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Citigroup Inc. 2021 Notice of Annual Meeting and | ||
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March
Dear Shareholder: We cordially invite you to attend Citi’s 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.
Thank you for your support of Citi. |
Sincerely, |
John C. Dugan Chair of the Board |
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2021 Board Letter toLetter from the Boardof Directors to ourShareholders“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.
Stockholders
Citi 20192021 Proxy Statement
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First among these, as the consent orders described above made painfully clear, is the need to fundamentally change the company’s risk and control environment. The Board believes that this change is absolutely critical: not just to remediate deficiencies identified by regulators, but to build and deeply invest in the technological and operating backbone that Citi will sorely need to compete effectively in its much more digital future. Indeed, this Transformation – as it has rightfully been dubbed – is the predicate for Citi’s long-term strategic success; done correctly, it will produce tangible benefits for our clients and investors while at the same time strengthen the bank’s safety and soundness. Jane has fully embraced and is actively leading the Transformation, and the Board has formed its Transformation Oversight Committee to oversee and hold management accountable for its successful execution. But the Transformation is not the only change potentially on the horizon. As part of assuming her new role as CEO, Jane and her team have been undertaking a thorough review and “refresh” of Citi’s core strategy. The focus of this review is on adapting to and leading the accelerated digitization of the financial services industry, for which the Transformation will be critical. In addition, while the pandemic demonstrated Citi’s financial resilience, it also Finally, there is a critically important change that Citi has embraced as we
Thank you for your ongoing support of Citi. Dialogue with | ||||
Ellen M. Costello Grace E. Dailey Barbara J. Desoer John C. Dugan Jane N. Fraser Duncan P. Hennes | Peter B. Henry S. Leslie Ireland Lew W. (Jay) Jacobs, IV Renée J. James Gary M. Reiner | James S. Turley Deborah C. Wright Alexander R. Wynaendts Ernesto Zedillo Ponce de Leon | ||
A WORD OF APPRECIATION | ||||
Mike |
www.citigroup.com
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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 16, 2019,27, 2021, at 9:00 a.m. at Citi’s Headquarters, 388 Greenwich Street, New York, New York. DirectionsEastern Time through a virtual meeting platform. Please go to the 2019 Annual Meeting location are provided on page 126of this Proxy Statement. You will need an admission ticket or proof of ownership of Citi stock“Register for Meeting” link at www.proxyvote.com to enterregister for the meeting. Live audio of the Annual Meeting will be webcast at www.citigroup.com. You or your proxyholder can participate, vote, ask questions, and examine our stocklist or rules of the meeting at the Virtual Annual Meeting by visiting www.virtualshareholdermeeting.com/CITI2021 and using your 16-digit control number. Electronic entry to the meeting will begin at 8:45 a.m. E.T. and the meeting will begin promptly at 9:00 a.m. E.T. If you encounter difficulties accessing the virtual meeting, please call the technical support number that will be posted at www.virtualshareholdermeeting.com/CITI2021.
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 |
3. | consider an advisory vote to approve Citi’s |
4. | approve additional authorized shares under 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. |
Citi has utilized the Securities and Exchange Commission (“SEC”) 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 20192021 Annual Meeting.
In accordance with this rule, on or about March 6, 2019,17, 2021, we sent to those current stockholders who were stockholders at the close of business on February 19, 2019,March 1, 2021, a notice of the 20192021 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.
By order of the Board of Directors,
Rohan Weerasinghe
Corporate Secretary
March 6, 201917, 2021
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Voting Items |
Proposal 1: Election of Directors(Pages The Board recommends you voteFOReach nominee | |
Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm(Pages | |
Proposal 3: Advisory Vote to Approve Citi’s | |
Proposal 4: | |
Stockholder Proposals |
Meeting and Voting Information (For additional information, please see About the 2021 Annual Meeting starting on page 138.) |
Date and Time April | |
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Voting | |
Admission |
Summary of Director Nominees
The nominees for the Board of Directors each have the qualifications and experience to approve and guide Citi’s strategy. The Board also overseesstrategy and oversee management’s execution of that strategic vision. Citi’s Board of Directors consists of individuals with the skills and backgrounds necessary to oversee Citi’s efforts on delivering sustainable, client-led revenue growth while operating within a complex financial and regulatory environment.
Independence | |
Board Refreshment | |
The average board tenure of our | |
Diversity | |
Citi’s Board is committed to ensuring that it is composed of individuals whose backgrounds reflect thediversity represented by our employees, customers, stockholders, and |
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 | ⚫ | ⚫ | ⚫ |
Name and Primary Qualifications | Age | Director Since | Principal Occupation and Other Current Public Company Directorships | Citi Committees | |||||||||
A | ECC | E | NGP | PC | RM | ||||||||
Ellen M. Costello | 66 | 2016 | Former President and CEO, BMO Financial Corporation, and Former U. S. Country Head, BMO Financial Group Board: Diebold Nixdorf, Inc. | ⚫ | ⚫ | ||||||||
Grace E. Dailey | 60 | 2019 | Former Senior Deputy Comptroller for Bank Supervision Policy and Chief National Bank Examiner, Office of the Comptroller of the Currency | ⚫ | ⚫ | ||||||||
Barbara J. Desoer | 68 | 2019 | Chair, Citibank, N. A. Board: DaVita Inc. | ⚫ | ⚫ | ||||||||
John C. Dugan | 65 | 2017 | Chair, Citigroup Inc. | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | |||||
Jane N. Fraser | 53 | 2020 | Chief Executive Officer, Citigroup Inc. | ||||||||||
Duncan P. Hennes | 64 | 2013 | Co-Founder and Partner, Atrevida Partners, LLC Board: RenaissanceRe Holdings Ltd. | ⚫ | ⚫ | ⚫ | ⚫ | ||||||
Peter B. Henry | 51 | 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 | 61 | 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 | 50 | 2018 | Former President and Managing Director, Pacific Investment Management Company LLC (PIMCO) | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ||||
Renée J. James | 56 | 2016 | Founder, Chairman and CEO, Ampere Computing Board: Oracle Corporation | ⚫ | |||||||||
Gary M. Reiner | 66 | 2013 | Operating Partner, General Atlantic LLC Board: Hewlett Packard Enterprise Company | ⚫ | |||||||||
Diana L. Taylor | 66 | 2009 | Former Superintendent of Banks, State of New York Board: Brookfield Asset Management | ⚫ | ⚫ | ⚫ | |||||||
James S. Turley | 65 | 2013 | Former Chairman and CEO, Ernst & Young Boards: Emerson Electric Co., Northrop Grumman Corporation, and Precigen, Inc. | ⚫ | ⚫ | ⚫ | |||||||
Deborah C. Wright | 63 | 2017 | Former Chairman, Carver Bancorp, Inc. | ⚫ | ⚫ | ||||||||
Alexander R. Wynaendts | 60 | 2019 | Former Chief Executive Officer and Chairman of the Executive Board, Aegon NV Board: Air France KLM | ⚫ | ⚫ | ||||||||
Ernesto Zedillo Ponce de Leon | 69 | 2010 | Director, Center for the Study of Globalization and Professor in the Field of International Economics and Politics, Yale University Board: Alcoa Corp. | ⚫ | ⚫ | ⚫ |
Qualifications |
Compensation | Institutional Business | ||
Consumer Business and Financial Services | International Business or Economics | ||
Corporate Governance | Legal, Regulatory and Compliance | ||
Risk Management | |||
Sustainability | |||
Human Capital Management |
⚫ | committee member |
⚫ | committee chair |
A | Audit |
Ethics, Conduct and Culture | |
E | Executive |
NGP | Nomination, Governance and Public Affairs |
PC | Personnel and Compensation |
RM | Risk Management |
12 | 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 | Adherence to Corporate Governance Best Practices | |||
●In ●Citi ●Stockholders have the right to act by written consent ●Citi has an independent ●Majority vote standard for uncontested Director elections ●No super-majority vote provisions in our governing instruments | ● | ● ●Members of Citi’s Board of Directors and Citi’s executive officers are not permitted to hedge their Citi securities or to pledge their Citi securities as collateral for a ●Citi’s Nominees for Director include ●Ongoing Board refreshment, with new independent Directors added in 2015, 2016, 2017, 2018, 2019, and ● ●Citi’s ●Citi appointed a Chief Sustainability Officer in September 2019 |
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) AND SUSTAINABILITY HIGHLIGHTS | 13 |
Our Investor Engagement Program*
Summer Members of senior management |
Fall Members of the Board and senior management conduct calls with investors for input on a variety of governance, human capital management, compensation, and environmental and social matters, including climate risk. |
Winter Senior management continues to conduct engagement calls with investors regarding governance, human capital management, 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 | |
Annual Stockholders’ Meeting |
* | In the period following the |
Environmental, Social and
Governance (ESG) and Sustainability Highlights
CitizenshipESG and Sustainability Governance at Citi
Three Board-level committees have oversight responsibility for citizenshipESG and sustainability-related activities and report to theactivities. The full Board also receives reporting on these topics. Management organizations help drive activities and provide strategic guidance and senior-level review on citizenshipESG and sustainability topics.
Board of Directors | Senior Management | |||||
Nomination, Governance and Public Affairs Committee | Ethics, Conduct and Culture Committee | Risk Management Committee | ●Executive Management Team ●Reputation Risk Committees ●Chief Sustainability Officer ●Head of Environmental and Social Risk Management ●Head of Climate Risk ●Head of Community Investing and Development ●Global Sustainability Steering Committee ●Climate Risk Advisory Council ● | |||
Oversees | Oversees | Reviews Citi’s risk appetite framework, including |
14 | ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) AND SUSTAINABILITY HIGHLIGHTS |
Board ESG Qualifications |
Members of Citi’s Board have expertise on key ESG issues, including regulatory trends, cybersecurity, community investment, talent and diversity, climate change and finance. For more information on the qualifications of our board members, please refer to the Election of Directors section on pages 45-65. |
Governance Highlights | ||||
Based on the voluntary self-identification by Board members, the Board is comprised of 50% WOMEN and 19% MINORITIES | Completed an orderly transition to a NEW CEO, with Jane Fraser becoming the FIRST FEMALE CEO OF A MAJOR U.S. BANK | PERFORMANCE SCORECARDS of members of the Executive Management Team include RELEVANT ESG METRICS on DIVERSITY AND ENVIRONMENTAL FINANCE |
Sustainability Framework
Our 2025 Sustainable Progress Strategy focuses on Climate Change, Sustainable Cities, and People and Communities, withlays out our sustainability activitiesapproach to advance solutions that address climate change around the world in support of the transition to a low-carbon economy. The strategy is organized under three primary pillars:
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Sustainable Progress Performance Highlights — 2018
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ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) AND SUSTAINABILITY HIGHLIGHTS | 15 |
Citizenship Approach
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Provided $1.17 BILLION IN FINANCIAL INCLUSION LENDING and supported 3.9 MILLION UNBANKED AND UNDERBANKED SMALL BUSINESSES in emerging markets since 2007 | ||||||
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Citi established Action for Racial Equity, a comprehensive framework that includes more than $1 billion in strategic initiatives to help close the racial wealth gap and increase economic mobility in the United States. The initiative represents an effort to leverage Citi’s core business capabilities alongside Citi Foundation’s philanthropic efforts to combat the impacts of racism on our economy and drive systemic change. The initiative includes four goals: expanding banking and access to credit in communities of color; investing in Black entrepreneurship; investing in affordable housing and promoting the growth of black homeownership; and strengthening Citi’s policies and practices in order to become an anti-racist institution. |
ESG Ratings |
●Inclusion in DJSI North America Index with score of 64/100 (80th percentile) ●Sustainalytics Score of 26.3/100 (lower score denotes better performance) ●MSCI Score of A ●CDP Climate Change Score of A- and Supplier Engagement Rating of B |
●Ranked #9 on Newsweek’s Most Responsible Companies List for 2021, and first among financial institutions ●Designated as North America’s Best Bank for Corporate Responsibility ●3BL Media ranked Citi as the #2 Best Corporate Citizen (of 1,000 largest U.S. Firms) in 2020 ●The Wall Street Journal ranked Citi (the only U.S. Bank) #72 in top most sustainably managed companies in the world in 2020 |
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Compensation and Human Capital Management Highlights
Significant Developments in Our Compensation Programs
This Proxy Statement provides detailed information concerning our executive compensation program and its alignment with our performance, beginning on page 73 of this Proxy Statement. The following supplements that discussion by highlighting compensation-related developments at Citi during 2020.
In October 2020, we entered into Consent Orders with the Federal Reserve Board and the Office of the Comptroller of the Currency (OCC) that focused on our risk and control practices (Consent Orders). Consistent with our performance-based approach to compensation decisions, in determining executive incentive compensation awards for 2020, the Compensation Committee reduced named executive officer incentive compensation awards based on assessments of individual performance concerning management of risk and control. In addition, named executive officer incentive compensation awards were further reduced to reflect shared responsibility for concerns about management of risk and control underlying the Consent Orders.
The following additional developments affected our compensation programs in 2020:
In 2019, we implemented a new performance management methodology for our Executive Management Team. In 2020, we cascaded the principles of our methodology to about 400 additional employees who have the ability to expose us to material amounts of risk and created the Compensation Accountability Rationale Tool (CART) to administer those principles. CART focuses the evaluation process on four pillars: Risk and Control; Financial; Client and Franchise; and Leadership. We also added new risk and control scorecard metrics and content related to specific regulatory remediation programs to CART. |
During 2020, we did not make any special one-time compensation awards to any executive officers, including retention or separation awards. We also did not adjust outstanding awards to reflect the impact on our business of the COVID-19 pandemic. |
Beginning with a report in 2020, our Chief Compliance Officer joined our Chief Risk Officer in making semi-annual reports to the Compensation Committee concerning compliance-related issues and our compensation practices. |
COMPENSATION AND HUMAN CAPITAL MANAGEMENT HIGHLIGHTS | 17 |
For 2019, the Compensation Committee adopted different weightings for Chief Financial Officer and Chief Risk Officer goals, consistent with their critical roles in providing for safety and soundness. Prior to 2019, financial goals were weighted 70% and non-financial goals were weighted 30% in each executive officer’s performance evaluation. In 2020, this weighting methodology for determining incentive awards was eliminated for all executive officers. Instead, performance against goals in each CART pillar resulted in positive or negative adjustments calculated as a percentage of target total compensation. The elimination of the weighting methodology and the introduction of adjustments calculated as a percentage of target total compensation was intended to emphasize performance in the Risk and Control pillar. The range of adjustments varies for each pillar based on the responsibilities of each executive officer’s position, in a manner that correlates to our risk and control-based line of defense classifications. Financial metrics were not used in the calculation of incentive awards for our Chief Risk Officer, Chief Compliance Officer or Chief Auditor, to strengthen the incentives for those function heads to focus on managing risk and control. |
For 2020, the Audit Committee of our Board of Directors working together with our Internal Audit function provided a qualitative assessment to the Compensation Committee related to the risk and control behavior of our Executive Management Team and a quantitative assessment based on specific metrics. Similarly, Executive Management Team members received an enhanced review of their quantitative and qualitative anti-money laundering (AML) metrics and behaviors. These changes were also in line with regulatory guidance. |
All of our employees have a shared responsibility to hold themselves to the highest standards of ethics and professional behavior, acting with integrity in everything they do, making the right decisions, and holding each other accountable for their actions as individuals, as team members, and as an organization. In 2019, we established, and in 2020 we enhanced, an Accountability Framework that prescribes consistent employee treatment and consequences in response to misconduct and risk management performance concerns to be applied within the context of the year-end performance and compensation process. If an employee is subject to discipline, breaches risk limit thresholds or fails to address identified control issues in a timely manner, that conduct is required by the Accountability Framework to be taken into consideration during the annual performance and compensation review. |
18 | COMPENSATION AND HUMAN CAPITAL MANAGEMENT HIGHLIGHTS |
Human Capital Management
Attracting, Retaining and Motivating Employees |
Diversity Actively seeking and listening to diverse perspectives at all levels of the organization | We were one of the first companies to measure and publicly disclose the differences in total compensation level based on gender and racial classification of all of its U.S. employees regardless of role. Our goals are to increase representation at the Assistant Vice President through Managing Director levels, which represent a large portion of our workforce, to at least 40% for women globally and 8% for Black employees in the U.S. by the end of 2021. We increased female representation in our full-time U.S. campus recruitment program from 45% in 2019 to 46% in 2020 and increased representation of underrepresented minorities in that program from 18% in 2019 to 26% in 2020. We increased female representation in our summer internship program from 47% in 2019 to 52% in 2020 in the U.S. and from 48% in 2019 to 50% in 2020 globally, while Black and Hispanic/Latino representation in our summer class increased from 26% to 27% over the same timeframe. This was our most diverse intern class to date. |
Development Continuously innovating in how we recruit, train, compensate, promote and engage with our workforce | We provide development and rotational programs for employees, including training programs to assist employees in building skills needed to advance. 33% of our open positions in 2020 were filled internally, which is supportive of our talent diversity goals by helping to increase diverse representation at more senior levels of the Company. We offer an online platform that delivers to employees training materials and communities of interest built around topics such as leadership, data analytics, artificial intelligence and cybersecurity. |
COMPENSATION AND HUMAN CAPITAL MANAGEMENT HIGHLIGHTS | 19 |
Workforce Size and Distribution
The COVID-19 Pandemic – Health and Safety of Employees
During 2020, we demonstrated solid performance as well as financial strength and operational resilience, despite a significant deterioration in public health and economic conditions during the year due to the COVID-19 pandemic.
The health and safety of our employees and their families were of the utmost importance to us. As the public health crisis unfolded, we took proactive measures to support employees’ well-being while maintaining our ability to serve customers and clients.
● | We provided more than 75,000 colleagues globally with a special compensation award—$1,000 to eligible colleagues who make $60,000 or less in base salary—to help ease the financial burden of the pandemic. It was targeted toward eligible colleagues most likely to feel economic hardship from challenges related to COVID-19. |
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● | We continue to provide additional health and well-being resources for employees, plus enhanced flexibility and paid time off for those impacted by COVID-19. |
The UN Sustainable Development Goals: Citi Priorities
The United Nations Sustainable Development Goals (SDGs) are a set of 17 global development goals for 2030. While our activities have an impact on all of the goals, 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.
Continuous Updates to Employees on COVID-19 | Flexible Work Schedules | Well-Being Support |
Financial Assistance |
For additional information about our response to the COVID-19 pandemic, please see the discussion beginning on page 78 of this Proxy Statement under Enabling Growth and Economic Progress.
