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C » Topics » Certain Transactions and Relationships, Compensation Committee Interlocks and Insider ParticipationThis excerpt taken from the C DEF 14A filed Mar 20, 2009. Certain
Transactions and Relationships, Compensation Committee
Interlocks and Insider Participation
The board has adopted a policy setting forth procedures for the
review, approval and monitoring of transactions involving Citi
and related persons (directors and executive officers or their
immediate family members). A copy of
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Citi’s Policy on Related Party Transactions is available in
the “Corporate Governance” section of Citi’s
website: www.citigroup.com. Under the policy, the nomination and
governance committee is responsible for reviewing and approving
all related party transactions involving directors or an
immediate family member of a director. 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
shall provide all material information concerning the related
party transaction to the nomination and governance committee.
The nomination and governance committee is also responsible for
reviewing and approving all related party transactions valued at
more than $50 million involving an executive officer or an
immediate family member of an executive officer. The transaction
review committee, comprised of the chief financial officer,
chief risk officer, general counsel, chief compliance officer,
and head of corporate affairs, is responsible for reviewing and
approving all related party transactions valued at less than
$50 million involving an executive officer or an immediate
family member of an executive officer. The policy also contains
a list of categories of transactions involving directors or
executive officers, or their immediate family members, that are
pre-approved under the policy, and therefore need not be brought
to the nomination and governance committee or transaction review
committee for approval.
The nomination and governance committee and the transaction
review committee will review the following information when
assessing a related party transaction:
Robert Rubin entered into an Aircraft Time Sharing Agreement
with Citiflight, Inc. (a subsidiary of Citigroup Inc.) on
August 10, 2006 that allows him to reimburse Citi for the
cost of his personal use of corporate aircraft. Mr. Rubin
reimbursed Citi $633,918 related to his personal use of
corporate aircraft during 2008. Vikram Pandit entered into an
Aircraft Time Sharing Agreement with Citiflight on
December 12, 2007, that allows him to reimburse Citi for
any personal use of Citi’s aircraft. Mr. Pandit
reimbursed Citi $171,808 related to his personal use of
corporate aircraft during 2008.
During 2008, certain Citi and Banamex executives used, for
Citi-related travel, private aircraft owned by Aeropersonal, a
company in which Roberto Hernández has an ownership
interest. The nomination and governance committee reviewed and
ratified the executives’ business-related use of aircraft
owned by Aeropersonal during 2008 and approved the
business-related use of Aeropersonal’s services by Citi and
Banamex executives in 2009. Citi reimbursed Aeropersonal
$1,002,126 for business-related services provided to Citi and
Banamex executives.
In April 2007, Citi entered into an agreement to purchase 100%
of the outstanding partnership interests in Old Lane Partners
L.P. (Old Lane), a hedge fund firm co-founded by Vikram Pandit
and John Havens in which each of Vikram Pandit, John Havens and
Brian Leach had an interest. At the time of the Old Lane
acquisition in 2007, a substantial portion of the purchase price
paid to the former owners of Old Lane was required to be
invested in the Old Lane Fund until July 2011, the fourth
anniversary of the closing of the transaction. Accordingly, on
behalf
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of each of Vikram Pandit and John Havens $100,273,630 was
invested (a substantial portion of which was subject to
forfeiture until July 2011) and on behalf of Brian Leach
$10,862,222 was invested in the Old Lane Fund. In June 2008,
Citi purchased substantially all of the assets in the Old Lane
Fund and redeemed substantially all of the interests of
investors in the Old Lane Fund. In connection with the
redemptions of investors’ interests, distributions were
made in respect of a portion of the investments made by the
former owners of Old Lane in the Old Lane Fund, including
$79,706,630, each, in the case of Mr. Pandit and
Mr. Havens, and $8,634,283, in the case of Mr. Leach.
The amounts distributed are invested, and all future
distributions will be invested, in an account at the Citi
Private Bank for the remainder of the period ending July 2011.
The funds may be earlier withdrawn in the event the executive
dies or his employment with Citi terminates by reason of his
disability or without cause or for good reason or, in the case
of Mr. Leach, upon termination of his employment with Citi
for any reason. A substantial portion of Mr. Pandit’s
and Mr. Havens’ investment remains subject to
forfeiture if the executive’s employment with Citi
terminates for cause or without good reason before July 2011.
State Street may be deemed to be the beneficial owner of more
than 5% of the outstanding shares of our common stock as a
result of its role as custodian of our 401(k) plan and other
unaffiliated accounts and investment funds. For further
information, see “Stock Ownership — Owners of
More than 5% of Our Common Stock” in this proxy statement.
