PRE 14A 1 dpre14a.htm PRELIMINARY PROXY STATEMENT Preliminary Proxy Statement
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.      )

 

 

 

 

Filed by the Registrant x

Filed by a Party other than the Registrant ¨

 

 

Check the appropriate box:

 

x  Preliminary Proxy Statement

 

¨  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

¨  Definitive Proxy Statement

 

¨  Definitive Additional Materials

 

¨  Soliciting Material Pursuant to §240.14a-12

 

 

 

 

CITIGROUP INC.


(Name of Registrant as Specified In Its Charter)

 

 

 

 

  


(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

 

Payment of Filing Fee (Check the appropriate box):

 

x  No fee required.

 

¨  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

  (1)    Title of each class of securities to which transaction applies:

 

  

 

  (2)    Aggregate number of securities to which transaction applies:

 

  

 

  (3)    Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

  

 

  (4)    Proposed maximum aggregate value of transaction:

 

  

 

  (5)    Total fee paid:

 

  

 

 

¨  Fee paid previously with preliminary materials.

 

¨  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

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Table of Contents

 

Preliminary Copy

 

LOGO

 

Citigroup Inc.

399 Park Avenue

New York, NY 10043

 

March [    ], 2010

 

Dear Stockholder:

 

We cordially invite you to attend Citi’s annual stockholders’ meeting. The meeting will be held on Tuesday, April 20, 2010, at 9AM at the Hilton New York, 1335 Avenue of the Americas in New York City. The entrance to the Hilton is on the Avenue of the Americas (6th Ave.) between West 53rd and West 54th Streets.

 

At the meeting, stockholders will vote on a number of important matters. Please take the time to carefully read each of the proposals described in the attached proxy statement.

 

The Board would also like to recognize our retiring directors, C. Michael Armstrong, John M. Deutch and Anne M. Mulcahy for their many contributions to Citi. The collective wisdom and insight of these directors have been an invaluable source of strength for Citi.

 

Thank you for your support of Citi.

 

Sincerely,

 

LOGO

Richard D. Parsons

Chairman of the Board

 

 


This proxy statement and the accompanying proxy card are being mailed to

Citi’s stockholders beginning about March     , 2010.


Table of Contents

 

LOGO

 

Citigroup Inc.

399 Park Avenue

New York, NY 10043

 

Notice of Annual Meeting of Stockholders

 

Dear Stockholder:

 

Citi’s annual stockholders’ meeting will be held on Tuesday, April 20, 2010, at 9AM at the Hilton New York, 1335 Avenue of the Americas in New York City. The entrance to the Hilton is on the Avenue of the Americas (6th Ave.) between West 53rd and West 54th Streets. You will need an admission ticket or proof of ownership of Citi stock to enter the meeting.

 

At the meeting, stockholders will be asked to

 

Ø  

act on certain stockholder proposals,

 

Ø  

ratify the selection of Citi’s independent registered public accounting firm for 2010,

 

Ø  

elect directors,

 

Ø  

approve Citi’s 2009 Executive Compensation,

 

Ø  

approve additional shares under the Citigroup 2009 stock incentive plan,

 

Ø  

approve an amendment to the Citigroup 2009 stock incentive plan to award additional shares required to be issued in accordance with Citi’s agreement to repay its TARP obligations,

 

Ø  

ratify the Tax Benefits Preservation Plan,

 

Ø  

approve an extension of the Board’s authority to effect a reverse stock split, and

 

Ø  

consider any other business properly brought before the meeting.

 

The close of business on February 25, 2010 is the record date for determining stockholders entitled to vote at the annual meeting. A list of these stockholders will be available at Citi’s headquarters, 399 Park Avenue, New York City, before the annual meeting.

 

Please sign, date and promptly return the enclosed proxy card in the enclosed envelope, or vote by telephone or Internet (instructions are on your proxy card), so that your shares will be represented whether or not you attend the annual meeting.

 

By order of the board of directors

 

LOGO

Michael S. Helfer

Corporate Secretary

 

March [    ], 2010


Table of Contents

Contents

 

About the Annual Meeting

   1

How We Have Done

   5

Annual Report

   5

Corporate Governance

   5

Nomination and Governance Committee

   5

Board Diversity

   7

Corporate Governance Guidelines

   7

Director Independence

   9

Certain Transactions and Relationships, Compensation Committee Interlocks and Insider Participation

   11

Indebtedness

   13

Business Practices

   14

Code of Ethics

   14

Ethics Hotline

   15

Code of Conduct

   15

Communications with the Board

   15

Stock Ownership

   16

Owners of More than 5% of Our Common Stock

   19

Proposal 1: Election of Directors

   20

Director Qualifications

   20

The Nominees

   28

Meetings of the Board of Directors and Committees

   36

Meetings of Non-Management Directors

   36

Board Leadership Structure

   36

Board’s Role in Risk Oversight

   37

Committees of the Board of Directors

   37

Involvement in Certain Legal Proceedings

   41

Directors’ Compensation

   41

Audit Committee Report

   47

Executive Compensation

   48

Compensation Discussion and Analysis

   48

Compensation Information

   62

Summary Compensation Table

   62

The Personnel and Compensation Committee Report

   81

Management Analysis of Material Adverse Effects of Compensation Plans

   87

Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm

   88

Disclosure of Independent Registered Public Accounting Firm Fees

   88

Approval of Independent Registered Public Accounting Firm Services and Fees

   88

Proposal  3: Approval of Amendments to the Citigroup 2009 Stock Incentive Plan (to Increase Authorized Shares)

   89

Supplemental Information on Equity Plan Grants

   94

Proposal  4: Approval of Amendments to the Citigroup 2009 Stock Incentive Plan (to Permit Payment of Common Stock Equivalent Awards in Shares)

   97

Description of the Citigroup 2009 stock incentive plan (including as proposed to be amended by proposal (3) and proposal (4))

   98

Equity Compensation Plan Information

   108

Proposal 5: Approval of Citi’s 2009 Executive Compensation

   111

Proposal 6: Ratification of the Tax Benefits Preservation Plan

   111

Proposal 7: Approval of the Reverse Stock Split Extension

   114

Stockholder Proposals

   123

Submission of Future Stockholder Proposals

   135

Cost of Annual Meeting and Proxy Solicitation

   135

Householding

   135

Section 16(a) Beneficial Ownership Reporting Compliance

   135

ANNEX A

CITIGROUP INC.

CORPORATE GOVERNANCE GUIDELINES

  





A-1

ANNEX B

CITIGROUP 2009 STOCK INCENTIVE

PLAN

  



B-1

ANNEX C

TAX BENEFITS PRESERVATION

PLAN (AS PROPOSED TO BE AMENDED)

  



C-1

ANNEX D

CITIGROUP INC.

FORM OF CERTIFICATE OF

AMENDMENT OF THE RESTATED

CERTIFICATE OF INCORPORATION

  







D-1

 


 


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About the Annual Meeting

 

Who is soliciting my vote?

The board of directors of Citi is soliciting your vote at the 2010 annual meeting of Citi’s stockholders.

 

Where and when will the annual meeting take place?

 

The meeting is scheduled to begin at 9 AM on April 20, 2010 at the Hilton New York at 1335 Avenue of the Americas in New York City. The entrance to the Hilton is on Avenue of the Americas (6th Ave.) between West 53rd and West 54th Streets.

 

What will I be voting on?

 

                     stockholder proposals (see page     ).

 

Ratification of KPMG LLP (KPMG) as Citi’s independent registered public accounting firm for 2010 (see page     ).

 

Election of directors (see page     ).

 

Approval of Amendments to the Citigroup 2009 Stock Incentive Plan (to increase Authorized Shares) (see page     ).

 

Approval of Amendments to the Citigroup 2009 Stock Incentive Plan (to Permit Payment of Common Stock Equivalent Awards in Shares) (TARP REPAYMENT SHARES) (see page     ).

 

Approval of Citi’s 2009 Executive Compensation (see page     ).

 

Ratification of the Tax Benefits Preservation Plan (see page     ).

• Approval of an extension of the Board’s authority to effect a reverse stock split (REVERSE STOCK SPLIT EXTENSION) (see page     ).

 

An agenda will be distributed at the meeting.

 

How many votes do I have?

You will have one vote for every share of Citi common stock you owned on February 25, 2010 (the record date).

 

How many votes can be cast by all stockholders?

                    , consisting of one vote for each of Citi’s shares of common stock that were outstanding on the record date. There is no cumulative voting.

 

How many votes must be present to hold the meeting?

A majority of the votes that can be cast, or             . We urge you to vote by proxy even if you plan to attend the annual meeting, so that we will know as soon as possible that enough votes will be present for us to hold the meeting.