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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:
Good Governance | ●Citi’s Board is committed to diversity — 50% of its members are women and 19% are people of color; ●Citi has appointed the first female CEO of a major U.S. financial institution; ●A standing Ethics, Conduct and Culture Committee of the Board of Directors oversees management’s efforts to foster a culture of ethics within Citi; ●No super-majority vote provisions in our Restated Certificate of Incorporation; ● Annual election of all Directors; ●Majority vote standard for uncontested Director elections; ●Citi has an Independent Chair; the By-laws provide that if Citi does not have an ● ●In 2019, we were the first ●Citi’s then CEO signed the Business Roundtable’s Statement on the Purpose of ●Citi appointed a Chief Sustainability Officer in September 2019. | |
Stockholder Rights | ●In 2019, the Board, taking into account the result of the stockholder vote on a proposal presented at the ●Proxy ●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 and executive officers; and ●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. For more information, please see Citi’s Hedging Policies on pages 39-40 of this Proxy Statement. | |
Political Activity | ●Political Activities Statement (formerly Citi’s Political Contributions and Lobbying Statement) includes significant disclosure about our lobbying practices and oversight. The Political Activities Statement provides meaningful disclosure about our lobbying policies and procedures; ●Nomination, Governance and Public Affairs Committee has oversight responsibility for trade association payments in addition to oversight responsibility for political contributions and lobbying activities; and ●Transparency on practices around political contributions and trade and business associations through: ➢a link on our website to federal and state government websites where our lobbying activities are reported; ➢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 business associations on Citi’s website. |
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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/ | ●Corporate Governance Guidelines ●Audit Committee Charter ●Ethics, Conduct and Culture Committee Charter ●Nomination, Governance and Public Affairs ●Personnel and Compensation Committee Charter ●Risk Management Committee Charter ●Code of Conduct ●Code of Ethics for Financial Professionals ●Environmental, Social and Governance Report ●Citi’s Compensation Philosophy ●By-laws and Restated Certificate of Incorporation ●Corporate Political Activities Statement ● ●Environmental and Social Policy Framework ●Citi’s 2020 TCFD Report: Finance for a Climate-Resilient ●Statement on Human Rights ●Citi’s U.K. Modern Slavery Act Statement ●A list of our |
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 Proxy materials by mail, you should have also received Citi’s Annual Report to Stockholders for 20182020 with them. The 20182020 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 20182020 Annual Report on Form 10-K, which is included in Citi’s Annual Report to Stockholders for 2018.2020.
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. The following summarizes certain provisions of the Guidelines.
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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Additional Board Service
The number of other for-profit public or non-public company boards on which a Director may serve isshall be subject to a case-by-case review and approval by the Nomination, Governance and Public Affairs Committee, in order to ensure that each Director is able to devote sufficient time to performingperform 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.Stockholders. All of the Directors then in office attended Citi’s 20182020 Virtual 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 regardsregard 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 3129 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/orand from recruiting firms. To develop internal candidates, Citi engages in
Citi 2019 Proxy Statement
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,
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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 38-3937-39 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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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 ●Grace E. Dailey ●John C. Dugan ●Duncan P. Hennes ●Peter B. Henry | ●S. Leslie Ireland ●Lew W. (Jay) Jacobs, IV ●Renée J. James ●Gary M. Reiner ●Diana L. Taylor | ●James S. Turley | ||
●Deborah C. Wright | ||||
● | ●Ernesto Zedillo Ponce de Leon | |||
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. CorbatJane N. Fraser and Barbara J. Desoer are not independent. Mr. CorbatMs. Fraser is our Chief Executive Officer and Ms. Desoer ispreviously served as 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.
● | During any 12-month period within the last three years, neither a Director nor any Immediate Family Member of a Director shall have received more than $120,000 in direct compensation from Citi, other than amounts paid (a) pursuant to Citi’s Amended and Restated Compensation Plan for Non-Employee Directors, (b) pursuant to a pension or 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 Member of a Director who is a non-executive employee of Citi or one of its subsidiaries. |
● | In addition, no member of the Audit Committee may 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 way on continued service. |
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● | All business relationships, lending relationships, deposit and other banking relationships between the Company and a Director’s primary business affiliation or the primary business affiliation 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-affiliated persons. |
● | In addition, the aggregate amount of payments for property or services in any of the last three fiscal years by the Company to, and to the Company from, any company of which a Director is an executive officer or employee or where an immediate family member of a Director is an executive officer, must not exceed the greater of $1 million or 2% of such other company’s consolidated gross revenues in any single fiscal year. |
● | Loans may be made or maintained by the Company to a Director’s primary business affiliation or the primary business affiliation of an immediate family member of a Director, only if the 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 classified by the Company as Substandard (II) or worse, as defined by the Office of the Comptroller of the Currency in its “Rating Credit Risk” Comptroller’s Handbook. |
Charitable Contributions
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.
● | A Director shall not: |
(i) | be or have been an employee of the Company within the last three years; |
(ii) | be part of, or within the past three years have been part of, an interlocking directorate in which a current executive officer of the Company serves or has served on the compensation committee of a company that concurrently employs or employed the Director as an executive officer; or |
(iii) | be or have been affiliated with or employed by (a) Citi’s present or former primary outside auditor or (b) any other outside auditor of Citi and personally worked on Citi’s audit, in each case within the three-year period following the auditing relationship. |
● | A Director may not have an immediate family member who: |
(i) | is an executive officer of the Company or has been within the last three years; |
(ii) | is, or within the past three years has been, part of an interlocking directorate in which a current executive officer of the Company serves or has served on the compensation committee of a company that concurrently employs or employed such immediate family member as an executive officer; or |
(iii) | (a) is a current partner of Citi’s primary outside auditor, or a current employee of Citi’s primary outside auditor and personally works on Citi’s audit, or (b) was within the last three years (but is no longer) a partner or employee of Citi’s primary auditor and personally worked on Citi’s audit within that time. |
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Meetings of the Board of Directors and Committees
The Board of Directors met 2032 times in 2018. During 2018,2020. Citi’s standing Board Committees met as follows: the Audit Committee met 2124 times, the Ethics, Conduct and Culture Committee met 46 times, the Nomination, Governance and Public Affairs Committee met 10 times, the Operations and Technology Committee met 56 times, the Personnel and Compensation Committee met 1320 times, and the Risk Management Committee met 1322 times. In addition, a subcommittee of the Risk Management Committee met 912 times. The Executive Committee did not meet in 2018.2020.
During 2018,2020, substantially all of the members of the Board served on and/or chaired one or more ad hoc committees, covering compliance mattersincluding the Transformation Oversight Committee, or served on an international subsidiary board. In addition, during 2018,2020, Mses. Costello, Dailey, Desoer, Fraser, Ireland, Taylor, and IrelandWright and Messrs. Corbat, Hennes, McQuade, Santomero, and Turley served on the Board of Directors of Citibank, N.A., which is a wholly owned subsidiary of Citi.
Each incumbent Director attended at least 75% of the meetings of the Board and of the standing committees of which he or she was a member during 2018.2020.
* | The Operations and Technology Committee was terminated on February 1, 2021 and merged into the Transformation Oversight Committee. Please see “Transformation Enhancements at Citi” on page 31 of this Proxy Statement. |
Meetings of Non-Management Directors
Citi’s non-management Directors meet in executive session without any management Directors in attendance whenever the full Board convenes for a regularly scheduled meeting. During 2018,2020, Mr. O’NeillDugan presided at each executive session of the non-management Directors. In addition, the independent Directors met in executive session during 2018.2020.
Citi currently has an independent Chair separate from the CEO, a structure that has been in place since 2009. The Board believes it is important to maintain flexibility in its Board leadership structure and has had in place different leadership structures in the past, depending on the Company’s needs at the time, but firmly supports having an independent Director in a Board leadership position at all times. Accordingly, Citi’s Board, on December 15, 2009, adopted a By-law amendment which provides that if Citi does not have an independent Chair, the Board will elect a lead independent Director having similar duties to an independent Chair, including leading the executive sessions of the non-management Directors at Board meetings. Citi’s Chair provides independent leadership of the Board. Having an independent Chair or Lead Director enables non-management Directors to raise issues and concerns for Board consideration without immediately involving management. The Chair or Lead Director also serves as a liaison between the Board and senior management. Citi’s Board has determined that the current structure, an independent Chair separate from the CEO, is the most appropriate structure at this time, while ensuring that, at all times, there will be an independent Director in a Board leadership position. The Board believes its approach to risk oversight, including, importantly, having a standing Risk Management Committee and the reporting line of the Chief Risk Officer to the Risk Management Committee, ensures that the Board can choose many leadership structures without experiencing a material impact on its oversight of risk.
Citi has had an independent Chair since 2009. |
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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, nationality, 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 CompanyCiti 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. When considering new Director candidates, the Nomination, Governance and Public Affairs Committee instructs its recruiting firm to include diverse candidates in each slate. The candidates nominated for election at Citi’s 20192021 Annual Meeting exemplify that diversity: sixeight nominees are women and three nominees are African-AmericanBlack or Hispanic.Latino. 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, national origin, 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, among other things, coverage of Citi’s institutional and consumer businesses; financial reporting;our regional operations, an overview of the Company’s risk management, audit, compliance, operations and technology, governance, regulatory, finance, human resources, government affairs, 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. In 2020, the Directors received training on various topics, including certain complex business products, Cybersecurity, Code of Conduct, Straight-Through Processing, Regulation O, Community Reinvestment Act, Fair Lending, and AML, among other topics.
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Annual Board Self-Evaluations* |
The Board conducts annual evaluations through the use of both individual interviews by the Chair with each Board member and a written questionnaire completed by all Board members 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. For 2020, the Board engaged a third party to conduct a portion of the assessment. The Third Party was engaged to help the Board improve its self-assessment process and provide the Board with a third-party assessment, together with recommendations for improving Board effectiveness. |
Summary of the Written Evaluations |
The Third Party reviewed the form of Board self-assessment questionnaire proposed for 2020, and recommended changes which were implemented for the Board’s 2020 self-assessment. Citi’s Corporate Governance Office |
Conversations With Third Party |
The Third Party held individual interviews with each Board member and consolidated their feedback for discussion with the full Board. |
Board Review |
Using the aggregated results |
Actions |
As an outcome of these discussions, the Board takes specific actions which may include providing guidance to management on specific Board-related initiatives. The Board will also consider the Third Party’s recommendations and, to the extent it agrees with them, work with senior management as needed to implement them. |
* | Each standing committee conducts an annual self-assessment and reports the results to the Board, which include how each committee’s effectiveness may be enhanced. |
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Board’s Role in Risk Oversight
For Citi, effective risk management is of primary importance to its overall operations. Accordingly, Citi’s risk management process has been designed to monitor, evaluate and manage the principal risks it assumes in conducting its activities. Specifically, the activities that Citi engages in, and the risks those activities generate, must be consistent with Citi’s mission and value proposition, the key principles that guide it and Citi’s risk appetite.
The Citigroup Board of Directors, both directly or through its committees, actively oversees Citi’s risk taking activities and holds management accountable for adhering to the Company-wide risk governance framework. The Board oversees of Directors recently formed the Transformation Oversight Committee to oversee management’s efforts to improve our Risk and Control environment, and oversee the FRB Order, as well as to monitor management’s progress as it relates to the broader transformation of Citi. (Please see page 31 of this Proxy Statement to review additional disclosure on the Transformation Oversight Committee.)
Citi’s globalrisk governance framework consists of the risk management framework.practices that include a risk governance structure and the firm’s key policies, processes, personnel and control systems through which Citi identifies, measures, monitors, and controls risks such that the Company’s risk taking is consistent with its strategy and risk appetite. It also emphasizes Citi’s risk culture and lays out standards, procedures and programs that are designed to set, reinforce and enhance the Company’s risk culture, integrate its values and conduct expectations into the organization, providing employees with tools to assist them with making prudent and ethical risk decisions and to escalate issues appropriately.
Citi uses a lines of defense construct to manage its risks. The construct includes units that create risks (first line of defense), those that independently assess risk (second line of defense), units that provide independent assurance (third line of defense) and units tasked with maintaining a strong control environment (control and support functions). The lines of defense, which include control and support functions, coordinate with each other in the risk management system in support of the common goal of identifying, measuring, monitoring and controlling risk-taking activities so they remain consistent with the firm’s strategy and risk appetite.
For more information about Citi’s risk management, see the “Managing Global Risks” section of the Firm’s Annual Report on Form 10-K for the year ended December 31, 2020 (“2020 Form 10-K”).
● ●provides oversight of | ||||||
Board Committees: Audit Committee ●provides oversight of Ethics, Conduct and Culture Committee ●provides oversight of Citi’s Conduct Risk Management Program Nomination, Governance and Public Affairs Committee ●provides oversight of reputational issues, ESG and sustainability, and legal and regulatory compliance risks as they relate to ●provides oversight of | Personnel and Compensation Committee ●provides oversight of incentive compensation plans and risk related to compensation Risk Management Committee ●approves Citi’s Risk Governance Framework ●reviews and approves risk management policies on the establishment of risk limits and reviews risk management programs for Citi and its subsidiaries ●consults with management on the effectiveness of risk identification, measurement, and monitoring processes ●provides oversight of, among others, matters related to Citi’s Comprehensive Capital Analysis and Review (CCAR) practices, Resolution and Recovery Planning, and, as a Committee, cybersecurity | |||||
Chief Risk Officer ●delivers risk report at regularly scheduled Board meetings ●responsible for the oversight of risk management globally ●responsible for an integrated effort to identify, assess, and manage risks ●reports to the Chief Executive Officer and Risk Management Committee ●reports at least twice annually to the Personnel and Compensation Committee on incentive compensation | ||||||
* | The Transformation Oversight Committee is an ad hoc committee. |
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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. GlobalIndependent Risk Management, led by the Chief Risk Officer, is a company-wide function that is responsible for an integrated effort to identify, assess,set standards and actively manage and oversee aggregate 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.
Transformation Enhancements at Citi
Citi is fully committed to a broad-based transformation of its risk management and controls (the “Transformation”). Citi believes the Transformation is essential, not only to address regulatory matters in an effective, timely, and sustainable manner, but also as a broader strategic imperative for the firm. Citi’s priorities revolve around three interconnected elements: the Transformation, strategy, and culture and talent. Driving toward excellence in risk and control in the Transformation is mutually reinforcing with Citi’s business strategy, and success for both can only be achieved with significant shifts in culture and talent.
In connection with the Transformation, the Board has changed its committee structure and the roles and responsibilities that each committee fulfills. First, the Board established the Transformation Oversight Committee in October 2020, to serve as the primary forum for Board oversight of the Transformation. The Board decided to unify the oversight of the Transformation through the Transformation Oversight Committee. Given this overall responsibility of the Transformation Oversight Committee and the need for holistic oversight, the Board decided to invite all non-management directors on the Board to join the committee to ensure full Board attention to the Transformation oversight. The full Board will focus in its other meetings on non-Transformation matters.
Similarly, the Board restructured and reduced the workload of its committees other than the Transformation Oversight Committee to enable them to focus their meeting time on matters unrelated to the Transformation. A series of Program Groups have been developed to address specific requirements of the Consent Order. These Program Groups have been tasked with performing gap assessments against a desired target state and developing implementation plans to remediate those gaps. Members of the Transformation Oversight Committee will be responsible for working closely with the Executive Management Team members responsible for the relevant Program Groups to better understand the work of the Program Groups and to help prepare for meetings of the Transformation Oversight Committee, in much the same way as Board Committee chairs interact with individual Executive Management Team members in preparation for committee meetings.
Board’s Role in Cybersecurity Oversight
The Board of Directors provides oversight of management’s efforts to addressmitigate cybersecurity risk.risk and respond to cyber incidents. The Board receives regular reports on cybersecurity and various Committees receive periodic reports and engageengages in discussions throughout the year with management and subject-matter experts on the effectiveness of Citi’s overall cybersecurity program, exploring Citi’s inherent cybersecurity risks, the road map for addressing these risks, and Citi’s progress in doing so. Board and Committee members receive contemporaneous reporting on any significant cyber events that may occur—which includes efforts atincluding response, discussions of legal obligations, and the status of outreach and notification to regulators—regulators, and providescustomers when needed, as well as guidance to management as appropriate.
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Committees of the Board of Directors
The followingBelow are the standing committees of the Board of Directors:Directors. In addition, the Board of Directors formed a new ad hoc committee, the Transformation Oversight Committee, to oversee management’s efforts to enhance its Risk and Control environment and achieve operational excellence. (Please see page 31 of this Proxy Statement to review additional disclosure related to the Transformation Oversight Committee).
Audit Committee Members: Ellen M. Costello Committee Meetings
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 Directors’ Committee Charters.” | Committee Roles and Responsibilities: The Audit Committee assists the Board in fulfilling its oversight responsibility relating to: ●the integrity of Citigroup’s consolidated financial statements, financial reporting process, and systems of internal accounting and financial controls; ●the performance of the internal audit function (“Internal Audit”); ●the annual independent integrated audit of Citigroup’s consolidated financial statements and effectiveness of Citigroup’s internal control over financial reporting, the engagement of the independent registered public accounting firm (“Independent Auditors”), and the evaluation of the Independent Auditors’ qualifications, independence and performance; ●policy standards and guidelines for risk assessment and risk management; ●the appointment and approval of the base compensation for the Chief Auditor; ●Citigroup’s compliance with legal and regulatory requirements, including Citigroup’s disclosure controls and procedures; and ●the fulfillment of the other responsibilities set out in the Audit Committee’s charter. The report of the Committee required by the rules of the SEC is included in this Proxy Statement. The Board has determined that each of |
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Ethics, Conduct and Culture Committee Members: Peter B. Henry Committee Meetings
Charter: The Ethics, Conduct and Culture 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 Ethics, Conduct and Culture Committee oversees management’s efforts to foster a culture of ethics and appropriate conduct within the organization; |
Executive Committee Members: Barbara J. Desoer 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 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 qualified to become Board members and recommending to the Board the Director nominees for the next Annual Meeting of The Committee, as part of the Board’s executive succession planning process, evaluates and nominates potential successors to the CEO and provides an annual report to the Board on CEO succession. The Committee also reviews Director Compensation and Benefits. The Committee is responsible for reviewing Citi’s policies and programs that relate to public issues of significance to Citi and the public at large and reviewing relationships with external constituencies and issues that impact Citi’s reputation. The Committee also has the responsibility for reviewing public policy and reputational issues facing Citi; reviewing political contributions and lobbying expenditures and payments to trade associations made by Citi, and charitable contributions made by Citi and the Citi Foundation; reviewing Citi’s policies and practices regarding supplier diversity; reviewing the work of Citi’s 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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Personnel and Compensation Committee Members: John C. Dugan Committee Meetings
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 affiliates. The Committee regularly reviews Citi’s management resources and performance of senior management. The Committee is responsible for determining the compensation for the CEO and approving the compensation of other executive officers of the Company 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 financial results in a manner that does not encourage employees to expose Citi to imprudent risks, and (ii) are consistent with bank safety and soundness. Toward that end, the Committee meets periodically with Citi’s Chief Risk Officer to discuss the risk attributes of Citi’s incentive compensation programs. The Committee has the power to hire and fire independent compensation consultants, legal counsel, or financial or other advisors as it may deem necessary to assist it in the performance of its duties and responsibilities, without consulting or obtaining the approval of senior management of the Company. The Committee has retained Frederic W. Cook & Co. (FW Cook) to provide the Committee with advice on Citi’s compensation programs for senior management. The amount paid to FW Cook in 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 defined in Section 16 of the Securities Exchange Act of 1934, and is an “outside Director,” as defined by Section 162(m) of the Internal Revenue Code. |
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Risk Management Committee Members: Ellen M. Costello Committee Meetings
Charter: The Risk Management 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 Risk Management Committee has been delegated authority to assist the Board in fulfilling its responsibility with respect to The Risk Management Committee created a subcommittee in 2016 to provide oversight of data governance, data quality, and data integrity. *The Data Quality Subcommittee was terminated on February 1, 2021 and merged into the Transformation Oversight Committee. |
Audit | Ethics, Conduct and Culture | Executive | Nomination, Governance and Public Affairs | Personnel and Compensation | Risk Management | |||
Ellen M. Costello | ● | ● | ||||||
Grace E. Dailey | ● | ● | ||||||
Barbara J. Desoer | ● | ● | ||||||
John C. Dugan | ● | ● | ● | ● | ● | |||
Duncan P. Hennes | ● | ● | ● | ● | ||||
Peter B. Henry | ● | ● | ||||||
● | ● | |||||||
S. Leslie Ireland | ● | |||||||
Lew W. (Jay) Jacobs, IV | ● | ● | ● | ● | ● | ● | ||
Renée J. James | ||||||||
● | ||||||||
Gary M. Reiner | ● | |||||||
Diana L. Taylor | ● | ● | ● | |||||
James S. Turley | ● | ● | ● | |||||
Deborah C. Wright | ● | ● | ||||||
Alexander R. Wynaendts | ● | ● | ||||||
Ernesto Zedillo Ponce de Leon | ● | ● | ● |
●committee member | |||||||
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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 certain 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 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 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; |
● | 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 each reported that they beneficially owned 5% or more of the outstanding shares of Citi’s common stock as of December 31, 20182020 — see Stock Ownership — Owners of More than 5% of Citi Common Stockin this Proxy Statement on page 44. During 2018,2020, 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
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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”)(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 the Impulsora de Fondos Banamex, S.A. de C.V., (“Impulsora”) (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. Pursuant to this agreement, fees of approximately $108 million were paid to Blackrock in 2020. 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 2020, Citibank, N.A., a subsidiary of Citi, entered into a binding Memorandum of Understanding (“MOU”) with BlackRock Financial Management, Inc. The MOU recorded the parties’ understanding as to the terms to be subsequently embodied in a Schedule 13G filed withSoftware Services (hosting) Agreement. The MOU reflects the SEC,parties’ understandings about a joint process to explore a hosted services arrangement for an ETF-related processing system. The system would be a technology platform for the middle- and back-office processing requirements of both BlackRock reportedsponsored ETF’s (known as iShares) and non-BlackRock sponsored ETF’s. The MOU provided that it beneficially owns more than 5%Citibank would pay BlackRock a total of Citi’s common stock.$4.5 million at a rate of $0.5 million per month towards the development of Aladdin for ETF Servicing. This represents the parties’ estimate of approximately half of the development costs to be borne by BlackRock and has now been paid.
