificationsMr. Turley, the retired Global Chair and CEO of Ernst & Young, brings to Citi his insights and expertise from his exceptional career in the accounting profession, both in the U.S. and internationally, as well as his executive experience from leading a major public accounting firm. Mr. Turley has been nominated to serve on the Board because of his extensive knowledge and expertise in the areas of Financial Reporting, Legal Matters, International Business, Regulatory Compliance, and Risk Management. As Chair of the Audit Committee and a member of the Risk Management Committee, Mr. Turley adds significant value to the Board’s oversight of financial reporting, regulatory matters, compliance, internal audit, legal issues and risk. Having served as Chair and CEO of Ernst & Young, he has developed significant expertise in the areas of compensation, litigation, corporate affairs, and corporate governance. Mr. Turley, the former Chairman of the Board of Catalyst, recognized as a champion of diversity, having received the prestigious Crystal Leadership Award for his support of equal marketplace access for women and the groundbreaking programs he oversaw at Ernst & Young that enable the strategic development of women-owned businesses, provides guidance to Citi on diversity matters as well.
International Economics and Politics, Yale Universitywww.citigroup.com 45BackMr. Zedillo Ponce de Leon is the former President of Mexico, a seasoned economist, and an academic. He has been nominated to Contentsserve on the Board because of his extensive experience in the areas of International Business or Economics, Corporate Affairs, Risk Management, and Corporate Governance. As a financial services company with a significant business in Mexico, Citi benefits from having Mr. Zedillo Ponce de Leon on its Board to provide a greater understanding of the business, governmental, regulatory, and economic environment in Mexico. Through his extensive governmental experience, including his service from 1978 to 1987 at the Central Bank of Mexico, as Undersecretary of the Budget for the Mexican government from 1987 to 1988, as Secretary of Economic Programming and the Budget from 1988 to 1992, and as President of Mexico from 1994 to 2000, as well as his academic experience, including his roles as the Director of the Center for the Study of Globalization, Professor of International Economics and Politics and Professor of International and Area Studies at Yale, he has had extensive experience in the areas of international business, regulatory compliance, and risk management. His service as Chair of the Global Development Network, Chair of the High Level Commission on Modernization of World Bank Group Governance, on the Group of Thirty, and on the International Advisory Boards of BP and the Coca-Cola Company, has given him extensive international business and corporate affairs experience. Mr. Zedillo Ponce de Leon has gained experience in risk management, corporate governance, and corporate affairs as a member of the Board of Alcoa Corp., serving on the Audit Committee and Public Issues Committee; at Procter & Gamble Company, as a member of the Governance and Public Responsibility Committee; as a member of the Innovation and Technology Committee, Grupo Prisa of Spain; as a past Director of the Union Pacific Corporation, where he served on the Audit and Finance Committees; as a past Director of EDS, where he served on the Governance Committee; and as Director of Grupo Prisa of Spain until November 2017, where he served as Chair of the Governance Committee.Corporate Affairs Corporate Governance International Business or Economics Risk Management
Citi 2019 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS 65 Name and Ageat Record DatePosition, Principal Occupation, Business Experience and DirectorshipsErnesto ZedilloPonce de Leon64Director, Center for the Study of Globalization and Professor in the Field of International Economics and Politics, Yale University•Director, Center for the Study of Globalization and Professor in the Field of International Economics and Politics, Yale University – September 2002 to Present•President of Mexico – 1994 to 2000•Secretary of Education, Government of Mexico – 1992 to 1993•Secretary of Economic Programming and the Budget, Government of Mexico – 1988 to 1992•Undersecretary of the Budget, Government of Mexico – 1987 to 1988•Banco de Mexico – Economist, Deputy Manager of Economic Research, Director General of FICORCA, Deputy Director – 1978 to 1987•Director of Citigroup since 2010•Other Directorships: Alcoa Inc., Procter & Gamble Company, and Grupo Prisa•Previous Directorships within the last five years: None•Other Activities: BP (Member of International Advisory Board), Credit Suisse Research Institute (Advisor), The Group of Thirty (Member), Inter-American Dialogue (Co-Chair of Board), and Natural Resource Governance Institute (Chair of the Board), and Presidential Counselor of Laureate International UniversitiesSkills and QualificationsMr. Zedillo Ponce de Leon is the former President of Mexico, a seasoned economist and academic. He has been nominated to serve on the Board because of his extensive experience in the areas of International Business and Economics, Financial Services, Regulatory Compliance, Corporate Affairs, Financial Reporting, Risk Management, and Corporate Governance. Through his extensive governmental experience, including his service from 1978 to 1987 at the Central Bank of Mexico, as Undersecretary of Budget for the Mexican government from 1987 to 1988, as Secretary of Economic Programming and the Budget from 1988 to 1992, and as President of Mexico from 1994 to 2000, as well as his academic experience, including his roles as the Director of the Center for the Study of Globalization at Yale and as Professor of International Economics and Politics and Professor of International and Area Studies at Yale, he has had extensive experience in the areas of international business, financial services, regulatory compliance, and risk management. His service as Chair of the Global Development Network, as Chair of the High Level Commission on Modernization of World Bank Group Governance, on the Group of Thirty, and on the International Advisory Boards of BP and the Coca-Cola Company, has given him extensive international business, financial services, and corporate affairs experience. As a member of the Board of Alcoa Inc., he serves on the Audit Committee and Public Issues Committee, and at Procter & Gamble Company, he is a member of the Governance and Public Responsibility Committee, and a member of the Innovation and Technology Committee, Grupo Prisa of Spain and as a past Director of the Union Pacific Corporation, where he served on the Audit and Finance Committees, and as a Director of EDS, where he served on the Governance Committee, Mr. Zedillo Ponce de Leon has gained experience in financial reporting, risk management, corporate governance, and corporate affairs.Citi 2016 Proxy Statement46ELECTION OF DIRECTORSDIRECTORS’ COMPENSATIONDirectors’ compensation is determined by the Board. Since
The key objectives of our Director Compensation Program are to attract qualified talent, provide pay that is commensurate with the substantial time commitment associated with service, and to foster commonality of interest between Board members and our stockholders.
Directors’ compensation is determined by the Board and the Nomination, Governance and Public Affairs Committee makes recommendations to the Board based on periodic benchmarking assessments and advice received from FW Cook, its independent advisor. In making recommendations to the Board, the Committee considers the competitive positioning of the aggregate and individual components of compensation, as well as the mix of pay and structure versus both direct competitors and other comparable organizations. The Committee also considers the unique skill set required to serve on our Board and the intense time commitment associated with preparation for and attendance at meetings of the Board and its committees as well as external commitments, such as engagement with our stockholders and regulators. Since our initial public offering in 1986, Citi has paid outside Directors all or a portion of their compensation in common stock to ensure that the Directors have an ownership interest in common with other stockholders.
In 2018, FW Cook provided benchmarking assessments and advice on peer and broad market practices. After considering the assessments and advice as well as the factors described above, the Committee determined that the current Director Compensation Program payment structure was appropriate.
Annual Cash Retainer and Deferred Stock Award |
Non-employee Directors receive an annual cash retainer of $75,000 and a deferred stock award valued at $150,000. The deferred stock award is generally granted on the same date that annual incentives are granted to the senior executives. The deferred stock award generally becomes distributable on the second anniversary of the date of the grant, and Directors may elect to defer receipt of the award beyond that date. In the event a Director leaves the Board voluntarily prior to the conclusion of the two-year deferral period and before attaining age 72, the deferred stock award will be pro-rated based on the number of calendar quarters the Director served. Directors may elect to receive all or a portion of their cash retainer in the form of common stock, and Directors may elect to defer receipt of this common stock. |
Fees for Service on Citi’s Board Committees, Citibank’s Board, and other Board Service | |
● | A Citi Director who serves as Chair of the Audit Committee, Personnel and Compensation Committee or Risk Management Committee is entitled to an annual $50,000 Committee Chair Fee per committee. A Director who serves as Chair of any other Committee is entitled to an annual $35,000 Committee Chair Fee per committee. A Citi Director who serves as a member of the Audit Committee, Personnel and Compensation Committee, or Risk Management Committee is entitled to an annual $30,000 Committee Fee per committee. A Citi Director who serves as a member of any other Committee (excluding the Executive Committee and the Preferred Stock Committee) is entitled to an annual $15,000 Committee Fee per committee. Directors are permitted to receive all or a part of their Committee Fee(s) and Committee Chair Fee(s) in common stock. |
● | Mses. Costello and Ireland and Messrs. Hennes, McQuade, Santomero, and Turley serve on Citibank’s Board of Directors. Each non-employee Director of Citibank is entitled to receive $25,000 as an annual cash retainer. The Chair of Citibank’s Board is entitled to an annual $50,000 Chair Fee. |
● | Citi reimburses its Board members for expenses incurred in attending Board and Committee meetings or performing other services for Citi in their capacities as Directors. Such expenses include food, lodging, and transportation. |
● | All Annual Retainers, Committee Fees, and Committee Chair Fees for Citi and Citibank are paid in four equal quarterly installments per annum. These fees are reported in the Non-Employee Director Compensation Table on page 67. |
● | Ms. Taylor serves on the Board of Citigroup Global Markets Limited, an international subsidiary Board of Citi. |
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66 | PROPOSAL 1: ELECTION OF DIRECTORS |
Chair Compensation |
Citi’s Chair receives annual compensation in the form of a $500,000 Chair Fee, the amount of which was set by the Board in 2012 in recognition of the significant commitment of time and energy required to serve as Citi’s Chair. This Fee is in addition to the Retainer and the Deferred Stock Award payable to all Directors, as well as any relevant Committee Chair and/or Committee Fees. Throughout his term as Chair, Mr. O’Neill, our prior Chair, waived receipt of any compensation other than the Chair Fee, which was payable 75% in deferred shares of Citi common stock and 25% in cash or deferred shares of Citi common stock. The three elements of Chair compensation for our new Chair, Mr. Dugan – the Chair Fee, the Retainer and Deferred Stock Award, and Committee Fees – remain unchanged from prior practice except regarding the mix of cash and equity in the Chair Fee; specifically, beginning in 2019, the Chair Fee is payable 50% in deferred shares of Citi’s common stock and 50% in cash or deferred shares of Citi’s common stock. Mr. Dugan has agreed to |
What We Do | What We Don’t Do | |
✓Citi’s Director Compensation Program is primarily equity based. ✓Directors have a robust Stock Ownership Commitment. ✓Subject to approval by stockholders at the Annual Meeting, Citi’s 2019 Stock Incentive Plan provides that the maximum number of shares subject to awards to an individual Director in a calendar year, taken together with any cash fees paid during the calendar year to the Director for services as a member of the Board, | ✕Directors who are employees of Citi or its subsidiaries do not receive any compensation for their services as Directors. ✕Directors are not paid Meeting Fees. ✕Citi does not offer a Retirement Program for its Directors. ✕Directors are not permitted to hedge or pledge their Citi common stock. |
Citi 2019 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS | 67 |
The following table provides information on 2018 compensation for non-employee Directors:
2018 DIRECTOR COMPENSATION
Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Total ($) | ||||||
Ellen M. Costello | $ | 171,250 | $ | 150,000 | $ | 321,250 | |||
John C. Dugan | $ | 165,000 | $ | 150,000 | $ | 315,000 | |||
Duncan P. Hennes | $ | 260,000 | $ | 150,000 | $ | 410,000 | |||
Peter B. Henry | $ | 146,250 | $ | 150,000 | $ | 296,250 | |||
Franz B. Humer | $ | 170,000 | $ | 150,000 | $ | 320,000 | |||
S. Leslie Ireland | $ | 130,000 | $ | 150,000 | $ | 280,000 | |||
Lew W. Jacobs, IV | $ | 75,000 | $ | 75,000 | $ | 150,000 | |||
Renée J. James | $ | 135,000 | $ | 150,000 | $ | 285,000 | |||
Eugene M. McQuade | $ | 180,000 | $ | 150,000 | $ | 330,000 | |||
Michael E. O’Neill(3) | $ | 500,000 | — | $ | 500,000 | ||||
Gary M. Reiner | $ | 155,000 | $ | 150,000 | $ | 305,000 | |||
Anthony M. Santomero | $ | 260,000 | $ | 150,000 | $ | 410,000 | |||
Diana L. Taylor | $ | 220,000 | $ | 150,000 | $ | 370,000 | |||
James S. Turley | $ | 260,000 | $ | 150,000 | $ | 410,000 | |||
Deborah C. Wright | $ | 135,000 | $ | 150,000 | $ | 285,000 | |||
Ernesto Zedillo Ponce de Leon | $ | 135,000 | $ | 150,000 | $ | 285,000 |
(1) | Directors may elect to receive all or a portion of
www.citigroup.com |
www.citigroup.com 47
68 PROPOSAL 1: ELECTION OF DIRECTORS
The following table provides information on 2015 compensation for non-employee Directors.
2015 Director Compensation
Name | Fees | Stock | All Other | Total | ||||||||
Duncan P. Hennes | $ | 232,500 | $ | 150,000 | – | $ | 382,500 | |||||
Peter B. Henry | $ | 62,500 | $ | 75,000 | – | $ | 137,500 | |||||
Franz B. Humer | $ | 110,000 | $ | 150,000 | – | $ | 260,000 | |||||
Eugene M. McQuade(4) | $ | 80,000 | $ | 75,000 | – | $ | 155,000 | |||||
Michael E. O’Neill(5) | $ | 500,000 | – | – | $ | 500,000 | ||||||
Gary M. Reiner | $ | 135,000 | $ | 150,000 | – | $ | 285,000 | |||||
Judith Rodin | $ | 100,000 | $ | 150,000 | – | $ | 250,000 | |||||
Robert L. Ryan(6) | $ | 65,000 | $ | 37,500 | – | $ | 102,500 | |||||
Anthony M. Santomero | $ | 240,000 | $ | 150,000 | – | $ | 390,000 | |||||
Joan E. Spero | $ | 155,000 | $ | 150,000 | – | $ | 305,000 | |||||
Diana L. Taylor | $ | 210,000 | $ | 150,000 | – | $ | 360,000 | |||||
William S. Thompson | $ | 135,000 | $ | 150,000 | – | $ | 285,000 | |||||
James S. Turley | $ | 205,000 | $ | 150,000 | – | $ | 355,000 | |||||
Ernesto Zedillo Ponce de Leon | $ | 100,000 | $ | 150,000 | – | $ | 250,000 |
(2) | The values in this column represent the aggregate grant date fair values of the 2018 Deferred Stock Awards. The grant date fair value is based on a grant date of February 15, 2018 and a grant price determined by the average NYSE closing prices of Citi’s common stock on the immediately preceding five trading days. The amounts in the chart below represent Deferred Stock Awards only and not shares awarded in lieu of the cash retainer and/or Chair or Committee Chair Fees. The grant date fair value of the Deferred Stock Awards is set forth below: |
Director | Deferred Stock Granted in 2018 (#) | Grant Date Fair Value ($) | |||
Ellen M. Costello | 2,015 | $ | 150,000 | ||
John C. Dugan | 2,015 | $ | 150,000 | ||
Duncan P. Hennes | 2,015 | $ | 150,000 | ||
Peter B. Henry | 2,015 | $ | 150,000 | ||
Franz B. Humer | 2,015 | $ | 150,000 | ||
S. Leslie Ireland | 2,015 | $ | 150,000 | ||
Lew W. Jacobs, IV* | 1,028 | $ | 75,000 | ||
Renée J. James | 2,015 | $ | 150,000 | ||
Eugene M. McQuade | 2,015 | $ | 150,000 | ||
Michael E. O’Neill | — | — | |||
Gary M. Reiner | 2,015 | $ | 150,000 | ||
Anthony M. Santomero | 2,015 | $ | 150,000 | ||
Diana L. Taylor | 2,015 | $ | 150,000 | ||
James S. Turley | 2,015 | $ | 150,000 | ||
Deborah C. Wright | 2,015 | $ | 150,000 | ||
Ernesto Zedillo Ponce de Leon | 2,015 | $ | 150,000 |
* | The Deferred Stock Award granted to Mr. Jacobs was prorated based on the date he commenced service on Citi’s Board. |
(3) | Mr. O’Neill received an annual Chair Fee of $500,000 for his service as Citi’s Chair. He elected to waive all other fees in relation to his service as a Director or Committee member. |
The aggregate number of shares of deferred stock outstanding for each Director at the end of 2018 was:
(1)
Name | Number of Shares | |
Ellen M. Costello | 15,884 | |
John C. Dugan | 2,515 | |
Duncan P. Hennes | 15,212 | |
Peter B. Henry | 15,971 | |
Franz B. Humer | 23,206 | |
S. Leslie Ireland | 2,565 | |
Lew W. Jacobs, IV | 1,036 | |
Renée J. James | 8,925 | |
Eugene M. McQuade | 8,613 | |
Michael E. O’Neill | 89,987 | |
Gary M. Reiner | 4,564 | |
Anthony M. Santomero | 38,159 | |
Diana L. Taylor | 31,618 | |
James S. Turley | 15,212 | |
Deborah C. Wright | 4,692 | |
Ernesto Zedillo Ponce de Leon | 30,208 |
Citi 2019 Proxy Statement
69 |
The Audit Committee (“Committee”) operates under a charter that specifies the scope of the Committee’s responsibilities and how it carries out those responsibilities.
The Board of Directors has determined that all seven members of the Committee are independent based upon the standards adopted by the Board, which incorporate the independence requirements under applicable laws, rules and regulations.
Management is responsible for the financial reporting process, the system of internal controls, including internal control over financial reporting, risk management and procedures designed to ensure compliance with accounting standards and applicable laws and regulations. KPMG LLP, Citigroup’s independent registered public accounting firm (“independent auditors”) is responsible for the integrated audit of the consolidated financial statements and internal control over financial reporting. The Committee’s responsibility is to monitor and oversee these processes and procedures. The members of the Committee are not professionally engaged in the practice of accounting or auditing and are not professionals in these fields. The Committee relies, without independent verification, on the information provided to us and on the representations made by management regarding the effectiveness of internal control over financial reporting, that the financial statements have been prepared with integrity and objectivity and that such financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. The Committee also relies on the opinions of the independent auditors on the consolidated financial statements and the effectiveness of internal control over financial reporting.
The Committee’s meetings facilitate communication among the members of the Committee, management, the internal auditors, and Citigroup’s independent auditors. The Committee separately met with each of the internal and independent auditors with and without management, to discuss the results of their examinations and their observations and recommendations regarding Citigroup’s internal controls. The Committee also discussed with Citigroup’s independent auditors all communications required by PCAOB Auditing Standard Nos. 1301 and 2410.
The Committee reviewed and discussed the audited consolidated financial statements of Citigroup as of and for the year ended December 31, 2018 with management, the internal auditors, and Citigroup’s independent auditors.
The Committee has received the written disclosures required by PCAOB Rule 3526 - “Communication with Audit Committees Concerning Independence.” The Committee discussed with the independent auditors any relationships that may have an impact on their objectivity and independence and satisfied itself as to the auditors’ independence.