We and certain of our subsidiaries have engaged in transactions
in the ordinary course of business with State Street and certain
of its affiliates during 2008. These transactions were on
substantially the same terms as comparable transactions with
unrelated third parties.
Officers and employees of Citi and members of their immediate
families who share their household or are financially dependent
upon them who wish to purchase or sell securities in brokerage
transactions are generally required by Citi’s policies to
do so through a Citi broker-dealer affiliate. Certain of our
directors and members of their immediate families have
brokerage accounts at our broker-dealer affiliates. Transactions
in such accounts are offered on substantially the same terms as
those offered to other similarly-situated customers. Citi’s
affiliates also may, from time to time, enter into transactions
on a principal basis involving the purchase or sale of
securities, derivative products and other similar transactions
in which our directors, officers and employees, or members of
their immediate families have an interest. All of these
transactions are entered into in the ordinary course of business
on substantially the same terms, including interest rates and
collateral provisions, as those prevailing at the time for
comparable transactions with our other similarly situated
customers. For certain transactions with officers and employees,
these affiliates may offer discounts on their services.
Citi has established funds in which employees have invested. In
addition, certain of our directors and 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 directors, executive officers, or
employees. Other than certain “grandfathered”
investments, in accordance with
sarbanes-oxley and
the Citi Corporate Governance Guidelines, executive officers may
invest in certain Citi-sponsored investment opportunities only
under certain circumstances and with the approval of the
appropriate committee.
In 2008, Citi performed investment banking, financial advisory
and other services in the ordinary course of our business for
certain organizations in which some of our directors are
officers or directors. Citi may also, in the ordinary course of
business, have sponsored investment opportunities in which such
organizations participated. 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 36 were the only members of the
personnel and compensation committee during 2008. No member of
the personnel and compensation committee was a
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part of a “compensation committee interlock” during
fiscal year 2008 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 committee had any material interest in a
transaction with Citi or is a current or former employee of Citi
or any of its subsidiaries.
Certain directors and executive officers have immediate family
members who are employed by Citi or a subsidiary. The
compensation of each such family member was established by Citi
in accordance with its employment and compensation practices
applicable to employees with equivalent qualifications and
responsibilities and holding similar positions. None of the
directors or executive officers has a material interest in the
employment relationships nor do any of them share a household
with these employees. These employees are two of the
approximately 326,000 employees of Citi. One of them reports to
an executive officer of Citi. With respect to this one
individual, and in any other instance where a relative may
report to an executive officer, that individual’s
compensation is reviewed by an independent compensation
consultant. A sibling of Manuel Medina-Mora, an executive
officer, is employed by Banamex, a subsidiary of Citi, and
received 2008 compensation of $1,510,726. An adult spouse of an
adult child of Lewis Kaden, an executive officer, is employed by
Citi’s Global Consumer Group and received 2008 compensation
of $292,333.
This excerpt taken from the C DEF 14A filed Mar 13, 2008. Certain Transactions and Relationships, Compensation Committee Interlocks and Insider Participation The board has adopted a policy setting forth procedures for the review, approval and monitoring of transactions involving Citi and related persons (directors and executive officers or their immediate family members). A copy of Citi’s Policy on Related Party Transactions is available in the “Corporate Governance” section of Citi’s website: www.citigroup.com. Under the policy, the nomination and governance committee is responsible for reviewing and approving all related party transactions involving directors or an immediate family member of a director. 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 shall provide all material information concerning the related party transaction to the nomination and governance committee. The nomination and governance committee is also responsible for reviewing and approving all related party transactions valued at more than $50 million involving an executive officer or an immediate family member of an executive officer. The transaction review committee, comprised of the
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Table of ContentsThis excerpt taken from the C DEF 14A filed Mar 13, 2007. 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 Citigroup and related persons (directors and executive officers or their immediate family members). A copy of Citigroup’s Policy on Related Party Transactions is available in the “Corporate Governance” section of Citigroup’s website: www.citigroup.com. Under the policy, the nomination and governance committee is responsible for reviewing and approving all related party transactions involving directors or an immediate family member of a director. 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 shall provide all material information concerning the related party transaction to the nomination and committee. The nomination and governance committee is also responsible for reviewing and approving all related party transactions valued at more than $50 million involving an executive officer or an immediate family member of an executive officer. The transaction review committee, comprised of the Chief Financial Officer, Senior Risk Officer, General Counsel, Head of Global Compliance, and Head of Corporate Affairs, is responsible for reviewing and approving all related party transactions valued at less than $50 million involving an executive officer or an immediate family member of an executive
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Table of ContentsThis excerpt taken from the C DEF 14A filed Mar 14, 2006. Certain Transactions and Relationships, Compensation Committee Interlocks and Insider Participation Officers and employees of Citigroup and members of their immediate families who share their homes or are financially dependent upon them who wish to purchase or sell securities in brokerage transactions are generally required by Citigroup’s policies to do so through a Citigroup broker-dealer affiliate. Citigroup’s affiliates also may, from time to time, enter into transactions on a principal basis involving the purchase or sale of securities, derivative products and other similar transactions
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Table of Contentsin which our directors, officers and employees, or members of their immediate families have an interest. All of these transactions are entered into in the ordinary course of business on substantially the same terms, including interest rates and collateral provisions, as those prevailing at the time for comparable transactions with our other similarly situated customers. For certain transactions with officers and employees, these affiliates may offer discounts on their services.