 

Does any single stockholder control as much as 5% of any class of Citi’s voting stock?

As of December 31, 2009 (i) the U.S. Treasury continues to hold approximately 7.7 billion shares, or approximately 27%, of Citi’s common stock, (ii) the U.S. Treasury and the Federal Deposit Insurance Corporation (FDIC) continue to hold an aggregate of approximately $5.3 billion of Citi’s trust-preferred securities, and (iii) the U.S. Treasury continues to hold three warrants exercisable for an aggregate of approximately 465.1 million shares of Citi’s common stock. See —Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Summary—Repayment of TARP and Exit of Loss-Sharing Agreement; Common and Preferred Stock Activities in the Form 10-K for 2009.

 

For further information, see “Stock Ownership—Owners of More than 5% of Our Common Stock” in this proxy statement.

 

How do I vote?

You can vote either in person at the annual meeting or by proxy whether or not you attend the annual meeting.

 

To vote by proxy, you must either

 

 

fill out the enclosed proxy card, date and sign it, and return it in the enclosed postage-paid envelope,

 

vote by telephone (instructions are on the proxy card), or

 

vote by Internet (instructions are on the proxy card).


 

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To ensure that your vote is counted, please remember to submit your vote by April 19, 2010.

 

Citi employees who participate in equity programs may receive their proxy cards separately.

 

If you want to vote in person at the annual meeting, and you hold your Citi stock through a securities broker (that is, in “street name”), you must obtain a proxy from your broker and bring that proxy to the meeting.

 

Can I change my vote?

Yes. Just send in a new proxy card with a later date, or cast a new vote by telephone or Internet, or send a written notice of revocation to Citi’s Corporate Secretary at the address on the cover of this proxy statement. If you attend the annual meeting and want to vote in person, you can request that your previously submitted proxy not be used.

 

What if I don’t vote for some of the matters listed on my proxy card?

If you return a signed proxy card without indicating your vote, your shares will be voted, in accordance with the board’s recommendation, for the nominees listed on the card, for KPMG as independent registered public accounting firm for 2010, for the additional shares under Citigroup 2009 Stock Incentive Plan, for the TARP REPAYMENT SHARES proposal, for Citi’s 2009 Executive Compensation, for the Tax Benefits Preservation Plan, for the REVERSE STOCK SPLIT EXTENSION proposal and against the other proposals.

 

Can my broker vote my shares for me on the election of directors?

No. Please note that this year the rules that govern how brokers vote your shares have changed. Brokers may no longer use discretionary authority to vote shares on the election of directors if they have not received instructions from their clients. Please vote your proxy so your vote can be counted.

 

Can my shares be voted if I don’t return my proxy card and don’t attend the annual meeting?

If you don’t vote your shares held in street name, your broker can vote your shares on matters that the New York Stock Exchange (NYSE) has ruled discretionary. KPMGS appointment, Citi’s 2009 Executive Compensation and the REVERSE STOCK SPLIT EXTENSION proposal are discretionary items. NYSE member brokers that do not receive instructions from beneficial owners may vote on these proposals in the following manner: (1) a Citi affiliated member is permitted to vote your shares in the same proportion as all other shares are voted with respect to each such proposal; and (2) all other NYSE member brokers are permitted to vote your shares in their discretion. The brokers will not be able to vote your shares for the election of directors, the additional shares under the Citigroup 2009 Stock Incentive Plan, the TARP REPAYMENT SHARES proposal, the Tax Benefits Preservation Plan, and the stockholder proposals if you fail to provide instructions.

 

If you don’t vote your shares registered directly in your name, not in the name of a bank or broker, your shares will not be voted.

 

If I hold shares through Citigroup’s 401(k) Plan and do not provide voting instructions, how will my shares be voted?

If you hold shares of common stock through Citigroup’s 401(k) Plan and do not provide voting instructions to the plan trustee, your shares will be voted in the same proportion as the shares beneficially owned through our 401(k) Plan for which voting instructions are received, unless otherwise required by law.

 

How are my votes counted?

You may vote for or against each director nominee, or abstain from voting on a director nominee. Each nominee for director will be elected if the votes for the director exceed the votes against the director. Abstentions will not be counted either for or against the director but will be counted for purposes of establishing a quorum.


 

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You may vote for or against the ratification of KPMG, or abstain from voting on this proposal. If you abstain from voting on the ratification of KPMG, your shares will be counted as present for purposes of establishing a quorum, and the abstention will have the same effect as a vote against this proposal.

 

With respect to the following proposals, you may vote for or against, or abstain from voting. If you abstain from voting, your shares will be counted as present for purposes of establishing a quorum, and the abstention will have the same effect as a vote against this proposal. The proposals are:

 

 

additional shares under the Citigroup 2009 Stock Incentive Plan;

 

the TARP REPAYMENT SHARES proposal;

 

Citi’s 2009 Executive Compensation;

 

the Tax Benefits Preservation Plan proposal;

 

the REVERSE STOCK SPLIT EXTENSION proposal; or

 

any stockholder proposal.

 

How many votes are required to elect directors and to adopt the other proposals?

Citi has adopted a by-law providing a majority vote standard for director elections. The by-law amendment provides that if a nominee receives, in an uncontested election, a number of votes cast against his or her election that is greater than the number of votes cast for the election of the director, such director shall offer to resign from his or her position as a director. Unless the board decides to reject the offer or to postpone the effective date of the offer, the resignation shall become effective 60 days after the date of the election.

 

KPMG’s appointment, the additional shares under the Citigroup 2009 Stock Incentive Plan, the TARP REPAYMENT SHARES proposal, Citi’s 2009 Executive Compensation, the Tax Benefits Preservation Plan, and the stockholder proposals each require the affirmative vote of a majority of the shares of common stock represented at the annual meeting and entitled to vote thereon in order to be adopted.

 

The REVERSE STOCK SPLIT EXTENSION proposal requires the affirmative vote of a majority of the

outstanding shares of common stock in order to be adopted. If you neither attend the meeting nor vote by proxy on the REVERSE STOCK SPLIT EXTENSION proposal, your shares will also be counted as votes against the proposal.

 

Is my vote confidential?

In 2006, the board adopted a confidential voting policy as a part of its Corporate Governance Guidelines. Under the policy, all proxies, ballots, and vote tabulations are kept confidential for registered stockholders who request confidential treatment. If you are a registered stockholder and would like your vote kept confidential, please check the appropriate box on the proxy card or follow the instructions when submitting your vote by telephone or by the Internet. If you hold your shares in “street name” or through an employee benefit plan, your vote already receives confidential treatment and you do not need to request confidential treatment in order to maintain the confidentiality of your vote.

 

The confidential voting policy will not apply in the event of a proxy contest or other solicitation based on an opposition proxy statement. For further details regarding this policy, please see the Corporate Governance Guidelines attached as Annex A to this proxy statement.

 

Could other matters be decided at the annual meeting?

We don’t know of any other matters that will be considered at the annual meeting. If a stockholder proposal that was excluded from this proxy statement is brought before the meeting, we will vote the proxies against the proposal. If any other matters arise at the annual meeting that are properly presented at the meeting, the proxies will be voted at the discretion of the proxy holders.

 

What happens if the meeting is postponed or adjourned?

Your proxy will still be good and may be voted at the postponed or adjourned meeting. You will still be able to change or revoke your proxy until it is voted.


 

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Do I need a ticket to attend the annual meeting?

Yes, you will need an admission ticket or proof of ownership of Citi stock to enter the meeting. When you arrive at the annual meeting, you may be asked to present photo identification, such as a driver’s license. If you are a stockholder of record, you will find an admission ticket attached to the proxy card sent to you. If you plan to attend the meeting, please so indicate when you vote and bring the ticket with you to the meeting. If your shares are held in the name of a bank, broker or other holder of record, your admission ticket will be included in your proxy materials. If you don’t bring your admission ticket, or opted to receive your proxy materials electronically, you will need proof of ownership to be admitted to the meeting. A recent brokerage statement or letter from a bank or broker is an example of proof of ownership. If you arrive at the meeting without an admission ticket, we will admit you only if we are able to verify that you are a Citi stockholder. Citi will not be able to accommodate guests at the annual meeting. Any persons needing special assistance should contact Shareholder Relations at the following email address: shareholderrelations@citi.com.

 

How can I access Citi’s proxy materials and annual report electronically?

This proxy statement and the 2009 annual report are available on Citi’s website at www.citigroup.com. Click on “About Citi,” “Corporate Governance,” then “Financial Disclosure,” and then “Annual Reports & Proxy Statements.” Most stockholders can elect not to receive paper copies of future proxy statements and annual reports and can instead view those documents on the Internet.