The Committee has reviewed and approved the amount of fees paid to the independent auditors for audit, audit related and tax compliance and other services. The Committee concluded that the provision of services by the independent auditors did not impair their independence.
Based on the above-mentioned review and discussions, and subject to the limitations on our role and responsibilities described above and in the Committee charter, the Committee recommended to the Board that Citigroup’s audited consolidated financial statements be included in Citigroup’s Annual Report on Form 10-K for the year ended December 31, 2018 for filing with the SEC.
The Audit Committee:
James S. Turley (Chair)
Ellen M. Costello
John C. Dugan
Peter B. Henry
Lew W. (Jay) Jacobs, IV
Anthony M. Santomero
Deborah C. Wright
Dated: March 5, 2019
www.citigroup.com
70 |
Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm
The Audit Committee has selected KPMG LLP (KPMG) as the independent registered public accounting firm of Citi for 2019. KPMG has served as the independent registered public accounting firm of Citi and its predecessors since 1969.
Arrangements have been made for representatives of KPMG to attend the 2019 Annual Meeting. The representatives will have the opportunity to make a statement, if they desire to do so, and will be available to respond to appropriate stockholder questions.
Disclosure of Independent Registered Public Accounting Firm Fees
The following is a description of the fees earned by KPMG for services rendered to Citi for the years ended December 31, 2018 and 2017:
2018 | 2017 | |||||
(in millions of dollars) | ||||||
Audit Fees | $ | 64.2 | $ | 64.7 | ||
Audit-Related Fees | $ | 24.5 | $ | 22.8 | ||
Tax Fees | $ | 10.1 | $ | 10.3 | ||
All Other Fees | $ | 0.0 | $ | 0.0 | ||
Total Fees | $ | 98.8 | $ | 97.8 |
Audit Fees
This includes fees earned by KPMG in connection with the annual integrated audits of Citi’s consolidated financial statements and internal control over financial reporting under Sarbanes-Oxley Section 404, audits of subsidiary financial statements, comfort letters and consents related to SEC registration statements and other capital-raising activities and certain reports relating to Citi’s regulatory filings, reports on internal control reviews required by regulators, evaluation of accounting for completed transactions, and reviews of Citi’s interim financial statements.
Audit-Related Fees
This includes fees for services performed by KPMG that are closely related to audits and in many cases could only be provided by our independent registered public accounting firm. Such services may include accounting consultations, internal control reviews not required by regulators, securitization-related services, employee benefit plan audits, certain attestation services as well as certain agreed upon procedures, and due diligence services related to contemplated mergers and acquisitions.
Tax Fees
This includes preparation and review of corporate tax returns, expense allocation reports for tax purposes, and other tax compliance services.
All Other Fees
Citi engaged KPMG for one service in 2018 classified under “All Other Fees.” The aggregate fee amount of $11,400 is included in the total amount; however, due to rounding, this fee is not represented in the “All Other Fees” column.
Citi 2019 Proxy Statement
PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 71 |
Approval of Independent Registered Public Accounting Firm Services and Fees
Citi’s Audit Committee has reviewed and approved all fees earned in 2018 and 2017 by Citi’s independent registered public accounting firm and actively monitored the relationship between audit and non-audit services provided. The Audit Committee has concluded that the fees earned by KPMG were consistent with the maintenance of the external auditors’ independence in the conduct of its auditing functions.
The Audit Committee must pre-approve all services provided and fees earned by Citi’s independent registered public accounting firm. The Audit Committee annually considers the provision of audit services and, if appropriate, pre-approves certain defined audit fees, audit-related fees, and tax-compliance fees with specific dollar-value limits for each category of service. The Audit Committee also considers on a case-by-case basis specific engagements that are not otherwise pre-approved (e.g., internal control and certain tax compliance engagements) or that exceed pre-approved fee amounts. On an interim basis, any proposed engagement that does not fit within the definition of a pre-approved service may be presented to the Chair of the Audit Committee for approval and to the full Audit Committee at its next regular meeting.
The Accounting Firm Engagement Standard is the primary basis upon which management ensures the independence of its independent registered public accounting firm. Administration of the Standard is centralized in, and monitored by, Citi senior corporate financial management, which reports the engagements earned by KPMG throughout the year to the Audit Committee. The Standard also includes limitations on the hiring of KPMG partners and other professionals to ensure that Citi satisfies applicable auditor independence rules.
KPMG has served as the independent registered public accounting firm of Citi and its predecessors since 1969. As in prior years, Citi and its Audit Committee have engaged in a review of KPMG in connection with the Audit Committee’s consideration of whether to recommend that stockholders ratify the selection of KPMG as Citi’s independent auditor for the following year. In that review, the Audit Committee considers both the continued independence of KPMG and whether retaining KPMG is in the best interests of Citi and its stockholders. Citi’s management prepares an annual assessment of KPMG for the Audit Committee that includes (i) the results of a management survey of KPMG’s overall performance; (ii) an analysis of KPMG’s known legal risks and significant proceedings that may impair KPMG’s ability to perform Citi’s annual audit; and (iii) KPMG’s fees and services provided to Citi both on an absolute basis, noting, of course, that KPMG does not provide any non-audit services, other than those described in the Proxy Statement, to Citi, and compared to services provided by other auditing firms to peer institutions. In addition, KPMG reviews with the Audit Committee its analysis of its independence in accordance with the Accounting Firm Engagement Standard and PCAOB Rule 3526. In performing its analysis, the Audit Committee considered the length of time KPMG has been Citi’s independent auditor, the breadth and complexity of Citi’s business and its global footprint and the resulting demands placed on its auditing firm in terms of expertise in Citi’s businesses, the quantity and quality of staff, and global reach. The Audit Committee recognized the ability of KPMG to provide both the necessary expertise to audit Citi’s business and the matching global footprint to audit Citi worldwide and other factors, including the policies that KPMG follows with respect to rotation of the key audit personnel, so that there is a new partner-in-charge at least every five years. Citi’s Audit Committee oversees the process for, and ultimately approves, the selection of the independent auditor’s lead engagement partner at the five-year mandatory rotation period. At the Audit Committee’s instruction, KPMG selects candidates to be considered for the lead engagement partner role, who are then interviewed by members of Citi’s senior management. After considering the candidates recommended by KPMG, senior management makes a recommendation to the Audit Committee regarding the new lead engagement partner. After discussing the qualifications of the proposed lead engagement partner with the current lead engagement partner and senior leadership of KPMG, the members of the Audit Committee, individually and/ or as a group, interview the leading candidate. The Audit Committee then considers the appointment and votes as an Audit Committee on the selection. The Audit Committee also reviewed external data on audit quality and performance, including recent PCAOB reports on KPMG and its peer firms. Based on the results of its review this year, the Audit Committee concluded that KPMG is independent and that it is in the best interests of Citi and its investors to appoint KPMG to serve as Citi’s independent registered accounting firm for 2019.
Board Recommendation The Board recommends a voteFORratification of KPMG as Citi’s independent registered public accounting firm for 2019. |
www.citigroup.com
72 |
Proposal 3: Advisory Vote to Approve Citi’s 2018 Executive Compensation
We are seeking a nonbinding, advisory vote approving the compensation of Citi’s named executive officers as disclosed in this Proxy Statement, as required by Section 14A and Rule 14a-21(a) of the Securities Exchange Act of 1934. We ask for this advisory vote annually. You are asked to vote on the following nonbinding advisory resolution:
RESOLVED, that the compensation paid to Citi’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables, and narrative discussion, is herebyAPPROVED.
Board Recommendation The Board recommends a voteFORProposal 3, which is advisory approval of Citi’s executive compensation as disclosed in this Proxy Statement. |
Compensation Discussion and Analysis
Directors may elect to receive all or a portion of the cash retainer in the form of Citi common stock and may elect to defer receipt of Citi common stock. Certain directors elected to defer receipt of the shares. Ms. Spero and Dr. Rodin elected to receive all or a portion of their Citigroup 2015 cash retainer and/or Chair fee in deferred stock as represented in the below chart. Mr. O’Neill elected to receive his Chair Fee in deferred stock as represented in the below chart. Messrs. Henry, Reiner and Thompson elected to receive their cash retainers in stock (100%). Messrs. Henry, Reiner, and Thompson did not elect to defer their retainers; therefore, their 955, 2,059 and 2,528 shares, respectively, were distributed to them quarterly on January 1, April 1, July 1, and October 1. The share price used for the deferred stock was the average consolidated NYSE closing price of Citigroup common stock for the first ten days of the last month of the quarter.
● | 2018 Company Performance (pages 72-74); |
● | Summary of Pay Decisions (pages 75-80); |
● | 2018 Executive Compensation Awards (pages 81-93); |
● | Long-Term Incentives (pages 94-95); and |
● | Additional Compensation Practices (pages 95-98). |
The 2018 Summary Compensation Table and Compensation Information follow on pages 99-107.
2018 Company Performance |
2018 Company Performance – Solid Progress
The Personnel and Compensation Committee of the Citigroup Inc. Board of Directors (the Compensation Committee) recognized the following when awarding executive incentive pay for 2018:
● | Citi made solid progress in 2018 toward improving its profitability and returns, despite a more challenging revenue environment. |
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| Deferred Fees | |||||||
Name | Fees Paid | Number of | Value of | ||||||
Duncan P. Hennes | $ | 232,500 | – | – | |||||
Peter B. Henry | $ | 12,500 | – | – | |||||
Franz B. Humer | $ | 110,000 | – | – | |||||
Eugene M. McQuade | $ | 80,000 | – | – | |||||
Michael E. O’Neill | – | 9,368 | $ | 500,000 | |||||
Gary M. Reiner | $ | 25,000 | – | – | |||||
Judith Rodin | – | 1,873 | $ | 100,000 | |||||
Robert L. Ryan | $ | 65,000 | – | – | |||||
Anthony M. Santomero | $ | 240,000 | – | – | |||||
Joan E. Spero | $ | 25,000 | 2,447 | $ | 130,000 | ||||
Diana L. Taylor | $ | 210,000 | – | – | |||||
William S. Thompson | – | – | – | ||||||
James S. Turley | $ | 205,000 | – | – | |||||
Ernesto Zedillo Ponce de Leon | $ | 100,000 | – | – |
➢ | For 2018, Citi |
➢ | Citi’s earnings per share were $6.65 for 2018, up 25% from the prior year, compared to $5.33 per share for 2017, excluding the one-time impact of Tax Reform in both periods. |
➢ | Our return on tangible common equity(2)improved to 10.9% in 2018, compared to 8.1% in 2017, excluding the one-time impact of Tax Reform in both periods. |
(1) | Results in 2018 included a one-time benefit of $94 million, or $0.03 per share, due to the finalization of the provisional component of the impact of Tax Reform based on Citi’s analysis as well as additional guidance received from the U.S. Treasury Department. Results in 2017 included a one-time, non-cash charge of $22.6 billion, or ($8.31) per share, related to the enactment of Tax Reform. As used throughout this Compensation Discussion and Analysis, Citi’s results of operations excluding the impact of Tax Reform are non-GAAP financial measures. For a reconciliation of all adjusted results to reported results, please see Annex A to this Proxy | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) | Return on tangible common equity, or RoTCE, is a non-GAAP financial measure. For a reconciliation of all adjusted results to
Citi 2019 Proxy Statement |
____________________
www.citigroup.com
2018 Financial Objectives During our outreach to stockholders, we heard that they wanted disclosure of performance against goals used in our executive scorecards to better understand company performance. Accordingly, the chart to the right shows how Citi performed in 2018 against the principal goals we set for our executives in their scorecards. We set each 2018 goal at a level that exceeded the achievement in 2017, reflecting the challenging nature of our goals.
Relative Total Shareholder Return The group of companies shown in the following graphs is our compensation peer group. As explained on page 83, we believe this group reflects the competitive market for talent in certain key roles, including the CEO role. While our relative total shareholder returns declined from 2017 to 2018, primarily as a result of deterioration in December 2018, one- and three-year relative stock performance through November 2018 and more recent performance in 2019 are more aligned with the stronger returns for periods ending on December 31, 2017.
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Citi 2019 Proxy Statement
PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S 2018 EXECUTIVE COMPENSATION | 75 |
Summary of Pay Decisions |
Our Stockholder Engagement
Our current executive compensation program reflects extensive stockholder engagement over the past three years. Throughout this period, the Compensation Committee and management undertook a comprehensive review of our executive compensation program, and as part of this process, we held meetings with each stockholder who accepted our invitation to engage.
In 2018, we held two sets of stockholder outreach meetings with holders of meaningful percentages of our outstanding shares, given the size of our shareholder base.
● | Spring 2018:Following the awards for 2017 performance but in advance of our 2018 Annual Meeting, Mr. O’Neill, then our Board Chair, and Mr. Hennes, the Chair of our Compensation Committee, led a stockholder outreach effort seeking feedback on last year’s executive compensation awards. In this round of engagement, we spoke to stockholders representing about 27.5% of our outstanding shares. The |
● | Fall 2018/Winter 2019:In addition, in the fall of |
We were pleased with the positive feedback from our stockholders and their endorsement of our executive compensation program, which resulted in a 94.58% favorable Say on Pay vote at our 2018 Annual Meeting. In response to this favorable result, we kept the core structure of our pay program and our disclosure consistent with last year. We also increased the performance targets in the Performance Share Units awarded for 2018 performance over prior-year targets and prior-year performance to reflect our improving performance and to further align the program with stockholder interests.
OUR STOCKHOLDER-RESPONSIVE EXECUTIVE PAY PROGRAM
As set forth below, all the material features of our executive compensation program are designed to be aligned with stockholder interests and in most cases are directly responsive to stockholder feedback we have received during the past three years.
● | Transparent disclosure of annual goals.Each executive’s total incentive award (including the annual cash bonus component of the
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● | Extensive disclosure of pay rationales.Our extensive scorecard disclosure clarifies the rigorous process we use for determining compensation. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
● | Equity-based compensation.Seventy percent of the total CEO incentive opportunity is awarded as equity-based, deferred long-term incentive compensation. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
● | Operational performance metrics.Our Performance Share Unit program includes two performance metrics: return on tangible common equity and cumulative earnings per share, which are forward-looking operational metrics used by investors to assess our performance over time. We disclose the metric targets at the start of the performance period to enable stockholders to assess the challenging nature of our goals. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
● | Rigorous targets.Our Performance Share Unit metrics require substantial operational improvements for target payout and exceptional performance for maximum payout. Targets have been set at higher levels each year. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
● | Robust clawbacks.Incentive compensation is subject to broad clawbacks, as described on page 97. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
● | U.S. peer group.Our 13-firm compensation peer group is a reasonable representation of the market for executive talent in which we compete. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
● | Limit on cash bonuses.We have a $20 million limit on individual executive officer cash bonuses. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
● | Governance.We have strong compensation governance practices, including an executive stock ownership commitment. Additional details on practices we employ and avoid in support of our performance-oriented culture are set forth in the table on page 80. |
www.citigroup.com
76 | PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S 2018 EXECUTIVE COMPENSATION |
Compensation Philosophy and Framework
We seek to design our executive pay program to motivate balanced behaviors, consistent with our focus on balanced long-term strategic goals. Our Compensation Philosophy, as summarized as a set of objectives below, is designed to encourage prudent risk-taking while attracting the world-class talent necessary to Citi’s success.
OUR COMPENSATION PHILOSOPHY |
● | Reinforce a business culture based on the highest ethical standards |
● | Manage risks to Citi by encouraging prudent decision-making |
● | Reflect regulatory guidance in compensation programs |
● | Attract and retain the best talent to lead Citi to success |
● | Align compensation programs, structures, and decisions with stockholder and other stakeholder interests |
OUR LEADERSHIP ON PAY EQUITY
We continue to align our compensation programs with stakeholder interests through our pay equity disclosures, related changes to pay, and announced representation goals. In 2017, Citi was the first large U.S. financial institution to publicly release the results of a pay equity review. Our 2017 review compared compensation of women to men in the U.S., the U.K., and Germany, and, in the U.S., minorities to non-minorities. Our review adjusted pay to account for a number of factors to make the comparisons meaningful, including job function, level, and geography, and we modified pay in response to the results. In 2018, we extended our pay equity review to include employees globally, and we found that in 2018 women globally were paid on average 99% of what men are paid at Citi and that there is no statistically significant difference between what U.S. minorities and non-minorities are paid at Citi. As in 2017, we modified pay in 2018 in response to the findings.
Earlier this year, we were the first large U.S. company to disclose our unadjusted or “raw” pay gap for women and U.S. minorities, which measures median total compensation unadjusted for factors such as job function, level, and geography. The analysis shows that the median pay at Citi for women globally is 71% of the median for men, and the median pay at Citi for U.S. minorities is 93% of the median for non-minorities. We are committing to reduce the raw pay gap numbers over time by increasing the representation of women and U.S. minorities in senior and higher-paying roles. As a starting point, our goal is to increase the representation in mid- and senior-level roles to at least 40% for women globally and 8% for Black employees in the U.S. by the end of 2021.
OUR EXECUTIVE COMPENSATION FRAMEWORK |
Our Compensation Philosophy is reflected in our executive compensation Framework, which enables incentive compensation awards to closely reflect business and individual performance, consistent with our pay-for-performance approach. Full information on our executive compensation Framework appears on page 82.
Citi 2019 Proxy Statement
PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S 2018 EXECUTIVE COMPENSATION | 77 |
2018 CEO Compensation
As it has done the past several years, the Compensation Committee evaluated 2018 CEO performance using our executive compensation Framework that measures results against quantitative and qualitative goals set at the beginning of the year. As explained in more detail on page 81, we use a rating system of 1 to 5 to assess performance against each goal, with 1 being the highest (Significant Outperform) and 5 being the lowest (Significant Underperform). The green color coding signifies that a quantitative goal set for 2018 was met or exceeded.
SUMMARY OF CEO SCORECARD RESULTS |
Quantitative Goal (Glossary on Page 127) | 2018 Result(1)(2) | Rating(2) | ||
Citigroup Income from Continuing | ||||
Operations Before Taxes | $23.4 billion | 3 | ||
Citigroup Efficiency Ratio | 57.4% | 3 | ||
Citigroup Return on Tangible | ||||
Common Equity | 10.9% | 2 | ||
Citigroup Return on Assets | 0.93% | 3 | ||
Risk | ||||
Citigroup Risk Appetite Ratio | 151% | |||
Citigroup Risk Appetite Surplus | $7.61 billion | 1 |
Qualitative Goal | Rating(2) | ||
Protect and enhance | |||
our reputation | 3 | ||
Develop client-relevant | |||
value propositions | 2 | ||
Produce extraordinary | |||
client experiences | 2 | ||
Deliver our financial | |||
commitments | 3 |
(1) | Return on Tangible Common Equity and Return on Assets exclude the impact of Tax |
(2) | Explanations of the colors and ratings used in the |
Pages 84-85 present a detailed overview of the CEO’s scorecard and the performance evaluation process, which resulted in the Compensation Committee awarding Mr. Corbat $24 million in total annual compensation for 2018. His total annual compensation consisted of his base salary of $1.5 million (unchanged since 2013) and a total annual incentive award of $22.5 million, representing a 4% increase over his 2017 total annual compensation of $23 million. Using Citi’s balanced scorecard approach to determining pay, the Compensation Committee favorably assessed Mr. Corbat’s leadership in multiple critical areas, including enhancing our reputation, delivering value to clients, and continued progress toward Citi’s longer-term targets. In addition to Citi’s positive operating results, the Compensation Committee also considered market levels of pay for the CEO role at peer institutions.