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 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 maywere able to invest in certain Citi-sponsored investment opportunities only under certain circumstances and with the approval of the appropriate committee. Executive officers are not eligible to participate in the funds on a leveraged basis. In 2018,2020, there were no distributions from the funds that require disclosure.exceeded $120,000.
In 2018,2020, 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 98101 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 20182020 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 2018.2020.
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In 2021, certain previously awarded shares granted to Ms. Desoer when she was an Aircraft Time Sharing Agreement withemployee of Citigroup Inc. that allows himvested. This award included Performance Share Units and Capital Accumulation Program Awards. On February 15, 2018, Ms. Desoer received from Citi a target award of 26,195.59 Performance Share Units. Based on adjustments due to reimburse Citiperformance conditions described in the Compensation Discussion and Analysis section of this Proxy Statement, Ms. Desoer became entitled to receive 7,321.67 Performance Share Units on February 12, 2021, when the share units vested. Performance Share Units are paid in cash, and Ms. Desoer received a cash payment of $505,575.96 for the costshare units on February 12, 2021. During her employment at Citi, Ms. Desoer also received shares of his personal useCiti common stock awarded under the Capital Accumulation Program. Approximately 22,607 shares vested on January 20, 2021, representing the deferred portion of corporate aircraft based Ms. Desoer’s annual incentive awards for 2017 to 2019, which were awarded to her under the Capital Accumulation Program. These shares are reported in the Beneficial Ownership Table on the aggregate incremental costpage 43 of the flightthis Proxy Statement. Ms. Desoer has 23,368 unvested shares remaining from her Capital Accumulation Program awards. These unvested shares remain subject 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 reimbursedfluctuations in Citi’s common stock price as well as to Citi $223,132 related to his personal use of corporate aircraft during 2018.clawbacks.
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 20182020 compensation of $479,139. An adult child$777,485. A sister-in-law of John Gerspach,Peter Babej, Citi’s former CFO,CEO of Asia Pacific, has been employed by Citi since 20092017 and is currently employed in Citi’s Compliance Group. HeShe received 20182020 compensation of $154,765.$325,040. 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 individualsMs. Wechter and Mr. Babej 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.
www.citigroup.com
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.
Business PracticesCiti’s Hedging Policies
Citi’s Corporate Governance Guidelines prohibit the hedging of Citi common stock held by directors and executive officers, whether the shares of stock are granted as compensation or are otherwise held by the director or executive officer. For this purpose, an executive officer means any person designated by Citi as an “officer” under Section 16 of the Exchange Act.
Citi’s Code of Conduct, which applies to all Citi employees, executive officers and directors, states that when considering personal investments in Citi securities, an individual must avoid any personal trade or investment in a security, derivative, futures contract, commodity, or other financial instrument if the trade or investment might affect or appear to affect the individual’s ability to make unbiased business decisions for Citi.
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In addition, Citi’s Personal Trading and Investment Policy (the PTIP) prohibits the hedging in any manner (other than currency hedges) by Covered Persons (including directors and executive officers) of unvested restricted stock or deferred stock awarded as compensation under Citi’s Capital Accumulation Program. The PTIP also prohibits engaging in speculative transactions in Citi securities, including sales of naked calls and speculative option strategies, as well as any other transaction that would benefit from a decline in the value of a Citi security. The PTIP generally allows Covered Persons (excluding directors and executive officers) to hedge vested long positions of then deliverable Citi securities. Covered Persons under the PTIP include (but are not limited to) individuals who 1) may have access to material non-public information regarding Citi, 2) are employed by Citi’s Institutional Clients Group, 3) are FINRA-registered employees or associates of any of Citi’s U.S. broker dealer entities, or 4) work in a securities or advisory business in Citi Personal Wealth Management, as well as certain individuals who are related to Covered Persons. Because directors and executive officers who are Covered Persons under the PTIP are also subject to the hedging policy applicable to directors and executive officers pursuant to the Corporate Governance Guidelines, a proposed transaction by a director or executive officer may be prohibited by application of one policy even if the transaction would be permissible under the other policy.
Finally, Citi maintains policies specific to U.K. and European regulatory requirements. These policies provide that all employees in the applicable countries who receive a portion of their remuneration in stock or any other deferral mechanism designated by Citi must not take out insurance contracts or engage in personal hedging strategies, or remuneration or liability-related contracts of insurance, that undermine, or may undermine, any risk alignment effects of their remuneration arrangements.
The business practices committees,Reputation Risk Committees, which are composedinternal management committees, are part of our most senior executives, provide the guidance necessary for Citi's business practicesgovernance infrastructure that Citi has in place to meetreview 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 reviewreputation risk posed by business activities, transactions, sales practices, product design, potentialor perceived conflicts of interest, and other franchise or reputational risk issues escalated to these committees.
Business practices concernsinterest. These committees may be raised through a variety of sources, including business practices working groups, other in-business committees, oralso raise potential reputation risks for due consideration by the control functions. Relevant issues fromReputation Risk Committee at the business practices committees are reported on a regular basiscorporate level. The Group Reputation Risk Committee may escalate reputation risks to the Nomination, Governance and Public Affairs Committee of the Board or another appropriate Committee of the Board. The Reputation Risk Committees, which are composed of Citi’s most senior executives, govern the process by which material reputation risks are identified, monitored, reported, managed, and escalated, and appropriate actions are taken in line with the firm-wide strategic objectives, risk appetite thresholds, and regulatory expectations, while promoting the culture of risk awareness and high standards of integrity and ethical behavior across the company, consistent with Citi’s Mission and Value Proposition.
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, Conduct 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, Conduct and Culture Committee Charter, which is set forth on Citi’s website at www.citigroup.com.
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With oversight from the Ethics, Conduct 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, Conduct and Culture Committee remains responsible for overseeing senior management’s efforts to reinforce and enhance a culture of ethics within Citi, which includes:
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Programs and Efforts that Embed Culture
To promote ethicala culture of ethics and appropriate 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, Conduct 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 awareness efforts concerning our Mission and Value Proposition,including Citi-wide videos from senior management articulating our core principles and providing examples of these principles in action. |
● | Embedding the Leadership Standards into key aspects of our employee life cycle,such as hiring and performance reviews. |
● | Training of employees on key culture-related themes,including |
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), and Controller (Principal Accounting Officer), and all finance professionalsFinance Professionals and administrative staffAdministrative Staff in a finance role, including but not limited to Controllers, Finance & Risk Shared Services Finance and Risk Infrastructure,(FRSS), Capital Planning, Financial Planning & Analysis, Productivity 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,these and other applicable laws, regulations, rules, or breaches of Citi policy, procedure, standard,policies, procedures, standards, 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. Calls to the Ethics Hotline are received by a third-party vendor, located in the United States.
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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 raising concerns 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 thecertain laws, regulations, and select 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.
Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s officers and directors, and persons who own more than 10% of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership with the SEC on Forms 3, 4 and 5. Officers, directors and greater than 10% shareholders are required by SEC regulation to furnish the Company with copies of all Forms 3, 4 and 5 they file.
Based solely on a review of the copies of such forms furnished to the Company, or written representations that no Forms 5 were required, the Company believes that during the fiscal year ended December 31, 2020, all reports required by Section 16(a) to be filed by the Company’s officers, directors and more than 10% shareholders were filed on a timely basis, except for Ms. Costello, a director. During the period January 15, 2016 to February 7, 2019, Ms. Costello failed to file accurate or timely Section 16 reports with respect to holdings and transactions of Citi 2019common stock in managed investment accounts maintained by Ms. Costello and her spouse with an investment advisor who had discretion to make individual investment decisions in the accounts without the prior knowledge or authorization of Ms. Costello or her spouse. Ms. Costello discovered the trading activity in the managed accounts in August 2020, and on September 4, 2020 she filed an amended Form 3 and an amended Form 4. Ms. Costello’s unreported holdings and trading activity resulted in 14 late reports (one Form 3 and 13 Forms 4), 17 transactions that were not reported on a timely basis and a short swing profit of $1,625.28, determined in accordance with Section 16 of the Securities Exchange Act of 1934, which Ms. Costello disgorged to Citi on August 31, 2020.
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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. For more information on hedging, please see Citi’s Hedging Policies on pages 39-40 of this Proxy Statement.
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.March 1, 2021. 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 |
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Name | Common Stock Beneficially Owned Excluding Options(1) | Options Exercisable Within 60 days | Owned by or Tenant- in-Common with Family Member, Trust, Mutual Fund or 401(K)(2) | Total Beneficial Ownership(3) | Receipt Deferred(4) | Total Ownership(5) | ||||||
Ellen M. Costello | 33,847 | — | 600 | 34,447 | 2,378 | 36,825 | ||||||
Grace E. Dailey | 2,712 | — | 2,712 | 2,378 | 5,090 | |||||||
Barbara J. Desoer | 77,290 | — | 77,290 | 25,746 | 103,036 | |||||||
John C. Dugan | 15,295 | — | 15,295 | 2,378 | 17,673 | |||||||
Jane N. Fraser | 90,629 | — | 90,629 | 205,511 | 296,140 | |||||||
Duncan P. Hennes | 21,149 | — | 21,149 | 2,378 | 23,527 | |||||||
Peter B. Henry | 30,053 | — | 30,053 | 2,378 | 32,431 | |||||||
S. Leslie Ireland | 7,793 | — | 7,793 | 2,378 | 10,171 | |||||||
Lew W. (Jay) Jacobs, IV | 1,955 | — | 22,166 | 24,121 | 2,378 | 26,499 | ||||||
Renée J. James | 14,027 | — | 14,027 | 2,378 | 16,405 | |||||||
Mark A. L. Mason | 30,055 | — | 296 | 30,351 | 97,400 | 127,751 | ||||||
Gary M. Reiner | 37,947 | — | 37,947 | 2,378 | 40,325 | |||||||
Diana L. Taylor | 38,248 | — | 38,248 | 2,378 | 40,626 | |||||||
James S. Turley | 22,275 | — | 22,275 | 2,378 | 24,653 | |||||||
Michael Whitaker | 47,082 | — | 7,000 | 54,082 | 88,466 | 142,548 | ||||||
Deborah C. Wright | 9,252 | — | 9,252 | 2,378 | 11,630 | |||||||
Alexander R. Wynaendts | 2,712 | — | 2,712 | 2,378 | 5,090 | |||||||
Paco Ybarra | 452,474 | — | 452,474 | 235,648 | 688,122 | |||||||
Ernesto Zedillo Ponce de Leon | 36,742 | — | 36,742 | 2,378 | 39,120 | |||||||
Total (31 Directors and | ||||||||||||
Executive Officers | ||||||||||||
as a group) | 1,430,350 | — | 30,178 | 1,460,528 | 1,256,116 | 2,716,644 |
(1) | The stock reported for certain Directors in this column includes deferred common stock, which is fully vested and which the Director or Directors have the right to acquire within 60 days. |
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44 | STOCK OWNERSHIP |
(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 its assets in Citi common stock. |
(3) | At |
(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 represent, as applicable, unvested shares of executive officers. |
(5) | Total Ownership reflects the amount represented in the Section 16 filings of the relevant Director or |
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 | Beneficial Ownership | Percent of Class | ||||
BlackRock, Inc.(a) | ||||||||
55 East 52nd Street, New York, NY 10055 | 172,569,709 | 7.1% | 155,739,588 | 7.5% | ||||
The Vanguard Group, Inc.(b) | ||||||||
100 Vanguard Blvd., Malvern, PA 19355 | 179,143,858 | 7.33% | 168,301,533 | 8.08% |
(a) | Based on the Schedule 13G filed with the SEC on February |
(b) | Based on the Schedule 13G filed with the SEC on February |
Citi 20192021 Proxy Statement
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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
TheOn September 10, 2020, Michael Corbat announced that, after 37 years at Citi, including the last eight years as CEO, he planned to retire from Citi and step down from its Board of Directors, which he did on February 26, 2021. Other than Mr. Corbat, the Board has nominated all of the current Directors for re-election at the 20192021 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.Meeting. 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. JacobsMs. Fraser 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 nominatedOctober 2020. Ms. Desoer for election to the Board at the 2019 Annual Meeting. Ms. DesoerFraser was recommended as a candidate for election to the CitigroupCiti’s Board by her fellow directors on the Citibank Board, all of whom are members of Citi’sthe Board. If elected, each nominee will hold office until the 20202022 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 2018,2020, 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. When nominating new director candidates, the Nomination, Governance and Public Affairs Committee instructs its recruiting firm to include diverse candidates in each slate. 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
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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, non-profit or professional experience at the chair, chief executive officer, chief operating officer, or equivalent policy-making and operational level of a large organization with significant international activities across many regulatory jurisdictions and regions that indicates that the candidate will be able to make a meaningful and immediate contribution to the Board’s discussion of and decision-making on the array of complex issues facing a large financial services business that operates on a global scale; |
● | Whether the candidate has special skills, expertise and a diverse 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 financial expertise required to provide effective oversight of a diversified financial services business that operates on a global scale; |
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46 | PROPOSAL 1: ELECTION OF DIRECTORS |
● | 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 sufficient time and energy to the performance of his or her duties as a Director. |
Application of these factors involves the exercise of judgment by the Nomination, Governance and Public Affairs Committee and the Board. In addition, see Board Diversity on page 28 for additional factors considered by the Board when selecting candidates.
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 20192021 Annual Meeting, Citi did not receivewe received notice from any stockholders regardingone stockholder who proposed himself for consideration to be nominated by the Nomination, Governance and Public Affairs Committee to stand for election at the Annual Meeting. The qualifications of the individual were discussed at a nominationmeeting of the Nomination, Governance and Public Affairs Committee and the views of Egon Zehnder were considered. After deliberation, the Committee decided not to include this individual on the slate of candidates it proposed to the full Board of Directors.for consideration. The Nomination, Governance and Public Affairs Committee used the above-mentioned criteria to evaluate the candidate.