 

If you are a stockholder of record, you can choose this option and save Citi the cost of producing and mailing these documents by following the instructions provided when you vote over the Internet. If you hold your Citi stock through a bank, broker or other holder of record, please refer to the information provided by that entity for instructions on how to elect not to receive paper copies of future proxy statements and annual reports.

 

If you choose not to receive paper copies of future proxy statements and annual reports, you will receive an e-mail message next year containing the Internet address to use to access Citi’s proxy statement and annual report. Your choice will remain in effect until you tell us otherwise. You do not have to elect Internet access each year. To view, cancel or change your enrollment profile, please go to www.InvestorDelivery.com.


 

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How We Have Done

 

Annual Report

If you received these materials by mail, you should have also received Citi’s annual report to stockholders for 2009 with them. The 2009 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 Securities and Exchange Commission’s (SEC) rules, the Five-Year Performance Graph appears in the 2009 Annual Report on Form 10-K.


 

LOGO

 

Corporate Governance

 

Citi 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. Among other initiatives, Citi in recent years has:

 

  Ø  

amended our by-laws to provide that if Citi does not have an independent chairman of the board, the board shall elect a lead independent director;

 

  Ø  

amended our by-laws to give holders of at least 25% of the outstanding common stock the right to call a special meeting;

 

  Ø  

separated the audit and risk management committee into two committees: the audit committee and a separate risk management and finance committee;

 

  Ø  

eliminated super-majority vote provisions contained in our charter;

 

  Ø  

amended our by-laws to include a majority vote standard for director elections;

 

  Ø  

adopted a policy to recoup unearned compensation; and

 

  Ø  

adopted a Political Contributions and Lobbying Statement under which Citi annually compiles and publishes a list of our political contributions. The policy and a list of our 2009 political contributions are available in the “Corporate Governance” section of Citi’s website: www.citigroup.com.

 

The current charters of the audit, Citi Holdings oversight, nomination and governance, personnel and compensation, public affairs and risk management and finance committees, as well as Citi’s Corporate Governance Guidelines, Code of Conduct and Code of Ethics, are available in the “Corporate Governance” section of Citi’s website: www.citigroup.com. Citi stockholders may obtain printed copies of these documents by writing to Citigroup Inc., Corporate Governance, 425 Park Avenue, 2nd floor, New York, NY 10022.

 

Nomination and Governance Committee

The nomination and governance committee’s mandate is to review and shape corporate governance policies and identify qualified individuals for nomination to the board of directors. All of the members of the committee meet the independence standards contained in the NYSE corporate governance rules and Citi’s Corporate Governance Guidelines, which are attached to this proxy statement as Annex A. A copy of the committee’s charter is available in the “Corporate Governance” section of Citi’s website: www.citigroup.com.

 

On December 15, 2009, the Board of Directors adopted a by-law amendment which provides that, if the chairman of the board does not qualify as independent under NYSE rules, the board shall elect a lead independent director, and that lead director will be empowered (among other responsibilities) to lead the executive sessions of the non-management directors at board meetings. Details regarding the selection, duties, term, and tenure of the independent lead director are specified in Citi’s Corporate Governance Guidelines, attached as Annex A to this proxy statement.


 

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The committee considers all qualified candidates identified by members of the committee, by other members of the board of directors, by senior management and by security holders. In 2009, the committee engaged Spencer Stuart to assist in identifying and evaluating potential nominees. Stockholders who would like to propose a director candidate for consideration by the committee may do so by submitting the candidate’s name, résumé and biographical information to the attention of the Corporate Secretary, Citigroup Inc., 399 Park Avenue, New York, NY 10043. All proposals for nominations received by the Corporate Secretary will be presented to the committee for its consideration.

 

The committee reviews each candidate’s biographical information and assesses each candidate’s independence, skills and expertise based on a variety of factors, including the following criteria, which have been developed by the 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 chairman, chief executive officer, chief operating officer or equivalent policy-making and operational level of a large organization with significant international activities 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 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.

 

 

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 our 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.

 

 

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 committee and the board.

 

Based on its assessment of each candidate’s independence, skills and qualifications and the criteria described above, the committee will make recommendations regarding potential director candidates to the board.

 

The 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 2010 annual meeting, we received timely notice of director nominations from 7 stockholders who nominated themselves or another person to stand for election at the annual meeting. The qualifications of these individuals were discussed at meetings of the nomination and governance committee and the views of Spencer Stuart on the candidates were considered. After deliberation, the committee decided not to include these individuals on the slate of candidates it proposed to the full board for consideration. The committee used the above-mentioned criteria to evaluate the candidates.


 

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Board Diversity

Among the factors that the nomination and governance committee considers when evaluating the composition of the board, diversity is critical. For a company like Citi, which operates in over 100 countries around the globe, diversity includes race, ethnicity 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 company operates.” Citi’s board is committed to ensuring that it comprises individuals whose backgrounds reflect the diversity represented by our employees, customers and stakeholders. The candidates nominated for election at Citi’s 2010 annual meeting exemplify that diversity: two nominees are women (13 percent) and five nominees (33 percent) – including the chairman and the chief executive officer – are Asian, African-American or Hispanic. 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 is satisfied that the current nominees reflect an appropriate diversity of gender, age, race, geographical background and experience but is committed to continuing to consider diversity issues in evaluating the composition of the board.

 

Corporate Governance Guidelines

Citi’s Corporate Governance 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 in Annex A to this proxy statement. The Guidelines outline the responsibilities, operations, qualifications and composition of the board.

 

Our goal is that at least two-thirds of the members of the board be independent. A description of our independence criteria and the results of the board’s independence determinations are set forth below.

 

The number of other public company boards on which a director may serve is subject to a case-by-case review by the nomination and governance committee, in order to ensure that each director is able to devote sufficient time to performing 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).

 

The Guidelines require that all members of the required committees of the board (audit, nomination and governance, and personnel and compensation) be independent. Committee members are appointed by the board upon recommendation of the nomination and governance 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.

 

Meetings of the non-management directors are held as part of every regularly scheduled board meeting and are presided over by the independent chairman.

 

If a director has a substantial change in professional responsibilities, occupation or business association, he or she is required to notify the nomination and governance committee and to offer his or her resignation from the board. The nomination and governance 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 and governance committee.


 

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Directors are expected to attend board meetings, meetings of the committees and subcommittees on which they serve and the annual meeting of stockholders. All of the directors then in office attended Citi’s 2009 annual meeting.

 

The nomination and governance committee nominates one of the members of the board to serve as chairman of the board on an annual basis. The nomination and governance committee also conducts an annual review of board performance, and each committee conducts its own self-evaluation. The board and committees may engage an outside consultant to assist in conducting the self-evaluations. The results of these evaluations are reported to the board.

 

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 and its legal, compliance, regulatory and risk profile. Citi provides educational sessions on a variety of topics, which all members of the board are invited to attend. These sessions are designed to allow directors to, for example, develop a deeper understanding of a business issue or a complex financial product.

 

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 best leadership for Citi. The board also works with the nomination and governance committee to evaluate potential successors to the CEO.

 

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 will be reported to the nomination and governance committee at least annually.

 

The Guidelines affirm Citi’s stock ownership commitment, which is described in greater detail in this proxy statement. In 2008, the stock ownership

commitment was reviewed in connection with the reorganization of Citi’s senior management structure and was simplified as part of Citi’s continuing efforts to streamline the organization and become more efficient. The members of the management executive committee are generally required to retain at least 75 percent of the equity awarded to them as incentive compensation (other than cash equivalents and net of amounts required to pay taxes and exercise prices) as long as they are members of senior management. Members of the senior leadership committee are also required to retain at least 50 percent of the same categories of net equity awards for the same period of time. Directors are similarly required to retain at least 75 percent of the net equity awarded to them. In addition, Citi has adopted a personal trading policy which limits trading by directors, members of the senior leadership committee and certain employees in Citi stock and prohibits these individuals from engaging in hedging, derivative or other transactions that have an economically similar effect that would undermine the incentives created by the stock ownership commitment and deferred stock compensation structures.

 

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 to executive officers and directors of Citi and its public issuer subsidiaries and the most senior executives of the company, or immediate family members who share any such person’s household, are prohibited, except for mortgage loans, home equity loans, consumer loans, credit cards, charge cards, overdraft checking privileges and margin loans to employees of a broker-dealer subsidiary of Citi made on market terms in the ordinary course of business. See Certain Transactions and Relationships, Compensation Committee Interlocks and Insider Participation on page      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


 

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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.

 

Director Independence

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.