LINKING 2018 CEO PAY ELEMENTS TO PERFORMANCE
●Over 90% variable pay for 2018. ●70% of variable pay is deferred long-term incentives subject to multi-year vesting and clawbacks. ●70% of variable pay is equity-based to align stockholder and executive interests. ●Total incentive award and annual bonus are based on the overall achievements of Citi and individual performance against goals set at the beginning of the year. ●PSUs are earned only to the extent Citi performs against two forward-looking metrics: RoTCE in 2021 and cumulative EPS over the 2019-2021 performance period. ●PSU metrics require substantial operational improvements for target payout and exceptional performance for maximum payout. |
www.citigroup.com
78 | PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S 2018 EXECUTIVE COMPENSATION |
2018 Pay Elements
Citi’s incentive awards delivered to the CEO and the other named executive officers (NEOs) are a mix of cash bonus, Performance Share Units, and Deferred Stock Awards. This incentive structure establishes a balance between annual and long-term compensation, with the majority of incentive compensation delivered in Performance Share Units and Deferred Stock Awards that vest over multiple years. In determining the percentages to award as cash bonuses, Performance Share Units, and Deferred Stock Awards, the Compensation Committee considered applicable regulatory requirements and guidelines for deferral as well as market practices.
% OF VARIABLE PAY | COMPENSATION | |||||||||
ELEMENT | CEO | NEOs | AWARD TYPE | PERFORMANCE LINK AND VESTING | TYPE | |||||
Fixed | ||||||||||
Salary | N/A | N/A | Base Pay | ●Fixed portion of total pay at a competitive level that enables Citi to attract and retain talent | Cash | |||||
Variable | ||||||||||
Annual Incentive | 30% | 40% | Annual Bonus | ●Scorecard assessment determines value ●Plan limits on executive officer cash bonuses | Cash | |||||
Deferred/ | 70% | 60% | Performance | ●Scorecard assessment determines target number of units ●Earned units based 50% on return on tangible common equity in 2021 and 50% on cumulative earnings per share over 2019-2021 ●Ultimate value of earned units linked to Citi total shareholder returns ●Award capped at 100% of target if Citi’s total shareholder return is negative over 2019-2021 ●Subject to clawbacks ●Other than increases in targets, no change in award terms as compared to last year | Equity-based, | |||||
Deferred Stock | ●Scorecard assessment determines number of shares granted ●Ultimate value based on Citi total shareholder returns ●Vest ratably over a four-year period ●Subject to reduction in the event of pretax losses in any year of the deferral period ●Subject to clawbacks ●No change in award terms as compared to prior years | Equity |
Performance Share Unit Targets
We have consistently set challenging targets for our Performance Share Units. For the Performance Share Units awarded for 2018 performance:
Citi 2019 Proxy Statement
PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S 2018 EXECUTIVE COMPENSATION | 79 |
Full details on our Performance Share Units for performance in 2018 appear on page 94.
Performance Share Unit Payouts
The variability of the value of our Performance Share Unit awards demonstrates the strong link between Citi’s executive pay and Citi’s performance. As an example, the following chart compares the grant date value of Mr. Corbat’s recent Performance Share Units to the value ultimately earned.
CEO PERFORMANCE SHARE UNIT PAYOUTS |
www.citigroup.com
80 | PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S 2018 EXECUTIVE COMPENSATION |
Compensation Governance Practices
In addition to our performance-sensitive direct compensation structure, Citi has strong compensation governance practices. Over the past several years, we have refined many of our governance practices as a result of feedback obtained through our ongoing engagement with stockholders.
PRACTICES WE EMPLOY | PRACTICES WE AVOID | |
Ongoing investor outreach.Regular stockholder engagement to solicit feedback on compensation and governance. Performance-based compensation.For 2018, variable performance-based incentive compensation was at least 94% of named executive officer annual compensation. The deferred variable award is further at risk based on the value of Citi common stock Clawbacks.Subjected Performance Share Units and Stock ownership commitment.Executive officers are required to hold at least 75% of the net after-tax shares acquired through our incentive compensation programs as long as they are executive officers. Post-employment stock holding requirement. Peer group review.Annual evaluation of peer group to ensure ongoing relevance of each member. Risk management.Strong risk and Independent advice.Independent compensation consultant input into the Compensation Committee’s decisions, as described on page 97. | No excessive perks.We do not provide personal perquisites such as free personal use of private aircraft or special executive medical benefits. No executive pensions.Executive officers are not eligible for additional benefit accruals under nonqualified executive retirement programs. No hedging or pledging of Citi No tax gross-ups.Citi does not allow tax gross-ups except through its tax equalization program for expatriates, which is available to all salaried employees. No multi-year compensation guarantees.We avoid features that could incentivize imprudent risk-taking, such as multi-year guarantees. No “single trigger” upon a change of control.Our stock incentive plan has a “double trigger” change-of-control feature, meaning that both a change of control No change-of-control or other “golden parachute” agreements.Executive officers do not have special agreements covering their compensation in the event of a change of control and are not entitled to severance pay upon termination of employment in excess of broad-based benefits. No unearned dividends paid.We do not pay dividend equivalents on
No extensive use of employment agreements. None of the named executive officers has an employment agreement with Citi. We make limited use of employment agreements, and their terms are subject to controls under our policies. Under a policy adopted by the Board, employment agreements with executive officers may not provide for post-retirement personal benefits of a kind not generally available to employees or retirees. |
Citi 2019 Proxy Statement
PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S 2018 EXECUTIVE COMPENSATION | 81 |
2018 Executive Compensation Awards |
2018 Named Executive Officer Compensation
The Compensation Committee approved the following compensation for performance in 2018:
1 | 2 | 3 | 4 | Annual Compensation for 2018 (Sum of Columns 1-4) | |||||||
Name | Base Salary(1) | Cash Bonus(1) | Performance Share Units(2) | Deferred Stock Awards(2) | |||||||
Michael Corbat | $1,500,000 | $6,750,000 | $7,875,000 | $7,875,000 | $24,000,000 | ||||||
John Gerspach | $500,000 | $4,600,000 | $3,450,000 | $3,450,000 | $12,000,000 | ||||||
James Forese | $500,000 | $7,800,000 | $5,850,000 | $5,850,000 | $20,000,000 | ||||||
Stephen Bird | $500,000 | $4,400,000 | $3,300,000 | $3,300,000 | $11,500,000 | ||||||
Jane Fraser | $500,000 | $3,500,000 | $2,625,000 | $2,625,000 | $9,250,000 |
(1) | Reported in the 2018 Summary Compensation Table. |
(2) | In accordance with SEC rules, these awards are not reportable in the 2018 Summary Compensation Table because they were not awarded during 2018. They will be reportable next year |
The above table is not intended to be a substitute for the reporting of compensation in accordance with SEC rules as shown in the 2018 Summary Compensation Table.
Roadmap for the Scorecards on Pages 84-93
The scorecards on pages 84-93 illustrate how our executive compensation Framework is used by the Compensation Committee to make compensation decisions.
The scorecards:
● | Show how the Compensation Committee |
● | Explain the size and scope of each named executive officer role to provide context for the Compensation Committee’s decision and level of pay. |
● | Explain how the Compensation Committee arrived at its decision on each named executive officer’s compensation. |
The colors in the Quantitative Goal section of the scorecards are intended to visually signify relative performance against operational and risk-related quantitative goals, as follows:
Signifies that an operational goal result achieved the 2018 goal or exceeded the 2018 goal by up to 10%.(1)Signifies that a risk goal result was achieved. | Signifies that an operational goal result was below the 2018 goal by 10% or less. Signifies that a risk goal had a positive but below-target result. | Signifies that an operational goal result was below the 2018 goal by more than 10%. Signifies that a risk goal had a negative result. |
(1) | Additional colors or definitions would be provided if any achievements are greater than 10% of a goal. |
The Compensation Committee assesses performance against each quantitative and qualitative goal according to the following scale:
Score | 1 | 2 | 3 | 4 | 5 | |||||
Rating | Significant Outperform | Outperform | Meets Expectations | Underperform | Significant Underperform |
www.citigroup.com
82 | PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S 2018 EXECUTIVE COMPENSATION |
Citi’s Executive Compensation Framework
Our Compensation Committee uses a five-step process to determine named executive officer incentive compensation.
● | The |
➢ | Quantitative goalsinclude: |
✓ | Company-wide goals for all named executive officers that reflect our annual business plan, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
✓ | Business unit-specific goals
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➢ | Qualitative goalsfocus on: |
✓ | Enhancing Citi’s reputation, |
✓ | Delivering value to clients, and |
✓ | Continued progress toward Citi’s longer-term targets. |
● | When we set the goals, we also assign weightings to the goals. For 2018 and consistent with prior years, quantitative goals were |
● |
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● | A performance rating |
● | In accordance with the relative weightings established early in |
● | The Compensation Committee |
● |
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● | This practice ensures that our named executive officer pay appropriately reflects market pay, based on |
● | The Compensation Committee then evaluates each named executive officer’s overall scorecard rating relative to the estimated market-based pay range for each named executive |
● | The
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● |
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● | Based on the evaluation of the scorecard ratings and market pay described in Step 4, the Compensation Committee, |
Citi 2019 Proxy Statement
PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S 2018 EXECUTIVE COMPENSATION | 83 |
Our Compensation Peer Group
The Compensation Committee believes that market compensation levels must frame compensation decisions in order to retain the executive talent necessary to execute the Company’s business strategy. Accordingly, a critical step in our executive compensation Framework is the Compensation Committee’s understanding of market pay, which it develops through consideration of surveys of historic peer firm compensation for each named executive officer role.
In 2016, the Compensation Committee, with input from its independent compensation consultant, established the compensation peer group Citi currently uses to determine market pay ranges. The Compensation Committee evaluates the compensation peer group on an annual basis to ensure that the group continues to be appropriate. The Compensation Committee continues to believe that a U.S.-based peer group reflects the relevant market for executive talent and the relevant regulatory environment for Citi’s executive compensation.
Our peers were chosen because they operate in one or more lines of business that are similar to Citi’s and compete in similar labor markets, although many do not have global scale that is comparable to Citi.
2018 COMPENSATION PEER GROUP | ||
AIG (AIG) | Goldman Sachs (GS) | Prudential (PRU) |
All compensation peer group firms were included in preparing the market data for the CEO and CFO roles. Not all compensation peer group firms have roles comparable to Citi’s named executive officer roles other than the CEO and CFO roles (e.g., the Institutional Clients Group role), so not all of the compensation peer group firms were represented in the market data for each of the other named executive officer roles. In evaluating the market for named executive officer compensation, the Compensation Committee additionally focused on compensation for comparable roles at the U.S.-based global banks with lines of business similar to Citi’s. That group includes Bank of America, Goldman Sachs, JP Morgan Chase, Morgan Stanley, and Wells Fargo.
In selecting the compensation peer group, the Compensation Committee used size-based metrics as primary screening criteria among financial services firms. Due to the absence of a sufficient number of comparably sized direct peers, the result is a peer group where Citi is above the 75th percentile in size, meaning that the market for target compensation prior to consideration of performance could be the upper quartile. Where Citi pays executives above median, the size and scope of their responsibilities and their performance tend to be critical factors in determining pay ranges.
(1) | AIG employees as of 12/31/2017; MET employees as of 10/1/2017; PRU employees as of 12/31/2017. |
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84 | PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S 2018 EXECUTIVE COMPENSATION |
CEO Scorecard and Pay Explanation
Mr. Corbat has been CEO of Citi since October 2012. He joined Citi in 1983 and has held various management positions throughout Citi in multiple businesses and geographies.
QUANTITATIVE SCORECARD | ||||||
Category | Quantitative Goal (Glossary on Page 127) | 2018 Result(1)(2) | Rating(2) | |||
Profitability | Citigroup Income from Continuing Operations Before Taxes | $23.4 billion | 3 | |||
Expense Management | Citigroup Efficiency Ratio | 57.4% | 3 | |||
Use of Capital | Citigroup Return on Tangible Common Equity | 10.9% | 2 | |||
Citigroup Return on Assets | 0.93% | 3 | ||||
Risk | Citigroup Risk Appetite Ratio | 151% | 1 | |||
Citigroup Risk Appetite Surplus | $7.61 billion |
QUALITATIVE SCORECARD | ||||
Qualitative Goal | Result Highlights (Glossary on Page 127) | Rating(2) | ||
Protect and enhance our reputation | ●Mr. Corbat continues to provide prominent and clear messaging across the company around the firm’s culture of ethics and conduct. ●Under Mr. Corbat’s sponsorship, Citi received no objection from regulators to its capital plan submitted as part of the 2018 CCAR process, enabling the return of $18.4 billion of capital to common stockholders during 2018. Citi repurchased over 200 million shares during 2018, resulting in an 8% reduction in outstanding common shares. ●Notwithstanding the continued progress in returning capital to shareholders, each of Citi’s key regulatory capital metrics remained strong. ●Control metrics generally improved year-over-year across Citi, and as measured by objective risk metrics, Citi’s risk profile was stable in 2018. Many outstanding regulatory issues were resolved, while others remain as focus areas. ●Mr. Corbat championed Citi’s leadership in disclosing gender and U.S. minority pay gaps and making related adjustments to compensation globally. We have published our goals to improve representation of women and U.S. minorities in senior roles throughout Citi. ●Mr. Corbat continued his outreach to external stakeholders globally, including investors, regulators, and government officials. ➢He led investor outreach by conducting 36 investor meetings in 2018. ➢In addition to regular bank supervisory meetings, he participated in 56 meetings in 2018 with regulators, central bankers, and government officials from the U.S. and other countries. | 3 | ||
Develop client-relevant value propositions | ●Mr. Corbat maintained regular client contact by holding, on average, approximately 40 client meetings per month in cities around the world. ●Mr. Corbat drove continued focus on key investments in Global Consumer Banking and Institutional Clients Group that are already showing results, such as digital and mobile innovations in consumer banking and investments in our | 2 | ||
Produce extraordinary client experiences | ●Innovations sponsored by Mr. Corbat have led to improved client satisfaction scores on objective surveys in Global Consumer Banking and Institutional Clients Group. ●Key digital user metrics improved substantially year-over-year, and in Institutional Clients Group, we have significantly improved the client onboarding experience. | 2 | ||
Deliver our financial commitments | ●Key financial metrics, including Citi’s 2018 return on tangible common equity, exceeded 2017 results (excluding the impact of Tax Reform in both periods) and our 2018 business plan. | 3 |
(1) | Return on Tangible Common Equity and Return on Assets exclude the impact of Tax Reform in 2018. For a reconciliation of all adjusted results to reported results, please see Annex A to this Proxy Statement. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) | Explanations of the
Citi 2019 Proxy Statement |
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CFO Scorecard and Pay Explanation John Gerspach has been CFO of Citi since July 2009 and has served in various executive financial management roles globally since joining Citi in 1990. He retired from the CFO role on February 22, 2019.
Citi 2019 Proxy Statement
Scorecard Assessment Summary
Linking Performance to Compensation
Final Award
James Forese is President of Citi and CEO of Institutional Clients Group (ICG). He assumed expanded duties as President of Citi in June 2015 after serving as Co-President of Citi and CEO of ICG since January 2013. Mr. Forese joined Citi in 1985 and has held various executive positions in multiple geographies throughout the businesses comprising ICG.
Mr. Forese’s performance on most quantitative metrics was evaluated on the basis of both company-wide and ICG results, consistent with his roles as President of Citi and as CEO of ICG.
Citi 2019 Proxy Statement
Scorecard Assessment Summary
Linking Performance to Compensation
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Global Consumer Banking CEO Scorecard and Pay Explanation Stephen Bird became CEO of Global Consumer Banking (GCB) in June 2015. Previously, Mr. Bird was CEO of Citi’s Asia Pacific region, responsible for Citi’s business lines across the region. He joined Citi in 1998 and has held regional executive roles in Operations & Technology as well as business executive roles in GCB.
Mr. Bird’s performance on most quantitative metrics was evaluated on the basis of both company-wide and GCB results, consistent with his roles as an executive officer of Citi and as CEO of GCB.
Citi 2019 Proxy Statement
Scorecard Assessment Summary
Linking Performance to Compensation
Final Award
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Latin America CEO Scorecard and Pay Explanation In June 2015, Jane Fraser became CEO of Citi’s Latin America (LatAm) region. Previously, she was CEO of Citi’s U.S. Consumer and Commercial Banking and CitiMortgage. From 2009 to 2013, Ms. Fraser served as CEO of Citi’s Private Bank, and before then, she held key strategy roles. She joined Citi in 2004.
Ms. Fraser’s performance on most quantitative metrics was evaluated on the basis of both company-wide and LatAm results, consistent with her roles as an executive officer of Citi and as CEO of LatAm.
Citi 2019 Proxy Statement
Scorecard Assessment Summary
Linking Performance to Compensation
Final Award
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Performance Share Units Thirty-five percent of CEO variable pay and 30% of other named executive officer variable pay are awarded as Performance Share Units, which represent half of Citi’s long-term incentive awards for these executives. The performance target levels for this year’s awards were updated, but there were no other changes to the terms of the Performance Share Units as compared to last year.
