|
|
 | | | |
- close
- close
- close
- close
This excerpt taken from the C DEF 14A filed Mar 20, 2009. Statement
of William Steiner
Special meetings allow shareowners to vote on important matters,
such as electing new directors, that can arise between annual
meetings. If shareowners cannot call special meetings,
management may become insulated and investor returns may suffer.
Shareowners should have the ability to call a special meeting
when a matter is sufficiently important to merit prompt
consideration.
Fidelity and Vanguard have supported a shareholder right to call
a special meeting. The proxy voting guidelines of many public
employee pension funds also favor this right. Governance ratings
services, such as The Corporate Library and Governance Metrics
International, take special meeting rights into consideration
when assigning company ratings. This proposal topic also won
from 55% to 69%-support at the following companies (based on
2008 yes and no votes):
It is important for Citigroup to enable shareholders to call a
special meeting because our board is composed of too many
overextended directors. According to the Corporate Library
www.thecorporatelibrary.com, an independent investment
research firm, Board composition at Citigroup represented a
concern for shareholders due to the high concentration of active
CEOs on the board.
Four of our directors were active CEOs at other public companies
(Alain Belda of Alcoa, George David of United Technologies, Anne
Mulcahy of Xerox and Andrew Liveris of Dow Chemical). This
raised concern about the ability of these individuals to
dedicate enough time to properly supervise the affairs of
Citigroup.
In addition, two directors were potentially conflicted
outside-related directors (Roberto Hernandez Ramirez and Sir
Winfried F. W. Bischoff — Chairman of our Board).
Mr. Hernandez Ramirez was non-executive chairman of our
company’s Mexico subsidiary (Banco Nacional de Mexico) and
received $2.6M in security services from Citigroup in 2007.
Meanwhile, Mr. Bischoff was our acting Chief Executive
Officer from November 2007 to December 2007. This raised
concerns about our board’s ability to remain an independent
and effective counter balance to management.
The above concerns shows there is need for improvement. Please
encourage our board to respond positively to this proposal:
Special Shareowner Meetings —
Yes on 12 101
Table of Contents
MANAGEMENT
COMMENT
In 2006, the proponent submitted a proposal requesting that the
board amend Citi’s by-laws “to give holders of at
least 10% to 25% of the outstanding common stock the power to
call a special shareholder meeting.” In 2007, Citi’s
board of directors adopted an amendment to Citi’s by-laws
to give to stockholders that own at least 25% of the outstanding
shares of the Company’s common stock the right to call a
special meeting. Notwithstanding that Citi has implemented the
proponent’s proposal, he has submitted the current proposal
with the same essential objective.
The 2007 amendment to Citi’s by-laws meets the essential
objective of the proposal by giving stockholders the ability to
call special meetings when a significant, though minority, of
them consider it is necessary to do so. Indeed, the arguments
advanced by the proponent in support of the proposal focus
exclusively on the benefits of giving stockholders such ability.
The proponent’s modification of the numerical percentage of
stock necessary for stockholders to call a special meeting is
the only difference between the new proposal and the provisions
of the by-laws.
Holding a special meeting of our stockholders would be a costly
undertaking, involve substantial planning, and require us to
commit significant resources and attention to the legal and
logistical elements of such a meeting.
Moreover, lowering the percentage to 10% would permit one or a
few stockholders who own a smaller percentage of Citi’s
common stock to call a special meeting that may serve their
narrow purposes rather than those of the majority of our
stockholders. The board believes the decision to call a special
meeting of stockholders should remain at the 25% ownership
level, which is an appropriate threshold for a company of
Citi’s size. Most large companies that have special meeting
by-law provisions set the threshold at 25% or higher.
The proposal also seeks to ensure that any by-law provisions on
special meetings not contain “any exclusion or exception
conditions, to the fullest extent permitted by state law,”
that apply only to stockholders but not to management or the
board. Citi’s by-law provisions do not contain any such
exception or exclusions. As requested by the proposal, Citi
by-law provision does have a minimum stock holding condition.
The special meeting provisions contained in Citi’s by-laws
already satisfy the request contained in the proposal to allow
stockholders to call special meetings. Citi has complied in all
material respects with the essential objective of the proposal
by giving stockholders the right to call a special meeting.
Because Citi has adopted a by-law amendment granting
stockholders the right to call a special meeting, the proposal
has been rendered moot and is unnecessary and the board
recommends that you vote against this
proposal 12.
|
| |||||||