 

In 2009, the board and the nomination and governance 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 on the one hand and Citi on the other 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 directors standing for re-election and the nominee standing for election are independent: Alain J.P. Belda, Timothy C. Collins, Jerry A. Grundhofer, Andrew N. Liveris, Michael E. O’Neill, Richard D. Parsons, Lawrence Ricciardi, Judith Rodin, Robert L. Ryan, Anthony M. Santomero, Diana L. Taylor and William S. Thompson, Jr.

 

Categorical Standards

 

Advisory, Consulting and Employment Arrangements

  Ø  

During any 12 month period within the last three years, neither a director nor any immediate family member of a director shall have received from the company, directly or indirectly, any compensation, fees or benefits in an amount greater than $120,000, other than amounts paid (a) pursuant to the company’s Amended and Restated Compensation Plan for Non-Employee Directors or (b) to an immediate family member of a director who is a non-executive employee of the company or another entity.

 

In addition, no member of the audit committee, nor any immediate family member who shares such individual’s household, nor any entity in which an audit committee member is a partner, member or executive officer shall, within the last three years, have received any payment for accounting, consulting, legal, investment banking or financial advisory services provided to the company.


 

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Business Relationships

  Ø  

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.

 

  Ø  

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.

 

  Ø  

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: (a) 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; (b) 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 FDIC Guidelines; (c) when made does not involve more than the normal risk of collectibility or present other unfavorable features; and (d) is not classified by the Company as Substandard (II) or worse, as defined by the Office of the Comptroller of the Currency (OCC) 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.

 

Employment/Affiliations

 

Ø An outside 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 present or former outside auditor of the company within the three-year period following the auditing relationship.

 

  Ø  

An outside 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 the company’s outside auditor, or a current employee of the company’s outside auditor and personally works on the company’s audit, or (B) was within the last three years (but is no longer) a partner of or employed by


 

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the company’s outside auditor and personally worked on the company’s audit within that time.

 

 

Immaterial Relationships and Transactions

The Board may determine that a director is independent notwithstanding the existence of an immaterial relationship or transaction between the company and (i) the director, (ii) an immediate family member of the director or (iii) the director’s or immediate family member’s business or charitable affiliations, provided the company’s proxy statement includes a specific description of such relationship as well as the basis for the board’s determination that such relationship does not preclude a determination that the director is independent. Relationships or transactions between the company and (i) the director, (ii) an immediate family member of the director or (iii) the director’s or immediate family member’s business or charitable affiliations that comply with the Corporate Governance Guidelines, including but not limited to the Director Independence Standards that are part of the Corporate Governance Guidelines and the sections titled Financial Services, Personal Loans and Investments/Transactions, are deemed to be categorically immaterial and do not require disclosure in the proxy statement (unless such relationship or transaction is required to be disclosed pursuant to Item 404 of SEC Regulation S-K).

 

Definitions

For purposes of these Corporate Governance Guidelines, (i) the term “immediate family member” means a director’s or executive officer’s (designated as such pursuant to Section 16 of the Securities Exchange Act of 1934) spouse, parents, step-parents, children, step-children, siblings, mother- and father-in law, sons- and daughters-in-law, and brothers and sisters-in-law and any person (other than a tenant or domestic employee) who shares the director’s household; (ii) the term “primary business affiliation” means an entity of which the director or executive officer, or an immediate family member of such a person, is an officer,

partner or employee or in which the director, executive officer or immediate family member owns directly or indirectly at least a 5% equity interest; and (iii) the term “related party transaction” means any financial transaction, arrangement or relationship in which (a) the aggregate amount involved will or may be expected to exceed $120,000 in any fiscal year, (b) the company is a participant, and (c) any related person (any director, any executive officer of the company, any nominee for director, any shareholder owning in excess of 5% of the total equity of the company, and any immediate family member of any such person) has or will have a direct or indirect material interest.

 

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 the “About Citi” 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 the head of corporate affairs, is


 

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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:

 

 

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.

 

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 $210,769.40 related to his personal use of corporate aircraft during 2009. In September 2009, Mr. Pandit announced that he would no longer use corporate aircraft for personal travel. The personal use reported for Mr. Pandit occurred prior to his announcement and the adoption of Citi’s Luxury Expenditure Policy.

 

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 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.


 

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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 2009, 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      are the current members of the personnel and compensation committee. Mr. Derr was a member of the committee until April 21, 2009 when he retired from the board of directors. Mrs. Mulcahy and Mr. Thompson joined the committee on April 27, 2009. No current or former member of the personnel and compensation committee was a part of a “compensation committee interlock” during fiscal year 2009 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 officer of Citi, and no member of the committee is a current 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 have 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 269,000 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, was employed by Banamex, a subsidiary of Citi, and received 2009 compensation of $874,045. He retired in June 2009. An adult spouse of an adult child of Lewis Kaden, an executive officer, is employed by Citi’s Global Consumer Group and received 2009 compensation of $258,097.

 

Indebtedness

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. Before and during 2009, certain executive officers have incurred indebtedness to broker-dealer subsidiaries of Citi, on margin loans against securities accounts. The margin loans were made in the ordinary course of business on substantially the same terms (including interest rates and collateral) as those prevailing for comparable transactions for other persons, and did not involve more than the normal risk of collectibility or present other unfavorable features.

 

Certain transactions involving loans, deposits, credit cards, and sales of commercial paper, certificates of deposit, and other money market


 

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instruments and certain other banking transactions occurred during 2009 between Citibank 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 collectibility or present other unfavorable features. Personal loans made to any director, executive officer or member of the management executive committee must comply with SARBANES-OXLEY, Regulation O and the Corporate Governance Guidelines, and must be made in the ordinary course of business.

 

Citigroup Capital Partners II Employee Master Fund, L.P. was formed in 2006. It invests either directly or via a master fund in private equity investments. Citi matches each dollar invested by an employee with an additional two dollar commitment to each fund, or feeder fund, in which an employee has invested, up to a maximum of $1 million. Citi’s match is made by a loan to the fund. Each employee, subject to vesting, receives the benefit of any increase in the value of the fund attributable to the loan made by Citi, less the interest paid by the fund on the loan, as well as any increase in the value of the fund attributable to the employee’s own investment.

 

One-half of the loan is full recourse to the employee via a guaranty and the other half is non-recourse to the employee. Before any distributions (other than tax distributions) are made to an employee, distributions are paid by the fund to Citi to pay interest on and to repay the loan.

 

Interest on the loans accrues quarterly at a rate determined from time to time by Citi as of the first

business day of each quarter equal to the greater of (i) the three-month London Inter-Bank Offered Rate plus 75 basis points (as determined by Citi), and (ii) the short-term applicable federal rate calculated in accordance with Section 1274(d) of the Internal Revenue Code of 1986, as amended (IRC) (as determined by Citi).

 

Michael Corbat, who participated in the Citigroup Capital Partners II Employee Master Fund, L.P., became an executive officer in 2009 and, pursuant to the fund’s offering memorandum and in compliance with SARBANES-OXLEY, was required to repay his outstanding leverage and associated interest. He reimbursed Citi $851,679.06 for leverage and interest outstanding to the Citigroup Capital Partners II Employee Fund, L.P.

 

Business Practices

Citi’s business practices committees, at the corporate level and in each of its business units, review business activities, sales practices, products, potential conflicts of interest, complex transactions, suitability and other reputational concerns providing guidance to ensure that Citi’s business practices meet the highest standards of ethics, integrity and professional behavior. These committees, comprised of our most senior executives, focus on reputational risk while our businesses ensure that our policies are adhered to and emphasize our commitment to the franchise.

 

Business practices concerns may be surfaced by a variety of sources, including business practices working groups, other in-business committees or the control functions. The business practices committees guide the development of business practices and may change them when necessary or appropriate. These issues are reported on a regular basis to the Citi business practices committee and the public affairs committee of the board.

 

Code of Ethics

The board has adopted a Code of Ethics for Financial Professionals governing the principal executive officers of Citi and its reporting subsidiaries and all Citi professionals worldwide


 

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serving in a finance, accounting, treasury, tax or investor relations role. A copy of the Code of Ethics is available on our website at www.citigroup.com. Click on “Corporate Governance” and then “Code of Ethics for Financial Professionals.” We intend to disclose amendments to, or waivers from, the Code of Ethics, if any, on our website.

 

Ethics Hotline

Citi strongly encourages employees to raise possible ethical issues. Citi offers several channels by which employees and others may report ethical concerns or incidents, including, without limitation, concerns about accounting, internal controls or auditing matters. We provide an Ethics Hotline that is available 24 hours a day, seven days a week with live operators who can connect to translators in multiple languages, a dedicated e-mail address, fax line, a web-link and conventional mailing address. Individuals may choose to remain anonymous to the extent permitted by applicable laws and regulations. We prohibit retaliatory actions against anyone who, in good faith, raises concerns or questions regarding ethics, discrimination or harassment matters, or reports suspected violations of other applicable laws, regulations or policies. Calls to the Ethics Hotline are received by a vendor, located in the U.S., which reports the calls to Citi’s Ethics Office for handling.