Citi 2019 Proxy Statement
Deferred Stock Awards Thirty-five percent of CEO variable pay and 30% of other named executive officer variable pay are awarded as Deferred Stock Awards, which represent half of Citi’s long-term incentive awards for these executives. There have been no changes to the terms of our Deferred Stock Awards since 2013. Vesting Period Vests 25% each year over a four-year period Number of Shares Portion of total incentive award allocated to DSAs divided by the average of the closing prices of Citi common stock for the five trading days immediately preceding the February 14, 2019 grant date ($62.428) Performance-Based Vesting Condition If Citigroup has pretax losses in any year of the deferral period, the portion of the DSA that is scheduled to vest in the year following the loss year will be reduced by a fraction: Example This example shows how the portion of a DSA granted in February 2019 of 20,000 shares that is scheduled to vest in January 2020 — 5,000 shares — would be affected, assuming the following pretax profit (loss) history for Citigroup. The profit amounts for 2016, 2017, and 2018 in the example are derived from current publicly reported financial information. The pretax loss amount for 2019 in the example is a hypothetical assumption for illustrative purposes only. The reduction produced by the formula (500 divided by 23,445) is 2.13%. Due to the minimum cancellation level, 20% of shares scheduled to vest in January 2020 would be cancelled. Therefore, 1,000 shares of the 5,000 that were scheduled to vest would be cancelled (1,000 = 20% of 5,000). Dividend Equivalents Dividend equivalents will be accrued and paid on vested shares after the end of the vesting period; dividend equivalents on DSAs that are not earned will be forfeited. Clawbacks Subject to clawbacks. Risk and Citi’s Incentive Compensation Programs Our compensation programs are designed in accordance with our responsibility to assume only risks that are prudent and well-understood and to effectively manage those risks to protect the franchise. Our programs have the following important elements:
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Citi 2019 Proxy Statement
At a minimum, Citi will consider whether a Material Adverse Outcome has occurred and potential impact on Performance Share Units if there is an annual pretax loss at any of the following three reportable financial segments: Citigroup (the entire company), Global Consumer Banking, and Institutional Clients Group. Citi will also consider making public disclosures whenever a decision has been made to cancel deferred compensation payable to an executive officer because he or she had significant responsibility for a Material Adverse Outcome or otherwise. Our Independent Compensation Consultant
FW Cook has been the Compensation Committee’s independent advisor since 2012. FW Cook provides no services to Citi other than its services to the Board, has no other ties to management that could jeopardize its fully independent status, and has strong internal governance policies that help ensure that it maintains its independence. Representatives of FW Cook attended all Compensation Committee meetings during 2018, including executive sessions as requested, and engaged with Compensation Committee members between meetings. FW Cook advised the Compensation Committee regarding the compensation awarded to the CEO and other executive officers. FW Cook also provided extensive guidance and analysis regarding the Compensation Committee’s and the Board’s responses to Citi’s advisory say-on-pay votes, offered market insights, and provided advice to the Compensation Committee on Citi’s executive compensation plan design and the presentation of its programs to stockholders. FW Cook also provided advice to the Board on non-executive director compensation. In 2018, FW Cook was paid fees of $282,428 for advice regarding executive compensation. Pursuant to SEC and NYSE rules, the Compensation Committee assessed the independence of FW Cook most recently in January 2019 and determined that FW Cook is independent from Citi management and that its work for the Compensation Committee has not raised any conflicts of interest. www.citigroup.com
Tax Deductibility of and Limits on Incentive Compensation Annual incentive awards for 2018 were awarded to named executive officers under the 2011 Executive Performance Plan (the EPP). The EPP was originally adopted to preserve the deductibility of incentive compensation paid to the named executive officers that might otherwise not be deductible under Section 162(m) of the Internal Revenue Code. However, Tax Reform amended Section 162(m) of the Internal Revenue Code by removing the exception for qualified performance-based compensation and expanding it to cover the CFO, thereby reducing the potential for deductible executive compensation for 2018 and later years. While Citi has sought to preserve deductibility of compensation paid to the named executive officers to the extent permitted by law, Citi has retained the flexibility to provide nondeductible compensation arrangements it believes are necessary to recruit, incentivize, and retain its executives. Citi does not intend to change its pay-for-performance approach to awarding executive pay even though Tax Reform eliminated the tax benefits of awarding qualified performance-based compensation. Accordingly, the Committee awarded named executive officer incentive compensation for 2018 performance under the EPP and subject to its limits on executive compensation. The EPP specifies a maximum amount that can be awarded to a participant for any year based on Citigroup’s income from continuing operations before income taxes. The amount of annual incentive actually awarded for the year, however, is determined by the Compensation Committee, applying the executive compensation Framework described in this Compensation Discussion and Analysis and subject to the condition that Citi may pay less (but not more) than the maximum. For 2018, the Compensation Committee certified the maximum amount payable under the EPP as $46.8 million per executive (0.2% of Citigroup pretax earnings) and exercised its negative discretion to award lesser amounts under the plan. In addition to this limit on total incentive pay, the EPP limits the annual cash bonus portion of individual executive officer incentive pay to $20 million. The Personnel and Compensation Committee Report The Personnel and Compensation Committee has evaluated the performance of and determined the compensation for the CEO, approved the compensation of executive officers, and approved the compensation structure for other members of senior management and other highly compensated employees. The Personnel and Compensation Committee reviewed and discussed the foregoing Compensation Discussion and Analysis with members of senior management and, based on this review, the Personnel and Compensation Committee recommended to the Board of Directors of Citigroup Inc. that the Compensation Discussion and Analysis be included in Citi’s Annual Report on Form 10-K and Proxy Statement on Schedule 14A filed with the SEC. The Personnel and Compensation Committee: Duncan P. Hennes (Chair) Dated: March 5, 2019 Citi 2019 Proxy Statement
2018 Summary Compensation Table and Compensation Information 2018 Summary Compensation Table The following table shows the compensation for 2018, 2017, and 2016 for any person serving as Citi’s CEO or CFO during 2018 and Citi’s three other most highly compensated executive officers. These individuals are referred to as Citi’s named executive officers.
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All named executive officers received 401(k) plan matching contributions pursuant to the formula applicable to all eligible U.S. employees. Mr. Bird had no expatriate benefits for 2018 but had significant tax equalization benefits for 2016 and 2017. He moved from Hong Kong to New York on an expatriate assignment effective July 1, 2015, with benefits provided under the general terms of Citi’s Expatriate Program. Mr. Bird’s expatriate assignment ended on December 31, 2016, at which time he became a U.S. local employee. Mr. Bird is not eligible for expatriate benefits for service after 2016. The benefits made available to Mr. Bird were fully in accordance with Citi’s Expatriate Program and are generally available to similarly situated employees who accept assignments outside their home countries. The Expatriate Program enables Citi to quickly fill specific business needs through relocating employees for a transitional period and neutralizing the tax and other personal financial consequences of the move. The tax equalization benefits were intended to limit Mr. Bird’s tax liabilities and related expenses to what they would have been had he remained employed in Hong Kong in 2016 and, as such, are not additional incentive compensation. Mr. Corbat has reimbursed Citi for his personal use of corporate aircraft pursuant to an Aircraft Time Sharing Agreement with Citigroup Inc. For additional disclosure regarding the use of corporate aircraft, see page 39 of this Proxy Statement. Citi 2019 Proxy Statement
2018 Grants of Plan-Based Awards The table below provides information regarding awards granted by the Compensation Committee to the named executive officers in 2018. The values shown are each equity award’s grant date fair value as determined under applicable accounting standards.
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Outstanding Equity Awards at 2018 Fiscal Year End The market values below were computed using the closing price of Citi common stock on December 31, 2018, which was $52.06.
Citi 2019 Proxy Statement
Option Exercises and Stock Vested in 2018
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2018 Pension Benefits
Citi’s policy is that executives should accrue retirement benefits on the same basis generally available to Citi employees under Citi’s broad-based, tax-qualified retirement plans. Citi has not granted extra years of credited service under any retirement plan to any of the named executive officers. Mr. Bird and Ms. Fraser have never been eligible to participate in a defined benefit pension plan under the terms of Citi’s broad-based retirement programs in effect in their employment countries; they have participated only in defined contribution retirement plans since the commencement of their employment at Citi. The following describes the pension plans listed in the 2018 Pension Benefits Table. The Citigroup Pension Plan.The purpose of this broad-based, tax-qualified retirement plan is to provide retirement income on a tax-deferred basis to all eligible U.S. employees. Effective December 31, 2006, The Citigroup Pension Plan was closed to new members and generally ceased benefit accruals effective December 31, 2007. Mr. Corbat, Mr. Gerspach, and Mr. Forese are eligible for benefits under this plan. Mr. Corbat’s and Mr. Forese’s entire benefits are cash balance benefits, and Mr. Gerspach accrued a cash balance benefit from 2000 through 2007. The Citigroup Pension Plan cash balance benefit is expressed as a hypothetical account balance. Prior to January 1, 2008, the plan generally provided for the annual accrual of benefit credits for most of the covered population, including the covered named executive officers, at a rate between 1.5% and 6% of eligible compensation; the benefit credit rate increased with age and service. Eligible compensation generally included base salary and incentive awards, but excluded compensation payable after termination of employment, certain non-recurring payments, and other benefits. Annual eligible compensation was limited by the Internal Revenue Code to $225,000 for 2007 (the final year of cash balance benefit accrual). Interest credits continue to be applied annually to each participant’s account balance; these credits are based on the yield on 30-year Treasury bonds (as published by the Internal Revenue Service). Prior to 2000, Mr. Gerspach accrued a benefit under the Citibank Retirement Plan formula, which is a component of The Citigroup Pension Plan. That formula generally provided for an annual benefit of 2% of annual average compensation per year of service for up to 30 years of credited service plus 0.75% of average annual compensation for up to an additional five years of credited service, reduced by an offset based on an estimated Social Security benefit. Annual compensation included base salary and excluded bonus and incentive pay, and average annual compensation was the average of the five highest years of annual compensation out of the final 10 annual computation periods. Annual compensation was also subject to limits imposed by the Internal Revenue Code. Citi 2019 Proxy Statement
Benefits under The Citigroup Pension Plan are payable in annuity form or in other optional forms, including a lump sum, upon termination of employment. The Citigroup Pension Plan’s normal retirement age is 65. The portion of an eligible participant’s benefit determined under the Citibank Retirement Plan formula may be paid upon early retirement, which is defined for this purpose as the first day of the month after the later of the participant’s 55th birthday or the date on which the participant completes a year of service (as defined in the plan). Mr. Gerspach has attained eligibility for early retirement, and there would be no reduction in his benefits attributable to early retirement under the terms of the plan because he attained age 60 while employed. Supplemental ERISA Compensation Plan of Citibank, N.A. and Affiliates (Pay Cap Plan).The Pay Cap Plan is an unfunded, nonqualified deferred compensation plan. The Pay Cap Plan provided benefits not otherwise provided under The Citigroup Pension Plan because of limits imposed by the Internal Revenue Code on eligible pay and benefits. To the extent that a participant’s benefit was determined under the cash balance formula in The Citigroup Pension Plan, eligible compensation under the Pay Cap Plan was limited to $500,000 beginning January 1, 2000. Future benefit accruals under the Pay Cap Plan ceased effective January 1, 2002, for most participants in the plan, including Mr. Gerspach. Benefits under the Pay Cap Plan are payable at the same time as benefits are payable under The Citigroup Pension Plan; accordingly, Mr. Gerspach is eligible for early retirement and immediate commencement under the Pay Cap Plan. 2018 Nonqualified Deferred Compensation
The following is additional information on the plan shown in the 2018 Nonqualified Deferred Compensation Table. Citicorp Deferred Compensation Plan.Mr. Gerspach participates in the Citicorp Deferred Compensation Plan, which was closed in 2001 and provided for mandatory and voluntary deferrals of compensation from 1996 through 2000 for employees of Citicorp. All mandatory deferrals under the Citicorp Deferred Compensation Plan have been distributed to participants, but voluntary deferrals are notionally invested at the participant’s election in one of six pre-determined investment alternatives. Participants may change investment elections up to four times per year. All amounts deferred under the Citicorp Deferred Compensation Plan are fully vested and are distributed in a lump sum or installments at the participant’s election upon termination at or after the attainment of age 55. Potential Payments upon Termination or Change of Control Mr. Gerspach’s Retirement.Mr. Gerspach retired as Citi CFO effective February 22, 2019, immediately following the filing of Citi’s Annual Report on Form 10-K for the fiscal year ending December 31, 2018. He retired from Citi employment effective March 1, 2019. Mr. Gerspach did not receive any special compensation as a result of his retirement. www.citigroup.com
General Policies.Citi does not provide guaranteed executive severance or change of control agreements, and none of the named executive officers has an individually negotiated employment or separation agreement. Potential Payments Table.Set forth below is a table showing the estimated value of outstanding awards that would have been delivered over time to each named executive officer, had the applicable employment termination or other event occurred on December 31, 2018 and assuming that all award vesting and performance conditions are satisfied. Unless the awards are forfeited, the awards shown in the Potential Payments Table vest on schedule following termination of employment and do not accelerate by their terms except in the case of death. The closing price of Citi’s common stock on December 31, 2018 ($52.06) was used in developing the estimates shown in the Potential Payments Table.
Deferred Stock Awards; Rule of 60.Deferred Stock Awards granted to the named executive officers under the 2014 Stock Incentive Plan vest over a period of four years subject to performance conditions. Deferred Stock Awards provide for accelerated vesting if a participant dies but provide for vesting on schedule in all other circumstances in which vesting occurs after termination of employment. If a participant’s combined years of age and service meet the Rule of 60 at the time he or she voluntarily resigns, the participant’s Deferred Stock Awards will continue to vest on schedule over the four-year period, provided he or she does not work for a “significant competitor” during the vesting period. A participant meets the Rule of 60 if his or her age plus full years of service equals at least 60 and he or she either: (i) is at least age 50 with at least five full years of service; or (ii) is under age 50 with at least 20 full years of service. Partial years of age and service are each rounded down to the nearest whole number. In contrast, if a participant does not meet the Rule of 60 and voluntarily resigns, any unvested Deferred Stock Awards shares are forfeited, unless the participant becomes employed in an “alternative career.” Citi 2019 Proxy Statement
Under the “alternative career” provisions of Citi’s Deferred Stock Awards, employees may continue to vest in their deferred awards if they resign from Citi to work full-time in government or at a charitable organization or to teach full-time at an educational institution. All of the named executive officers attained the Rule of 60 prior to 2018, so none of them are eligible for the “alternative career” provisions, and each of them would be eligible for continued vesting following resignation without regard to whether they pursued an “alternative career.” Performance Share Units.Performance Share Units have the same vesting provisions covering termination of employment as those applicable to Citi’s Deferred Stock Awards, including the Rule of 60. Any named executive officer who meets the Rule of 60 will receive his or her earned Performance Share Units unless: (i) he or she voluntarily resigns during the performance period and performs services for a competitor, or (ii) he or she is terminated for gross misconduct (in which case the undelivered award is cancelled). If a named executive officer who meets the Rule of 60 resigns and competes, at the end of the performance period, he or she will forfeit a prorated Performance Share Unit award, based on his or her service during the performance period. For example, if such a named executive officer resigns after the first year of the performance period to work for a competitor, he or she will receive one-third of the earned Performance Share Units after the end of the three-year performance period and the other two-thirds will be forfeited. Deferred Cash Awards.Deferred Cash Awards were granted to senior executives before the creation of our Performance Share Unit program and are also granted to executives who are not eligible for Performance Share Units, which are awarded only to the CEO and executives who report directly to him. Like our Performance Share Units, Deferred Cash Awards represent 50% of each executive’s deferred incentive award for the applicable performance year with Deferred Stock Awards representing the other 50%. Deferred Cash Awards are a fixed amount that earns notional interest at a fixed market rate and vests over a period of four years. The treatment of Deferred Cash Awards upon termination of employment is the same as the treatment of Deferred Stock Awards. “Double Trigger” Change of Control Requirement.Citi’s 2014 Stock Incentive Plan has a “double trigger” requirement, which provides that an involuntary termination of employment not for gross misconduct must occur as a result of a “change of control” of Citi before any vesting of equity awards may occur in connection with the change of control. The 2019 Stock Incentive Plan, which is subject to stockholder approval at the 2019 Annual Meeting pursuant to Proposal 4 of this Proxy Statement, has the same provision. In addition, the Compensation Committee has a policy that equity awards granted to executive officers will not be accelerated solely by reason of a change of control of Citigroup Inc. The intent of the policy is for such a change of control to have no impact on the applicable awards. The same change of control provisions apply to Citi’s Performance Share Units and Deferred Cash Awards. Under the 2014 Stock Incentive Plan, a “change of control” means: (i) a person acquiring direct or indirect beneficial ownership of Citigroup Inc. securities representing 30% or more of the combined voting power of then outstanding securities of Citigroup Inc.; (ii) specified changes in the majority of the Board (not including the election of Directors whose election or nomination was approved by a majority of the then incumbent Board); (iii) a sale, transfer, or distribution of all or substantially all of the assets of Citigroup Inc. or a dissolution or liquidation of Citigroup Inc.; or (iv) consummation of a reorganization, merger, consolidation, or other corporate transaction that results in stockholders of Citigroup Inc. not owning more than 50% of the combined voting power of Citigroup Inc. or other corporation resulting from the transaction. The 2019 Stock Incentive Plan has the same provision. Management Analysis of Potential Adverse Effects of Compensation Plans Citi has adopted multiple coordinated strategies to manage the risk of material adverse effects to the franchise through the design and administration of its incentive compensation programs, including those applicable to the named executive officers. During 2018, Citi continued its efforts to align its processes with the U.S. Interagency Guidance on Sound Incentive Compensation Policies and the Financial Stability Board’s Principles for Sound Compensation Practices. Citi’s approach to risk and incentive compensation plans is detailed on pages 95-97 of this Proxy Statement. On the basis of the foregoing analysis, management has concluded that Citi’s compensation plans are not reasonably likely to have a material adverse effect on Citi. www.citigroup.com
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing the following information about the relationship of the annual total compensation of our employees to the annual total compensation of our CEO. The pay ratio included in this information is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.
CEO Pay Ratio Supplemental Information Citi aims to provide competitive pay and benefits for each employee’s role in every business and geography. Market levels of pay are therefore important factors in determining pay for every role at Citi, including senior executive roles. In addition, Citi’s business mix and global footprint drive the median pay level at Citi. Over 65% of our workforce is employed outside the U.S., and 52% of our workforce is employed in Global Consumer Banking.
How We Calculated the Ratio
Citi 2019 Proxy Statement
www.citigroup.com
Proposal 4: Approval of the Citigroup 2019 Stock Incentive Plan On the recommendation of the Compensation Committee, the Board has unanimously approved the Citigroup 2019 Stock Incentive Plan (the 2019 Plan), which will become effective on April 16, 2019, if approved by stockholders at our Annual Meeting. Upon approval, the 2019 Plan will become the only equity compensation plan under which we will grant shares. Currently, we grant equity awards exclusively under the 2014 Stock Incentive Plan (the 2014 Plan), and the 2014 Plan will expire by its terms on April 16, 2019. The 2019 Plan is proposed to replace the 2014 Plan. The discussion and description of the 2019 Plan that follows is qualified in its entirety by the text of the 2019 Plan that is included as Annex B.
Executive Summary
Citi 2019 Proxy Statement
Shares Requested The initial share authorization of the 2019 Plan will be 30 million shares, which is estimated to be approximately equal to the shares that would no longer be available for grant upon the expiration of the 2014 Plan. This initial share authorization is intended to support grant activity for at least one to two years, and we expect to continue our practice of asking stockholders to approve additional share authorizations under the 2019 Plan, as frequently as annually, thereafter. The 2019 Plan will expire by its terms on the date of the annual general meeting of stockholders in 2024. Our Equity Award Practices Are Aligned with Stockholder Interests
Run Rate Table Our run rate is the number of shares subject to equity awards granted during a year stated as a percentage of common shares outstanding for such year, based on annual grant data and the basic weighted average number of common shares outstanding as reported in Citigroup’s Annual Report on Form 10-K for such year.