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 diverse 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
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
Citi 2021 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS | 47 |
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 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:
Citi’s Personnel and Compensation Committee is responsible for determining the compensation of the CEO and approving the compensation of other executive officers of the Company and | ||
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Citi aspires to the highest standards of corporate governance and ethical conduct: doing what we say, reporting results with accuracy and transparency, and maintaining compliance with the laws, rules, and regulations that govern the Company’s businesses. The Board is responsible for shaping corporate governance policies and practices, including adopting the corporate governance guidelines applicable to the Company and monitoring the Company’s compliance with governance policies and the guidelines. To carry out these responsibilities, the Board must include experienced leaders in the area of corporate governance who must be familiar with governance issues, the constituencies most interested in those issues, and the impact that governance policies have on the functioning of a company. | ||
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. As 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, 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. 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. |
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48 | PROPOSAL 1: ELECTION OF DIRECTORS |
Citi’s internal controls over financial reporting are designed to ensure that Citi’s financial reporting and its financial statements are prepared in accordance with generally accepted accounting principles. While the Board and its committees are not responsible for preparing our financial statements, they have oversight responsibility, including the selection of outside independent auditors, subject to stockholder ratification, and lead engagement partner. The Board must include members with direct or supervisory experience in the preparation of financial statements, as well as finance, audit, and accounting expertise. | ||
Citi employs approximately 200,000 people in nearly 100 countries. Human capital management is a critical capability for Citi’s Board given the strategic importance of maintaining a skilled, motivated workforce. Citi’s Board must include Directors who understand key issues related to human capital including training, diversity, employee benefits, compensation programs, career trajectories, and U.S. and global labor issues. Having Directors with the appropriate expertise to review our succession strategy and leadership pipeline for key roles while taking into account Citi’s long-term corporate strategy is paramount to managing Citi’s resources—its employees. Citi seeks out Board members who have had experience overseeing and managing executive teams and a sizeable worldwide work force, with an emphasis on development of human resources. | ||
Citi provides a wide variety of services to its corporate clients, including strategic and financial advisory services, such as mergers, acquisitions, financial restructurings, loans, foreign exchange, cash management, underwriting and distributing equity, and debt and equity derivative services, markets and securities services, retail structured products, liquidity management, treasury and trade solutions and securities and fund services. With a corporate business as extensive and complex as Citi’s, it is crucial that members of the Board have the depth of understanding and experience necessary to guide management’s conduct of these lines of business. | ||
As a company with a broad international reach, Citi’s Board values the perspectives of Directors with international business or governmental experience or expertise in global economics. Citi’s presence in markets outside the United States is an important competitive advantage for Citi, because it allows us to serve U.S. and foreign businesses and individual clients whose activities span the globe. Directors with international business experience can use the experience that they have developed through their own business dealings to assist Citi’s Board and management in understanding and successfully navigating the business, political, and regulatory environments in countries in which Citi does or seeks to do business. Directors with global economics expertise can help guide Citi management in understanding the challenges faced by other markets and in developing its global strategy. | ||
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Citi 20192021 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS | 49 |
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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 | ||
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 | ||
Sustainability is a critical business issue, with ties to both risk and opportunity. Citi has been engaged in sustainability for over 20 years and views sustainability performance and transparency as an important aspect of stockholder and broader stakeholder value. Citi communicates its sustainability and ESG efforts to stockholders, clients and other stakeholders, including its achievements in the areas of environmental sustainability, climate change, community investment and development, and human rights. Environmental and social issues have the potential to impede corporate plans and performance, and also to generate new business, which is why it is necessary to have a sustainability-competent Board. Citi’s Board must include members with experience in the areas of climate change and finance, community development, corporate social responsibility and other ESG issues to help Citi navigate these complex and quickly evolving issues and to assist management in evaluating Citi’s ESG policies and programs. |
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50 | PROPOSAL 1: ELECTION OF DIRECTORS |
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. |
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Citi 2019 Proxy Statement
Ellen M. Costello Age: |
Director of Citigroup Director of Citibank, N.A. Other Public Company Directorships: Previous Directorships within the last five years: Other Activities: |
Former President and 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 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 ●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 | |
Skills and Qualifications 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 is 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 provide 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. | |
Primary Qualifications | |
Consumer Business and Financial Services | |
Financial Reporting | |
Legal, Regulatory and Compliance |
Citi 2021 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS | 51 |
Grace E. Dailey Age: 60 |
Director of Citigroup Director of Citibank, N.A. Other Public Company Directorships: Previous Directorships within the last five years: Other Activities: |
Former Senior Deputy Comptroller for Bank Supervision Policy and Chief National Bank Examiner, Office of the Comptroller of the Currency ●Senior Deputy Comptroller for Bank Supervision Policy and Chief National Bank Examiner, Office of the Comptroller of the Currency – 2016 to 2019 ●Assistant Deputy Comptroller, Office of the Comptroller of the Currency – 2015 to 2016 ●Examiner-in-Charge – U.S. Bank, Office of the Comptroller of the Currency – 2010 to 2015 ●Deputy Comptroller – Large Bank Supervision, Office of the Comptroller of the Currency – 2001 to 2010 ●Examiner-in-Charge – Citibank, Office of the Comptroller of the Currency – 1997 to 2001 ●Various Roles, Office of the Comptroller of the Currency – 1983 to 1997 | |
Skills and Qualifications Ms. Dailey is an experienced former banking regulator and has been nominated to serve on the Board because of her extensive skills and knowledge in the areas of Consumer Business and Financial Services, Financial Reporting, Regulatory and Compliance, and Risk Management. Ms. Dailey’s service as the former Senior Deputy Comptroller for Bank Supervision and as the former Chief National Bank Examiner enables her to bring a deep experience in risk management, consumer banking, and financial regulation. In addition, her extensive financial services background adds significant value to Citi’s Board. Her 36 years of experience as a banking regulator gives her a unique understanding of our industry and insight into key issues facing financial institutions. Ms. Dailey’s extensive risk management, regulatory, compliance, and government affairs experience well qualify her to serve on Citi’s Board. | |
Primary Qualifications | |
Consumer Business and Financial Services | |
Financial Reporting | |
Legal, Regulatory and Compliance | |
Risk Management |
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52 | PROPOSAL 1: ELECTION OF DIRECTORS |
Barbara J. Desoer Age: |
Director of Citibank, N.A. Other Public Company Directorships: Previous Directorships within the last five years: Other Activities: |
Citibank, N.A. ●Chair, Citibank, N.A. – April 2019 to Present ●Chief Executive Officer, Citibank, N.A. – April 2014 to April 2019 ●Chief Operating Officer, Citibank, N.A. – October 2013 to April 2014 ●President, Bank of America Home Loans, Bank of America – 2008 to 2012 ●Global Technology & Operations Executive, Bank of America – 2004 to 2008 | |
Skills and Qualifications Ms. Desoer has been nominated to serve 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, and Institutional Business through her roles at Citibank, N.A. and Bank of America; Operations and Technology experience while serving as a Global Technology & Operations Executive at | |
Primary Qualifications | |
Consumer Business and Financial Services | |
Legal, Regulatory and Compliance | |
Risk Management |
Citi 20192021 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS | 53 |
John C. Dugan Age: |
Director of Citigroup Other Public Company Directorships: Previous Directorships within the last five years: Other Activities: |
Chair Citigroup Inc. ●Chair, Citigroup Inc. – January 2019 to Present ●Director, Citigroup Inc. – October 2017 to Present ●Partner and Chair, Financial Institutions Group, Covington & Burling LLP – 2011 to 2017 ●Comptroller of the Currency – 2005 to 2010 ●Partner (1995 to 2005) and Of Counsel (1993 to 1995), Covington & Burling LLP ●Assistant Secretary for Domestic Finance and Deputy Assistant Secretary for Financial Institutions Policy, U.S. Department of the Treasury – 1989 to 1993 ●Minority General Counsel and Counsel for the U.S. Senate Committee on Banking, Housing, and Urban Affairs – 1985 to 1989 | |
Skills and Qualifications Mr. Dugan is an experienced former banking regulator and former law firm partner and has been nominated to serve on the Board because of his extensive skills and knowledge in the areas of Risk Management, Financial Services, | |
Primary Qualifications | |
Corporate Governance | |
Legal, | |
Regulatory and Compliance | |
Risk Management |
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54 | PROPOSAL 1: ELECTION OF DIRECTORS |
Jane N. Fraser Age: 53 |
Director of Citigroup Director of Citibank, N.A. Other Public Company Directorships: Previous Directorships within the last five years: Other Activities: |
Chief Executive Officer Citigroup Inc. ●Chief Executive Officer, Citigroup Inc. – February 2021 to Present ●President of Citi – January 2021 to February 2021 ●President of Citi and Chief Executive Officer, Global Consumer Banking - 2019 to 2020 ●Chief Executive Officer, Citi Latin America – 2015 to 2019 ●CEO, U.S. Consumer and Commercial Banking and CitiMortgage – 2013 to 2015 ●Global Head of Citi Private Bank – 2009 to 2013 ●Global Head of Strategy and Mergers & Acquisitions – 2007 to 2009 | |
Skills and Qualifications Ms. Fraser is an experienced financial services executive and finance professional, and has been nominated to serve on the Board because of her extensive experience and expertise in the areas of Corporate and Consumer Businesses, Financial Services, Human Capital Management, Institutional Business, Regulatory and Compliance, and Corporate Affairs. Ms. Fraser has gained leadership experience as the President of Citi, extensive consumer business experience as the CEO of Citi’s Global Consumer Banking business, and as the CEO of Citi’s U.S. Consumer and Commercial Banking and Mortgage businesses. She also has experience in global and institutional business operations as the CEO of Citi Latin America, and strategic planning experience as the Global Head of Strategy and Mergers & Acquisitions. With extensive knowledge and experience with both major business lines at Citi, as well as experience leading from the top of the house, Ms. Fraser is uniquely qualified to serve on the Board. As President she has gained extensive experience with Citi’s governance, regulatory interaction, human capital management, ESG initiatives, and Citi’s values and culture. She also brings significant risk management, regulatory, and international experience to our Board. The Board believes that Ms. Fraser’s financial background, leadership and operational skills, and expertise in regulatory matters and banking, is a valuable resource for the Board. | |
Primary Qualifications | |
Consumer Business and Financial Services | |
Human Capital Management | |
International Business or Economics | |
Legal, Regulatory and Compliance |
Citi 2021 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS | 55 |
Duncan P. Hennes Age: |
Director of Citigroup Director of Citibank, N.A. Other Public Company Directorships: Previous Directorships within the last five years: Other Activities: |
Co-Founder and Partner Atrevida Partners, LLC ●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 Corporation – 1987 to 1999 ●Audit Manager, Arthur Andersen & Co. – 1979 to 1987 | |
Skills and Qualifications Mr. Hennes is an experienced financial services professional and has been nominated to serve on the Board because of his considerable expertise in the areas of Compensation, Financial Services, Risk Management, Financial Reporting, Institutional Business, and Regulatory and Compliance. Because Citi is an international financial services company with a significant institutional business and a need to ensure proper risk management, having an executive, like Mr. Hennes, with extensive institutional and risk management experience, enables the Board to provide knowledgeable oversight of its institutional business and its risk management function. In his role as the Co-Founder of Atrevida Partners, LLC and his prior experience at Promontory Financial Group and Bankers Trust Corporation, Mr. Hennes has developed wide-ranging skills and 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. In his capacity 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. | |
Primary Qualifications | |
Compensation | |
Institutional Business | |
Legal, Regulatory and Compliance | |
Risk Management |
Citi 2019 Proxy Statementwww.citigroup.com
56 | PROPOSAL 1: ELECTION OF DIRECTORS |
Peter B. Henry Age: |
Director of Citigroup Other Public Company Directorships: Previous Directorships within the last five years: Other Activities: |
Dean Emeritus and W. R. Berkley Professor of Economics and Finance, New York University, Leonard N. Stern School of Business ●Dean Emeritus and W. R. Berkley Professor of Economics and Finance, New York University, Leonard N. Stern School of Business – December 2017 to Present ●Dean, New York University, Leonard N. Stern School of Business – January 2010 to December 2017 ●Faculty Member, Stanford University – 1997 to 2009 ●Fellow, National Science Foundation – 1993 to 1996 | |
Skills and Qualifications Mr. 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 or Economics, Financial Services, Risk Management, Financial Reporting, Institutional Business, Human Capital Management, and Corporate 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 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 member of the Board of Nike, Inc. and its Corporate Responsibility and Sustainability and Governance Committees, Mr. Henry has gained valuable insights about the consumer business environment, sustainability issues, and governance. Mr. 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. Mr. Henry brings to the Board valuable insight 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. | |
Primary Qualifications | |
Corporate Governance | |
Financial Reporting | |
International Business or Economics |
www.citigroup.comCiti 2021 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS | 57 |
S. Leslie Ireland Age: |
Director of Citigroup Director of Citibank, N.A. Other Public Company Directorships: Previous Directorships within the last five years: Other Activities: |
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 ●Assistant Secretary and Head of the Office of Intelligence and Analysis, U.S. Department of the Treasury – 2010 to 2016 ●National Intelligence Manager for Threat Finance, Office of the Director of National Intelligence – 2010 to 2016 ●President’s Daily Intelligence Briefer – 2008 to 2010 ●Iran Mission Manager – 2005 to 2008 ●Executive Advisor to the Director and Deputy Director on Central Intelligence, CIA – 2004 to 2005 ●Various Leadership, Staff and Analytical positions (classified), CIA – 1985 to 2003 | |
Skills and Qualifications Ms. Ireland, former Assistant Secretary for Intelligence and Analysis for the U.S. Department of the Treasury and National Intelligence Manager for Threat Finance, brings to Citi significant knowledge and expertise from her career in financial intelligence and cybersecurity, both in the U.S. and internationally. Ms. Ireland has been nominated to serve on the Board because of her experience in the areas of Institutional Business, International Business or Economics, Operations and Technology, Regulatory and Compliance, and Risk Management. During her service to the U.S. Government, Ms. Ireland provided global economic and financial intelligence, developed and strengthened infrastructure to protect U.S. national security, and advised and oversaw financial intelligence processes. Ms. Ireland is able to offer insight and perspective to Citi’s Board on financial threats faced by organizations in the public and private sectors, including cybersecurity and money laundering. Ms. Ireland’s expertise in protecting IT systems from internal and external cybersecurity threats, and setting and evaluating organizational risks, helps enhance the Board’s oversight of cybersecurity and risk management practices. | |
Primary Qualifications | |
International Business or Economics | |
Risk Management |
Citi 2019 Proxy Statementwww.citigroup.com
58 | PROPOSAL 1: ELECTION OF DIRECTORS |
Lew W. (Jay) Jacobs, IV Age: |
Director of Citigroup Other Public Company Directorships: Previous Directorships within the last five years: Other Activities: |
Former President and Managing ●Chair (non-executive), Commercial Trust Company – 2020 to Present ●President (non-executive), Commercial Trust Company – 1998 to 2020 ●President and Managing Director; Executive Committee Member, Compensation Committee Member, Global Risk Committee Chair, PIMCO – 2014 to 2017 ●Managing Director and Global Head of Human Resources, PIMCO – 2008 to 2014 ●Managing Director and Head of Fixed Income – Germany, PIMCO – 2006 to 2008 ●Executive Vice President and Head of Fixed Income – Germany, PIMCO – 2003 to 2006 ●Executive Vice President (2003), Senior Vice President (2001 to 2003), Vice President (2000 to 2001), and Associate (1998 to 2000), Office of the CEO, PIMCO – 1998 to 2003 | |
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, Human Capital Management, and Risk Management. Citi is an international financial services company with a significant institutional business and a large diverse workforce and Mr. Jacobs, with extensive human resources experience, enhances the Board’s ability to provide knowledgeable oversight of one of its most important elements, its employees. He has been responsible for overseeing and managing executive teams and a sizeable worldwide workforce, developing and marketing | |
Primary Qualifications | |
Compensation | |
Financial Reporting | |
www.citigroup.comCiti 2021 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS | 59 |
Renée J. James Age: |
Director of Citigroup Other Public Company Directorships: Previous Directorships within the last five years: Other Activities: |
● ●Operating Executive, The Carlyle Group – February 2016 to Present ●President, Intel Corporation – ●Executive Vice President ●Group Vice President and ● ●Chief of Staff to Intel Founder, Chairman and CEO Andrew Grove – 1995 to 1999 | |
Skills and Qualifications Ms. James is a seasoned technology leader with large-scale, broad international operations experience. An accomplished operational executive, Ms. James has been nominated to serve on the Board because of her expertise in the areas of Technology, Risk Management, Human Capital 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 | |
Primary Qualifications | |
Consumer Business and Financial Services | |
Risk Management |
Citi 2019 Proxy Statementwww.citigroup.com
60 | PROPOSAL 1: ELECTION OF DIRECTORS |
|
www.citigroup.com
Gary M. Reiner Age: |
Director of Citigroup Other Public Company Directorships: Previous Directorships within the last five years: Other Activities: |
Operating Partner General Atlantic LLC ●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 | |
Skills and Qualifications Mr. 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, 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. | |
Primary Qualifications | |
Compensation | |
Consumer Business and Financial Services | |
Cybersecurity and Data Management | |
International Business or Economics | |
Citi 20192021 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS | 61 |
Diana L. Taylor Age: |
Director of Citigroup Director of Citibank, Other Public Company Directorships: Previous Directorships within the last five years: Other Activities: |
Former Superintendent of Banks, State of New York ●Vice Chair, Solera Capital LLC – July 2014 to 2018 ●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 | |
Skills and Qualifications Ms. 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 and Compliance, Risk Management, | |
Primary Qualifications | |
Compensation | |
Corporate Governance | |
Legal, Regulatory and Compliance | |
Sustainability |
www.citigroup.com
62 | PROPOSAL 1: ELECTION OF DIRECTORS |
James S. Turley Age: |
Director of Citigroup Director of Citibank, N.A. Other Public Company Directorships: Previous Directorships within the last five years: Other Activities: |
Former Chairman and CEO Ernst & Young ●Chairman and CEO, Ernst & Young – 2001 to June 2013 ●Regional Managing Partner, Ernst & Young – 1994 to 2001 | |
Skills and Qualifications Mr. 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, | |
Primary Qualifications | |
Financial Reporting | |
Legal, Regulatory and Compliance | |
Risk Management |
Citi 20192021 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS | 63 |