 

Code of Conduct

The board has adopted a Code of Conduct, which outlines the laws, rules, regulations and Citi policies that govern the activities of Citi and sets the standards of business behavior and ethics that apply across Citi. The Code of Conduct applies to every director, officer and employee of Citi and each of its subsidiaries. All employees, directors and officers are required to read and follow the Code of Conduct. In addition, other persons performing services for Citi may be subject to the Code of Conduct by contract or agreement. A copy of the Code of Conduct is available on our website at www.citigroup.com. Click on “About Citi,” then “Corporate Governance” and then “Code of Conduct.”

 

Communications with the Board

Stockholders or other interested parties who wish to communicate with a member or members of the board of directors, including the Chairman 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, Citigroup Inc., 399 Park Avenue, New York, NY 10043. 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.


 

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Stock Ownership

 

Citi has long encouraged stock ownership by its directors, officers and employees to align their interests with the long-term interests of stockholders.

 

The members of the management executive committee are generally required to retain at least 75 percent of the equity awarded to them as incentive compensation (other than cash equivalents and net of amounts required to pay taxes and exercise prices) as long as they are members of senior management. Members of the senior leadership committee are also required to retain at least 50 percent of the same categories of net equity awards for the same period of time. Directors are similarly required to retain at least 75 percent of the net equity awarded to them. In

addition, Citi has adopted a personal trading policy which limits trading by directors, members of the senior leadership committee and certain employees in Citi stock and prohibits these individuals from engaging in hedging, derivative or other transactions that have an economically similar effect that would undermine the incentives created by the stock ownership commitment and deferred stock compensation structures.

 

Exceptions to the stock ownership commitment include gifts to charity, certain estate planning transactions, and certain other limited circumstances. In addition, the commitment relates to the net number of shares received in connection with the exercise of employee stock options and the payment of withholding taxes under equity compensation programs.


 

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The following table shows the beneficial ownership of Citi common stock by our directors, nominee and certain executive officers at February 25, 2010.

 

Name    Position        Common
Stock
Beneficially
Owned
Excluding
Options
    Stock
Options
Exercisable
Within 60
Days of
Record
Date (A)
   Total
Common
Stock
Beneficially
Owned (A)
 

C. Michael Armstrong

   Director        408,106      25,495    433,601   

Alain J.P. Belda

   Director        157,659      65,752    223,411   

Timothy C. Collins

   Director        59,023      —      59,023   

John M. Deutch

   Director        237,131      21,637    258,768   

John C. Gerspach

   Chief Financial Officer        1,139,708      54,427    1,194,135   

Jerry A. Grundhofer

   Director        104,727      —      104,727   

John P. Havens

   Chief Executive Officer, Institutional Clients Group        2,841,754      152,542    2,994,296   

Robert L. Joss

   Director        84,824      —      84,824   

Edward J. Kelly

   Vice Chairman        2,156,812      165,678    2,322,490   

Andrew N. Liveris

   Director        82,071      56,600    138,671   

Manuel Medina-Mora

  

Chairman & Chief Executive Officer

North America Consumer Banking

Latin America & Mexico

       5,949,083      631,976    6,581,059   

Anne M. Mulcahy

   Director        95,728      —      95,728   

Michael E. O’Neill

   Director        99,983      —      99,983   

Vikram S. Pandit

   Chief Executive Officer & Director        2,309,879      1,500,000    3,809,879   

Richard D. Parsons

   Chairman of the Board        226,740      50,746    277,486   

Lawrence R. Ricciardi

   Director        78,917      —      78,917   

Judith Rodin

   Director        94,685      35,877    130,562   

Robert L. Ryan

   Director        95,578      —      95,578   

Anthony M. Santomero

   Director        95,061      —      95,061   

Diana L. Taylor

   Director        59,023      —      59,023   

William S. Thompson, Jr.

   Director        353,598 (1)    —      353,598 (1) 

Alberto J. Verme

   Co-Chief Executive Officer, Europe, Middle East, & Africa        2,735,407      117,773    2,853,180   

Ernesto Zedillo

   Nominee        —        —      —     

All directors, nominee & executive officers as a group (33 persons)

       31,980,160      3,618,741    35,598,901   

 

(1)   Includes 144,542 shares of common stock that Mr. Thompson has the right to acquire as of February 25, 2010 through his ownership of 4,900 units of Citigroup Inc.’s Tangible Dividend Enhanced Common Stock.

 

(A) The share numbers in these columns have been restated to reflect equitable adjustments made to all Citi options outstanding on August 20, 2002 in respect of the distribution to all stockholders of shares of Travelers Property Casualty Corp. For each option grant, the number of options was increased by a factor of 1.0721990 and the exercise

price was decreased by a factor of .9326627. The expiration and vesting dates of each option did not change.

 

At February 25, 2010, no director, nominee or executive officer owned as much as 1% of Citi’s common stock.


 

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At February 25, 2010, all of the directors, nominees and executive officers as a group beneficially owned approximately .    % of Citi’s common stock.

 

Of the shares shown on the preceding page, all of which are deemed to be beneficially owned under SEC rules, some portion may not be held directly by the director or executive officer. The following table details the various forms in which directors or executive officers indirectly hold shares. Such indirectly-held shares may be shares:

 

 

for which receipt has been deferred under certain deferred compensation plans,

 

 

 

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 stock,

 

 

for which the director or executive officer has direct or indirect voting power but not dispositive power, or

 

 

for which the director or executive officer has direct or indirect voting power but that are subject to restrictions on disposition,

 

as shown in the following table:


 

Director/Officer    Receipt
Deferred
   Owned by or
Tenant in Common
with Family
Member, Trust or
Mutual Fund
    Voting Power,
but not
Dispositive
Power
   Restricted or
Deferred Shares
Subject to
Restriction on
Disposition

C. Michael Armstrong

   199,938    15,150 (1)    —      —  

Alain J.P. Belda

   152,660    —        —      —  

Timothy C. Collins

   59,023    —        —      —  

John C. Gerspach

   —      79      —      886,720

John M. Deutch

   85,048    600      —      —  

Jerry A. Grundhofer

   79,938    24,789      —      —  

John P. Havens

   —      —        —      1,731,979

Robert L. Joss

   59,023    17,000      —      —  

Edward J. Kelly

   —      —        —      2,022,721

Andrew N. Liveris

   78,842    1,200      —      —  

Manuel Medina-Mora

   —      —        —      1,928,591

Anne M. Mulcahy

   95,669    59      —      —  

Michael E. O’Neill

   99,984    —        —      —  

Vikram S. Pandit

   —      —        —      500,000

Richard D. Parsons

   168,940    —        —      —  

Lawrence R. Ricciardi

   78,917    —        —      —  

Judith Rodin

   94,320    366      —      —  

Robert L. Ryan

   80,465    —        —      —  

Anthony M. Santomero

   95,062    —        —      —  

Diana L. Taylor

   59,023    —        —      —  

William S. Thompson, Jr.

   79,938    129,118      —      —  

Alberto J. Verme

   —      900      —      1,445,882

Ernesto Zedillo

   —      —        —      —  

All directors, nominee & executive officers as a group (33 persons)

   1,566,790    1,401,293      —      17,221,902

 

(1)   disclaims beneficial ownership

 

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Owners of More than 5% of Our Common Stock

As of December 31, 2009 (i) the U.S. Treasury continues to hold approximately 7.7 billion shares, or approximately 27%, of Citi’s common stock, (ii) the U.S. Treasury and FDIC continue to hold an aggregate of approximately $5.3 billion of Citi’s trust-preferred securities, and (iii) the U.S. Treasury continues to hold three warrants

exercisable for an aggregate of approximately 465.1 million shares of Citi’s common stock. See —Management’s Discussion and Analysis of Financial Condition and Results of Operations —Executive Summary — Repayment of TARP and Exit of Loss-Sharing Agreement; Common and Preferred Stock Activities in the Form 10-K for 2009.


 

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Proposal 1: Election of Directors

 

The board of directors has nominated all of the current directors for re-election at the 2010 annual meeting except for C. Michael Armstrong, John M. Deutch, and Anne M. Mulcahy who are retiring from the board. Directors are not eligible to stand for re-election after reaching the age of 72. With

respect to Ms. Taylor, Mr. Collins and Dr. Joss, each of whom was appointed to the board in July of 2009, each was recommended to the board by a non-management director and a third-party search firm.