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Overhang Table “Overhang” refers to the potential stockholder dilution represented by outstanding employee equity awards and shares available for future grants.
The preceding Run Rate Table and the Overhang Table demonstrate our prudent use of shares. Our Plan Terms Are Aligned with Stockholder Interests The following features of the 2019 Plan protect the interests of our stockholders:
Citi 2019 Proxy Statement
Equity Compensation Plan Information All of Citi’s outstanding equity awards have been granted under two stockholder-approved plans—the 2014 Plan and its predecessor, the 2009 Stock Incentive Plan (the 2009 Plan). There are no equity awards outstanding under plans for which stockholder approval was not required or sought. The information below is as of December 31, 2018.
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New Plan Benefits Awards under the 2019 Plan will be granted by the Compensation Committee in its sole discretion. Therefore, the benefits or amounts that will be received by any particular employee or group of employees in the future is not determinable at this time. Description of the Citigroup 2019 Stock Incentive Plan This summary description of the 2019 Plan is qualified in its entirety by reference to the 2019 Plan document, which is included as Annex B to this Proxy Statement. If Proposal 4 is approved by stockholders at our Annual Meeting, we intend to file a registration statement on Form S-8, pursuant to the Securities Act of 1933, as amended, to register the shares authorized for grant under the 2019 Plan. General.If Proposal 4 is approved by stockholders, the 2019 Plan will become effective on April 16, 2019 and will expire on the date of the annual general meeting of stockholders to be held in 2024. The 2019 Plan provides for various types of awards denominated in shares of Citi common stock to Citi employees, officers, and non-employee Directors. The NYSE closing price of a share of Citi common stock on February 26, 2019 was $64.12. Administration.The 2019 Plan is administered by the Compensation Committee. All members of such Committee or a sub-committee thereof must satisfy the requirements for independence of SEC Rule 16b-3. With respect to participants who are outside Directors, the 2019 Plan is administered by the Board. The Compensation Committee may delegate some or all of its authority over administration of the 2019 Plan to one or more officers, directors, employees, or another plan administrator except with respect to persons who are Section 16(a) officers. In addition, any special terms or conditions that the Compensation Committee considers necessary or appropriate to accommodate differences in non-U.S. law, tax policy or custom may be included a sub-plan that forms a part of the 2019 Plan. Eligibility.All “employees” of Citi—within the broad definition set forth in the instructions to the SEC Form S-8 registration statement, as in effect on April 16, 2019, but expressly excluding consultants and advisors who are not members of the Board—generally are eligible to receive awards under the 2019 Plan. Based on worldwide employment at December 31, 2018, approximately 204,000 persons could be eligible to participate in the 2019 Plan. However, participation is discretionary—awards are subject to approval by the Compensation Committee. In general, employees with discretionary annual incentive awards of at least $100,000 are eligible to receive at least 25% of that annual award in deferred stock. In 2019 through February 26, 2019, awards were made under the 2014 Plan to 16 non-employee Directors, 17 executive officers, and approximately 7,350 employees worldwide. Former “employees” are eligible to participate in the 2019 Plan, but only with respect to their last year of service or substitute awards to replace awards granted by a prior employer acquired by the Company. Shares subject to the 2019 Plan.Shares of Citi common stock issued in connection with awards under the 2019 Plan may be shares that are authorized but unissued, or previously issued shares that have been reacquired, or both. The initial share authorization under the 2019 Plan is 30 million shares. (The shares authorized under the 2019 Plan is estimated to be approximately equal to number of shares that would no longer be available for grant upon expiration of the 2014 Plan.) “Recycling” provisions.If an award under the 2019 Plan, or, after April 16, 2019, the 2014 Plan and the 2009 Plan, is forfeited, cancelled, or expires or is settled without the issuance of shares, the shares subject to such award will be available for future grants under the 2019 Plan. However, shares tendered by a participant or withheld by Citi to pay an option exercise price, withheld or tendered to satisfy tax withholding obligations relating to any award, repurchased by Citi with option exercise proceeds, covered by a stock-settled SAR (without regard to the number of shares actually issued upon exercise) or withheld to satisfy any debt or other obligation owed to Citi, and cancelled fractional shares will be considered issued and shall not be added to the maximum number of shares that may be issued under the 2019 Plan. Citi 2019 Proxy Statement
Limits on awards.The maximum number of shares subject to awards to an individual Director in a calendar year (including awards made at the election of a Director in lieu of his or her cash retainer), taken together with any cash fees paid during the calendar year to the Director, in respect of the Director’s service as a member of the Board during such year (including service as a member or chair of any committees of the Board), may not exceed $1,000,000 in value, as determined as of the date of each award. However, the independent members of the Board may make exceptions to this limit for a non-executive chair of the Board, provided that the Director receiving any additional compensation may not participate in the decision to award such compensation. For all other eligible “employees,” the number of shares subject to stock options or SARs granted during a calendar year may not exceed one million shares, and the number of shares that may be subject to stock awards granted in a calendar year may not exceed one million shares, unless granted subject to substitute awards that replace awards of a former employer acquired by the Company. Types of awards.The following types of awards may be made under the 2019 Plan:
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Minimum vesting requirement.Awards granted under the 2019 Plan may not vest earlier than the first anniversary of the date on which the award is granted, except that the Compensation Committee may grant awards that vest in less than a year (i) as a “substitute award” to replace awards of a former employer acquired by the Company, (ii) awards to Directors that vest on the earlier of the one-year anniversary of the date of grant and the next annual meeting of stockholders which is at least 50 weeks after the immediately preceding year’s annual meeting, and (iii) any additional awards the Compensation Committee may grant, up to a maximum of five percent (5%) of the available share reserve authorized for issuance under the 2019 Plan. This restriction does not apply to the Compensation Committee’s discretion to provide for accelerated exercisability or vesting of any award, including in cases of retirement, death, disability, leave of absence, termination of employment, change of control, or upon the sale or other disposition of the subsidiary employing a participant or other similar event. Performance conditions.In the case of an award subject to a performance condition, the applicable performance condition may include one or more of the following performance conditions and be expressed in either, or a combination of, absolute or relative values or a percentage of: revenue, revenue or product growth, net income (pre-or after-tax), earnings, earnings per share, stockholders’ equity or return on stockholders’ equity, assets or return on assets, return on risk-adjusted assets, capital or return on capital, return on risk capital, book value or book value per share, economic value-added models or equivalent metrics, operating income, pre- or after-tax income, expenses or reengineering savings, margins, cash flow or cash flow per share, stock price, total shareholder return, market share, debt reduction, net promoter scores, operating efficiency ratios, expense ratios, liquidity ratios, regulatory achievements, or any objective or subjective performance conditions selected by the Compensation Committee. Prohibition against repricing.The 2019 Plan prohibits any action under the 2019 Plan that would constitute a ”repricing” of any outstanding option or SAR granted under the 2019 Plan, the 2014 Plan, the 2009 Plan or any other plan of the Company or of any acquired company, except with the approval of the stockholders of the Company. The 2019 Plan defines “repricing” to mean (i) any action that constitutes a “repricing” under GAAP or the rules of the NYSE (including any modification or amendment to an outstanding option or SAR that has the effect of reducing its exercise price); (ii) any cancellation of an outstanding option or SAR when its exercise price exceeds its fair market value in exchange for cash; (iii) any cancellation of an option or SAR in exchange for a new option or SAR with a lower exercise price; or (iv) a substitution of a stock award for an option or SAR when its exercise price exceeds fair market value; in each case other than a permitted equitable adjustment. Prohibition of reload options.The 2019 Plan does not permit the grant of “reload” options. Repayment obligation; right of set-off.If the Compensation Committee subsequently determines that all conditions to vesting and payment of an award, or the vesting and exercisability of an option or SAR, were not satisfied in full, the Compensation Committee may cancel such vesting or exercise and refuse to issue shares and immediately terminate the participant’s rights with respect to such award (or improperly vested portion thereof). If the vesting or exercise of any such award (or portion thereof) has already been settled by delivery of shares or cash, the participant shall be obligated, upon demand, to return the shares or cash (or higher value received at vesting or exercise), to Citi, without reduction for any shares or cash withheld to satisfy withholding tax or other obligations. Consistent with the requirements of Section 409A of the Internal Revenue Code, the 2019 Plan also provides for the set-off of vested awards against obligations a participant may owe to Citi, including but not limited to the obligation to repay improperly vested or exercised awards. Any failure to timely pay tax-related obligations owing to Citi in connection with an award may result in its cancellation. Non-transferability.During the vesting period, awards and sale-restricted shares generally are not transferable other than by will or the laws of descent and distribution. Adjustments.The 2019 Plan provides that the Compensation Committee shall make appropriate equitable adjustments to the maximum number of shares available for grant under the 2019 Plan and to the annual individual award limits expressed in numbers of shares in the event of any changes to the Company’s capital structure, Citi 2019 Proxy Statement
including a change in the number of shares outstanding on account of any stock dividend, stock split, reverse stock split, spinoff or any similar equity restructuring, or any combination or exchange of equity securities, merger, consolidation, recapitalization, reorganization, or similar transaction. In the event of any such transaction, or any extraordinary dividend, divestiture, or other distribution (other than ordinary cash dividends) of assets to stockholders, the Compensation Committee shall make appropriate equitable adjustments to the number or kind of shares subject to outstanding awards, the exercise prices of outstanding options and SARs, and performance conditions, to the extent necessary to prevent the enlargement or diminution of participants’ rights. Change of control.The Compensation Committee may, when an award is made, or at any time prior to, at, or after the time of a “change of control” (as defined below), provide for the adjustment of performance conditions to reflect the change of control, provide for the cancellation of outstanding awards if the surviving entity or acquiring entity (or the surviving or acquiring entity’s parent company) replaces the awards with new rights of substantially equivalent value, provide for the acceleration of any time periods or the waiver of any other conditions to vesting, exercise, payment, or distribution of an award upon an involuntary termination of a participant’s employment as a result of a change of control, or provide for the purchase of any award. The vesting, payment, purchase, or distribution of an award, however, may not be accelerated by reason of a change of control for any participant unless the participant’s employment is involuntarily terminated as a result of the change of control. For these purposes, a termination of employment as a result of a change of control means involuntary termination of employment other than for “gross misconduct” (as defined in the 2019 Plan) upon, or on or prior to the first anniversary of, the change of control. The 2019 Plan defines a “change of control” to mean (i) a person acquiring direct or indirect beneficial ownership of Citigroup Inc. securities representing 30% or more of the combined voting power of then outstanding securities of Citigroup Inc.; (ii) specified changes in the majority of the Board (not including the election of Directors whose election or nomination was approved by a majority of the then incumbent Board); (iii) a sale, transfer, or distribution of all or substantially all of the assets of Citigroup Inc. or a dissolution or liquidation of Citigroup Inc.; or (iv) consummation of a reorganization, merger, consolidation, or other corporate transaction that results in stockholders of Citigroup Inc. not owning more than 50% of the combined voting power of Citigroup Inc. or other corporation resulting from the transaction. Tax withholding.Citi retains the right to deduct or withhold, or require the participant to remit to his or her employer, an amount sufficient to satisfy federal, state, local, and foreign taxes (including hypothetical taxes owed to Citi by tax-equalized expatriates) required by law or regulation to be withheld with respect to any taxable event as a result of the 2019 Plan. Amendment and termination.The 2019 Plan may be amended, suspended, or terminated by the Compensation Committee at any time, provided that no amendment shall be made without stockholder approval if it would materially increase the number of shares available under the 2019 Plan (other than in connection with an equitable adjustment), materially expand the types of awards available under the 2019 Plan or the class of persons eligible to participate in the 2019 Plan, materially extend the term of the 2019 Plan, materially change the method of determining the exercise price of an option or SAR granted under the 2019 Plan, delete or limit the prohibition against “repricing,” or otherwise require approval by stockholders in order to comply with applicable law or the rules of the NYSE (or principal national securities exchange upon which Citi’s common stock is traded or quoted). Award modification.The Compensation Committee retains the right to modify outstanding awards without a participant’s prior consent if it determines that the modification is required to comply with applicable law, regulation, or regulatory guidance (including applicable tax law). Subject to certain exceptions, any other modifications, if adverse to a participant, shall not be effective without the participant’s written consent. www.citigroup.com
Certain U.S. Federal Income Tax Consequences The following is a brief summary of the principal U.S. federal income tax consequences relating to stock options granted under the 2019 Plan, based on current U.S. federal income tax laws. This summary does not constitute tax advice and, among other things, does not describe state, local, or foreign tax consequences, which may be substantially different. Generally, a participant will not recognize taxable income on the grant of a stock option. Upon the exercise of a stock option, a participant will recognize ordinary income in an amount equal to the difference between the fair market value of the Citi common stock received on the date of exercise and the option cost (number of shares purchased multiplied by the exercise price per share). The participant will recognize ordinary income upon the exercise of the option even though the shares acquired may be subject to further restrictions on sale or transferability. Citi will ordinarily be entitled to a deduction on the exercise date in an amount equal to the amount of ordinary income recognized by the participant upon exercise, except as may be specified under Section 162(m) of the Internal Revenue Code. Generally, upon a subsequent sale of shares acquired in an option exercise, the difference between the sale proceeds and the cost basis of the shares sold will be taxable as a capital gain or loss, including any sale of shares freed from sale restrictions to fund the payment of taxes incurred at exercise. The 2019 Plan does not provide for awards of “incentive stock options,” which have different tax consequences under the Internal Revenue Code. Citi 2019 Proxy Statement
Citi makes every effort to be responsive to concerns expressed by our stockholders by engaging in dialogues, participating in issuer/investor working groups, and adopting policies or initiatives we believe to be in the best interests of all stockholders. Over the years, Citi has met with several proponents and other interested parties regarding such issues as gender pay equity, proxy access, human rights, the Company’s response to regulation (Dodd-Frank, credit cards), derivatives, risk management, auditor rotation, and trade association payments, among others, and has, on certain occasions, as appropriate, taken action in response to these engagements and/ or shareholder votes. We encourage our stockholders to communicate with management and the Board. Any stockholder wishing to communicate with management, the Board, or an individual Director, or obtain the addresses of any of the stockholder proponents or their Citi stock ownership information, should send a request to the Corporate Secretary, Rohan Weerasinghe, at 388 Greenwich Street, New York, New York 10013. Proposal 5 John Chevedden has submitted the following proposal for consideration at the 2019 Annual Meeting: Proposal 5 – Shareholder Proxy Access Enhancement RESOLVED: Stockholders ask the board of directors to amend its proxy access bylaw provisions and any associated documents, to include the following change for the purpose of decreasing the average amount of Company common stock the average member of a nominating group would be required to hold for 3-years to satisfy the aggregate ownership requirements to form a nominating group and to increase the possible number of proxy access director candidates: No limitation shall be placed on the number of stockholders that can aggregate their shares to achieve the 3% of common stock required to nominate directors under our Company’s proxy access provisions. Proxy access for shareholders enables shareholders to put competing director candidates on the company ballot to see if they can get more votes than some of management’s director candidates. A competitive election is good for everyone. This proposal can help ensure that our management will nominate directors with outstanding qualifications in order to avoid giving shareholders a reason to exercise their right to use proxy access. Even if the 20 largest public pension funds were able to aggregate their shares, they would not meet the current 3% criteria for a continuous 3-years at most companies according to the Council of Institutional Investors. This proposal addresses the situation that our company now has with proxy access potentially for only the largest shareholders who are the least unlikely shareholders to make use of it. Since no group of shareholders at any U.S. company has yet to make use of proxy access, it is important to make sure that the current limitation of 20 shareholders is not a deterrent to shareholders using proxy access. A more practical proxy access right would put shareholders in a better position to ask for improvement in our stock price performance of a decline from $71 to $63 in the year leading up to the submittal of this proposal. Please vote yes: Shareholder Proxy Access Enhancement – Proposal 5 www.citigroup.com
Management Comment Summary Citi implemented a progressive proxy access by-law provision for our stockholders in 2015 that is aligned with current best practices, providing stockholders with meaningful and appropriate proxy access rights while taking into account the need to balance enhancing stockholder rights with protecting the interests of all our stockholders. The Board adopted the proxy access by-law provision after careful consideration and engagement with a number of our stockholders. Since our adoption of proxy access, we have had further discussions regarding proxy access with stockholders. Based on their feedback as well as a benchmarking review of proxy access rights adopted by other companies, we continue to believe that our current proxy access structure is the most appropriate for the Company and its stockholders at this time.