Deborah C. Wright Age: |
Director of Citigroup Director of Citibank, N.A. Other Public Company Directorships: Previous Directorships within the last five years: Other Activities: |
Former Chairman ●Managing Director of U.S. Jobs and Economic Opportunity, Rockefeller Foundation ●Chairman, Carver Bancorp, Inc. – 2005 to 2016 ●President and Chief Executive Officer of Carver Bancorp, Inc. and Carver Federal Savings Bank – 1999 to 2014 ●President and Chief Executive Officer of the Upper Manhattan Empowerment Zone Development Corporation, a redevelopment fund – 1996 to 1999 ●Commissioner of the Department of Housing Preservation and Development – 1994 to 1996 ●Member of the New York City Housing Authority Board – 1992 to 1994, and served on the New York City Planning Commission – 1990 to 1992 | |
Skills and Qualifications Ms. Wright is an experienced financial services executive and through her prominent roles in the areas of Financial Services, Consumer Business, Risk Management, | |
Primary Qualifications | |
Consumer Business and Financial Services | |
Financial Reporting | |
Legal, Regulatory and Compliance | |
www.citigroup.com
64 | PROPOSAL 1: ELECTION OF DIRECTORS |
Alexander R. Wynaendts Age: 60 |
Director of Citigroup Other Public Company Directorship: Previous Directorships within the last five years: Other Activities: |
Former Chief Executive Officer and Chairman of the Executive Board Aegon NV ●CEO and Chairman of the Executive Board, Aegon – 2008 to May 2020 ●Chief Operating Officer, Aegon – 2007 to 2008 ●Senior Vice President and Executive Vice President, Group Business Development, Aegon – 1997 to 2007 ●Various Roles, Aegon – 1992 to 1997 ●Various Roles, ABN AMRO (Amsterdam) – 1984 to 1992 | |
Skills and Qualifications Mr. Wynaendts is an experienced executive and has been nominated to serve on the Board because of his extensive experience in the areas of Consumer Business and Financial Services, International Business or Economics, Regulatory and Compliance, and Risk Management. Mr. Wynaendts developed valuable expertise in international and consumer business, risk management, and regulatory compliance through his more than 30 years’ experience in insurance and international finance. Mr. Wynaendts’ background provides him with an international perspective, particularly in the Europe, Middle East and Asia regions, where Citi has a significant presence, geopolitical insights, and experience as a leader of a large, international, highly complex business. Through his service on public company boards, including his service on the Board of Directors of Air France KLM, he has board-level experience overseeing large, complex public companies in various industries, which provides him with an understanding of corporate governance and risk management. His experience as the leader of a company in a heavily regulated industry gives him valuable expertise in managing a complex business in the context of an extensive regulatory regime. | |
Primary Qualifications | |
Consumer Business and Financial Services | |
International Business or Economics | |
Legal, Regulatory and Compliance | |
Risk Management |
Citi 2021 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS | 65 |
Ernesto Zedillo Ponce de Leon Age: |
Director of Citigroup Other Public Company Directorships: Previous Directorships within the last five years: Other Activities: |
Director, 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 México – Economist, Deputy Manager of Economic Research, Director General of FICORCA, Deputy Director – 1978 to 1987 | |
Skills and Qualifications Mr. Zedillo Ponce de Leon is the former President of Mexico, a seasoned economist, and an academic. He has been nominated to serve on the Board because of his extensive experience in the areas of International Business or Economics, | |
Primary Qualifications | |
Corporate Governance | |
International Business or Economics | |
Risk Management | |
Sustainability |
Citi 2019 Proxy Statementwww.citigroup.com
66 | PROPOSAL 1: ELECTION OF DIRECTORS |
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, |
● | Mses. Costello, Dailey, Desoer, Ireland, Taylor, and |
● | 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 |
● | Ms. Taylor |
* | The Operations and Technology Committee and the Data Quality Subcommittee were terminated on February 1, 2021. |
www.citigroup.comCiti 2021 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS | 67 |
Chair Compensation |
Citi’s Chair receives annual compensation in the form of a $500,000 Chair Fee, the amount of which was set by the Board in 2012 in recognition of the significant commitment of time and energy required to serve as Citi’s Chair. This Fee is in addition to the Retainer and the Deferred Stock Award payable to all Directors, as well as any relevant Committee Chair and/or Committee Fees. |
What We Do | What We Don’t Do | |
✓Citi’s Director Compensation Program is primarily equity based. ✓Directors have a robust Stock Ownership Commitment. ✓ | ✕Directors who are employees of Citi or its subsidiaries do not receive any compensation for their services as Directors. ✕Directors are not paid Meeting Fees. ✕Citi does not offer a Retirement Program for its Directors. ✕Directors are not permitted to hedge or pledge their Citi common stock. For more information on hedging, please see Citi’s Hedging Policies on pages 39-40 of this Proxy Statement. |
Citi 2019 Proxy Statementwww.citigroup.com
68 | PROPOSAL 1: ELECTION OF DIRECTORS |
The following table provides information on 20182020 compensation for non-employee Directors:
20182020 DIRECTOR COMPENSATION
Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Total ($) | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Total ($) | ||||||||||||
Ellen M. Costello | $ | 171,250 | $ | 150,000 | $ | 321,250 | $ | 277,500 | $ | 150,000 | $ | 427,500 | ||||||
Grace E. Dailey | $ | 186,250 | $ | 150,000 | $ | 336,250 | ||||||||||||
Barbara J. Desoer | $ | 258,750 | $ | 150,000 | $ | 408,750 | ||||||||||||
John C. Dugan | $ | 165,000 | $ | 150,000 | $ | 315,000 | $ | 575,000 | $ | 150,000 | $ | 725,000 | ||||||
Duncan P. Hennes | $ | 260,000 | $ | 150,000 | $ | 410,000 | $ | 315,000 | $ | 150,000 | $ | 465,000 | ||||||
Peter B. Henry | $ | 146,250 | $ | 150,000 | $ | 296,250 | $ | 188,750 | $ | 150,000 | $ | 338,750 | ||||||
Franz B. Humer | $ | 170,000 | $ | 150,000 | $ | 320,000 | ||||||||||||
S. Leslie Ireland | $ | 130,000 | $ | 150,000 | $ | 280,000 | $ | 225,000 | $ | 150,000 | $ | 375,000 | ||||||
Lew W. Jacobs, IV | $ | 75,000 | $ | 75,000 | $ | 150,000 | ||||||||||||
Lew W. (Jay) Jacobs, IV | $ | 232,500 | $ | 150,000 | $ | 382,500 | ||||||||||||
Renée J. James | $ | 135,000 | $ | 150,000 | $ | 285,000 | $ | 211,250 | $ | 150,000 | $ | 361,250 | ||||||
Eugene M. McQuade | $ | 180,000 | $ | 150,000 | $ | 330,000 | ||||||||||||
Michael E. O’Neill(3) | $ | 500,000 | — | $ | 500,000 | |||||||||||||
Eugene M. McQuade(3) | $ | 142,500 | $ | 75,000 | $ | 217,500 | ||||||||||||
Gary M. Reiner | $ | 155,000 | $ | 150,000 | $ | 305,000 | $ | 155,000 | $ | 150,000 | $ | 305,000 | ||||||
Anthony M. Santomero | $ | 260,000 | $ | 150,000 | $ | 410,000 | ||||||||||||
Diana L. Taylor | $ | 220,000 | $ | 150,000 | $ | 370,000 | $ | 218,750 | $ | 150,000 | $ | 368,750 | ||||||
James S. Turley | $ | 260,000 | $ | 150,000 | $ | 410,000 | $ | 292,500 | $ | 150,000 | $ | 442,500 | ||||||
Deborah C. Wright | $ | 135,000 | $ | 150,000 | $ | 285,000 | $ | 148,750 | $ | 150,000 | $ | 298,750 | ||||||
Alexander R. Wynaendts | $ | 157,500 | $ | 150,000 | $ | 307,500 | ||||||||||||
Ernesto Zedillo Ponce de Leon | $ | 135,000 | $ | 150,000 | $ | 285,000 | $ | 135,000 | $ | 150,000 | $ | 285,000 |
(1) | 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. Costello and Mr. Henry elected to receive all of their Citigroup |
Name | Fees Paid Currently in Cash ($) | Deferred Fees to Be Paid in Stock | ||||||||||||||
Fees Paid Currently in Cash ($) | Deferred Fees to Be Paid in Stock | |||||||||||||||
Name | Fees Paid Currently in Cash ($) | Number of Units | Value of Units | Number of Units | Value of Units | |||||||||||
2,186 | $ | 146,250 | $ | 25,000 | 4,581 | $ | 252,500 | |||||||||
Grace E. Dailey | $ | 186,250 | — | — | ||||||||||||
Barbara J. Desoer | $ | 258,750 | — | — | ||||||||||||
John C. Dugan | $ | 165,000 | — | — | $ | 325,000 | 4,543 | $ | 250,000 | |||||||
Duncan P. Hennes | $ | 260,000 | — | — | $ | 315,000 | — | — | ||||||||
Peter B. Henry | — | 2,186 | $ | 146,250 | — | 3,426 | $ | 188,750 | ||||||||
Franz B. Humer | $ | 170,000 | — | — | ||||||||||||
S. Leslie Ireland | $ | 130,000 | — | — | $ | 225,000 | — | — | ||||||||
Lew W. Jacobs, IV | — | — | — | |||||||||||||
Lew W. (Jay) Jacobs, IV | — | — | — | |||||||||||||
Renée J. James | $ | 135,000 | — | — | $ | 211,250 | — | — | ||||||||
Eugene M. McQuade | $ | 180,000 | — | — | ||||||||||||
Michael E. O’Neill | — | 7,458 | $ | 500,000 | ||||||||||||
Eugene M. McQuade(3) | $ | 142,500 | — | — | ||||||||||||
Gary M. Reiner | — | — | — | — | — | — | ||||||||||
Anthony M. Santomero | $ | 260,000 | — | — | ||||||||||||
Diana L. Taylor | $ | 220,000 | — | — | $ | 218,750 | — | — | ||||||||
James S. Turley | $ | 260,000 | — | — | $ | 292,500 | — | — | ||||||||
Deborah C. Wright | $ | 135,000 | — | — | $ | 148,750 | — | — | ||||||||
Alexander R. Wynaendts | $ | 157,500 | — | — | ||||||||||||
Ernesto Zedillo Ponce de Leon | $ | 135,000 | — | — | $ | 135,000 | — | — |
www.citigroup.comCiti 2021 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS | 69 |
(2) | The values in this column represent the aggregate grant date fair values of the |
Director | Deferred Stock Granted in 2018 (#) | Grant Date Fair Value ($) | ||||||||
Name | Deferred Stock Granted in 2020 (#) | Grant Date Fair Value ($) | ||||||||
Ellen M. Costello | 2,015 | $ | 150,000 | 1,900.8516 | $ | 150,000 | ||||
Grace E. Dailey | 1,900.8516 | $ | 150,000 | |||||||
Barbara J. Desoer | 1,900.8516 | $ | 150,000 | |||||||
John C. Dugan | 2,015 | $ | 150,000 | 1,900.8516 | $ | 150,000 | ||||
Duncan P. Hennes | 2,015 | $ | 150,000 | 1,900.8516 | $ | 150,000 | ||||
Peter B. Henry | 2,015 | $ | 150,000 | 1,900.8516 | $ | 150,000 | ||||
Franz B. Humer | 2,015 | $ | 150,000 | |||||||
S. Leslie Ireland | 2,015 | $ | 150,000 | 1,900.8516 | $ | 150,000 | ||||
Lew W. Jacobs, IV* | 1,028 | $ | 75,000 | |||||||
Lew W. (Jay) Jacobs, IV | 1,900.8516 | $ | 150,000 | |||||||
Renée J. James | 2,015 | $ | 150,000 | 1,900.8516 | $ | 150,000 | ||||
Eugene M. McQuade | 2,015 | $ | 150,000 | |||||||
Michael E. O’Neill | — | — | ||||||||
Eugene M. McQuade(4) | 950.4258 | $ | 75,000 | |||||||
Gary M. Reiner | 2,015 | $ | 150,000 | 1,900.8516 | $ | 150,000 | ||||
Anthony M. Santomero | 2,015 | $ | 150,000 | |||||||
Diana L. Taylor | 2,015 | $ | 150,000 | 1,900.8516 | $ | 150,000 | ||||
James S. Turley | 2,015 | $ | 150,000 | 1,900.8516 | $ | 150,000 | ||||
Deborah C. Wright | 2,015 | $ | 150,000 | 1,900.8516 | $ | 150,000 | ||||
Alexander R. Wynaendts | 1,900.8516 | $ | 150,000 | |||||||
Ernesto Zedillo Ponce de Leon | 2,015 | $ | 150,000 | 1,900.8516 | $ | 150,000 |
(3) | Mr. McQuade retired from Citi's Board on April 21, 2020. |
The Deferred Stock Award |
The aggregate number of shares of deferred stock outstanding for each Director at the end of 20182020 was:
Name | Number of Shares | |
Ellen M. Costello | ||
Grace E. Dailey | 2,712 | |
Barbara J. Desoer | 3,558 | |
John C. Dugan | ||
Duncan P. Hennes | ||
Peter B. Henry | ||
S. Leslie Ireland | ||
Lew W. (Jay) Jacobs, IV | ||
Renée J. James | ||
Eugene M. McQuade(3) | ||
Gary M. Reiner | ||
Diana L. Taylor | ||
James S. Turley | ||
Deborah C. Wright | ||
Alexander R. Wynaendts | 2,712 | |
Ernesto Zedillo Ponce de Leon |
Citi 2019 Proxy Statementwww.citigroup.com
70 |
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 seveneight 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 usit 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 onof 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’sthe independent auditors all communicationsthe matters required to be discussed by PCAOB Auditing Standard Nos. 1301 and 2410.the applicable requirements of the PCAOB.
The Committee reviewed and discussed the audited consolidated financial statements of Citigroup as of and for the year ended December 31, 20182020 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 relatedaudit-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, 20182020 for filing with the SEC.
The Audit Committee:
James S. Turley (Chair)
Ellen M. Costello
Grace E. Dailey
John C. Dugan
Duncan P. Hennes
Peter B. Henry
Lew W. (Jay) Jacobs, IVAnthony M. Santomero
Deborah C. Wright
Dated: March 5, 201910, 2021
www.citigroup.comCiti 2021 Proxy Statement
71 |
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 2019.2021. 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 20192021 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, 20182020 and 2017:2019:
2018 | 2017 | 2020 | 2019 | ||||||||
(in millions of dollars) | (in millions of dollars) | ||||||||||
Audit Fees | $ | 64.2 | $ | 64.7 | $70.6 | $67.3 | |||||
Audit-Related Fees | $ | 24.5 | $ | 22.8 | $23.0 | $20.7 | |||||
Tax Fees | $ | 10.1 | $ | 10.3 | $5.0 | $9.4 | |||||
All Other Fees | $ | 0.0 | $ | 0.0 | $0.0 | $0.0 | |||||
Total Fees | $ | 98.8 | $ | 97.8 | $98.6 | $97.4 |
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 20182020 classified under “All Other Fees.” The aggregate fee amount of $11,400$10,393 is included in the total amount; however, due to rounding, this fee is not represented in the “All Other Fees” column.
Citi 2019 Proxy Statementwww.citigroup.com
72 | PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
Approval of Independent Registered Public Accounting Firm Services and Fees
Citi’s Audit Committee has reviewed and approved all fees earned in 20182020 and 20172019 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 engagedengage in aan annual 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 for 2021, 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. KPMG's history and familiarity with Citi's businesses leads to greater audit effectiveness as well as a lower fee structure. 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. Mandatory lead audit partner rotation ensures a regular influx of fresh perspective balanced by the benefits of having a tenured auditor with deep institutional knowledge of Citi. 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 2019.2021.
Board Recommendation The Board recommends a voteFORratification of KPMG as Citi’s independent registered public accounting firm for |
www.citigroup.comCiti 2021 Proxy Statement
73 |
Proposal 3: Advisory Vote to Approve Citi’s 2018Our 2020 Executive Compensation
We are seeking a nonbinding, advisory vote approving the compensation of Citi’sour 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’sour 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 |
Compensation Discussion and Analysis
Our Compensation Discussion and Analysis is organized into fivethe following sections:
● | |
● |
● | Financial (pages |
● | |
● | |
● | Client and Franchise (pages |
● | Philosophy and Framework |
● | Elements of Annual Compensation (pages 80-81) |
● | Our Process (pages 81-85) |
● | Stockholder Engagement (pages 86-87) |
● | Risk- and Control-Related Aspects of our Compensation Program (pages 87-88) |
● | Decisions |
● | Named Executive Officer Performance Assessments (pages 89-96) |
● | Performance Share Units (pages 97-98) |
● | Deferred Stock and Cash Awards (pages 99-100) |
● | Additional Compensation Practices (pages |
The 20182020 Summary Compensation Table, and accompanying tables and narrative disclosure, follow this Compensation Information followDiscussion and Analysis, beginning on pages 99-107.
2018 Company Performance – Solid Progresspage 102 of this Proxy Statement.
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 2019 Proxy Statement
Table includes an explanation of Contentshow such measures are determined from GAAP measures.
Summary of 2018 Business Performance
The following graphs demonstrate our achievements and progress against key metrics.
www.citigroup.com
74 | PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S |
2020 Named Executive Officer Annual Compensation |
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 Compensation Committee approved the chart to the right shows how Citi performed in 2018 against the principal goals we setannual compensation described below 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.named executive officers for 2020 performance:
1 | 2 | 3 | 4 | 5 | 6 | |||||||
Annual | ||||||||||||
Compensation | ||||||||||||
for 2020 | ||||||||||||
Performance | Deferred | Deferred | (Sum of | |||||||||
Name | Base Salary(1) | Cash Bonus(1) | Share Units(2) | Stock(2) | Cash(2) | Columns 1-5) | ||||||
Michael Corbat | $1,500,000 | $5,260,500 | $6,137,250 | $6,137,250 | — | $19,035,000 | ||||||
Mark Mason | $500,000 | $4,220,000 | $3,165,000 | $3,165,000 | — | $11,050,000 | ||||||
Jane Fraser | $500,000 | $6,660,000 | $4,995,000 | $4,995,000 | — | $17,150,000 | ||||||
Paco Ybarra(3) | $8,355,669 | — | — | $4,809,382 | $3,934,949 | $17,100,000 | ||||||
Michael Whitaker(3) | $3,856,463 | — | — | $2,109,820 | $1,726,217 | $7,692,500 |
(1) | |
(2) | In accordance with SEC rules, these awards are |
(3) | Compensation for Messrs. Ybarra and Whitaker is designed to comply with U.K. and E.U. requirements, as described on pages 97-100 of this Proxy Statement. Their compensation is converted from British pounds to U.S. dollars at the rate of 1.2854875 dollars per pound. |
Overall, the Compensation Committee balanced various considerations in determining 2020 pay for the named executive officers and the entire Executive Management Team. 2020 was a challenging year as the Consent Orders entered into by us with the Federal Reserve Board and the Office of the Comptroller of the Currency, together with specific operational issues giving rise to franchise reputational risks, highlighted our need to transform aspects of our risk and control environment and culture. At the same time, while the value of our franchise was evident in our financial performance in an unprecedented business environment, and important parts of our business had strong financial results, our overall financial performance fell short of our aspirations, both in absolute terms and relative to peers. Citi’s earnings were substantially reduced by a higher allowance for credit loss build during 2020 which was a function of the macroeconomic environment. By linking 70% and 60%, respectively, of total compensation to the value of our stock for our CEO and other named executive officers, we ensured that compensation decisions are aligned over time with stockholder returns. 2020 named executive officer compensation decisions reflected that mix of factors. Total compensation for half of our Executive Management Team was down in 2020 compared to 2019. Mr. Corbat’s compensation was down by more than 20% in 2020 compared to 2019.
The above table is not intended to be a substitute for the reporting of compensation in accordance with SEC rules as shown in the 2020 Summary Compensation Table on page 102 of this Proxy Statement.
Performance |
The following summarizes highlights of Company performance in the four pillars under CART (our Compensation Accountability Rationale Tool) that are factored into the Compensation Committee’s compensation determinations for our named executive officers for 2020. CART and the four pillars are described further on pages 81-83 of this Proxy Statement. Discussion of the performance of each of the named executive officers individually is on pages 89-96 of this Proxy Statement.
Financial
The following financial performance highlights were considered by the Compensation Committee when awarding executive incentive pay for 2020, in addition to numerous additional financial performance metrics included on individual named executive officer scorecards and incorporated into CART.*
SIGNS OF FRANCHISE STRENGTH IN A TUMULTUOUS YEAR |
● | Our 2020 results demonstrated solid performance as well as financial strength and operational resilience, despite a significant deterioration in public health and economic conditions during the year due to the pandemic. | |
➢ | For 2020, Citi reported net income of $11.0 billion on flat revenues of $74.3 billion, compared to net income of $19.4 billion on revenues of $74.3 billion in 2019. | |
➢ | Our diluted earnings per share were $4.72 for 2020, down 41% from the prior year, compared to $8.04 per share for 2019. Our earnings were substantially reduced by a higher allowance for credit loss (ACL) build (approximately $9.8 billion) during the year under the newly effective accounting standard for Current Expected Credit Losses (CECL). |
Citi 2021 Proxy Statement
PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S 2020 EXECUTIVE COMPENSATION | 75 |
➢ | Despite the challenging environment, our revenues were largely unchanged compared to the prior year as strong performance in fixed income markets, equity markets, investment banking and the private bank in our Institutional Clients Group (ICG) offset the impact of | |
➢ | Our expenses reflected continued investments in the transformation of our operating environment, including infrastructure supporting its risk and control environment. One part of the broader transformation effort involves our compliance with the Consent Orders. Results also include a $400 million civil money penalty in the third quarter of 2020 in connection with the Consent Order entered into with the OCC. | |
➢ | Citi had broad-based deposit growth across ICG and GCB, reflecting strong client engagement, as well as an elevated level of liquidity in the financial system, while loans declined as a result of lower levels of consumer and corporate activity due to the pandemic. | |
● | We continued to optimize our capital base while supporting customers, clients and the broader economy, as well as maintaining a strong capital and liquidity position. | |
➢ | In 2020, Citi returned $7.2 billion of capital to common stockholders through share repurchases and dividends. Citi repurchased approximately 41 million shares contributing to a 7% reduction in average diluted outstanding common shares from the prior year. | |
➢ | We continued to support our colleagues, customers and clients as well as the broader economy during this challenging time, while maintaining strong capital and liquidity positions with a CET1 Capital ratio of 11.7% and Liquidity Coverage Ratio of 118% — well above minimum regulatory requirements. | |
➢ | During 2020, Citi grew book value per share by 4%. | |
* | As a result of new information we received subsequent to December 31, 2020, we adjusted downward our fourth quarter of 2020 financial results from those previously reported on January 15, 2021 (and filed on a Form 8-K with the SEC on such date), due to a $390 million increase in operating expenses ($323 million after-tax) recorded within ICG, resulting from operational losses related to certain legal matters. For |
Relative Total Shareholder Return
KEY FINANCIAL METRICS |
The group of companies shown in the following graphs isillustrate our achievements in respect of key financial metrics during 2020.