Citigroup has established funds that employees have invested in. In addition, certain of our directors and 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 Citigroup’s subsidiaries on the same terms and conditions as the other outside investors in these funds, who are not our directors, executive officers, or employees. Other than certain “grandfathered” investments, in accordance with SARBANES-OXLEY and the Citigroup Corporate Governance Guidelines, executive officers may invest in certain Citigroup-sponsored investment opportunities only under certain circumstances and with the approval of the appropriate committee.
In 2005 Citigroup performed investment banking, financial advisory and other services in the ordinary course of our business for certain organizations in which some of our directors are officers or directors. Citigroup may also, in the ordinary course of business, have sponsored investment opportunities in which such organizations participated. In addition, in the ordinary course of business, Citigroup may use the products or services of organizations in which some of our directors are officers or directors.
Except for Messrs. Hernández, Prince, Rubin, and Weill, no director is a current or former officer or employee of Citigroup or any of its subsidiaries.
Other than Mr. Andrall Pearson, who retired from the board in April 2005, the persons listed on page 38 were the only members of the personnel and compensation committee during 2005.
Certain directors and executive officers have immediate family members who are employed by Citigroup or a subsidiary. The compensation of each such family member was established by Citigroup in accordance with its employment and compensation practices applicable to employees with equivalent qualifications and responsibilities and holding similar positions. None of the directors or executive officers has a material interest in the employment relationships nor do any of them share a home with these employees. These employees are nine of the approximately 300,000 employees of Citigroup. With one exception, none of them is, or reports directly to any executive officer of Citigroup. With respect to this one individual, and in any other instance where a relative may report to an executive officer, that individual’s compensation is reviewed by an independent compensation consultant.
Until January 27, 2006, an adult child of Mr. Thomas, a director, was employed in Citigroup’s Private Client business and received 2005 compensation of $288,918. An adult child of Mr. Druskin, an executive officer, is employed in Citigroup’s Corporate and Investment Banking business and received 2005 compensation of $2,750,000. An adult spouse of another adult child of Mr. Druskin is employed in Citigroup’s Corporate and Investment Banking business and received 2005 compensation of $311,000. A sister-in-law of Ms. Magner, formerly an executive officer, is employed in Citigroup’s Global Consumer business and received 2005 compensation of $139,346. A sibling of Mr. Prince, a director and Chief Executive Officer, is employed in Citigroup’s Corporate and Investment Banking business and received 2005 compensation of $170,000. A sibling of Mr. Willumstad, a former director and executive officer, is employed in Citigroup’s Global Consumer business and received 2005 compensation of $247,825. A sibling of Mr. Medina-Mora, an executive officer, is employed by Banamex, a subsidiary of Citigroup, and received 2005 compensation of $1,006,309. A cousin of Mr. Medina-Mora is employed by Banamex and received 2005 compensation of $196,741. An adult spouse of a sibling of
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Table of ContentsMr. Freiberg, an executive officer, is employed by the Citigroup’s Global Consumer business and received 2005 compensation of $101,500.
The spouse of Mr. Prince, the Chief Executive Officer and a director, was in 2005 a partner in a law firm that performed legal services for Citigroup and its subsidiaries. In order to ensure that she had no interest in the revenues the firm received from its business relationship with Citigroup she entered into an agreement with the firm under which her income for the period July 1, 2003 through December 31, 2005 was proportionately reduced each year by the percentage of the firm’s revenues attributable to Citigroup and its subsidiaries. On January 1, 2006, she ceased being a partner in the firm and became Of Counsel, an employee of the law firm. Going forward, she will receive a fixed salary which will not vary with the amount of legal work the law firm performs for Citigroup and its subsidiaries. She has never performed legal services for Citigroup or its subsidiaries and will not do so as Of Counsel to the firm. This excerpt taken from the C DEF 14A filed Mar 15, 2005. Certain Transactions and Relationships, Compensation Committee Interlocks and Insider Participation Officers and employees of Citigroup and members of their immediate families who share their homes or are financially dependent upon them who wish to purchase or sell securities in brokerage transactions are generally required by Citigroup’s policies to do so through a Citigroup broker-dealer affiliate. Citigroup’s affiliates also may, from time to time, enter into transactions on a principal basis involving the purchase or sale of securities, derivative products and other similar transactions in which our directors, officers and employees, or members of their immediate families have an interest. All of these transactions are entered into in the ordinary course of business on substantially the same terms, including interest rates and collateral provisions, as those prevailing at the time for comparable transactions with our other similarly situated customers. For certain transactions with officers and employees, these affiliates may offer discounts on their services.