Citi 2019 Proxy Statement
Proposal 6 AFL–CIO Reserve Fund has submitted the following proposal for consideration at the 2019 Annual Meeting: RESOLVED: Shareholders of Citigroup Inc. (the “Company”) request that the Board of Directors adopt a policy prohibiting the vesting of equity-based awards for senior executives due to a voluntary resignation to enter government service (a “Government Service Golden Parachute”). For purposes of this resolution, “equity-based awards” include stock options, restricted stock and other stock awards granted under an equity incentive plan. “Government service” includes employment with any U.S. federal, state or local government, any supranational or international organization, any self-regulatory organization, or any agency or instrumentality of any such government or organization, or any electoral campaign for public office. This policy shall be implemented so as not to violate existing contractual obligations or the terms of any compensation or benefit plan currently in existence or approved by shareholders on the date this proposal is adopted, and it shall apply only to equity plans or plan amendments that shareholders approve after the date of the 2019 annual meeting. Supporting Statement: Our Company provides its senior executives with vesting of equity-based awards after their voluntary resignation of employment from the Company to pursue a career in government service. In other words, our Company gives a “golden parachute” for entering government service. Although the Company’s current named executive officers may have attained the “rule of 60” under which deferred stock awards continue to vest on schedule, future named executive officers and other senior executives may be able to take advantage of this golden parachute. At most companies, equity-based awards vest over a period of time to compensate executives for their labor during the commensurate period. If an executive voluntarily resigns before the vesting criteria are satisfied, unvested awards are usually forfeited. While government service is commendable, we question the practice of our Company providing continued vesting of equity-based awards to executives who voluntarily resign to enter government service. The vesting of equity-based awards over a period of time is a powerful tool for companies to attract and retain talented employees. But contrary to this goal, our Company’s award agreements contain a “Voluntary Resignation to Pursue Alternative Career” clause that provides for the continued vesting of restricted stock of executives who voluntarily resign to pursue a government service career. In last year’s proxy statement, the Company responded to this proposal by stating its desire to facilitate “some degree of parity between private and public sector employment” because “unvested awards are typically replaced with new awards by a new private sector employer.” In our view, it is simply not appropriate for our Company’s employees who choose to enter government service to be “bought out” in this way. We believe that compensation plans should align the interests of senior executives with the long-term interests of the Company. We oppose compensation plans that provide windfalls to executives that are unrelated to their performance. For these reasons, we question how our Company benefits from providing Government Service Golden Parachutes. Surely our Company does not expect to receive favorable treatment from its former executives? www.citigroup.com
Management Comment Summary Citi’s deferred compensation programs, like those of many other companies, include provisions that alter an award’s regular forfeiture conditions and provide for vesting in a range of circumstances (e.g., termination of employment on account of death, disability, involuntary termination not for cause, and upon meeting certain retirement-type age and service provisions). The alternative career provision, which is available to all employees who are eligible for deferred compensation awards (not just senior executives), is one of these exceptions. Under the alternative career provision, an employee who is not eligible for retirement may resign to work full-time in a paid career in government service, for a charitable institution, or as a teacher at an educational institution, and have his/her awards continue to vest on schedule. (A retirement-eligible employee may work for such employers and continue to vest regardless of the alternative career provision.) We believe that the alternative career provision, like other exceptions to the vesting conditions of our programs, helps us attract talented employees, which is a goal that furthers both our long-term business objectives and benefits stockholders at minimal cost. Important Points to Consider
Citi 2019 Proxy Statement
Proposal 7 Kenneth Steiner has submitted the following proposal for consideration at the 2019 Annual Meeting: Proposal 7 – Special Shareholder Meetings Resolved, Shareowners ask our board to take the steps necessary (unilaterally if possible) to amend our bylaws and each appropriate governing document to give holders in the aggregate of 15% of our outstanding common stock the power to call a special shareowner meeting. This proposal does not impact our board’s current power to call a special meeting. Special shareholder meetings allow shareholders to vote on important matters, such as electing new directors that can arise between annual meetings. This proposal topic won more than 70%-support at Edwards Lifesciences and SunEdison. This proposal topic, sponsored by William Steiner, also won 78% support at a Sprint annual meeting with 1.7 Billion yes-votes. Nuance Communications (NUAN) shareholders gave 94%-support in February 2018 to a rule 14a-8 proposal calling for 10% of shareholders to call a special meeting. This proposal topic won majority support at the 2011 Citigroup annual meeting and also 49.9% support at the 2018 Citigroup annual meeting. Both these votes would have been higher if all shareholders had access to independent proxy voting advice. Our current higher 25%-threshold for shareholders to call a special meeting may be unreachable due to time constraints and the detailed technical requirements that can easily trigger disqualifying errors by shareholders. Any claim that a shareholder right to call a special meeting can be costly – may be moot. When shareholders have a good reason to call a special meeting – our board should be able to take positive responding action to make a special meeting unnecessary. Shareholder proposals such as this have taken a leadership role to improve the corporate governance rules of our company. For instance Citigroup adopted shareholder proxy access after James McRitchie submitted a proxy access proposal in 2014 and 2015. Please vote yes: Special Shareholder Meetings – Proposal 7 Management Comment Summary Citi supports stockholders having the right to call a special meeting, which is why Citi’s By-laws already provided stockholders that own at least 25% of the outstanding shares of the company’s common stock the power to call a special meeting of stockholders. In response to the vote at the 2018 Annual Meeting on a proposal to lower the threshold to 15%, which did not pass but received significant shareholder support, the Board, taking into account the vote result, input from institutional investors and peer thresholds, has carefully considered the appropriate ownership threshold to call a special meeting and amended Citi’s By-laws to lower the threshold to 20%. The 20% threshold aligns Citi with many of its peers and strikes an appropriate balance between the right of shareholders to call a special meeting and the interests of Citi and our stockholders in promoting the appropriate use of Company resources. Given the number of outlets stockholders have to express their concerns, Citi believes that the adjustment to the 20% threshold properly addresses shareholder concerns, without providing undue power to a small minority of stockholders. www.citigroup.com
Important Points to Consider
Citi 2019 Proxy Statement
Submission of Future Stockholder Proposals Under SEC Rule 14a-8, a stockholder who intends to present a proposal at the next Annual Meeting of stockholders and who wishes the proposal to be included in the Proxy Statement for that meeting must submit the proposal in writing to the Corporate Secretary of Citi, Rohan Weerasinghe, at 388 Greenwich Street, New York, New York 10013. The proposal must be received no later than November 7, 2019. The proposal and its proponent must satisfy all applicable requirements of Rule 14a-8. Citi’s By-laws permit a stockholder or group of stockholders (up to 20) who have owned at least 3% of Citi common stock for at least three years to submit Director nominees (up to the greater of two nominees or 20% of the Board, as determined in accordance with the By-laws) for inclusion in Citi’s Proxy Statement if the nominating stockholder(s) satisfies the requirements specified in the By-laws. With respect to stockholder nominees for Director election submitted for inclusion in Citi’s Proxy Statement for the 2020 Annual Meeting, written notice of nominations must be provided by the stockholder proponent(s) to Citi in accordance with Citi’s By-laws. The notice must be delivered to, or mailed and received by, Citi’s Corporate Secretary between October 8, 2019 and November 7, 2019. These deadlines are based on the 150th day and 120th day, respectively, before the one-year anniversary of the date that the Proxy Statement for this Annual Meeting was first sent to stockholders (which date, for purposes of Citi’s By-laws, is March 6, 2019). The ability to include a nominee in Citi’s Proxy Statement is subject to the terms and conditions set forth in Citi’s By-laws. With respect to stockholder nominees for Director election at the next Annual Meeting (other than nominees submitted for inclusion in Citi’s proxy materials) and stockholder proposals for consideration at the next Annual Meeting that are not submitted for inclusion in Citi’s proxy materials under Rule 14a-8, written notice of nominations and proposals must be provided by the stockholder proponent to Citi in accordance with Citi’s By-laws. The notice must be delivered to, or mailed and received by, Citi’s Corporate Secretary, Rohan Weerasinghe, between December 18, 2019 and January 17, 2020 and must comply with all applicable provisions of Citi’s By-laws. You may obtain a copy of Citi’s By-laws on Citi’s website or by writing to the Corporate Secretary, Rohan Weerasinghe, at 388 Greenwich Street, New York, New York 10013. Cost of Annual Meeting and Proxy Solicitation Citi pays the cost of the Annual Meeting and the cost of soliciting proxies. In addition to soliciting proxies by mail, Citi may solicit proxies by personal interview, telephone, and similar means. No Director, officer, or employee of Citi will be specially compensated for these activities. Citi also intends to request that brokers, banks, and other nominees solicit proxies from their principals and will pay the brokers, banks, and other nominees certain expenses they incur for such activities. Citi has retained Morrow Sodali LLC, 470 West Avenue, Stamford, CT 06902, a proxy soliciting firm, to assist in the solicitation of proxies, for an estimated fee of $30,000 plus reimbursement of certain out-of-pocket expenses. Under SEC rules, a single set of Annual Reports and Proxy Statements may be sent to any household at which two or more stockholders reside if they appear to be members of the same family. Each stockholder continues to receive a separate proxy card. This procedure, referred to as householding, reduces the volume of duplicate information stockholders receive and reduces mailing and printing expenses. In accordance with a notice sent to certain stockholders who shared a single address, only one Annual Report and Proxy Statement will be sent to that address unless any stockholder at that address requested multiple sets of documents be sent. However, if any stockholder who agreed to householding wishes to receive a separate Annual Report or Proxy Statement, he or she may telephone toll-free 1-866-540-7095 or write to Broadridge Financial Services, Inc., Householding Department, 51 Mercedes Way, Edgewood, NY 11717. Stockholders sharing an address who wish to receive a single set of reports may do so by contacting their banks or brokers, if they are beneficial holders, or by contacting Broadridge at the address set forth above, if they are record holders. www.citigroup.com
Directions to 2019 Annual Meeting Location
Key Information for attending Citi’s 2019 Annual Meeting:
Citi 2019 Proxy Statement
Additional Information Regarding Proposal 3 CCARrefers to the Federal Reserve Board’s annual Comprehensive Capital Analysis and Review. CCAR is an important regulatory supervisory mechanism for assessing the capital adequacy of banks including, among other things, ensuring that banks have sufficient capital to continue to provide key financial services under adverse economic and financial market scenarios. Banks may not return capital to stockholders or take other capital actions unless the Federal Reserve Board indicates that it has “no objection” to a bank’s capital plan, including its requested capital actions. Cumulative Earnings Per Sharefor our Performance Share Units is determined by adding the diluted earnings per share based on net income allocated to common stockholders from our quarterly earnings reports for the 12 quarters of the applicable three-year performance period. Efficiency Ratiois total operating expenses divided by total revenues (net of interest expense). This ratio generally compares the cost of generating revenue to the amount of revenue generated. A lower cost is preferable to a higher cost in generating the same amount of revenue, and therefore, a lower efficiency ratio is generally better than a higher one. This metric encourages management to consider the costs of generating additional revenue instead of simply maximizing revenue, and can be used on a relative basis to identify which businesses are managed better than others. Income from Continuing Operations Before Taxesis revenues minus expenses and cost of credit, before taxes and discontinued operations. Net Incomerepresents a company’s after-tax profits. Net Income is an element of the metrics that measure return on assets or capital. Return on Assets (ROA)is net income divided by average assets as determined under U.S. GAAP. Return on Tangible Common Equityis net income for a business or Citigroup (minus preferred dividends in the case of Citigroup) divided by average tangible common equity for the year. Management views this metric as an appropriate indication of the long-term potential of Citi’s operating businesses to deliver long-term value to stockholders. Risk Appetite Ratiois the ratio between the earnings of a business unit, including expected losses (defined as revenues, net of interest expense, minus operating expenses, minus expected losses) (the numerator) and the stress losses (i.e., unexpected losses) of Citi or the applicable business segment under a 1-in-10 year stress scenario (the denominator). The applicable business unit should produce sufficient earnings each year, so that it does not lose money under a moderate stress event (i.e., a 1-in-10 year stress scenario). As long as the relationship is higher than 1-to-1, then the business unit “passes” the Risk Appetite Ratio test. The Risk Appetite Ratio is currently viewed as a baseline standard or a minimum goal. Risk Appetite Surplus, for a business unit, is earnings (defined as revenues, net of interest expense, minus operating expenses) minus both expected losses and unexpected losses (i.e., the stress losses of the business unit under a 1-in-10 year stress scenario). The Risk Appetite Surplus metric is intended to measure the ability of a business unit to withstand a moderate stress event without incurring an annual loss. Risk Appetite Surplus is used as a more nuanced qualitative tool to evaluate the capital generation power of businesses that may “pass” the Risk Appetite Ratio test. www.citigroup.com
Citigroup – Quantitative Scorecard Metric Details and Adjusted Results Reconciliations (In millions of dollars, except ratios and earnings per share)
Citi 2019 Proxy Statement
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Citigroup 2019 Stock Incentive Plan (effective April 16, 2019, subject to stockholder approval) 1. Purpose The purposes of the Citigroup 2019 Stock Incentive Plan (as amended from time to time, the “Plan”) are to (i) align incentive compensation programs with the Company’s long-term business objectives and the interests of stockholders; (ii) attract and retain Employees by providing compensation opportunities that are competitive within the global financial services industry; and (iii) provide compensation opportunities that do not create incentives to take imprudent risks. 2. Effective Date and Term The Plan will become effective on April 16, 2019 (the “Effective Date”), subject to approval by the stockholders of the Company. Unless terminated earlier by the Committee, the Plan will expire on the date of the annual general meeting of stockholders to be held in 2024. The Plan replaces the 2014 Stock Incentive Plan (the “2014 SIP”) for Awards granted on or after the Effective Date. Awards may not be granted under the 2014 SIP beginning on the Effective Date, but the adoption and effectiveness of the Plan will not affect the terms or conditions of any outstanding awards granted under the Prior Plans or any other plan prior to the Effective Date. 3. Definitions “Award”shall mean an Option, SAR, or Stock Award granted under the Plan. “Award Agreement”shall mean one or more documents (in either paper or electronic form (including by posting on the Company’s intranet or other shared electronic medium controlled by the Company to which a Participant has access)) evidencing the terms and conditions of an Award. “Board”shall mean the Board of Directors of the Company. “Change of Control”shall have the meaning set forth in Section 11. “Code”shall mean the Internal Revenue Code of 1986, as amended, including any rules and regulations promulgated thereunder. “Committee”shall mean the Personnel and Compensation Committee of the Board, or a sub-committee thereof, the members of which shall qualify as “Non-Employee Directors” under Rule 16b-3 of the 1934 Act; provided, however, that with respect to the application of the Plan to Directors, unless specifically provided otherwise herein, “Committee” shall mean the Board. Unless expressly provided otherwise herein or not permitted by applicable law, “Committee” includes any authorized delegate of the Committee, including each Plan Administrator. For avoidance of doubt, a failure of one or more members of the Committee to qualify as “Non-Employee Directors” under Rule 16b-3 of the 1934 Act shall not impair the validity of actions taken by the Committee, including the granting of any Award. “Common Stock”shall mean the common stock of the Company, par value $.01 per share. “Company”shall mean Citigroup Inc., a Delaware corporation. Citi 2019 Proxy Statement
“Deferred Stock Award”shall mean an Award payable in shares of Common Stock at the end of a specified deferral period that is subject to the terms, conditions, limitations, and restrictions set forth in the Plan and an Award Agreement. “Director”shall mean a member of the Board who is not also an active employee or officer of the Company or a Subsidiary. “Employee”shall have the meaning set forth in General Instruction A to the Registration Statement on Form S-8 promulgated under the Securities Act of 1933, as amended, in effect on the Effective Date.
“Fair Market Value”shall mean, in the case of a grant of an Option or a SAR, the closing price of a share of Common Stock on the New York Stock Exchange (or, if the Common Stock is not traded on the New York Stock Exchange, the principal national securities exchange upon which the Common Stock is traded or quoted) on the date on which the Option or the SAR is granted. For all other purposes of administering an Award (including Options and SARs granted as Substitute Awards), “Fair Market Value” shall be as determined pursuant to the valuation methodology approved for such purpose by the Committee. “GAAP”shall mean U.S. generally accepted accounting principles. “Gross Misconduct”shall mean any conduct by a Participant (a) while employed by the Company or a Subsidiary that is competitive with the Company’s or any Subsidiary’s business operations, (b) that is in breach of any obligation that Participant owes to the Company or any Subsidiary or of that Participant’s duty of loyalty to the Company or any Subsidiary, (c) that is materially injurious to the Company or any Subsidiary, or (d) that otherwise constitutes “gross misconduct” as determined pursuant to guidelines adopted by the Committee or a Plan Administrator. “Option”shall mean the right to purchase a specified number of shares of Common Stock at a stated exercise price for a specified period of time subject to the terms, conditions, limitations, and restrictions set forth in the Plan and an Award Agreement. “Participant”shall mean an Employee or former Employee who holds an Award under the Plan (and the legal representative of the estate of a deceased Participant). “Performance Condition”shall mean any condition to the vesting of an Award based on the performance of the Company (including one or more of its Subsidiaries), the performance of any branch, business unit of the Company (or of any Subsidiary), or the performance of an individual Participant (other than remaining employed by the Company or a Subsidiary), whether based on absolute or relative performance measures. “Plan Administrator”shall mean any officer or employee of the Company or a Subsidiary performing a function related to administration of the Plan as part of his or her normal job duties, and any director, officer, or employee, whether acting alone or as part of a committee or other group, or non-employee agent, to whom any authority over any matter related to administration of the Plan or any Award has been directly or indirectly delegated by the Committee. “Prior Plans”shall mean the 2014 SIP and the Citigroup 2009 Stock Incentive Plan. “Repricing”shall mean (a) any action that constitutes a “repricing” under GAAP or the rules of the New York Stock Exchange (including any modification or amendment to an outstanding Option or SAR that has the effect of reducing its exercise price), (b) any cancellation of an Option or SAR when its exercise price exceeds Fair Market Value in exchange for cash, (c) any cancellation of an Option or SAR in exchange for a new Option or SAR with a lower exercise price, or (d) a substitution of a Stock Award for an Option or SAR when its exercise price exceeds Fair Market Value; in each case other than an adjustment to an outstanding Award that is consistent with the requirements of Section 6(d). www.citigroup.com
“Restricted Stock Award”shall mean an Award of Common Stock that is subject to the terms, conditions, limitations, and restrictions set forth in the Plan and an Award Agreement. “SAR”shall mean “stock appreciation right,” which is a right to receive a payment, during a specified term, in cash, Common Stock, or a combination thereof, in an amount equal to the excess of the Fair Market Value of a specified number of shares of Common Stock at the time the SAR is exercised over the exercise price of such SAR, which right is subject to the terms, conditions, limitations, and restrictions set forth in the Plan and an Award Agreement. “Section 16(a) Officer”shall mean an Employee who is subject to the reporting requirements of Section 16(a) of the 1934 Act. “Stock Award”shall mean a Deferred Stock Award, a Restricted Stock Award, a Stock Payment, or Other Stock-Based Award. “Stock Payment”shall mean an immediately vested payment in shares of Common Stock that may or may not be in lieu of cash. “Subsidiary”shall mean any of the consolidated subsidiaries of the Company. “Substitute Award”shall mean an Award designated as such and granted in connection with a transaction between the Company or a Subsidiary and another entity or business in substitution or exchange for, or conversion, adjustment, assumption, or replacement of, awards previously granted by such other entity to any individuals who have become Employees of the Company or any Subsidiary as a result of such transaction or who were formerly employed by the acquired entity. An Award granted as an inducement to joining the Company or a Subsidiary in replacement of an award forfeited when leaving a previous employer to join the Company or a Subsidiary shall not be considered a Substitute Award. “1934 Act”shall mean the Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder and any successor thereto. 4. The Committee
Citi 2019 Proxy Statement
5. Participation
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Citi 2019 Proxy Statement
8. Dividends and Dividend Equivalents The Committee may provide that Stock Awards shall earn dividends or dividend equivalents. Such dividends or dividend equivalents may be paid currently or may be credited to an account maintained on the books of the Company. Any payment or crediting of dividends or dividend equivalents will be subject to such terms, conditions, limitations, and restrictions as the Committee may establish, from time to time, including, without limitation, reinvestment in additional shares of Common Stock or common share equivalents. Notwithstanding the foregoing, the Committee may not provide for the current payment of dividends or dividend equivalents with respect to any shares of Common Stock subject to an Award with a Performance Condition; for such Awards, the Committee may only provide for the accrual of dividends or dividend equivalents that will not be payable to a Participant unless and until, and only to the extent that, the shares of Common Stock subject to the Award vest upon satisfaction of the relevant Performance Condition and all other applicable conditions to vesting. Dividend or dividend equivalent rights shall be as specified in the Award Agreement, or pursuant to a resolution adopted by the Committee with respect to outstanding Awards. No dividends or dividend equivalents shall be paid on Options or SARs. 9. Voting Unless the Committee has determined otherwise, a Participant shall have the right to direct the vote of shares of Common Stock subject to an unvested Restricted Stock Award. Unvested shares of Common Stock that are eligible to vote shall be voted by a Plan Administrator in accordance with instructions received from Participants (unless to do so would constitute a violation of any applicable exchange rules). Shares subject to unvested Restricted Stock Awards as to which no instructions are received shall be voted by the Plan Administrator proportionately in accordance with instructions received with respect to all other unvested Restricted Stock Awards (including, for these purposes, outstanding awards granted under the Prior Plans and any other “non-qualified” stock incentive plan of the Company) that are eligible to vote (unless to do so would constitute a violation of any applicable exchange rules). 10. Nontransferability Awards granted under the Plan, and during any period of restriction on transferability, shares of Common Stock issued in connection with the exercise of an Option or a SAR, or vesting of a Stock Award, may not be sold, pledged, hypothecated, assigned, margined, or otherwise transferred by a Participant in any manner other than by will or the laws of descent and distribution, unless and until the shares underlying such Award have been issued, and all restrictions applicable to such shares have lapsed or have been waived by the Committee. No Award or interest or right therein shall be subject to the debts, contracts, or engagements of a Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment, or any other means whether such disposition be voluntary or involuntary or by operation of law, by judgment, lien, levy, attachment, garnishment, or any other legal or equitable proceedings (including bankruptcy and divorce), and any attempted disposition thereof shall be null and void, of no effect, and not binding on the Company in any way. www.citigroup.com
Notwithstanding the foregoing, the Committee may permit Options and/or shares issued in connection with an Option or a SAR exercise that are subject to restrictions on transferability to be transferred one time and without payment or consideration to a member of a Participant’s immediate family or to a trust or similar vehicle for the benefit of a Participant’s immediate family members. During the lifetime of a Participant, all rights with respect to Awards shall be exercisable only by such Participant or, if applicable pursuant to the preceding sentence, a permitted transferee. 11. Change of Control of the Company
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(c) | A “Change of Control” shall be deemed to occur if and when: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(i) | any person, including a “person” as such term is used in Section 14(d)(2) of the 1934 Act (a “Person”), is or becomes a beneficial owner (as such | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(ii) | individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to |
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ANNEX B | 139 |
(iii) | all or substantially all of the |
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12. Award Agreements
Each Award under the Plan shall be evidenced by an Award Agreement (as such may be amended from time to time) that sets forth the terms, conditions, restrictions, and limitations applicable to the Award, including, but not limited to, the provisions governing vesting, exercisability, payment, forfeiture, cancellation, and termination of employment, all or some of which may be incorporated by reference into one or more other documents delivered or otherwise made available to a Participant in connection with an Award. The Committee need not require the formal execution or acceptance of such document by the Participant, in which case acceptance of any benefit of the Award by the Participant shall constitute agreement by the Participant to the terms, conditions, restrictions, and limitations set forth in the Plan and the Award Agreement as well as the administrative guidelines and practices of the Company in effect from time to time. Any assertion by an Employee that any term, condition, limitation, or restriction of the Award as specified in the Award Agreement is invalid or not binding on such Employee because of his or her non-acceptance of the Award Agreement (or any portion thereof) shall be deemed a refusal of the Award and the Employee shall cease to be a Participant with respect to the Award, which shall be immediately cancelled. Each Award Agreement shall provide for forfeiture or cancellation of unvested Awards if it is determined that a Participant engaged in Gross Misconduct on or prior to a vesting date.