NET INCOME TO COMMON STOCKHOLDERS | RETURN ON ASSETS | RETURN ON TANGIBLE COMMON EQUITY | DISTRIBUTIONS TO COMMON STOCKHOLDERS | TOTAL PAYOUT RATIO |
www.citigroup.com
76 | PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S 2020 EXECUTIVE COMPENSATION |
The following graph shows our total shareholder return for 2020 and for the three-year period ending with 2020 compared to the companies in 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.
(1) | Increase in share price plus reinvested dividends over one- and three-year periods ending |
Risk and Control Management
The following risk and control management performance highlights were considered by the Compensation Committee when awarding executive incentive pay for 2020, in addition to numerous additional risk and control management metrics included on individual named executive officer scorecards and incorporated into CART.
CONSENT ORDERS |
Given the leadership role we play in the global financial system, our regulators hold us to appropriately high standards. The Consent Orders are evidence that our performance in this area fell short.
Our shortcomings in the management of risk and control had a significant impact on the compensation of our Executive Management Team in 2020. The Compensation Committee determined individual risk and control performance and then imposed a reduction for the shared accountability concerning risk and control across all Executive Management Team members.
Our response to the Consent Orders is far from limited to a one-time impact on compensation. Rather, we have embarked on a transformation, including modernization of our operations and a continued evolution in our culture concerning risk and control. We are committed to addressing the challenges represented by the Consent Orders and achieving our transformation goals.
In furtherance of our transformation efforts, we are making significant investments in our infrastructure and control and have made this work a strategic priority for our firm. We have also centralized management of our transformation under a new Chief Administrative Officer, and we are planning a redesign of our performance assessment efforts throughout the Company.
Every member of our leadership team is involved in the transformation and will play a key, hands-on role in the implementation. In addition, we have assembled an extraordinary team of top talent from across the firm with representatives from the businesses and global functions to lead six different transformation programs. We are putting our best minds into this effort and have a detailed, integrated approach addressing the needs of our clients, investors and regulators.
We appreciate our regulators’ acknowledgments in the Consent Orders that we have begun taking the necessary actions. In 2019, we adopted a disciplined and systematic process for factoring risk and control into our compensation decisions for our Executive Management Team, which was expanded to approximately 400 of our most senior employees in 2020. Also during 2020, the Compensation Committee revised the ranges of potential impacts to compensation based on CART pillar ratings, to increase the potential impact of negative risk and control management on compensation.
Citi 20192021 Proxy Statement
PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S |
Leadership
The following highlights were considered by the Compensation Committee as important examples of leadership for 2020, together with other accomplishments and behaviors evidencing the opportunities and challenges in modelling leadership qualities included on individual named executive officer scorecards and incorporated into CART.
CEO SUCCESSION |
During 2020 and early 2021 we successfully executed a transition in the leadership of our Executive Management Team, with Jane Fraser succeeding Mike Corbat as our Chief Executive Officer. Ms. Fraser’s elevation in 2019 to the role of President of Citi, and subsequent promotion effective March 1, 2021, to Chief Executive Officer, illustrate the successful management of the succession process by Mr. Corbat, the Nomination, Governance and Public Affairs Committee and the entire Board. Information concerning Ms. Fraser’s compensation as CEO will appear in the Proxy Statement relating to our 2022 Annual Meeting of Stockholders.
Our Executive Management Team is focused on continuing the transformation and improving our returns under Ms. Fraser���s leadership. As the world’s most global bank, we will continue to invest in our infrastructure and our risk and control management to ensure that we operate in a safe and sound manner and serve our clients and customers with excellence.
PAY EQUITY |
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 ofwork to champion equality is reflected in our executive compensation program, and as part of this process, we held meetings with each stockholder who acceptedapproach to pay equity within our invitation to engage.firm.
In 2018, we held two setswere the first large U.S. financial institution to publicly release the results of stockholder outreach meetings with holdersa pay equity review. Our pay equity review as disclosed in 2018 compared the compensation of women to men in the U.S., the U.K. and Germany and of minorities to non-minorities in the U.S. Our review adjusted pay to account for a number of factors to make the comparisons meaningful, percentagesincluding job function, level, and geography, and we made changes to compensation, where appropriate on an individual basis, as a result of the review.
In 2019, we extended our adjusted pay equity review to include employees globally, and we found that women globally were paid, on average, 99% of what men were paid and that there was no statistically significant difference between what U.S. minorities and non-minorities were paid. As in the prior year, we made changes to compensation, where appropriate on an individual basis, as a result of the review.
In 2019, we were again first among our peers in the transparency of our outstanding shares, givenapproach to pay equity. In that year, we were the sizefirst large U.S. company to disclose our unadjusted or “raw” pay gap for women globally and U.S. minorities, which measures median total compensation unadjusted for factors such as job function, level, and geography. The analysis showed that the median pay for women globally for 2018 was 71% of our shareholder base.
We were pleased with the positive feedback from our stockholdersmedian for men, and their endorsementthe median pay for U.S. minorities in 2018 was 93% of our executive compensation program, which resulted in a 94.58% favorable Say on Pay votethe median for non-minorities.
In 2020, we again looked at our adjusted pay equity and “raw” pay gaps and found that, on an adjusted basis, women globally are paid, on average, more than 99% of what men are paid and there is no statistically significant difference in adjusted compensation for U.S. minorities and non-minorities. Following the review, we again made changes to compensation, where appropriate on an individual basis, as part of the compensation cycle. The 2020 raw pay gap analysis showed that the median pay for women globally is more than 74% of the median for men, up from 73% last year and 71% in 2018, Annual Meeting. In responseand that the median pay for U.S. minorities is just under 94% of the median for non-minorities, which is similar to this favorable result, we keptlast year and up from 93% in 2018.
Our work to address pay equity and representation is continuous. We made significant progress in 2020 and remain committed to reducing the core structureraw pay gap numbers over time by increasing the representation of our pay programwomen and our disclosure consistent with last year. We also increased the performance targetsU.S. minorities in the Performance Share Units awarded for 2018 performance over prior-year targetssenior and prior-year performance to reflect our improving performance and to further align the program with stockholder interests.higher-paying roles.
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.
www.citigroup.com
PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S |
Client and Franchise
The following highlights were considered by the Compensation PhilosophyCommittee as important examples of our efforts to solidify client relationships and Frameworkstrengthen our franchise during 2020.
ENABLING GROWTH AND ECONOMIC PROGRESS |
Our mission is to serve as a trusted partner to our clients by responsibly providing financial services that enable growth and economic progress. Our core activities are safeguarding assets, lending money, making payments and accessing the capital markets on behalf of our clients. We have 200 years of experience helping our clients meet the world’s toughest challenges and embrace its greatest opportunities.
We seekhave an obligation to designact responsibly. We also know that acting responsibly and sustainably will help to drive value for our executive pay programdifferent stakeholders and for our Company.
Our continuity of business and crisis management groups are managing protocols in response to motivate balanced behaviors, consistentthe COVID-19 pandemic by providing for the safety and well-being of our staff, while continuing to maintain high levels of client servicing across all of the markets in which we operate. As the majority of Citi colleagues—roughly 80%—around the world are working remotely, we are pursuing a slow and measured return in locations where local guidelines permit, beginning with only a small number of colleagues. Also, our focusresponse teams continue to consult with health experts and follow local government guidelines in determining the safest return to office for each location.
In addition, we are supporting those immediately impacted by the COVID-19 pandemic. We were one of the first banks in the U.S. to announce temporary assistance measures for pandemic-impacted consumer customers by offering relief primarily in the form of payment deferrals, fee waivers and suspending foreclosures for U.S. mortgages. We remain committed to discussing assistance options with customers that continue to experience financial hardship on balanced long-terma case-by-case basis.
Through our businesses, we address some of society’s greatest challenges—an imperative stated in our mission and an idea that shapes our decisions every day. The need for action grew in urgency and scope in 2020 with the onset of the COVID-19 pandemic and calls for racial equity and systemic change in the U.S. Mirroring our mission of enabling progress, our businesses and community investments work together to contribute positive societal impact through numerous initiatives, including the following:
● | In 2020, Citi and the Citi Foundation announced more than $1 billion in strategic business investments, including $100 million in Citi Foundation grants, to help close the racial wealth gap and increase economic mobility in the U.S. Beginning on the bottom of this page is a further discussion of our Action for Racial Equity initiative. |
● | Climate change is one of the most pressing challenges facing our society, and the COVID-19 pandemic reminded us that our health, our economic success and our environment are all inextricably linked. In 2020, we launched our new five-year Sustainable Progress Strategy to play a leading role in driving the transition to a low-carbon economy. At the core of our new strategy is a commitment to finance and facilitate $250 billion in environmental solutions, as well as to continue focusing on climate risk assessment and reducing the operational footprint of our facilities globally. |
● | We support entrepreneurs in emerging markets through efforts like Scaling Enterprise, a $100 million loan guarantee facility and joint effort with the U.S. International Development Finance Corporation and the Ford Foundation launched in 2019. Similarly, we provide equity capital to U.S.-based companies addressing societal challenges through our $200 million Citi Impact Fund established in January 2020. |
● | Potential entrepreneurs today have little chance without access to the web. Programs like Cobro Digital, launched in Mexico in 2018, have helped to bridge gaps in digital access by enabling clients to send invoices and payments using QR codes on their phones at no cost. Building on this work, in 2020, Citibanamex partnered with PepsiCo Alimentos Mexico and Amigo PAQ to provide digital financial tools to more than 800,000 small, underbanked retailers who are part of the PepsiCo distribution network. |
● | We and the Citi Foundation champion philanthropic causes to increase economic opportunity. In 2020, we and the Citi Foundation expanded our Pathways to Progress job skills-building initiative, led by a Citi Foundation investment of $100 million, to improve employability and economic opportunity for young people around the |
Citi 2021 Proxy Statement
PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S 2020 EXECUTIVE COMPENSATION | 79 |
world. We and the Citi Foundation gave $81,263,000 and $100,150,000, respectively, in grants and charitable contributions during 2020. Additionally, in the immediate aftermath of the death of George Floyd in 2020, we gave more than $10 million to Black-led organizations fighting for racial justice. | |
● | Notwithstanding the challenges posed by the COVID-19 pandemic, Citi volunteers contributed 218,488 hours of service in 2020. |
ACTION FOR RACIAL EQUITY |
The events of 2020 put a spotlight on social issues confronting communities around the globe. There is a need to do better for various reasons, including to create an environment in which businesses can grow and prosper by meeting the evolving needs of economically thriving communities with racially diverse talent. Accordingly, we believe that responsible businesses must contribute to solutions.
The recently published Citi Global Perspectives & Solutions report entitled, “Closing the Racial Inequality Gaps,” found if the U.S. had closed key racial gaps for Black Americans in wages, housing, education and investment 20 years ago, $16 trillion could have been added to the U.S. economy. If these gaps are closed today, $5 trillion could be added to U.S. gross domestic product over the next five years.
In September 2020, we and the Citi Foundation announced more than $1 billion in strategic goals. initiatives to help close the racial wealth gap and increase economic mobility in the U.S. Our Action for Racial Equity is a comprehensive approach to:
Providing greater access to banking and credit in communities of color | Many communities of color lack access to traditional banking services that are the foundation of financial stability and thriving communities. Economic security is also hampered by insufficient access to credit, which makes it hard to qualify for affordable mortgages and small business loans. | |
Increasing investment in Black-owned businesses | Black-owned businesses have long faced obstacles in obtaining loans. They are the most likely to apply for bank financing, but get turned down at twice the rate as white business owners. This financing gap is especially pronounced in the start-up world, where studies show that Black entrepreneurs receive only 1% of venture capital funding. | |
Expanding homeownership among Black Americans | Homeownership is a key way to build wealth and equity, and safe, affordable housing is an important platform for financial stability. However, Black homeownership is at its lowest level since the 1960s. In addition, rental housing in many urban areas across the country is scarce and too expensive. Compounding this crisis is the near-absence of minority-owned real estate developers in the affordable housing industry. | |
Advancing anti- racist practices in the financial services industry | Advancing racial equity requires a more intentional focus on the challenges faced by communities of color and a commitment to becoming an anti-racist institution. We are taking a hard look at our own policies and practices to actively identify potential bias to help level the playing field for communities of color. |
To support these goals, our core businesses are committing the following resources over the next three years:
● | $550 million to support homeownership for people of color and affordable housing by minority developers |
● | $350 million in procurement opportunities for Black-owned business suppliers |
● | $50 million in additional impact investing capital for Black entrepreneurs |
● | $100 million to support Minority Depository Institutions’ growth and revenue generation |
In addition, the Citi Foundation has committed $100 million in grants to support community change agents addressing racial equity.
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80 | PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S 2020 EXECUTIVE COMPENSATION |
Philosophy and Framework |
Our Compensation Philosophy as summarized as a set of objectives below, is designed to encourage prudent risk-taking and management of controls while attracting the world-class talent necessary to Citi’sour success. Our Compensation Philosophy is summarized by the following five objectives:
● | Reinforce a business culture based on the highest ethical standards |
● | Manage our risks |
● | Reflect regulatory guidance in compensation programs |
● | Attract and retain the best talent to lead |
● | 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 resultsThe full statement 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 Compensation Philosophy is reflectedavailable on our public website at https://www.citigroup.com/citi/investor/data/comp_phil_policy.pdf?ieNocache=132.
Consistent with our Compensation Philosophy, we design our executive pay program to motivate balanced behaviors. The compensation of our executive officers is determined based on a disciplined policy of goal setting and measurement and assessment of performance against pre-established goals. Transparency, discipline and performance feedback are key factors in our approach to executive compensation Framework,officer compensation.
Elements of Annual Compensation
The total incentive award granted to executive officers is paid out in three parts: annual cash bonus, deferred stock awards, the value of which enablesdepends on our stock price, and performance share units (PSUs).
Our incentive awards are balanced between annual and long-term components, with the majority of incentive compensation delivered in awards that vest over multiple years. In determining the percentages to closely reflect businessgrant of each award type, the Compensation Committee considered applicable regulatory requirements and individual performance, consistent with our pay-for-performance approach. Full information on our executive compensation Framework appears on page 82.
guidelines for deferral as well as market practices.
Citi 20192021 Proxy Statement
PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S |
% 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 us to attract and retain talent | Cash | |||||
Variable | ||||||||||
Annual Incentive | 30% | 40% | Annual Bonus | ●CART assessment determines amount ●Plan limit on executive officer cash bonuses | Cash | |||||
Deferred/ Long-Term Incentives (LTI) | 70% | 60% | Performance Share Units (50% of LTI) | ●CART assessment and share price determine target number of units ●Earned units based on financial metrics over three-year performance period (a description of the metrics for 2020 awards is included on page 97) ●Earned units vest at the end of the three-year performance period ●Ultimate amount based on our total shareholder return ●Award capped at 100% of target if our total shareholder return is negative over performance period ●Subject to clawbacks | Equity-linked, performance- based and cash- settled | |||||
Deferred Stock Awards (50% of LTI) | ●CART assessment and share price determine number of shares ●Ultimate amount based on our total shareholder return ●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 | Equity |
Mr. Whitaker and Mr. Ybarra are employed in our London office. Their compensation is designed to comply with U.K. and E.U. regulatory guidance and, therefore, differs from the general structure shown in the table above. Mr. Ybarra’s and Mr. Whitaker’s total incentive award must not exceed two times their respective fixed compensation. They each receive a fixed role-based allowance based on certain guidelines related to the significance of their respective roles. Their entire incentive award is deferred (with no annual bonus component) and is granted in the form of a Deferred Stock Award and a Deferred Cash Award.
Our Process
The following summarizes the principal elements of our process for setting incentive compensation for our named executive officers. Set forth on pages 87-88 is a detailed description of how we take risk into account in our compensation process and award features.
CART PERFORMANCE ASSESSMENT |
2018 CEO Compensation
AsWe adopted CART in 2020 as a tool for administering our new principles that is an integral part of our compensation framework. Although CART is only a process tool, not a new set of performance criteria or metrics, 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.
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 |
Pages 84-85 present a detailed overview of the CEO’s scorecard and the performance evaluation process, which resulted in significantly increased transparency, discipline and thoughtfulness with respect to the Compensation Committee awarding Mr. Corbat $24 million in total annualimpact of risk and control management on compensation for 2018. His total annual compensation consisted of his base salary of $1.5 million (unchanged since 2013) anddecisions. While CART requires 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 scorecardnotably disciplined 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.year-end
LINKING 2018 CEO PAY ELEMENTS TO PERFORMANCE
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PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S |
performance assessment, its most important feature is that it requires managers to provide a detailed, deep and broad explanation of performance across each of the four CART pillars — Risk and Control, Financial, Client and Franchise, and Leadership — to support compensation decisions.
2018 Pay ElementsIn particular, CART creates a comprehensive record evidencing how risk was considered in compensation decisions. These comprehensive descriptions enable us to systematically hold each senior manager accountable in a disciplined way for management of risk and control and for determining compensation. We think that it is an important step forward in our transformation plan.
Citi’sEach executive’s total incentive awards deliveredaward (including the annual cash bonus component of the total award) is based on our overall achievements, individual executive performance against applicable goals and a market benchmarking process. The metrics and goals for each named executive officer’s total incentive award are contained in the executive’s scorecard, which is developed early in each compensation cycle. At the same time, the market benchmarking process, with market rates of pay adjusted to the CEOreflect each named executive officer’s experience, and the otherscope of his or her role in our system, is determined. The scorecard results are fed into CART. CART write-ups for each of the four CART pillars are completed for each named executive officers (NEOs) are a mix of cash bonus, Performance Share Units,officer. The Compensation Committee contributes to and Deferred Stock Awards. This incentive structure establishes a balance between annual and long-term compensation,assesses those write-ups. The write-ups, together with the majorityadjusted market-based benchmarking results, form the basis for the Compensation Committee’s determination 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, theamounts.
Under our compensation framework, our Compensation Committee considered applicable regulatory requirementsuses a five-step process when making final determinations regarding named executive officer incentive compensation. The steps are illustrated in the following graphic, 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. Forsummarized immediately below the Performance Share Units awarded for 2018 performance:graphic.
Citi 20192021 Proxy Statement
PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S |
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.