 

LOGO

 

Director Qualifications

The nominees for the board of directors each have the qualifications and experience to focus on the complex issues confronting Citi and the financial industry in the most challenging economic environment since the Great Depression. Citi’s board of directors consists of individuals with the skills, experience and backgrounds necessary to ensure that Citi is taking the right steps to solve problems arising in connection with the current economic environment and the complex financial and regulatory issues that Citi faces.

 

The nominees listed below are leaders in business, the financial community and academia because of their intellectual acumen and analytic skills, strategic vision, their ability to lead and inspire others to work with them, and their 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.

 

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 coming fully prepared to meetings and being willing to spend the time and effort needed to fulfill one’s professional obligations, the ability to maintain a collegial environment, and the experience of having served as a board member of a sophisticated global company.

 

In evaluating the composition of the board, the nomination and governance 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 business within the United States and over 100 countries around the globe. The committee has determined it is critically important to Citi’s proper operation and success that its board of directors has, in addition to the qualities described above, expertise and experience in the following areas:

 

 

International Business: As a company with a broad international reach, Citi’s board values the perspectives of directors with international business or governmental experience. Citi’s presence in markets outside the United States is an important competitive advantage for Citi, because it allows us to serve US and foreign businesses and individual clients whose activities span the globe. Directors with international business experience can use the experience and relationships 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.

 

 

Financial Services Industry: Citi is a global diversified banking company whose businesses provide a broad range of financial services to consumer and corporate customers, making it critically important that its board include members who have deep financial services backgrounds. To deepen the financial services


 

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strength on its board, Citi had announced on January 21, 2009 that it would ask experienced industry leaders with strong, proven financial and banking sector expertise to join its board of directors. We have done so and the nominees include many individuals with extensive financial institution experience.

 

 

Risk Management: 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 and review recommendations by management regarding risk mitigation. Citi’s board must include members with risk expertise to assist Citi in ensuring that it is properly identifying, measuring, monitoring, reporting, analyzing and controlling or mitigating risk.

 

 

Regulatory Compliance: Citi and its subsidiaries are regulated and supervised by numerous regulatory agencies, both domestically and internationally, including the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, state banking and insurance departments, and international financial services authorities. Having directors with experience serving at, or interacting with, regulators, or operating businesses subject to extensive regulation, is important to ensuring Citi’s continued compliance with its many regulatory requirements and ensuring ongoing productive relationships with its regulators.

 

 

Consumer Business: With more than 200 million accounts, Citi provides services to its retail customers in connection with its retail banking, credit card, consumer finance, real estate lending, personal loans, investment services, auto loans, small and middle market commercial banking and other financial services businesses. Citi looks to its board members with extensive

   

consumer experience to assist it in evaluating its business model and strategies for reaching and servicing its retail customers domestically and around the world.

 

 

Corporate Business: 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 derivative services; global transaction services, including treasury and trade solutions and securities and fund services; and an alternative asset management platform. 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.

 

 

Corporate Affairs: Citi’s reputation is a vital asset in building trust with its clients and Citi makes every effort to communicate its corporate values to its shareholders and clients, its achievements in the areas of corporate social responsibility and philanthropy, and its efforts to improve the communities in which we live and work. Members of the board with experience in the areas of corporate affairs, philanthropy, communications, and corporate social responsibility assist management by reviewing Citi’s policies and programs that relate to significant public issues as well as by reviewing Citi’s relationships with external stakeholders and issues that impact Citi’s reputation.

 

 

Financial Reporting: 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 shareholder ratification. The board must include members with direct or supervising experience in the preparation of financial statements, as well as finance and accounting expertise.


 

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Compensation: Citi’s personnel and compensation committee is responsible for determining the compensation of the CEO and approving the compensation structure for executive officers, other members of senior management and certain highly compensated employees. In order to properly carry out its responsibilities with respect to compensation, Citi’s board must include members who have experience evaluating the structure of compensation for senior executives. They must understand the various forms of compensation that can be utilized, the purpose of each type and how various elements of compensation can be used to motivate and reward executives and drive performance while not encouraging undue risk or simply short-term goals.

 

 

Corporate Governance: Citi aspires to the highest standards of corporate governance and ethical conduct: doing what we say, reporting results with accuracy and transparency, and maintaining full 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.

 

 

Legal Matters: In addition to the regulatory supervision described above, Citi is subject to myriad laws and regulations, and is party to many lawsuits and regulatory proceedings. Citi’s board has an important oversight function with respect to compliance with applicable requirements, monitors the progress of legal proceedings and evaluates major settlements. Citi’s board must include members with experience in complying with regulatory requirements as well as understanding complex litigation and litigation strategies.

 

 

Nominee Biographies:

Many of our nominees are either current or former Chief Executive Officers or Chairmen of other large international corporations or have experience operating large, complex academic, governmental or philanthropic institutions or departments. As such, they have a deep understanding of, and extensive experience in, many of the areas that were outlined above as being of critical importance to Citi’s proper operation and success. For the purposes of our analysis, we have determined that nominees who have served as Chief Executive Officer or Chairman 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. Below please find a short biography of each of the nominees highlighting the particular skills, qualification and experience of each nominee that supports the conclusion of the nomination and governance committee that these individuals are uniquely qualified to serve on Citi’s board. The more formal and complete biographies of the nominees can be found starting on page [    ].

 

Alain J.P. Belda

Mr. Belda is an experienced executive and has been nominated to serve on the board because of his extensive experience in the areas of International Business, Financial Reporting, Financial Services, Compensation, Regulatory Compliance, Legal Matters, and Risk Management. Mr. Belda gained extensive experience in international business, regulatory compliance and litigation as the Chair and Chief Executive Officer of, and in other executive positions at, Alcoa Inc., as well as in his previous service as a director of DuPont Automotive Co. and as a director of International Business Machines Corp. As the Chief Executive Officer of Alcoa from 1999-2008, as a managing director of Warburg Pincus, where he heads investment activities in Latin America, and provides strategic counsel across that firm’s portfolio, as a former member of the audit and risk management committee of Citi and as former chair of the consumer subcommittee of Citi’s audit and


 

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risk management committee, Mr. Belda has had extensive experience with, and gained expertise in, finance, financial reporting and risk management. As the former CEO of Alcoa, as a member of IBM’s executive compensation and management resources committee, and as Chair of Citi’s personnel and compensation committee, Mr. Belda has gained extensive experience with executive compensation. Please find his full biography on page [    ].

 

Timothy C. Collins

Mr. Collins is an experienced investor and executive and has been nominated to serve on the board because of his extensive experience in the areas of Financial Services, Corporate Business, Financial Reporting, Risk Management and International Business. Mr. Collins, through his current role as Chief Executive Officer and Senior Managing Director of Ripplewood Holdings L.L.C., an investment firm that invests in a broad array of industries, including financial services, automotive, manufacturing, consumer and business services, and his previously held executive positions with Lazard Frères & Co., and Booz Allen & Hamilton, has had extensive experience in financial markets, private equity, and other financial services and corporate businesses. As the Chief Executive Officer of Ripplewood and through his service as the Chair of the audit committee of Weather Investments S.p.A., Mr. Collins has had extensive experience with the analysis and preparation of financial statements and risk management. Mr. Collins has developed compensation and governance expertise both through his board service, and on the governance and compensation committee of the Commercial International Bank of Egypt. Through his role as a director of RHJ International, S.A., Commercial International Bank of Egypt and Weather Investments S.p.A., Mr. Collins has had significant international business expertise. Please find his full biography on page [    ].

 

Jerry A. Grundhofer

Mr. Grundhofer is a seasoned banker and has been nominated to serve on the board because of his extensive experience in the areas of Financial Services, Corporate and Consumer Business, Risk Management, Financial Reporting, Compensation

and Regulatory Compliance. Through his previous roles as Chairman and Chief Executive Officer of the Board of U.S. Bancorp, President and Chief Executive Officer of Firstar Corporation and its predecessor Star Banc, and Vice Chairman of BankAmerica Corporation (now Bank of America), Mr. Grundhofer has amassed extensive expertise in financial services, corporate and consumer business, regulatory compliance, financial reporting and compensation. As a member of the compensation committee and finance committee at Ecolab Inc., where he is a director, Mr. Grundhofer has developed extensive skills and expertise in compensation and financial matters. As former chair of the Audit and Risk Management Committee and current chair of the Risk Management and Finance Committee of Citi, Mr. Grundhofer has developed extensive skills and expertise in Risk Management and Financial Reporting. Please find his full biography on page [    ].

