Proxy Blog

Citigroup Inc. 

April 3, 2019

The annual proxy for this financial services corporation had the following proposals: 

  1. Proforma votes on directors, the appointment of auditors, and executive compensation 
  2. Special vote on board proposal to approve the Global Omnibus Stock Purchase Plan 
  3. Votes on shareholder proposals covering proxy access, prohibition on vesting of equity-based awards during voluntary resignation, and threshold to call special meetings 

Magni voted as follows: 

  1. For all proforma proposals.
    -Directors – The board has a majority of independent directors and some have CEO/CFO experience with other companies. The compensation of directors is disclosed with a meaningful portion in equity where the equity has restrictions to align director incentives with long-term value creation. The compensation levels are set using a benchmarking process.
    -Auditors – There appear to be no controversies with the financial statements of the company.
    -“Say-on-pay” – The shareholder engagement and peer group disclosures indicate good governance practices in executive compensation. 
  2. For board proposal. The stock purchase plan is generally consistent with good governance, while aligning the management with the interests of the shareholders. 
  3. For and against shareholder proposals. 
    -For easier proxy access  Access to proxies is an important tool for shareholders to make sure that the board and executives understand the priorities of the shareholders.
    -Against prohibition on vesting of equity-based awards for senior executives when they resign their positions to enter government service  The purpose of the proposal ito limit the industry influence on government regulations. While well intended, such a proposal could prevent regulatory bodies from hiring qualified and knowledgeable people into key roles. The risks from staff without adequate knowledge are greater than the risks from a “revolving door” between the industry and the government. 
    -For lowering threshold for special meetings to 15%. As with proxy access, good governance means open communications with shareholders.