The Compensation Committee sets scorecard goals for each named executive officer early in the annual compensation cycle. These scorecard goals and results are then incorporated into CART. The goals fall into four categories or performance “pillars”: Risk and Control, Financial, Client and Franchise and Leadership. The type and number of goals for each pillar vary by named executive officer, based on the nature of his or her position: |
➢ | Risk and Control goals include: |
✓ | risk management and delivering strong controls, and |
✓ | accountability for key regulatory remediation focus areas |
➢ | Financial goals include: |
✓ | company-wide goals for all named executive officers that reflect our annual business plan, |
business unit-specific goals for named executive officers who are business unit leaders that reflect annual plans for our individual business units |
➢ | Client and Franchise goals include: |
✓ | goals relating to metrics that are important to the strength of the franchise and, for executives who are business leaders, goals relating to growth in our client relationships |
➢ | Leadership goals focus on: |
✓ | leadership values, including diversity and other human capital management goals |
● | After the end of each year, a named executive officer’s performance against each goal is assessed. A performance rating (pillar rating) is assigned for each performance pillar on a scale of 1 to 5, with 1 being “Exceptional” and 5 being “Not Effective,” reflecting a subjective assessment of the executive’s performance. |
● | Each named executive officer is categorized into one of four classifications, which are driven by the line of defense designations under our Risk Governance Framework. We have established prescribed compensation adjustment ranges by pillar and a pillar rating for each of these four classifications. In order to align potential compensation impacts with the executive’s role and drive desired behavior on performance outcomes, the compensation ranges vary based on the pillar rating for each classification. |
● | The Compensation Committee retains the authority to adjust goals, pillar ratings, and compensation adjustment ranges during the year, if appropriate. |
● | The Compensation Committee rates the CEO’s performance, and the CEO and Compensation Committee rate the performance of the other named executive officers. |
● | The Compensation Committee reviews estimated market pay to determine a market benchmark for each named executive officer role. Ranges are developed based on public information and third-party market surveys of compensation for the same or comparable roles at peer firms. This market benchmark is then adjusted based on the scope of the role at Citi, and experience of the executive. |
● | This practice helps us set named executive officer pay at levels that reflect market pay, based on varying levels of performance. |
● | The Compensation Committee then uses CART to apply each named executive officer’s performance rating for each pillar against the prescribed compensation adjustment range to determine an appropriate compensation adjustment for each pillar. The net aggregate compensation adjustments are then applied to the adjusted market benchmark to determine a forecasted compensation amount. |
● | The Compensation Committee thinks that the simultaneous evaluation of scorecard performance and market pay is the most effective approach to aligning pay and performance in an industry where market levels of pay are volatile. |
● | Based on the evaluation of the scorecard ratings and market pay described in Step 4, the Compensation Committee, exercising its fiduciary judgment, determines the final award amount for each named executive officer. The qualitative factors (such as risk behaviors) that inform the decision are explained in detail within each named executive officer’s CART write-up. |
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PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S |
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.
COMPENSATION GOVERNANCE PRACTICES | ||
We have strong compensation governance practices that are regularly refined as a result of engagement with stockholders and regulators and our attention to evolving best practices. | ||
PRACTICES WE EMPLOY | PRACTICES WE AVOID | |
Rigorous Performance-Assessment Process. CART facilitates a rigorous performance-assessment process under which the Compensation Committee participates in the development of a comprehensive written analysis of executive officer Regulatory requirements. Our governance practices are designed to comply with the principles for sound incentive compensation practices promulgated by our regulators, who provide ongoing oversight and engagement in respect of those practices. Limit on cash bonus. Annual Risk | No excessive perks.We do not provide personal perquisites such as free personal use of private aircraft or special executive medical benefits. |
Citi 20192021 Proxy Statement
PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S |
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 |
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:
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:
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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 |
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Citi’s Executive Compensation Framework
Our Compensation Committee uses a five-step process to determine named executive officer incentive compensation.
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Citi 2019 Proxy Statement
Our Compensation Peer Group
The Compensation Committee believes that market compensation levels must frame compensation decisions in order to retainsecure the executive talent necessary to execute the Company’s business strategy. Accordingly, a criticalan important step in our executive compensation Frameworkframework is the Compensation Committee’s understandinganalysis of market pay, which it develops through consideration ofis based on 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 Citiwe currently usesuse 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’sour executive compensation.
OurWe chose the peers were chosen because they operate in one or more lines of business that are similar to Citi’sours and compete in similar labor markets, although manymost do not have global scale that is comparable to Citi.ours.
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AIG (AIG) | Goldman Sachs (GS) | Prudential (PRU) | ||
American Express (AXP) | JPMorgan Chase (JPM) | U.S. Bancorp (USB) | ||
Bank of America (BAC) | MetLife (MET) | Wells Fargo (WFC) | ||
BNY Mellon (BK) | Morgan Stanley (MS) | |||
Capital One (COF) |
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All firms in the compensation peer group firms wereare included in preparing the market data for the CEO and CFO roles. Not all firms in the compensation peer group firms have roles comparable to Citi’sour 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 focusedfocuses on compensation for comparable roles at the U.S.-based global banks with lines of business and scale similar to Citi’s. Thatours. This group includes Bank of America, Goldman Sachs, JP MorganJPMorgan Chase, Morgan Stanley, and Wells Fargo.Fargo, and the information is compiled with the assistance of an outside third-party survey firm using a proprietary database. For named executive officers other than the CEO or CFO, only these U.S. global banks are typically included in the evaluation.
In selecting the compensation peer group, the Compensation Committee useduses 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 iswe are above the 75th percentile in size, meaning that the market for target compensation prior to consideration of performance couldwould be the upper quartile.quartile based on correlation between size and pay opportunity. Where Citi payswe pay executives above median, the size and scope of their responsibilities and their performance tend to be critical factors in determining pay ranges.
2019 CITI POSITIONING RELATIVE TO PEER COMPANIES
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The following summarizes our engagement with stockholders and
Our executive compensation program reflects feedback received from investors through an extensive stockholder engagement process. In 2020, we held two rounds of stockholder engagement with holders of meaningful percentages of our outstanding shares.
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 engagement as outlined above and in previous years, including the following:
Citi
Our compensation programs are designed in accordance with our responsibility to assume only risks that are prudent and
Our Compensation Philosophy requires us to consider risk management when making discretionary incentive compensation awards. Our incentive compensation awards have the following important elements:
Our robust clawback policies are applicable to incentive awards to the named executive officers and all other employees eligible for similar awards. The clawback provisions provide us with the right to cancel unvested deferred incentive compensation under a range of adverse outcomes. The following lists our principal clawback triggers. The variety of triggers is due in part to regulatory considerations in the principal jurisdictions in which we operate and accounting considerations applicable to Deferred Stock Awards.
In addition to the clawback provisions described in the table above, Deferred Stock Awards are subject to clawback in the event of a pretax loss in a relevant business unit. This performance-based vesting condition is not applicable to PSUs or Deferred Cash Awards. Also, to comply with U.K. and E.U. regulatory guidance, additional clawbacks are applicable to Mr. Ybarra’s and Mr. Whitaker’s incentive awards covering various compliance issues. At a minimum, Citi 2021 Proxy Statement
The foregoing sections of our Compensation Discussion and Analysis set forth the 2020 annual compensation of our named executive officers, summarize our performance highlights in various areas—financial, risk and control, client and franchise, and leadership—during 2020 and outline our compensation philosophy and framework. The following provide further detail concerning the decisions made by the Committee in respect of 2020 compensation for our named executive officers. Named Executive Officer Performance Assessments The summaries on pages 89-96 describe the assessment of performance during 2020 of each of our named executive officers in each of the four pillars of CART. Ratings in each of the four pillars for 2020 took into account performance in light of the pandemic’s unprecedented impacts on the macro-economic environment and our business during 2020. In addition, ratings in the Risk and Control pillar took into account the Consent Orders and the issues underlying them, and there was also a compensation impact for shared accountability in our risk and control environment. Ratings are on a scale of 1 to 5, with 1 being “Exceptional” and 5 being “Not Effective.” For a reconciliation of all adjusted results to reported results, please see Annex A to this Proxy Statement. Michael Corbat – Chief Executive Officer of Citi Mr. Corbat has been CEO of Citi since October 2012. He joined us in 1983 and has held various management positions throughout our businesses in multiple businesses and geographies. Mr. Corbat retired as CEO of Citi as of February 26, 2021. As CEO, Mr. Corbat was responsible for our global business operations. Our GCB operates in North America, Mexico, and Asia and provides traditional banking services to retail customers through retail banking, Citi-branded cards, and, in North America, retail services. ICG provides corporate, institutional, public sector, and high-net-worth clients around the world with a full range of wholesale banking products and services. We have approximately 200 million customer accounts and do business in over 160 countries and jurisdictions. As of December 31, 2020, we had revenues of approximately $74 billion for full year 2020, total assets of approximately $2.3 trillion, approximately 210,000 employees, and total deposits of approximately $1.3 trillion.
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Citi 2021 Proxy Statement
Jane Fraser - President of Citi and Chief Executive Officer of Global Consumer Banking Jane Fraser was President of Citi and CEO of GCB from October 2019 until December 31, 2020. Before assuming the role of President of Citi and CEO of GCB, she was CEO of our Latin America (LATAM) region, with responsibility for GCB in Mexico and the ICG businesses in the 23 countries where we are present in this region. As the CEO of GCB, Ms. Fraser was responsible for the performance of our consumer businesses, including Retail Banking and Wealth Management, Credit Cards and Mortgage, in 19 countries and jurisdictions. As President of Citi, Ms. Fraser was responsible for driving our company-wide transformation efforts.
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Mark Mason - Chief Financial Officer of Citi Mark Mason has been CFO of Citi since February 2019, and, prior to assuming that role, he had been CFO of ICG and was the executive responsible for our Comprehensive Capital Analysis and Review (CCAR) submission process. Mr. Mason joined us in 2001 and has held several senior operational, strategic, and financial executive positions, including CFO of Citi Private Bank, CFO of Citi Holdings and CFO and Head of Strategy and M&A for our Global Wealth Management Division. Our CFO is responsible for our financial management, including managing our balance sheet and financial reporting processes. The Finance function, led by the CFO, also plays a central role in our strategic decisions and in the capital planning processes. In addition, Mr. Mason has oversight of Citi Ventures, which includes our investments in innovative products and services.
Citi 2021 Proxy Statement
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Michael Whitaker - Head of Enterprise Infrastructure, Operations and Technology Mike Whitaker was named our Head of Enterprise Infrastructure, Operations & Technology (Operations and Technology) in November 2018 following four years as Head of Operations & Technology for ICG. Mr. Whitaker joined us in October 2009 as the Head of Markets Technology. Since then, he has undertaken various roles, including Regional Chief Information Officer, Head of ICG Technology, and Head of Securities & Banking Operations & Technology. With approximately 110,000 direct employees in 96 countries, Operations and Technology plays a central role in driving value for us and our clients. It provides the foundation that enables us to achieve our day-to-day operational and long-term growth goals.
Citi 2021 Proxy Statement
Paco Ybarra - Chief Executive Officer of Institutional Clients Group Paco Ybarra is CEO of the ICG. He assumed his current position in May 2019. Previously, he had been Global Head of Markets and Securities Services in ICG since November 2013 and has held a number of other executive roles in ICG. ICG provides corporate, institutional, public sector, and high-net-worth clients around the world with a full range of wholesale banking products and services. ICG’s international presence is supported by trading floors in approximately 80 countries and a proprietary network in 96 countries and jurisdictions. At December 31, 2020, ICG had approximately $1.7 trillion of assets and $924 billion of deposits, while two of its businesses, Securities Services and Issuer Services, managed approximately $24.0 trillion of assets under custody.
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Citi 2021 Proxy Statement
Performance Share Units Under the general structure of our annual executive compensation program, 35% of CEO variable pay and 30% of other named executive officer variable pay is awarded as PSUs. PSUs are not awarded to Mr. Whitaker or Mr. Ybarra, because they are subject to U.K. and E.U. regulatory requirements.
The following summarizes the terms of PSUs awarded by us in 2021 in respect of performance during 2020.
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For 2020 PSU awards, we made the following changes to the PSU performance metrics:
The chart below illustrates the components of the payout amounts for PSUs settled in 2019 through 2021, illustrating the relative impact of stock price change and operational performance metrics on grant date value, in order to determine final PSU payout amounts, for the last three completed PSU performance periods. PSU awards granted in 2018 and settled in 2021 based on performance for the years 2018 through 2020 paid out at 28% of PSU Grant Date Value primarily as a result of performance against operational financial metrics during the performance period. This award, which is highlighted in the box below, represents the payout for the most recently completed performance cycle. We show the prior two cycles for comparative purposes to illustrate the variable, performance-based nature of the program. PSU PAYOUT — AWARDS SETTLED IN 2019 - 2021 Citi 2021 Proxy Statement
Deferred Stock and Cash Awards Under the general structure of our executive compensation program, 35% of CEO variable pay and 30% of other named executive officer variable pay is awarded as Deferred Stock Awards, which represent half of our long-term incentive awards for these executives. There have been no changes to the general terms of our Deferred Stock Awards since 2013. Deferred Cash Awards have been a core element of our risk-balanced approach to awarding incentive compensation and have been awarded consistently since 2013 to our incentive-eligible employee population, excluding most named executive officers but including executives who are ineligible for PSUs. Accordingly, Mr. Whitaker and Mr. Ybarra received Deferred Cash Awards instead of PSUs for their performance in 2020 as an element of our approach to compliance with U.K. and E.U. regulatory guidance.
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To comply with U.K. and E.U. regulatory guidance, Mr. Whitaker’s and Mr. Ybarra’s Deferred Stock Awards for 2020 performance have features that differ from those shown in the chart above, including the award representing at least 50% of the total incentive award for each and additional prescribed clawback provisions. Also, Mr. Whitaker’s Deferred Stock Awards are vesting over a three-year period subject to a 12-month holdback while Mr. Ybarra’s are vesting over a five-year period with a six-month holdback, respectively.
FW Cook has been the Compensation Committee’s independent advisor since 2012. FW Cook provides no services to
Annual incentive awards for
The Personnel and Compensation Committee Report The The Personnel and Compensation Committee:
Dated: March
The following table shows the compensation for
Citi 2021 Proxy Statement
The table below provides information regarding awards granted by the Compensation Committee to the named executive officers in
Outstanding Equity Awards at The market values below were computed using the closing price of Citi common stock on December 31,
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Option Exercises and Stock Vested in
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. The following describes the pension plans listed in the 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 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).
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).
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Mr. Ybarra accrued benefits under the International Staff Plan from 1994 through 2007. From 1994 through 1999, Mr. Ybarra accrued an International Staff Plan benefit determined using the Citibank Retirement Plan formula described above, and from 2000 through 2007, Mr. Ybarra accrued an International Staff Plan benefit determined using The Citigroup Pension Plan cash balance benefit formula previously described. Limits on eligible compensation and benefits imposed by the Internal Revenue Code on tax-qualified retirement plans generally did not apply to International Staff Plan benefit accruals because the International Staff Plan is nonqualified; however, the International Staff Plan was amended over time to include certain limits. Effective January 1, 2000, eligible compensation under the International Staff Plan was limited to $500,000, and effective January 1, 2002, the limit on eligible compensation imposed by the Internal Revenue Code applied to International Staff Plan benefit accruals. Mr. Ybarra is eligible for early retirement under the Citibank Retirement Plan formula, meaning that he is eligible for a benefit, actuarially reduced for early commencement, under the International Staff Plan commencing upon his termination of employment. He is eligible for an unreduced benefit commencing immediately if he terminates employment after attaining age 60, or, if he terminates employment before age 60, he is eligible for an unreduced benefit commencing at age 65. The International Staff Plan offered lump sum and life annuity distribution options to participants. Payments upon Termination or Change of Control General Potential Payments
Citi 2021 Proxy Statement
Deferred Stock Awards; Rule of 60.Deferred Stock Awards granted to the named executive officers under the
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 had attained the Rule of 60 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 “Double Trigger” Change of Control Requirement.Citi’s 2019 Stock Incentive Plan and its predecessor, the 2014 Stock Incentive Plan, www.citigroup.com
Under the 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.
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. HEADCOUNT AT DECEMBER 31, 2020
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How We Calculated the Ratio
Proposal 4: Approval of Additional Authorized Shares under the Citigroup 2019 Stock Incentive Plan On the recommendation of the Compensation Committee, the Board has unanimously approved an amendment to the Citigroup 2019 Stock Incentive Plan (the 2019 Plan)
Executive Summary
At the 2019
www.citigroup.com Table of
Our Equity Award Practices Are Aligned with Stockholder Interests
Overhang Table “Overhang” refers to the potential stockholder dilution represented by outstanding employee equity awards and shares available for future grants.
Citi 2021 Proxy Statement
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.
The preceding Our Plan Terms Are Aligned with Stockholder Interests The following features of the 2019 Plan protect the interests of our stockholders:
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Equity Compensation Plan Information All of Citi’s outstanding equity awards have been granted under
Awards under the 2019 Plan Citi 2021 Proxy Statement
Description of the Citigroup 2019 Stock Incentive Plan This summary description of the 2019 Plan, as amended, 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 additional shares authorized for grant under the 2019 Plan. General. 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 in 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, 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 “Recycling” provisions.If an award under the 2019 Plan, or, after April 16, 2019 (the effective date of the 2019 Plan), 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.
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 Types of awards.The following types of awards may be made under the 2019 Plan:
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 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 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 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. www.citigroup.com
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,
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.
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 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, Proposal 5 John Chevedden has submitted the following proposal for consideration at the Proposal 5
The 60 shareholders could then be whittled down to 40 shareholders because some shareholders would be unable to timely meet all the paper chase requirements. After the 40 shareholders submit their And 60 shareholders who own 9% of company stock for an unbroken 3-years might determine that they own 51% of company stock when length of unbroken stock ownership is factored out. Plus it would be easier to simply call for a But how does one begin to assemble a group of 60 potential participants if potential participants cannot be guaranteed participant status after following the tedious rules that can easily be 1500-words of legalese — because they could be voted off the island after a substantial investment of time by the arbitrary quota of 20 shareholders. Who would be voted off the island? Would one favor shareholders who own the most
As an analogy such an arbitrary maximum limit of 20 shareholders does not apply to shareholders acting by written consent or to shareholders calling for a special shareholder meeting. Please vote yes: Improve Our Catch-22 Proxy Access — Proposal 5 Management Comment Summary Citi implemented a progressive proxy access by-law provision for our stockholders Important Points to Consider
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Kenneth Steiner has submitted the following proposal for consideration at the 2021 Annual Meeting. Proposal 6 — Independent Board Chairman The shareholders request the Board of Directors to If the Board determines that a Chair who was independent when selected is no longer independent, the Board shall select a new Chair who satisfies the requirements of the policy within a reasonable amount of time. Compliance with this policy is temporarily waived if in the unlikely event no independent director is available and willing to serve as Chair. This proposal topic won 52% support at Boeing and 54% support at Baxter International in 2020. Support for this proposal topic jumped from 34% to 52% in one year at Boeing. Citigroup stock is down from $79 in late 2019. Support for this proposal topic received 17% higher support at U.S. companies in 2020. Since management performance setbacks often result in higher support for this proposal topic, the mere submission of this proposal may be an incentive for our Chairman of the Board to perform better leading up to the 2021 annual meeting.