13. Tax Withholding
Participants shall be solely responsible for any applicable taxes (including without limitation income, payroll, and excise taxes) and penalties, and any interest that accrues thereon, which they incur under applicable law in connection with the receipt, vesting, or exercise of any Award. The Company and its Subsidiaries shall have the right to require payment of, or may deduct from any payment made under the Plan or otherwise to a Participant, or may permit or require shares to be tendered or sold (including shares of Common Stock delivered or vested in connection with an Award) in an amount sufficient to cover withholding of, any federal, state, local, foreign, or other governmental taxes or charges required by law, or hypothetical taxes required to be paid by a Participant pursuant to a tax-equalization policy for expatriate employees, and to take such other action as may be necessary to satisfy any such withholding or payment obligations. The value of any shares allowed to be withheld or tendered for tax withholding may not exceed the amount allowed consistent with fixed plan accounting in accordance with GAAP, to the extent applicable. To the extent that a number of shares of Common Stock sufficient to satisfy a tax withholding obligation of the Company may not be withheld (whether because the Award has not vested in full pursuant to its terms, administrative procedures in effect at such time, applicable accounting principles, or any other reason), it shall be a condition to the obligation of the Company to issue shares of Common Stock upon the exercise of an Option or a SAR, or in settlement of any vested Award, that a Participant pay to the Company, on demand, such amount as may be requested by the Company for the purpose of satisfying any actual tax withholding (or hypothetical tax) liability. If the amount is not timely paid to the Company in cash by such Participant, the Company may cancel the Award and refuse to issue such shares.
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14. Repayment Obligations and Right of Set-Off
(a) | If the Committee determines that all conditions to vesting and payment or distribution of an Award (or any portion thereof), or the vesting and exercisability of an Option or SAR (or any portion thereof), were not satisfied in full on the scheduled vesting date (including but not limited to, any Performance Condition), the Committee shall cancel such vesting and refuse to issue or distribute shares or cash and immediately |
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140 | ANNEX B |
terminate the Participant’s rights with respect to such Award (or improperly vested portion thereof). If any such Award (or portion thereof) has already been paid, distributed, or exercised, the Participant shall be obligated, upon demand, to: (i) in the case of an improperly vested Stock Award, return the amount of any cash payment received in settlement of the Stock Award (or improperly vested portion thereof), or if settled in shares, the number of shares of Common Stock issued in settlement of the Stock Award (or improperly vested portion thereof), or make a cash payment in an amount equal to the Fair Market Value of such shares on their vesting date, if greater than their Fair Market Value on the date they are due to be returned to the Company; or (ii) in the case of an improperly exercised Option or SAR, make a cash payment in an amount equal to the gain realized upon exercise of such Option or SAR (or improperly vested or exercised portion thereof), in each case, without reduction for any shares of Common Stock or cash withheld or paid to satisfy withholding tax or hypothetical tax obligations in connection with such Awards or any other obligation of the Participant. | ||
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15. Other Benefit and Compensation Programs
Awards granted under the Plan and amounts received upon vesting or exercise of an Award shall not be deemed a part of a Participant’s regular, recurring compensation for purposes of calculating payments or benefits under any Company benefit plan or severance program unless specifically provided for under the plan or program. Unless specifically set forth in an Award Agreement, Awards under the Plan are not intended as payment for compensation that otherwise would have been delivered in cash, and even if so intended, such Awards shall be subject to such vesting requirements and other terms, conditions, restrictions and limitations as may be provided in the Award Agreement.
16. Unfunded Plan
Unless otherwise determined by the Committee, the Plan shall be unfunded and shall not create (or be construed to create) a trust or a separate fund or funds. The Plan shall not establish any fiduciary relationship between the Company and any Participant or other person. To the extent any Participant holds any rights by virtue of an Award granted under the Plan, such rights shall constitute general unsecured liabilities of the Company and shall not confer upon any Participant or any other person or entity any right, title or interest in any assets of the Company.
17. Expenses of the Plan
The expenses of the administration of the Plan shall be borne by the Company and its Subsidiaries. The Company may require Subsidiaries to pay for the Common Stock issued under the Plan to Participants employed (or formerly employed) by such Subsidiaries.
18. Rights as a Stockholder
Unless the Committee determines otherwise, a Participant shall not have any rights as a stockholder with respect to shares of Common Stock covered by an Award until the date the Participant becomes the holder of record with respect to such shares. No adjustment will be made for dividends or other rights for which the record date is prior to such date, except as provided in Section 6(d) or Section 8.
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19. Future Rights
No Employee shall have any claim or right to be granted an Award under the Plan. There shall be no obligation of uniformity of treatment of Employees under the Plan. Further, the Company and its Subsidiaries may adopt other compensation programs, plans or arrangements as it deems appropriate or necessary. The adoption of the Plan or the granting of any Award shall not confer upon any Employee any right to continued employment in any particular position or at any particular rate of compensation, nor shall it interfere in any way with the right of the Company or a Subsidiary to terminatea third party pursuant to any award, judgment, or settlement of a complaint, arbitration, or lawsuit of which a Participant was the employment of its Employees atsubject; and (ii) any time, free fromoutstanding amounts (including, without limitation, travel and entertainment or advance account balances, loans, repayment obligations under any claim or liabilityAwards granted under the Plan. Unless expressly provided otherwise elsewhere in the Plan, or in an Award Agreement, Awardsawards granted under the Plan shall be made in anticipation of future service and/or subject to other vesting conditions and will not be earned until all conditions to vesting have been satisfied.
20. Amendment and Termination
The Plan may be amended, suspended or terminated at any time by the Committee, provided that no amendment shall be made without stockholder approval, if it would (a) materially increase the number of shares available under the Plan, (b) materially expand the types of awards available under the Plan, (c) materially expand the class of persons eligible to participate in the Plan, (d) materially extend the term of the Plan, (e) materially change the method of determining the exercise price of an Award, (f) delete or limit the Plan’s prohibition against Repricing, or (g) otherwise require approval by the stockholders of the Company in order to comply with applicable law or the rules of the New York Stock Exchange (or, if the Common Stock is not traded on the New York Stock Exchange, the principal national securities exchange upon which the Common Stock is then traded or quoted). No such amendment referred to above shall be effective unless and until it has been approved by the stockholders of the Company. The Committee retains the right to modify an Award without a Participant’s prior consent if it determines that the modification is required to comply with applicable law, regulation, or regulatory guidance (including applicable tax law). Except as may be provided by Section 7(e), Section 11 and this Section 20, any other adverse modification shall not be effective without the Participant’s written consent. The Company shall furnish or make available to Participants a written notice of any modification through a brochure, prospectus supplement or otherwise, which notice shall specify the effective date of such modification.
21. Successors and Assigns
The Plan and any applicable Award Agreement entered into under the Plan shall be binding upon and inure to the benefit of the respective successors and permitted assigns of Participants, including, without limitation, the executors, administrators or trustees of a Participant’s estate,plan, or any receiver or trustee in bankruptcy or representative of a Participant’s creditors.
22. Governing Law
The Plan and all Award Agreements entered into under the Plan shall be construed in accordance with and governed by the laws of the State of New York, except that any principles or provisions of New York law that would apply the law of another jurisdiction (other than applicable provisions of U.S. Federal law) shall be disregarded. Notwithstanding the foregoing, matters with respect to indemnification, delegation of authority under the Plan, and the legality of shares of Common Stock issued under the Plan, shall be governed by the Delaware General Corporation Law.
23. Tax Compliance
Awards granted hereunder shall comply with or be exempt from Section 409A of the Code, unless otherwise determined by the Committee. Ifobligations pursuant to any Awarda tax-equalization or housing allowance policy or other expatriate benefit) that is subject to Section 409A of the Code a Participant is entitled to receive a payment on a specified date, such payment shall be deemed made as of such specified date if it is made (a) not earlier than 30 days before such specified date and (b) not later than December 31 of the year in which such specified date occurs or, if later, the fifteenth day of the third month following such specified date, provided that the Participant shall not be permitted, directly or indirectly, to designate the taxable year in which such payment is made. If pursuant to any Award that is subject to Section 409A of the Code a Participant is entitled to a series of installment payments, such Participant’s right to the series of installment payments shall be treated as a right to a series of separate payments and not as a right to a single payment. For purposes of the preceding sentence, the term ”series of installment payments“ has the same meaning as provided in Section 1.409A-2(b)(2)(iii) of the regulations promulgated under the Code. Notwithstanding any provision of this Plan to the contrary, in no event shall the Company or any Subsidiary be
Citi 2016 Proxy StatementB-20
liable to a Participant on account of an Award’s failure to (a) qualify for favorable U.S. or foreign tax treatment or (b) avoid adverse tax treatment under U.S. or foreign law, including, without limitation, Sections 409A and 457A of the Code.
24. Severability
If any provision of this Plan is finally held to be invalid, illegal or unenforceable (whether in whole or in part), such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability and the remaining provisions shall not be affected thereby; provided that, if any such provision is finally held to be invalid, illegal or unenforceable because it exceeds the maximum scope determined to be acceptable to permit such provision to be enforceable, such provision shall be deemed modified to the minimum extent necessary in order to make such provision enforceable.
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ANNEX C
ADDITIONAL INFORMATION REGARDING PROPOSAL 5
Description of the Amended and Restated 2011 Citigroup Executive Performance Plan
The following is a description of certain important features of the amended and restated 2011 Citigroup Executive Performance Plan (the Executive Plan), the full text of which is included in this Annex C. This summary is qualified in its entirety by reference to the Executive Plan document.
Participation. Participants in the Executive Plan are selected by the Compensation Committee from our executive employees (i) who are, or are expected to be, (a) ”covered employees“ as defined in Section 162(m) of the Internal Revenue Code or (b) executive officers subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934; or (ii) are otherwise selected by the Compensation Committee to participate in the Executive Plan. For each calendar year, the Compensation Committee’s practice has been to select all individuals who are Citi employees on January 1 and, as of December 31, exclude all such individuals except those who are executive officers on such December 31. In 2015, 14 executives participated in the Executive Plan.
Performance periods. The Compensation Committee has historically established one-year performance periods under the Executive Plan, and this practice is expected to continue. The Compensation Committee may also establish performance periods of different durations, including longer and multi-year periods, and shorter performance periods for individuals who are hired or become eligible to participate in the Executive Plan after the commencement of the performance period.
Performance goals. Within 90 days after the beginning of each performance period or, if earlier, before 25% of the period elapses, the Compensation Committee will establish the relevant performance goal or goals for the period and the amounts of the awards that each participant is eligible to earn on achievement of the goals, which amounts may be expressed as percentages of an incentive pool or other measures prescribed by the Compensation Committee. The performance goals may be based on one or more of the following objective performance measures, which may be expressed in absolute and/or relative values or as a percentage of:
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At the time that the Compensation Committee establishes performance goals, it will also indicate the manner in which the level of the performance goals will be calculated and, if more than one goal is established, the relevant weighting assigned to each goal. In measuring the achievement of a performance goal, the Compensation Committee may determine to include or exclude any of the following: unrealized investment gains and losses; extraordinary, unusual, infrequently occurring or non-recurring items; asset write-downs; the effects of accounting, tax or legal changes; currency fluctuations; mergers and acquisitions; litigation or claim judgments or settlements; business interruption events; unbudgeted capital expenditures; and reserve-strengthening and other non-operating items. For the avoidance of doubt, any performance criteria that are financial metrics may or may not be determined in accordance with U.S. GAAP. To the extent appropriate, the performance goals will also reflect adjustments for risk-balancing features.
The Compensation Committee will determine and certify in writing, based on the level of achievement of the applicable performance goals and the other terms of the Executive Plan, whether a participant has earned an award and, if so, the amount of the award. The Compensation Committee may not increase the amount of an award above the amount determined based on the level of achievement of the applicable performance goals. The Compensation Committee may, however, reduce the amount of or cancel any award, so long as such reduction or cancellation does not result in any increase in the amount of any award payable to any other participant.
Maximum award. The maximum amount payable to a participant under the Executive Plan for any calendar year will be 0.2% multiplied by the amount of income from continuing operations before income taxes of Citigroup as reported for such year in the Quarterly Financial Data Supplement reporting the results of operations for the last fiscal quarter of such year. If an award is subject to a multi-year performance period, the maximum amount of the award will be measured by allocating the award to each calendar year (or portion thereof) within such period based on the performance goals properly allocated to each such year (or portion thereof).
Termination of employment. Unless the Compensation Committee determines otherwise, if a participant’s employment terminates for any reason prior to the date that the Compensation Committee certifies that the performance goals and other material terms of the Executive Plan were satisfied for the applicable performance period, the participant’s award for such performance period will be cancelled.
Form of awards. The Compensation Committee shall have full discretion to determine the form, terms and conditions of any award, which will include terms and conditions that the Compensation Committee deems appropriate, such as performance-based vesting or clawbacks.
Clawbacks. Awards under the Executive Plan must be subject to the Citi Clawbacks. Under the Citi Clawbacks, an award will be cancelled or forfeited or subject to recovery by Citi if the Committee, in its sole discretion, determines that (i) a participant received the award based on materially inaccurate publicly reported financial statements; (ii) a participant knowingly engaged in providing materially inaccurate information relating to publicly reported financial statements; (iii) a participant materially violated any risk limits established or revised by senior management and/or risk management; or (iv) a participant has engaged in ”gross misconduct“ as defined in the Executive Plan. The Compensation Committee may also, in its discretion, impose other forfeiture or recovery conditions on any award.
Citi 2016 Proxy StatementC-2
Amendment or termination of the Executive Plan. The Compensation Committee may amend, suspend or terminate the Executive Plan at any time, provided that any such action complies with the requirements of Section 162(m) of the Internal Revenue Code. As long as the Executive Plan remains in effect, it must be resubmitted to stockholders at least every five years in order for incentive compensation paid under the plan to be treated as performance-based compensation under Section 162(m) of the Internal Revenue Code.
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1. Purpose
The purpose of the 2011 Citigroup Executive Performance Plan (the ”Plan“) of Citigroup Inc. (the ”Company“) is to promote the interests of stockholders by (a) incentivizing officers and other key executives to contribute to the Company’s long-term profitability, thereby aligning the executives’ interests with those of the Company’s stockholders and other stakeholders; (b) motivating officers and key executives by means of performance-related incentives that are appropriately balanced to avoid incentives for executives to take unnecessary and excessive risks; and (c) attracting and retaining officers and key executives of outstanding ability by providing competitive incentive compensation opportunities. The Plan commenced on January 1, 2011 and was approved by stockholders of the Company on April 21, 2011. The Plan was amended and restated as of January 1, 2016, subject to approval by stockholders of the Company.
2. Administration
The Plan shall be administered by the Personnel and Compensation Committee of the Board of Directors of the Company or its delegate (the ”Committee“). The Committee may delegate its authority and responsibilities under the Plan, except to the extent that such delegation would cause any compensation paid under the Plan to fail to be ”performance-based compensation“ within the meaning of section 162(m) of the Internal Revenue Code of 1986, as amended (the ”Code“). Subject to the express provisions of the Plan, the Committee shall have authority to: (a) select the employees who will participate in the Plan (the ”Participants“); (b) determine the amounts of the awards (”Awards“) to be made under the Plan, as described in Section 4; and (c) establish from time to time regulations for the administration of the Plan, interpret the Plan, and make all determinations deemed necessary or advisable for the administration of the Plan, which interpretations and determinations shall be final, binding and conclusive on all persons.
3. Participation
Participants in the Plan shall be selected for each calendar year (each such year a ”Plan Year“) from those executive employees of the Company (a) who are, or are expected to be, (i) ”covered employees“ as defined in Section 162(m) of the Code, or (ii) executive officers subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934, as amended, or (b) who are otherwise selected by the Committee to participate in the Plan. No employee shall at any time have a right to be selected as a Participant in the Plan for any Plan Year, or to be entitled automatically to an Award, or, having been selected as a Participant for one Plan Year, to be a Participant in any other Plan Year.