Citigroup has established funds that employees have invested in. In addition, certain of our directors and 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 Citigroup’s subsidiaries on the same terms and conditions as the other outside investors in these funds, who are not our directors, executive officers, or employees. Other than certain “grandfathered” investments, in accordance with SARBANES-OXLEY and the Citigroup Corporate Governance Guidelines, executive officers may invest in certain Citigroup-sponsored investment opportunities only under certain circumstances and with the approval of the appropriate committee.
In 2004 Citigroup performed investment banking, financial advisory and other services in the ordinary course of our business for certain organizations in which some of our directors are officers or directors. Citigroup may also, in the ordinary course of business, have sponsored investment opportunities in which such organizations participated. In addition, in the ordinary course of business, Citigroup may use the products or services of organizations in which some of our directors are officers or directors.
State Street Bank and Trust Company may be deemed to have beneficially owned more than 5% of the outstanding shares of Citigroup common stock as of December 31, 2004. During fiscal 2004, Citigroup engaged in transactions in the ordinary course of business with State Street and certain of its affiliates. State Street acts as custodian for Citigroup’s 401(k) plan for U.S. employees. Such transactions were on substantially the same terms as those prevailing at the time for comparable transactions with unrelated third parties. CitiStreet, a 50/50 joint venture of Citigroup and State Street, is a global benefits delivery firm that serves more than nine million benefit plan participants. CitiStreet contributed $17 million of revenue to Citigroup in 2004.
Except for Roberto Hernández, Charles Prince, Robert Rubin, Sanford Weill and Robert
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Table of ContentsWillumstad, no director is a current or former officer or employee of Citigroup or any of its subsidiaries.
Other than Ann Jordan, Dudley Mecum, Franklin Thomas and Arthur Zankel, the persons listed on page 30 were the only members of the personnel and compensation committee during 2004.
Certain directors and executive officers have immediate family members who are employed by Citigroup or a subsidiary. The compensation of each such family member was established by Citigroup in accordance with its employment and compensation practices applicable to employees with equivalent qualifications and responsibilities and holding similar positions. None of the directors or executive officers has a material interest in the employment relationships nor do any of them share a home with these employees. These employees are seven of the approximately 300,000 employees of Citigroup. None of them is, or reports directly to, any executive officer of Citigroup.
An adult child of Ann Dibble Jordan, a director, was employed in Citigroup’s corporate human resource area for a portion of 2004 and received 2004 compensation of $131,250. At December 31, 2004, this individual was no longer employed by Citigroup. An adult child of Franklin Thomas, a director, is employed in Citigroup’s Private Client business and received 2004 compensation of $276,869 and 500 options. An adult child of Robert Druskin, an executive officer, is employed in Citigroup’s Global Corporate and Investment Bank and received 2004 compensation of $2,750,000 and 9,620 options. An adult spouse of another adult child of Robert Druskin is employed in Citigroup’s Global Corporate and Investment Bank and received 2004 compensation of $300,000. A sister-in-law of Marjorie Magner, an executive officer, is employed in Citigroup’s Global Consumer business and received 2004 compensation of $79,844. A sibling of Charles Prince, a director and Chief Executive Officer, is employed in Citigroup’s Global Corporate and Investment Bank and received 2004 compensation of $165,000. A sibling of Robert Willumstad, a director and executive officer, is employed in Citigroup’s Global Consumer business and received 2004 compensation of $232,444 and 700 options. Similarly to options granted to all other employees, all options described above were granted in January 2004 at fair market value.
The spouse of Charles Prince, the Chief Executive Officer and a director of Citigroup, is a partner in a law firm that performs legal services for Citigroup and its subsidiaries. She has never performed legal services for Citigroup or any of its subsidiaries. In order to ensure that she has no interest in the revenues the firm receives from its business relationship with Citigroup (a) she agreed with the firm that she will not work on matters for Citigroup or any of its subsidiaries; and (b) her income, following her marriage to Mr. Prince in the second half of 2003, was and, for each year thereafter, will be, proportionately reduced by the percentage of the firm’s revenues attributable to Citigroup and any of its subsidiaries.
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