As Andrew Grove, Intel’s former chair, stated, “The separation of the two jobs goes to the heart of the conception of a corporation. Is a company a sandbox for the CEO, or is the CEO an employee? If he’s an employee, he needs a boss. and that boss is the Board. The Chairman runs the Board. How can the CEO be his own boss?” Shareholders are best served by an independent Board Chair who can provide a balance of power between the CEO and the Board. The primary duty of a Board of Directors is to oversee the management of a company on behalf of shareholders. A CEO serving as Chair can result in excessive management influence on the Board and weaker oversight of management. We urge the Board to take the opportunity to appoint a new independent Board Chair. It is also important to have an independent board chairman to help make up for the 2020 devaluation of shareholder meetings with the widespread substitution of online shareholder meetings using the pandemic as an easy steppingstone. Online meetings, which are a shareholder engagement and shareholder outreach wasteland, are so easy for management that management will never want to return to in-person shareholder meetings. With tightly controlled online shareholder meetings everything is optional. For instance management reporting on the status of the company is optional. Also answers to questions are optional even if management misleadingly asks for questions. Please vote yes: Independent Board Chairman — Proposal 6 Citi
Management Comment Summary Since 2009, Citi has had an independent Chair separate from the CEO. The Board firmly supports having an independent Director in a Board leadership position at all times. As such, Citi’s Board, on December 15, 2009, adopted a By-law amendment which provides that if Citi does not have an independent Chair, the Board will elect an independent Lead Director having similar duties to an independent Chair, including leading the executive sessions of the non-management Directors at Board meetings. Citi’s Board has determined that the current structure, an independent Chair separate from the CEO, is the most appropriate structure at this time, while ensuring that, at all times, there will be an independent Director in a Board leadership position. Since Citi’s Board has adopted a framework that provides for either an independent Chair or an independent Lead Director, the Board believes that this Proposal is not necessary. Important Points to Consider
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Proposal 7 James McRitchie and Myra K. Young have submitted the following proposal for consideration at the 2021 Annual Meeting. Proposal 7 - Increase Diversity of Director Nominees Resolved: Shareholders of Citigroup Inc. (‘Citigroup’ or ‘Company’) urge the board to adopt a policy (‘Policy’) of promoting significant representation of employee perspectives among corporate decision makers by requiring the initial list of candidates from which new director nominees are chosen (‘Initial List’) by the Nominations and Governance Committee include (but need not be limited to) non-management employees. The Policy should provide that any third-party consultant asked to furnish an Initial List will be requested to include such candidates. Whereas: There is growing consensus that employees on corporate boards can contribute to long-term corporate sustainability. Policymakers note, having companies run exclusively to benefit shareholders contributes to “stagnant wages, runaway executive compensation and underinvestment in research and innovation.”1 The Business Roundtable asks corporations to align with stakeholder interests, including employees.2 Employee representation grows long-term value of companies in several ways. According to the National Bureau of Economic Research, giving workers formal control rights increases female board representation and raises capital formation. 3 Employees are also often more diverse than boards in terms of race, gender, and wealth. The German “co-determination” model of shared governance provides a check against short-term capital allocation practices.4 The 2018 UK Corporate Governance Code encourages boards to establish a method for gathering workforce views. Options include a director appointed from the workforce, a formal workforce advisory panel or designating a director to liaise with workers.5 Senators Baldwin and Warren introduced legislation codifying employee representation on corporate boards, noting that modern corporate governance needs to be accountable wider interests, notably employees.6 Polling demonstrates bipartisan public support (over 53%) for employee representation. 7 Anticipated benefits include reduced turnover as employees are more empowered to influence firm-specific investments, better informed decision-making because employees have specialized knowledge, better monitoring of management with increased information channels, and reduced myopia since employees often take a longer-term view. 8 While our Board satisfies independence requirements and strives for a culture of participation,9 it lacks formal representation from non-management employees, who bring a different understanding of operations than typical directors. Additionally, Citigroup’s CEO to median employee pay ratio is 482:1 and our Company has no employee stock ownership plan (ESOP) to help grow employee wealth and engagement.10 The Policy we propose resembles the Rooney Rule, which requires teams to interview minority candidates for head coaching and senior operations openings. By adopting the Rooney Rule, National Football League teams increased diversity and set a precedent for other industries. Policies similar to the Rooney Rule have been adopted by Amazon, Costco, Home Depot, Activision Blizzard, Dover, Expedia, Fastenal, Hilton Worldwide Holdings, L Bands, Robert Half lnternational, Ross Stores and others. Also consider the Office of the Comptroller of the Currency levied a $400 million penalty on our Company on October 7, 2020. 11 Increase Long-Term Shareholder Value
Citi 2021 Proxy Statement
Management Comment Summary The Proposal requests that Citi promotes significant employee representation on the Board by adopting a Rooney Rule Policy mandating that the initial list of board candidates include non-management employees. The proponent believes by adopting this policy, the benefits to the Board, among others, would be increasing diversity and providing an avenue to gather workforce views. At Citi, there is no prohibition on nominations by or of employees; the procedures for doing so are outlined on pages 45-46 of this Proxy Statement. The Board believes it is problematic to mandate inclusion of individuals on the candidate list based on a single qualification – employment by Citi – without requiring that such candidates meet Citi’s overall Director Qualifications. Adopting such a practice would require us to deviate from our existing rigorous processes and could diminish the effectiveness of our Board. We believe an employee candidate for the Board of Directors should be evaluated by the same standards and criteria as any other candidate. The Board believes that changing its process regarding board nominations and memberships to include Company employees as outlined by this Proposal is unnecessary to address the concerns the Proposal purports to address; could cause Citi to be non-compliant with the Company and regulatory independence requirements; and will not enhance value for our stockholders or employees. Important Points to Consider
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Citi 2021 Proxy Statement
Proposal 8 Miller/Howard Investments, Inc. on behalf of Luc Theeuwes and the Greater Manchester Pension Fund have submitted the following proposal for consideration at the 2021 Annual Meeting. Whereas, we believe that full disclosure of Citigroup’s direct and indirect lobbying activities and expenditures to assess whether Citigroup’s lobbying is consistent with its expressed goals and in stockholder interests. Resolved, the stockholders Citigroup request the preparation of a report, updated annually, disclosing:
For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation, and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Citigroup is a member. Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state, and federal levels. The report shall be presented to the Nomination, Governance and Public Affairs Committee and posted on Citigroup’s website. Supporting Statement Citigroup spent $52,403,000 from 2010 — 2019 on federal lobbying. This does not include state lobbying expenditures in the 42 states where Citigroup lobbies but disclosure is uneven or absent.1 And Citigroup also lobbies abroad, reportedly spending between €700,000 — €799,000 on lobbying in Europe for 2019. Citigroup belongs to the Chamber of Commerce, which has spent over $1.6 billion on lobbying since 1998. Citigroup is also a member of the Business Roundtable (BRT) and signed the Statement on the Purpose of the Corporation to be socially responsible. Citigroup does not disclose its trade association payments and social welfare organizations, or the amounts used for lobbying, including grassroots. Grassroots lobbying does not get reported the federal level under the Lobbying Disclosure Act, and disclosure is uneven or absent in states. We are concerned that Citigroup’s lack of direct and indirect lobbying disclosure presents reputational risks when its lobbying contradicts company public positions. For example, Citigroup has pledged $1 billion in strategic initiatives to help close the racial wealth gap,2 yet has previously drawn attention lobbying for a bill undermining “fair lending rules that work to counter racial discrimination.”3 And Citigroup showed leadership supporting the Paris Agreement on climate change,4 yet the Chamber of Commerce undermined the Paris climate accord.5 And Citigroup publicly supported COVID-19 efforts, but the Chamber directly lobbied against using the Defense Production Act to speed production of life-saving personal protective equipment for workers.6 We believe the reputational damage stemming from these misalignments can harm the company’s long-term value creation. Thus, we urge Citigroup to expand its lobbying disclosure.
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Management Comment Summary The Proposal would be substantively duplicative and not an effective use of Citi’s resources as Citi already has a comprehensive system of reporting on its lobbying activities and political contributions. Citi discloses its lobbying activities as required by law in the more than 21 states in which it is actively engaged in lobbying, and at the federal level. Citi provides this information on its website, which allows stockholders to access Citi’s filings in the states or under the Lobbying Disclosure Act to view the issues on which Citi engages through its lobbying efforts. Citi also publishes annually on its website its political contributions made by the Citi Political Action Committees. Finally, Citi lists the names of the significant trade and business associations in which it participates. Important Points to Consider
Citi 2021 Proxy Statement
Proposal 9 CtW Investment Group has submitted the following proposal for consideration at the 2021 Annual Meeting. RESOLVED that shareholders of Citigroup Inc. (“Citi”) urge the Board of Directors to oversee a racial equity audit analyzing Citi’s adverse impacts on nonwhite stakeholders and communities of color. Input from civil rights organizations, employees, and customers should be considered in determining the specific matters to be analyzed. A report on the audit, prepared at reasonable cost and omitting confidential or proprietary information, should be publicly disclosed on Citi’s website. SUPPORTING STATEMENT High-profile police killings of black people—most recently George Floyd—have galvanized the movement for racial justice. That movement, together with the disproportionate impacts of the COVID-19 pandemic have focused the attention of the media, the public and policy makers on systemic racism, racialized violence and inequities in employment, health care, and the criminal justice system. In September 2020, CEO Michael Corbat noted Citi “[was] committed to leading the way and investing in communities of color to build wealth and strong financial futures.”1 Citi has committed $1 billion over four years to close the racial wealth gap. www.citigroup.com
Citi has a conflicted history when it comes to addressing racial injustice within the communities it serves. In 2019, the Treasury Department’s Office of the Comptroller of Currency assessed a $25 million fine against Citi for failing to offer all eligible customers mortgage discounts and credits, adversely impacting customers of color. Citi also imposes a minimum maintenance fee of $12 per month for checking account customers or a minimum daily balance of $1500. Such minimum fees and balances disproportionately impact people of color and can inhibit wealth creation among these communities. Lastly, the company discloses that over 45.8 % of its workforce are people of color, yet there is only one Black executive within its C-suite, according to a study by Stanford University. The impact of Citi’s practices on communities of color has been exacerbated by the coronavirus pandemic. Citi was one of the banks selected for the Paycheck Protection Program. A recent House of Representatives’ report found that Citi instituted a policy of only accepting applications for funding from clients with an existing banking relationship, despite its own internal assessment that recognized “a policy of not taking non-customers might create heightened risk of disparate impact on minority and women-owned businesses.”2 Citi’s activities with potential adverse impacts are not limited to the employment and lending contexts. Citi donated $242,000 during the 2020 election cycle to 74 members of Congress who are rated “F” by the NAACP. A racial equity audit would help Citi identify, prioritize, remedy and avoid adverse impacts on nonwhite stakeholders and communities of color. We urge Citi to assess its behavior through a racial equity lens in order to obtain a complete picture of how it contributes to, and could help dismantle, systemic racism.
Management Comment Summary Citi has made a commitment to social justice and racial equity in its operations, business dealings, and engagement with stakeholders, customers and employees. As recently as September 2020, Citi released a 104 page report on the economic cost of Black inequality in the United States titled Closing the Racial Inequality Gaps, and shortly thereafter Citi announced its Action for Racial Equity Initiative which pledged more than $1 billion in strategic initiatives to help close the racial wealth gap and increase economic mobility in the United States. The reports generated by Citi’s ongoing work in the areas of social justice and racial equity are made widely available to the public, including all of Citi’s stakeholders. Given Citi’s commitment to addressing racial disparities in banking, matters of social justice, and the racial wealth gap, and the resulting reports and disclosures Citi publishes in furtherance of its commitment, Citi believes it is already addressing the intent of this Proposal - to help Citi identify, prioritize, remedy and avoid adverse impacts on nonwhite stakeholders and communities of color -thereby rendering the Proposal unnecessary. While we disagree with the overall approach in this Proposal, we are completely aligned with its stated goal of addressing racial inequity in the financial sector. Important Points to Consider
Citi 2021 Proxy Statement
Proposal 10 Harrington Investments, Inc. has submitted the following proposal for consideration at the 2021 Annual Meeting. Whereas, our Chief Executive Officer in August of 2019 signed a Statement on the Purpose of a Corporation, including a statement supporting “... the communities in which we work ... respect(ing) the people in our communities and protect(ing) the environment by embracing sustainability practices across our business, and Whereas, despite our company’s commitment to embracing sustainability practices mentioned above, Citigroup is one of the world’s top funders of fossil fuels, lending, between 2016 through 2019, over $19.7 billion to fossil fuel companies and business entities financing fossil fuels according to Banking on Climate Change: Fossil Fuel Finance Report Card 2020, with no specific policy constraining fossil fuel financing in our bank’s Certificate of Incorporation or Bylaws, and www.citigroup.com
Whereas, the Intergovernmental Panel on Climate Change concluded that to avoid the worst global catastrophe, we will have to cut the emission of global warming gasses 45% from 2010 levels and we have only 11 years left to make this happen; Whereas, these facts are evidence of incongruities between statements made by our Chief Executive Officer and the Board, as fiduciaries, as reflected in our company’s governance documents including Bylaws, Articles of Incorporation and Committee Charters and Delaware law; Whereas, a shareholder proposal in 2020 requested that the board review the Statement on the Purpose of the Corporation to conduct a review of Citigroup’s governance documents making recommendations to shareholders how such statement could be implemented by management, however, the board opposed the resolution and no action was taken; and Whereas, the State of Delaware has adopted and recently amended a law allowing our company to become a Public Benefit Corporation (PBC) by amending our company’s Certificate of Incorporation to establish a public purpose, such as promoting a sustainable global economy, consistent with our CEO’s statement to commit our company to all stakeholders; and Whereas, in the opinion of the proponent, the approach of this law seems consistent with our CEO’s commitment to the Statement, providing the opportunity for the board to legally articulate the purpose of our corporation in a manner that would reconcile its accountability to all stakeholders, be it therefore Resolved, that shareholders request the board of directors to approve an amendment to the company’s Restated Certificate of Incorporation to become a Public Benefit Corporation (PBC) pursuant to Delaware law, and to submit the proposed amendment to shareholders for our approval. Such a change would enable the company to operate in a responsible and sustainable manner that balances the stockholder’s pecuniary interests, and the best interests of those materially affected by the corporation’s conduct. Supporting Statement: Following Citi’s historic announcement of hiring the first woman to be the CEO of a major US bank, committing to become a public benefit financial institution with accountability to all stakeholders will cement unparalleled leadership and vision for our bank for decades to come. Management Comment Summary The Stockholder Proposal requests that the Board approve an amendment to the Company’s Restated Certificate of Incorporation to become a public benefit corporation under Delaware corporate law and to submit the proposed amendment for approval by stockholders. The Proponent states that, if Citi converts to a public benefit corporation, Citi would act in a “responsible and sustainable manner” for all stakeholders. The Board believes Citi has clearly demonstrated that it acts in a “responsible and sustainable manner” in the way it provides its services and operates its business, in the way it engages with the communities in which it operates, in the way it recruits, develops and promotes its people and in the way it engages in the financial markets – all of which inure to the benefit of its stockholders and the broader base of its stakeholders. Citi has shown its commitment to acting in a responsible and sustainable manner through, among other things, its leadership in environmental and sustainability issues; its efforts to address racial disparities in the availability of services in the banking industry, its commitment to help eradicate the racial wealth gap; its commitment to strengthening diversity in its Board, leadership, workforce and the entities with which it does business; and its willingness to take public positions on issues of societal importance. Citi 2021 Proxy Statement
The Board believes that Citi has made this commitment in numerous public statements, including as a signatory of the Statement on the Purpose of a Corporation. The Board believes this commitment is part of the fabric of the way Citi does business and engages with the markets and the world, and changing its form of corporate organization in the manner described in the Stockholder Proposal is neither necessary to, and will only distract the Board’s and management’s focus and Citi’s resources away from, achieving the very objectives that are underlying the Stockholder Proposal. Important Points to Consider
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Citi 2021 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 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 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, 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
Citi 2021 Proxy Statement
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Citi 2021 Proxy Statement
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Citi Additional Information Regarding Proposal 3 Glossary
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 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.
Operating Leverage represents the annual change in [(Revenues, net of Interest Expense in bps), less (the annual change in Operating Expenses in bps)]. Return on Assets (ROA) is net income divided by average assets as determined under U.S. GAAP. Return on Tangible Common Equity (RoTCE) is 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. Total Payout Ratio is the sum of dividends paid to common shareholders plus common share repurchases, divided by (Net Income, less preferred dividends). www.citigroup.com
Citigroup – Quantitative Scorecard Metric Details and (In millions of Citi 2021 Proxy Statement www.citigroup.com Citigroup 2019 Stock Incentive Plan (as amended and restated as of April 27, 2021, 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 became effective on April 16, 2019 (the “Effective Date”). 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 2021 Proxy Statement Table of Contents “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. Notwithstanding the foregoing, consultants and advisors (other than Directors) shall not be eligible to receive Awards under the Plan. “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 2021 Proxy Statement 5. Participation www.citigroup.com 6. Available Shares of Common Stock Citi 2021 Proxy Statement 7. Awards Under the Plan Awards under the Plan may be granted as Options, SARs, or Stock Awards, as described below. Awards may be granted singly, in combination, or in tandem as determined by the Committee. Subject to the terms of the Plan (including but not limited to the minimum vesting requirement of Section 7(d)), Awards shall have such terms, conditions, limitations, and restrictions as may be determined by the Committee from time to time, and may include vesting, forfeiture, cancellation and clawback provisions. www.citigroup.com Citi 2021 Proxy Statement period. 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). www.citigroup.com 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. 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 Citi 2021 Proxy Statement 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 term is defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of securities of the Company individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board, shall be considered as though such individual were a member of the Incumbent Board, but excluding for this purpose any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; a reorganization, merger, consolidation, or other corporate transaction involving the Company (a “Transaction”) is consummated, in each case, with respect to which the stockholders of the Company immediately prior to such Transaction do not, immediately after the Transaction, own more than 50% of the combined voting power of the Company or other corporation resulting from such Transaction in substantially the same respective proportions as such stockholders’ ownership of the voting power of the Company immediately before such Transaction. 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 www.citigroup.com 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. 14. Repayment Obligations and Right of Set-Off 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 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. To the extent not prohibited by applicable law, and consistent with the requirements of Section 409A of the Code, if applicable, the Company will have the right to offset against its obligation to deliver vested shares of Common Stock or make any vested cash payment pursuant to any Award granted under the Plan: (i) any amounts paid by the Company or a Subsidiary to a third party pursuant to any award, judgment, or settlement of a complaint, arbitration, or lawsuit of which a Participant was the subject; and (ii) any outstanding amounts (including, without limitation, travel and entertainment or advance account balances, loans, repayment obligations under any Awards granted under the Plan, or awards granted under any other plan, or any obligations pursuant to a tax-equalization or housing allowance policy or other expatriate benefit) that a Participant then owes to the Company or a 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. Citi 2021 Proxy Statement 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. 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. www.citigroup.com 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 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 2021 Proxy Statement Meeting Information Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: Attending the Virtual Meeting: Electronic entry to the meeting will begin on Tuesday, April 27, 2021 at 8:45 a.m. Eastern Time and the meeting will begin promptly at 9:00 a.m. Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice The undersigned hereby constitutes and appoints John C. Dugan, 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 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 Your Vote Counts! CITIGROUP INC. 2021 Annual Meeting You invested in CITIGROUP INC. and it’s time to vote! Get informed before you vote Control # Smartphone users Point your camera here and Vote Virtually at the Meeting* April 27, 2021 *Many stockholder meetings have attendance requirements. Please check the meeting materials for any special requirements for meeting attendance. V1 THIS IS NOT A VOTABLE BALLOT This is an overview of the proposals being presented at the D36487-P49834-Z79186-Z79220 |