 

Robert L. Joss

Dr. Joss is an experienced financial services executive and academic expert and has been nominated to serve as a member of the board because of his extensive experience in the areas of International Business, Financial Services, Financial Reporting, Compensation, Corporate and Consumer Business, Risk Management and Corporate Governance. Through his experience as Chief Executive Officer and Managing Director of Westpac Banking Corporation Ltd., one of the largest banking organizations in Australia and New Zealand, his executive positions at Wells Fargo & Company, including Vice Chairman, as well as his 10-year service as Dean and Philip H. Knight Professor of the Graduate School of Business at Stanford University, and previous service as Deputy to the Assistant Secretary for Economic Policy at the U.S. Department of the Treasury, he has gained wide-ranging experience and expertise in the areas of financial services, financial reporting, compensation, corporate and consumer business, risk management and corporate governance. Through his prior service on the boards of directors of Westpac, Shanghai Commercial Bank Ltd., Wells Fargo, where he served as chair of the credit committee


 

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and as member of the audit, compliance, nominating and governance and finance committees, and Sallie Mae, as well as his current service on the board of Bechtel Group, Inc., Dr. Joss has deepened his understanding of international business, financial services, compensation, financial reporting, corporate governance and risk management. Please find his full biography on page [    ].

 

Andrew N. Liveris

Mr. Liveris is an experienced international business executive and has been nominated to serve on the board because of his extensive skills and experience in the areas of International Business, Financial Reporting, Regulatory Compliance, Corporate Affairs, Legal Matters, and Risk Management. As the Chairman and Chief Executive Officer of The Dow Chemical Company where he joined in 1976, has served in senior executive positions since 1999, was named Chief Executive Officer in 2004 and has been Chairman and Chief Executive Officer since 2006, Mr. Liveris has had extensive experience and developed considerable skills in the areas of international business, including Asia, financial reporting, regulatory compliance, risk management and legal matters. In addition, as a former member of Citi’s audit and risk management committee and as the former chair of the consumer subcommittee of Citi’s audit and risk management committee, Mr. Liveris has had additional financial reporting and risk management experience. Mr. Liveris also has extensive experience in the area of corporate affairs both through his leadership of Dow, his service on the Dow executive committee and environment, health & safety committee, and his service as a Trustee of the Herbert H. and Grace A. Dow Foundation and of Tufts University, as a member of the CEO Board of the United States Climate Action Partnership, and as the Chairman of the U.S.-China Business Council. Please find his full biography on page [    ].

 

Michael E. O’Neill

Mr. O’Neill is an experienced financial services executive and has been nominated to serve on the board because of his extensive experience in the

areas of Financial Services, International Business, Corporate and Consumer Business, Regulatory Compliance, Risk Management and Financial Reporting. As the former Chairman and Chief Executive Officer of the Bank of Hawaii, Vice Chairman and Chief Financial Officer at BankAmerica Corporation (now Bank of America) and Chief Financial Officer of Continental Bank, Mr. O’Neill has had extensive experience and developed his expertise in the areas of financial services, international, corporate and consumer business, regulatory compliance, risk management and financial reporting. Under his leadership, Bank of Hawaii executed a successful three-year strategic turnaround and risk management procedures were overhauled. Furthering his regulatory compliance expertise, while at the Bank of Hawaii, Mr. O’Neill served as district member of the Federal Reserve Advisory Council. During his tenure at Continental Bank and while he was an independent financial consultant Mr. O’Neill gained extensive international financial services experience. Please find his full biography on page [    ].

 

Vikram S. Pandit

Mr. Pandit is an experienced financial services executive and finance professional and has been nominated to serve on the board because of his extensive experience and expertise in the areas of Financial Services, Risk Management, Financial Reporting, International Business, Corporate and Consumer Business, Regulatory Compliance and Corporate Affairs. In his role as Chief Executive Officer of Citigroup Inc., and his prior experience as Chairman and Chief Executive Officer of Citi’s Institutional Clients Group, Chairman and Chief Executive Officer of Citi Alternative Investments, a founding member of Old Lane Partners, LP, and President and Chief Operating Officer of the Institutional Securities and Investment Banking at Morgan Stanley, Mr. Pandit has gained extensive financial services, financial reporting, corporate business and risk management experience. The re-structuring of the independent Risk Management function at Citi was a major focus for Mr. Pandit when he was named CEO. As the CEO of Citi, Mr. Pandit has had extensive experience with


 

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respect to regulatory compliance issues as well as consumer and corporate business. Please find his full biography on page [    ].

 

Richard D. Parsons

Mr. Parsons is an experienced executive with both financial services and non-financial services experience and has been nominated to serve on the board because of his extensive experience and skills in the areas of Financial Services, Regulatory Compliance, Consumer Business, International Business, Compensation, Legal Matters, Financial Reporting, Risk Management, and Corporate Affairs. Through current role as Chairman of Citigroup Inc. and his prior experience as Chairman and Chief Executive Officer of Dime Savings Bank of New York from 1991 to 1995 and its President and Chief Operating Officer from 1988 to 1990, Mr. Parsons developed extensive skills and had had wide-ranging experience in the areas of financial services, regulatory compliance, consumer business and corporate affairs. As the Chairman of TimeWarner from 2003 to 2008, its Chief Executive Officer from 2002 to 2007, its Co-Chief Operating Officer from 2001 to 2002, its President from 1995 to 2000, and a Director since 1991, Mr. Parsons has had extensive experience in international and consumer business, financial reporting, compensation, legal matters and corporate affairs. Mr. Parsons has had extensive legal, regulatory compliance and corporate affairs experience in roles as Managing Partner (as well as a Partner and an Associate) at the law firm of Patterson, Belknap, Webb & Tyler, as General Counsel and Associate Director, Domestic Council, at the White House from 1975 to 1977, as Deputy Counsel to the Vice President at the Office of the Vice President of the United States in 1975, and as Assistant and First Assistant Counsel to the Governor of the State of New York from 1971 to 1974. In addition, through his service on Citi’s audit and risk management, personnel and compensation and nomination and governance committees, as well as the compensation and nominating and board affairs committees at The Estee Lauder Companies Inc., where he is also a director, he has had extensive corporate governance, financial reporting, risk management,

and compensation experience. Please find his full biography on page [    ].

 

Lawrence R. Ricciardi

Mr. Ricciardi is an experienced executive and has been nominated to serve as a member of the board because of his extensive experience in the areas of Financial Services, Risk Management, Financial Reporting, International Business, Consumer Business, Corporate Governance and Legal Matters. Mr. Ricciardi’s experience as an executive includes senior leadership positions as well as senior legal and finance positions at international consumer products companies giving him particular insight into those areas where law and business interact. From his positions as Chief Financial Officer and Senior Vice President and General Counsel at IBM, and Executive Vice President and General Counsel of RJR Nabisco, as well as his experience as the chairman of the audit committees of Citi, Royal Dutch Shell and Reader’s Digest, Mr. Ricciardi had had extensive experience in financial reporting, risk management and legal matters. In his roles as Senior Vice President and Advisor to the Chairman of IBM Corporation, and as President, Co-Chairman and Chief Executive Officer of RJR Nabisco, Inc., Mr. Ricciardi has had significant international and consumer business experience. As the lead independent director of Reader’s Digest and through his leadership roles at IBM and RJR Nabisco, he gained extensive corporate governance experience. While at IBM, he played a key role on the IBM management team that transformed and reinvigorated the corporation into the competitive market leader that it is today. Please find his full biography on page [    ].

 

Judith Rodin

Dr. Rodin is an experienced leader in the not-for-profit sector and has been nominated to serve on the board because of her skills and experience in the areas of Corporate Affairs, Corporate Governance, Compensation, Financial Reporting, Risk Management and Legal Matters. Through her current role as the President of the Rockefeller Foundation, and her previous positions as President of the University of Pennsylvania


 

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from 1994 until her retirement in 2004, and as Provost of Yale University from 1992 to 1994, together with her previous service on Citi’s audit and risk management committee and her service as a member of the Comcast audit committee, Dr. Rodin has had extensive experience in the areas of corporate affairs, financial reporting, risk management and legal matters. As the President of the University of Pennsylvania, which was the largest private employer in Philadelphia, as a member of the compensation committees of both AMR Corporation and Comcast Corporation and as a director of Comcast Corporation, AMR Corporation and Aetna Inc., Dr. Rodin has had extensive experience with compensation matters. Her service as a Director of the World Trade Memorial Foundation, and of Carnegie Hall, as an honorary director of the Brookings Institution, a member of the Council on Foreign Relations, a member of the Institute of Medicine and a member of the New York City Commission for Economic Opportunity have deepened her understanding of corporate affairs issues. Please find her full biography on page [    ].

