Citigroup (C)

annual incentive and retention awards payable to all named executive officers was made in shares of restricted or deferred stock of Citi under the terms of CAP, with the remainder paid in cash. The stock awards under CAP vest over a four-year period, thereby aligning the executives’ interests with the long-term interests of stockholders. The terms of CAP are discussed in detail in the General Discussion of the Summary Compensation Table and Grants of Plan-Based Awards Table. For 2007, four of the named executive officers (Mr. Pandit, Mr. Kaden, Mr. Klein and Mr. Volk) were ineligible for CAP as they did not receive incentive compensation in respect of 2007, due to the absence of a bonus pool under the Executive Performance Plan.

Retention equity awards. All of the named executive officers were eligible to receive retention equity awards. These awards were made in January 2008 to the named executive officers and other members of senior management who the committee considered to have skills essential to managing Citi towards short-term and long-term recovery and performance. The awards were made to balance the need to retain key executives, who received significantly reduced cash and total awards, at market levels while linking their compensation to Citi’s future performance. In determining the size of the awards, the committee took into account the executives’ past compensation history, past individual performance, expected roles in the future of Citi, and Citi’s need to retain executives with skills needed to assist in the future performance of Citi. These awards vest ratably over a two- or four-year period. The executive must be employed on the date the award vests; however, the awards will also vest if the executive terminates employment prior to the scheduled vesting date due to death, disability, or involuntary termination other than for gross misconduct, or if there is a change in control of Citi. Unlike CAP, these awards do not continue to vest after termination of employment for executives

whose combined years of age and service total at least 60 or 75. These retention equity awards, along with CAP, link total compensation for Citi’s senior executives to the performance of Citi and its stock.

Deferred cash retention awards. To retain certain named executive officers who had performed well over a period of years and were expected to have key roles in the future of Citi, the committee made deferred cash retention awards. The committee took a number of factors into account in determining the size of the awards, including compensation history, past performance, and expectations for the executive’s future at Citi. These awards are payable in cash in 50 percent increments on January 20, 2009 and January 20, 2010, and will increase or decrease in value according to the cumulative total return on Citi stock through the vesting date. The executive must be employed on the date the award vests; however, the awards will also vest if the executive terminates employment prior to the vesting date due to death, disability, or involuntary termination other than for gross misconduct, or if there is a change in control of Citi. Awards to executives whose combined years of age and service total at least 60 or 75 do not continue to vest after termination of employment. The committee elected to make retention awards using a mix of stock and cash to provide a balance between an executive’s need for liquidity and the fact that Citi executives have a significant stock ownership commitment.

No LTIP awards earned. In July 2007, the committee adopted the Management Committee Long-Term Incentive Program (LTIP) to provide pay for performance for Citi’s senior executives in a manner that was consistent with the plans of competitors and provides for a formulaic payout. The objectives and purpose of the LTIP are to (a) raise the level of performance of Citi and deliver value to the stockholders, (b) provide for a direct link between compensation and outperformance of peers, (c) retain key

members of management by providing for a multi-year, long-term incentive plan like those existing at competitors, (d) provide clarity through an award that is based on clearly measurable reported data, (e) provide common focus for senior executives across Citi, and (f) satisfy stockholder demand for performance-based equity programs. During the first performance period (the last half of 2007), the LTIP did not deliver any value to program participants because performance measures were not met. The program may deliver value for 2008 and/or 2009 if performance metrics are met for those years, as explained in more detail in the discussion of the Grants of Plan-Based Awards Table. For a detailed discussion of the metrics of the program, see the discussion of the LTIP in the General Discussion of the Summary Compensation Table and Grants of Plan-Based Awards Table.

Stock ownership. While stock ownership commitments are now considered to be in the vanguard of good corporate governance, Citi has had some form of a stock ownership commitment for well over a decade. As part of Citi’s stock ownership commitment, the named executive officers are generally required to retain at least 75 percent of the equity awarded to them as long as they are members of senior management. This policy is intended to align the interests of the named executive officers even further with the interests of stockholders. Accordingly, as shown on the Outstanding Equity Awards at Fiscal Year-End Table, the named executive officers held significant amounts of stock throughout 2007 and experienced a diminution in wealth along with other stockholders. In addition, due to their significant stock holdings, the executive officers, like other stockholders, received an income reduction when the Board of Directors reduced the dividend to stockholders as announced in 2008.