4. Awards, Performance Goals and Performance Periods
Section 4.01. Awards. Awards may be earned by Participants for a specified performance period (a ”Performance Period“) determined in accordance with Section 4.03; provided, however, that (a) the making of any Award under the Plan shall be contingent upon the achievement of the relevant performance goals established by the Committee (”Performance Goals“) for such Performance Period; and (b) no Award may exceed the amount established by the Committee for the actual level of performance attained.
Section 4.02. Performance Goals
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Section 4.03. Performance Periods. Unless otherwise determined by the Committee, each Performance Period shall commence on the first day of a Plan Year and end on the last day of such Plan Year. The Committee may establish longer Performance Periods, including multi-year Performance Periods, and the Committee may also establish shorter Performance Periods for individuals who are hired or become eligible to participate in the Plan after the commencement of a Performance Period.
Section 4.04. Discretion. The Committee shall have no discretion to increase the amount of any Award that would otherwise be payable to a Participant upon attainment of the Performance Goals applicable to a Performance Period, but the Committee may in its discretion reduce the amount or cancel such Award; provided, however, that the exercise of such negative discretion shall not be permitted to result in any increase in the amount of any Award payable to any other Participant.
Section 4.05. Determination of Award. The amount of a Participant’s Award for a Plan Year, if any, shall be determined by the Committee or its delegate in accordance with the level of achievement of the applicable Performance Goals and the other terms of the Plan. Prior to the making of any Awards hereunder, the Committee shall determine and certify in writing the extent to which the Performance Goals and other material terms of the Plan were satisfied.
Section 4.06. Maximum Award. Notwithstanding any other provision of the Plan, the maximum amount payable to a Participant under the Plan for any Plan Year shall be 0.2% of the amount of income from continuing operations before income taxes of Citigroup Inc. as reported for such Plan Year in the Quarterly Financial Data Supplement reporting the results of operations for the last fiscal quarter of such Plan Year (the ”Participant Limit“). In the case of an Award for a multi-year Performance Period, the Participant Limit will be measured by allocating the Award to each Plan Year (or portion thereof) within the Performance Period based upon the Performance Goals properly allocated to each Plan Year. The amount payable with respect to an Award for any Plan Year shall be measured for such Plan Year, regardless of the fact that the Award may be delivered in a later year. The limitation in this section shall be interpreted and applied in a manner consistent with Section 162(m) of the Code.
Citi 2016 Proxy StatementC-4
5. Termination of Employment
Unless otherwise determined by the Committee in accordance with the requirements of Section 162(m) of the Code, if a Participant’s employment or service with the Company and all of its subsidiaries and affiliates terminates for any reason prior to the date the Committee certifies in accordance with Section 4.05 that the Performance Goals and other material terms of the Plan were satisfied for a Performance Period, the Participant’s Award, and all rights of the Participant to such Award for such Performance Period, will be cancelled.
6. Making of Awards to Participants
Section 6.01. Making of Awards. Unless the Committee determines otherwise, an Award for a Performance Period shall be granted to a Participant during the two and one-half month period following the end of the year in which the Performance Period ends.
Section 6.02. Form of Award. Awards shall be made in any form permitted (a) under the Citi Discretionary Incentive and Retention Plan, as amended and restated effective January 1, 2015, or any successor or future similar plans, or (b) any long-term incentive award plan adopted by the Company. Subject to the terms of the Plan and Section 162(m) of the Code, the Committee shall have full discretion to determine the form, terms and conditions of any Award, which may include without limitation performance vesting conditions and clawback provisions.
Section 6.03. Tax Withholding. All Awards shall be subject to tax withholding to the extent required by applicable law.
7. Citi Clawback and Other Clawbacks
An Award will be cancelled or forfeited or subject to recovery by the Company if the Committee, in its sole discretion, determines that (a) Participant received the Award based on materially inaccurate publicly reported financial statements, (b) Participant knowingly engaged in providing materially inaccurate information relating to publicly reported financial statements, (c) Participant materially violated any risk limits established or revised by senior management and/or risk management, or (d) Participant has engaged in ”gross misconduct“ as defined herein (the ”Citi Clawback“). For purposes of this Plan, ”gross misconduct“ means any conduct that is determined by the Committee, in its sole discretion, (a) to be in competition during employment by the Company with the Company’s business operations, (b) to be in breach of any obligation that Participantthen owes to the Company or Participant’s dutya Subsidiary.
15. Other Benefit and Compensation Programs
Awards granted under the Plan and amounts received upon vesting or exercise of an Award shall not be deemed a part of a Participant’s regular, recurring compensation for purposes of calculating payments or benefits under any Company benefit plan or severance program unless specifically provided for under the plan or program. Unless specifically set forth in an Award Agreement, Awards under the Plan are not intended as payment for compensation that otherwise would have been delivered in cash, and even if so intended, such Awards shall be subject to such vesting requirements and other terms, conditions, restrictions, and limitations as may be provided in the Award Agreement.
16. Unfunded Plan
Unless otherwise determined by the Committee, the Plan shall be unfunded and shall not create (or be construed to create) a trust or a separate fund or funds. The Plan shall not establish any fiduciary relationship between the Company and any Participant or other person. To the extent that any Participant holds any rights by virtue of an Award granted under the Plan, such rights shall constitute general unsecured liabilities of the Company and shall not confer upon any Participant or any other person or entity any right, title, or interest in any assets of the Company.
17. Expenses of the Plan
The expenses of the administration of the Plan shall be borne by the Company and its Subsidiaries. The Company may require Subsidiaries to pay for the Common Stock issued under the Plan to Participants employed (or formerly employed) by such Subsidiaries.
18. Rights as a Stockholder
Unless the Committee determines otherwise, a Participant shall not have any rights as a stockholder with respect to shares of Common Stock covered by an Award until the date the Participant becomes the holder of record with respect to such shares. No adjustment will be made for dividends or other rights for which the record date is prior to such date, except as provided in Section 6(d) or Section 8.
Citi 2019 Proxy Statement
ANNEX B | 141 |
19. Future Rights
No Employee shall have any claim or right to be granted an Award under the Plan. There shall be no obligation of uniformity of treatment of Employees under the Plan. Further, the Company and its Subsidiaries may adopt other compensation programs, plans, or arrangements as they deem appropriate or necessary. The adoption of the Plan or the granting of any Award shall not confer upon any Employee any right to continued employment in any particular position or at any particular rate of compensation, nor shall it interfere in any way with the right of the Company or a Subsidiary to terminate the employment of its Employees at any time, free from any claim or liability under the Plan. Unless expressly provided otherwise elsewhere in the Plan or in an Award Agreement, Awards under the Plan shall be made in anticipation of future service and/or subject to other vesting conditions and will not be earned until all conditions to vesting have been satisfied.
20. Amendment and Termination
The Plan may be amended, suspended, or terminated at any time by the Committee, provided that no amendment shall be made without stockholder approval, if it would (a) materially increase the number of shares available under the Plan (other than pursuant to Section 6(d)), (b) materially expand the types of awards available under the Plan, (c) materially expand the class of persons eligible to participate in the Plan, (d) materially extend the term of the Plan, (e) materially change the method of determining the exercise price of an Award, (f) delete or limit the Plan’s prohibition against Repricing, or (g) otherwise require approval by the stockholders of the Company in order to comply with applicable law or the rules of the New York Stock Exchange (or, if the Common Stock is not traded on the New York Stock Exchange, the principal national securities exchange upon which the Common Stock is then traded or quoted). No such amendment referred to above shall be effective unless and until it has been approved by the stockholders of the Company. The Committee retains the right to modify an Award without a Participant’s prior consent if it determines that the modification is required to comply with applicable law, regulation, or regulatory guidance (including applicable tax law). Except as may be provided by Section 7(e), Section 11, and this Section 20, any other adverse modification shall not be effective without the Participant’s written consent. The Company shall furnish or make available to Participants a written notice of any modification through a brochure, prospectus supplement, or otherwise, which notice shall specify the effective date of such modification.
21. Successors and Assigns
The Plan and any applicable Award Agreement entered into under the Plan shall be binding upon and inure to the benefit of the respective successors and permitted assigns of Participants, including, without limitation, the executors, administrators, or trustees of a Participant’s estate, or any receiver or trustee in bankruptcy or representative of a Participant’s creditors.
22. Governing Law
The Plan and all Award Agreements entered into under the Plan shall be construed in accordance with and governed by the laws of the State of New York, except that any principles or provisions of New York law that would apply the law of another jurisdiction (other than applicable provisions of U.S. federal law) shall be disregarded. Notwithstanding the foregoing, matters with respect to indemnification, delegation of authority under the Plan, and the legality of shares of Common Stock issued under the Plan, shall be governed by the Delaware General Corporation Law.
23. Tax Compliance
Awards granted hereunder shall comply with or be exempt from Section 409A of the Code, unless otherwise determined by the Committee. If, pursuant to any Award that is subject to Section 409A of the Code, a Participant is entitled to receive a payment on a specified date, such payment shall be deemed made as of such specified date if it is made (a) not earlier than 30 days before such specified date, and (b) not later than December 31 of the year in which such specified date occurs or, if later, the fifteenth day of the third month following such specified
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142 | ANNEX B |
date; provided that the Participant shall not be permitted, directly or indirectly, to designate the taxable year in which such payment is made. If, pursuant to any Award that is subject to Section 409A of the Code, a Participant is entitled to a series of installment payments, such Participant’s right to the series of installment payments shall be treated as a right to a series of separate payments and not as a right to a single payment. For purposes of the preceding sentence, the term “series of installment payments” has the same meaning as provided in Section 1.409A-2(b)(2)(iii) of the regulations promulgated under the Code. Notwithstanding any provision of this Plan to the contrary, in no event shall the Company or any Subsidiary be liable to a Participant on account of an Award’s failure to (a) qualify for favorable U.S. or foreign tax treatment, or (b) avoid adverse tax treatment under U.S. or foreign law, including, without limitation, Sections 409A and 457A of the Code.
24. Severability
If any provision of this Plan is finally held to be invalid, illegal, or unenforceable (whether in whole or in part), such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality, or unenforceability, and the remaining provisions shall not be affected thereby; provided that, if any such provision is finally held to be invalid, illegal, or unenforceable because it exceeds the maximum scope determined to be acceptable to permit such provision to be enforceable, such provision shall be deemed modified to the minimum extent necessary in order to make such provision enforceable.
Citi 2019 Proxy Statement
SCAN TO VIEW MATERIALS & VOTE |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | |
E59445-P17380-Z73893-Z73892 | KEEP THISPORTION FOR YOURRECORDS |
DETACH AND RETURN THIS PORTION ONLY | |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
CITIGROUP INC. |
The Board of | ||||||||
1. Proposal to elect 15 Directors: | ||||||||
For | Against | Abstain | ||||||
1a. | Michael L. Corbat | ☐ | ☐ | ☐ | ||||
1b. | Ellen M. Costello | ☐ | ☐ | ☐ | ||||
1c. | Barbara J. Desoer | ☐ | ☐ | ☐ | ||||
1d. | John C. Dugan | ☐ | ☐ | ☐ | ||||
1e. | Duncan P. Hennes | ☐ | ☐ | ☐ | ||||
1f. | Peter B. Henry | ☐ | ☐ | ☐ | ||||
1g. | S. Leslie Ireland | ☐ | ☐ | ☐ | ||||
1h. | Lew W. (Jay) Jacobs, IV | ☐ | ☐ | ☐ | ||||
1i. | Renée J. James | ☐ | ☐ | ☐ | ||||
1j. | Eugene M. McQuade | ☐ | ☐ | ☐ | ||||
1k. | Gary M. Reiner | ☐ | ☐ | ☐ | ||||
1l. | Diana L. Taylor | ☐ | ☐ | ☐ | ||||
1m. | James S. Turley | ☐ | ☐ | ☐ |
For | Against | Abstain | ||||||
1n. Deborah C. Wright | ☐ | ☐ | ☐ | |||||
1o. Ernesto Zedillo Ponce de Leon | ☐ | ☐ | ☐ | |||||
2. | Proposal to ratify the | ☐ | ☐ | ☐ | ||||
3. | Advisory vote to | ☐ | ☐ | ☐ | ||||
4. | Approval of the Citigroup 2019 Stock Incentive Plan. | ☐ | ☐ | ☐ | ||||
| For | Against | Abstain | |||||
5. | Shareholder proposal requesting Shareholder Proxy Access Enhancement to Citi's proxy access bylaw provisions. | ☐ | ☐ | ☐ | ||||
6. | Shareholder proposal requesting that the
| ☐ | ☐ | ☐ | ||||
7. | Shareholder proposal requesting that the
| ☐ | ☐ | ☐ | ||||
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12. Effective Date and Term
The Plan was amended and restated as of January 1, 2016, subject to approval by stockholders of the Company. The Plan became effective on January 1, 2011, and subject to Section 10 (regarding the Committee’s right to amend, suspend or terminate the Plan), shall remain in effect thereafter. As long as the Plan remains in effect, it shall be resubmitted to stockholders at least every five years as required by Section 162(m) of the Code.
13. Governing Law; Arbitration
The Plan shall be subject to and construed in accordance with the laws of the State of New York, without regard to any conflicts or choice of law rule or principle that might otherwise refer the interpretation of the Award to the substantive law of another jurisdiction. All disputes under the Plan shall be subject to final and binding arbitration in accordance with the Company’s arbitration policy.
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Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | |||||
Meeting Information
2019 Annual Meeting of Stockholders
April 16, 2019 at 9:00 a.m. at Citi's
Headquarters
388 Greenwich Street
New York, New York 10013
ADMISSION TICKET2016 AnnualShareholder Meeting of StockholdersApril 26, 2016 at 9:00 a.m. atUniversity of MiamiThe Grand Ballroom at the Student Center Complex1330 Miller DriveCoral Gables, FL 33146You should present this admission ticket in orderRegistration permits shareholders to gain admittance to the meeting. This ticket admits only the stockholder(s) listed on the reverse side and is not transferable. Each stockholder may be asked to present valid picture identification, such as a driver's license. Cameras,recording devices and other electronic devices will not be permitted at the meeting.If you submit your proxy by telephone or Internet, do not return your proxy card.Thank you for your proxy submission.Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Noticeand Proxy Statement and Annual Report are available athttp://www.citigroup.com/citi/investor/corporate_governance.html.E01848-P74106-Z67254CITIGROUP INC.Proxy Solicited on Behalf of the Board of Directorsof Citigroup Inc.register for the Annual Meeting April 26, 2016The undersigned hereby constitutes and appoints Michael E. O’Neill, Michael L. Corbat and Rohan Weerasinghe, and each of them his or her true and lawful agents and proxies with full power of substitution in each,print their admission tickets at their leisure.
If you plan to represent the undersigned atattend the Annual Meeting, of Stockholders of Citigroup Inc. (“Citigroup”) to be heldplease click the "Register for Meeting" link at the University of Miami, The Grand Ballroom at the Student Center Complex, 1330 Miller Drive, Coral Gables, Florida, on Tuesday, April 26, 2016, at 9:00 a.m. local time and at any adjournments or postponements thereof, on all matters properly coming before the Annual Meeting, including but not limited to the matters set forth on the reverse side.If shares of Citigroup Common Stock are issued to or held for the account of the undersigned under employee plans and voting rights attached to such shares (any of such plans, a “Voting Plan”), then the undersigned hereby directs the respective fiduciary of each applicable Voting Plan to vote all shares of Citigroup Common Stock in the undersigned's name and/or account under such Plan in accordance with the instructions given herein and the terms of the applicable Voting Plan, at the Annual Meeting and at any adjournments or postponements thereof, on all matters properly coming before the Annual Meeting, including but not limited to, the matters set forth on the reverse side.You are encouraged to specify your choices by marking the appropriate boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance with the Board of Directors’ recommendations. Your proxy cannot be voted unless you sign, date and return this card or follow the instructions for telephone or Internet voting set forth on the reverse side.This proxy, when properly executed, will be voted in the manner directed herein. If no direction is made, this proxy will be voted FOR Proposals 1-5 and AGAINST Proposals 6-10 and will be voted in the discretion of the proxies (or, in the case of a Voting Plan, will be voted in the discretion of the plan trustee or administrator) upon such other matters as may properly come before the Annual Meeting.www.proxyvote.com.The signer(s) hereby acknowledge(s) receipt of the Notice of Annual Meeting of Stockholders and accompanying Proxy Statement. The signer(s) hereby revoke(s) all proxies heretofore given by the signer(s) to vote at said Annual Meeting and any adjournments or postponements thereof. NOTE: Please sign exactly as name appears herein. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.IF NO BOXES ARE MARKED, THIS PROXY WILL BE VOTED IN THE MANNER DESCRIBED ABOVE.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice
and Proxy Statement and Annual Report are available at
www.citigroup.com/citi/investor/corporate_governance.html.
E59446-P17380-Z73893-Z73892 |
The undersigned hereby constitutes and appoints John C. Dugan, Michael L. Corbat and Rohan Weerasinghe, and each of them his or her true and lawful agents and proxies with full power of substitution in each, to represent the undersigned at the Annual Meeting of Stockholders of Citigroup Inc. ("Citigroup") to be held at Citi's Headquarters, 388 Greenwich Street, New York, NY 10013, on Tuesday, April 16, 2019, at 9:00 a.m. local time and at any adjournments or postponements thereof, on all matters properly coming before the Annual Meeting, including but not limited to the matters set forth on the reverse side.
You are encouraged to specify your choices by marking the appropriate boxes (SEE REVERSE SIDE) but you need not mark any boxes if you wish to vote in accordance with the Board of Directors' recommendations. Your proxy cannot be voted unless you sign, date and return this card or follow the instructions for telephone or Internet voting set forth on the reverse side.
This proxy, when properly executed, will be voted in the manner directed herein. If no direction is made, this proxy will be votedFOR Proposals 1-4, andAGAINST Proposals 5-7 and will be voted in the discretion of the proxies (or, in the case of a Voting Plan, will be voted in the discretion of the plan trustee or administrator) upon such other matters as may properly come before the Annual Meeting.
The signer(s) hereby acknowledge(s) receipt of the Notice of Annual Meeting of Stockholders and accompanying Proxy Statement. The signer(s) hereby revoke(s) all proxies heretofore given by the signer(s) to vote at said Annual Meeting and any adjournments or postponements thereof. NOTE: Please sign exactly as name appears herein. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.
Attention employee benefit plan participants:If you hold shares of Citigroup common stock through an employee benefit plan, you should complete, sign and return this proxy card to instruct the trustee of the plan how to vote these shares. Your proxy must be received no later than 8:00 a.m., Eastern Time, on April 11, 2019 so that the trustee of the plan (who votes the shares on behalf of plan participants) has adequate time to tabulate the voting instructions. Your voting instructions will be kept confidential.