Retirement and other deferred compensation plans. With the exceptions noted below, the

named executive officers are eligible to participate in the Citigroup Pension Plan and the Citigroup 401(k) Plan, which are tax-qualified retirement plans available to all eligible U.S. Citi employees. The purpose of these programs is to provide employees with tax-advantaged savings opportunities and income after retirement or other termination from Citi. Basic broad-based, tax-qualified retirement benefits are provided to assist employees in saving and accumulating assets for their retirement. Eligible pay under these plans is limited to IRC annual limits ($225,000 for 2007). More information on the terms of Citi’s retirement plans is provided in the narrative following the Pension Benefits Table.

Mr. Prince, Citi’s former CEO, is the only named executive officer who has accrued benefits under legacy nonqualified retirement plans, as described in detail in the narrative following the Pension Benefits Table. Accruals for Mr. Prince under these supplemental plans ceased in 1993 for one supplemental plan and in 2001 for another plan. After 2001, the only retirement benefits accrued by the named executive officers were those available generally to all salaried employees.

Mr. Klein has entered into a deferral agreement applicable to his equity awards that would have vested in January 2007 and later years, but for the deferral agreement. The deferral agreement was entered into at the request of Citi primarily due to the tax effect on Citi of Mr. Klein’s compensation. The arrangement does not result in an increase to Mr. Klein’s total compensation from Citi, as explained in more detail in connection with the Nonqualified Deferred Compensation Table.

Health and insurance plans. With the exception noted below, the named executive officers are eligible to participate in the company-sponsored U.S. benefit programs on the same terms and conditions as those made available to U.S. salaried employees generally. Basic health benefits, life insurance, disability benefits and similar programs are provided to ensure that employees have access to healthcare and income protection for themselves and their family members. Under Citi’s U.S. medical plans, higher-paid employees are required to pay a significantly higher amount of the total premiums, while the premiums paid by lower paid employees receive a higher subsidy from Citi. In 2007, Sir Winfried was eligible to participate in the broad-based health and insurance programs generally available to similarly situated employees in the U.K. and was not eligible for the U.S. broad-based programs.

Other compensation. Citi pays additional compensation to its named executive officers in the form of personal benefits to the extent set forth in the Summary Compensation Table. A discussion of personal benefits is provided in the footnotes to the Summary Compensation Table.

Retirement and other deferred compensation plans. The named executive officers participate or are eligible to participate in the Citigroup Pension Plan and the Citigroup 401(k) Plan, which are broad-based, tax-qualified retirement plans. The purpose of these programs is to provide all employees with tax-advantaged savings opportunities and income after retirement or other termination from Citigroup. Basic broad-based, tax-qualified retirement benefits are provided to assist employees in saving and accumulating assets for their retirement. Eligible pay under these plans is limited to IRC annual limits ($220,000 for 2006). More information on the terms of Citigroup’s retirement plans is provided in the narrative following the Pension Benefits Table.

Some named executive officers have accrued benefits under legacy nonqualified retirement plans, as described in detail in the narrative following the Pension Benefits Table. Accruals for the named executive officers under these supplemental plans ceased in 1993 for one supplemental plan and in 2001 for another plan. After 2001, the only retirement benefits accrued by the named executive officers were those available generally to all salaried employees.

Nonqualified deferred compensation plans are not generally available to named executive officers at Citigroup. Mr. Rubin is a party to an employment agreement dated as of October 26, 1999 (as amended), and pursuant to this agreement, the cash component of Mr. Rubin’s annual incentive awards from 1999 though 2005 was deferred into a nonqualified trust established by Citigroup. The deferral arrangement was entered into at the request of Citigroup primarily to facilitate Citigroup’s tax planning. The amount deferred for each such year has been previously disclosed in the Summary Compensation Table in the applicable prior year’s proxy statement as annual bonus compensation. The arrangement does not result in an increase to Mr. Rubin’s total compensation from Citigroup, as explained in more detail in connection with the Nonqualified Deferred Compensation Table.

Health and insurance plans. The named executive officers are eligible to participate in company-sponsored benefit programs on the same terms and conditions as those made available to salaried employees generally. Basic health benefits, life insurance, disability benefits and similar programs are provided to ensure that employees have access to healthcare and income protection for themselves and their family members. Under Citigroup’s medical plans, higher paid employees are required to pay a significantly higher amount of the total premiums, while the premiums paid by lower paid employees receive a higher subsidy from Citigroup.

Other compensation. As demonstrated in the Summary Compensation Table, Citigroup pays additional compensation to its named executive officers in the form of personal benefits only in limited circumstances. A discussion of personal benefits is provided in the footnotes to the Summary Compensation Table.