 

Robert L. Ryan

Mr. Ryan is an experienced finance executive and has been nominated to serve on the board because of his extensive skills and experience in the areas of Financial Reporting, Risk Management and Corporate Affairs. Mr. Ryan has developed extensive expertise in financial reporting and risk management through his roles as Senior Vice President and Chief Financial Officer of Medtronic from 1993 to 2005, Vice President, Finance and Chief Financial Officer of Union Texas Petroleum Corporation from 1984 to 1993, its Controller from 1983 to 1984, and its Treasurer from 1982 to 1983, as well as through his service on Citi’s audit committee, his prior service on Citi’s audit and risk management committee, and his service on the audit committees of General Mills and Hewlett-Packard. Through his service on the boards of Citi, Black & Decker, General Mills, and Hewlett-Packard and his roles as a Trustee of Cornell University and a member of the Visiting Committee of Harvard Business School, Mr. Ryan

has gained valuable corporate affairs expertise and experience. Please find his full biography on page [    ].

 

Anthony M. Santomero

Dr. Santomero is a seasoned economist and economic policy adviser and has been nominated to serve on the board of directors because of his extensive experience in the areas of Risk Management, Regulatory Compliance, and Financial Reporting. Among many other distinguished positions at which he had wide-ranging risk and regulatory experience, Dr. Santomero was most recently a Senior Advisor at McKinsey & Company, served as the President of the Federal Reserve Bank of Philadelphia from 2000-2006, and was Chair of the System’s Committee on Credit and Risk Management, and was a member of the Financial Services Policy Committee and the Payments System Policy Advisory Committee. As the Richard K. Mellon Professor of Finance at the Wharton School of the University of Pennsylvania and Deputy Dean of the School, Dr. Santomero’s particular focus was on issues related to managing risk at the firm level as well as ways to improve productivity and performance, while working closely with industry executives and practitioners to ensure that the research was informed by the operating realities and competitive demands facing industry participants as they pursue competitive excellence. Through his service on Citi’s risk management and finance and audit committees as well as the investment and risk management committee of RennaissanceRe Holdings, he has deepened his risk management experience. Please find his full biography on page [    ].

 

Diana L. Taylor

Ms. Taylor is an experienced financial services executive and regulator and has been nominated to serve on the board of directors because of her wide-ranging experience in the areas of Financial Services, Corporate Business, Regulatory Compliance, Risk Management, Corporate Affairs, Compensation, Corporate Governance, Financial Reporting and Legal Matters. Ms. Taylor has extensive bank regulatory and risk management


 

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experience having served as the Superintendent of Banks for the New York State Banking Department. Her financial services and corporate business experience includes in-depth private equity, fund management and investment banking experience as a Managing Director of Wolfensohn Fund Management, L.P., a fund manager, Founding Partner and President of M.R. Beal & Company, a full service investment banking firm, and through various executive positions with Donaldson, Lufkin & Jenrette, Lehman Brothers Kuhn Loeb, Inc., and Smith Barney, Harris Upham & Co. Earlier in her career, Ms. Taylor served as Chief Financial Officer of the Long Island Power Authority. In addition, through her work on the Sotheby’s compensation committee, the Brookfield Properties governance committee, on the compensation committee of, and as chair of the audit committee of, the Dartmouth Board of Trustees, and as chair of Accion International, Ms. Taylor has gained additional experience in corporate affairs, corporate governance, financial reporting, compensation and legal matters. Please find her full biography on page [    ].

 

William S. Thompson, Jr.

Mr. Thomson is an experienced financial services executive and has been nominated to serve on the board of directors because of his extensive experience in the areas of Financial Services, Corporate Governance, Financial Reporting, Compensation, Legal Matters, International Business, Corporate and Consumer Business and Risk Management. As Chief Executive Officer of PIMCO from 1993 to 2009, Chairman of Salomon Brothers Asia Ltd. in Tokyo from 1991 to 1993, and head of Corporate Finance, Western Region and Head of Institutional Sales, Western Region, at Salomon Brothers, Mr. Thompson gained extensive financial services, and corporate, consumer and international business, skills and experience. As a Chief Executive Officer, and through his service on the compensation and personnel committee of Pacific Life Corporation, on whose board he serves, Mr. Thompson developed extensive skills and experience in corporate governance, financial reporting, compensation and legal matters. Please find his full biography on page [    ].

 

Ernesto Zedillo

Mr. Zedillo is the former President of Mexico, a seasoned economist and academic expert and has been nominated to serve on the board of directors because of his extensive experience in the areas of International Business, Financial Services, Regulatory Compliance, Corporate Affairs, Financial Reporting, Risk Management and Corporate Governance. Through his extensive governmental experience, including his service from 1978 to 1987 at the Central Bank of Mexico, as undersecretary of budget for the Mexican government from 1987 to 1988, as secretary of economic programming and the budget from 1988 to 1992 and as President of Mexico from 1994 to 2000, as well as his academic experience, including his roles as the director of the Center for the Study of Globalization at Yale and as Professor in the Field of International Economics and Politics and Professor of International and Area Studies at Yale, he has had extensive experience in the areas of international business, financial services, regulatory compliance and risk management. As President of Mexico, among other achievements, he was credited with strengthening democratic institutions in the country, promoting an economic recovery and expanding Mexico’s ties to countries around the world. His roles as an influential spokesperson on issues of international trade, finance and political economy, as well as on the alleviation of world poverty; as editor of two books, Global Warming: Looking Beyond Kyoto and The Future of Globalization: Explorations in Light of Recent Turbulence; as chair of the Global Development Network, chair of the High Level Commission on Modernization of World Bank Group Governance; on the International Commission on Nuclear Non-proliferation and Disarmament, on the Global Development Program Advisory Panel of the Bill and Melinda Gates Foundation, on the Foundation Board of the World Economic Forum, on the Trilateral Commission, on the International Advisory Board of the Council on Foreign Relations, on the G30, on the board of directors of the Institute for International Economics and of the Inter-American Dialogue, and the board of trustees of the International Crisis Group; on the international


 

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advisory boards of ACE Limited, Rolls-Royce, BP and JPMorgan-Chase; as a senior advisor of the Credit Suisse Research Institute, and on the international advisory boards of former Daimler-Chrysler, the Coca-Cola Company, Magna International and Nihon Global Partners, have given him extensive international business, financial services and corporate affairs experience. As a member of the boards of Alcoa Inc., where he is on the audit committee, governance and nominating committee and public issues committee, and Procter & Gamble Company,

where he is chair of the governance and public responsibility committee, a member of the innovation and technology committee and a past member of that board’s finance committee, and as a past director of the Union Pacific Corporation, where he served on the audit and finance committees, and as a director of EDS, where he served on the governance committee, Mr. Zedillo has gained experience in financial reporting, risk management, corporate governance and corporate affairs. Please find his full biography on page [    ].


 

 

LOGO

 

The Nominees

The following tables give information — provided by the nominees — about their principal occupation, business experience, and other matters.

 

 

The board of directors recommends that you vote for each of

the following nominees.

 

Name and Age at

Record Date

  

Position, Principal Occupation, Business Experience

and Directorships

Alain J.P. Belda

66

LOGO

  

Chairman

Alcoa Inc.

•Managing Director, Warburg Pincus —August 2009 to present

•Chairman, Alcoa Inc. —2001 to present

•Chief Executive Officer —1999 to 2008

•Director* —1999 to present

•President —1997 to 2001

•Chief Operating Officer —1997 to 1999

•Vice Chairman —1995 to 1997

•Executive Vice President —1994 to 1995

•President, Alcoa (Latin America) —1991 to 1994

•Vice President —1982 to 1991

•President, Alcoa Aluminio SA (Brazil) —1979 to 1994

•Joined Alcoa — 1969

•Director of Citigroup (or predecessor) since 1997

•Other Directorships: IBM Corporation and Renault

•Previous Directorships within the last five years: E.I. du Pont de Nemours and Company

•Other Activities: Brazil Project Advisory Board (Co-Chair) at The Woodrow Wilson International Center for Scholars, The Business Council (member), Business Roundtable (member), Committee to Encourage Corporate Philanthropy (member), World Business Council for Sustainable Development (member), and World Economic Forum — International Business Council (member)

*   Mr. Belda will retire from Alcoa Inc.’s Board of Directors on April 23, 2010.

 

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Name and Age at

Record Date

  

Position, Principal Occupation, Business Experience

and Directorships

Timothy C. Collins

53

LOGO

  

Chief Executive Officer and Senior Managing Director

Ripplewood Holdings LLC

•    CEO and Senior Managing Director, Ripplewood Holdings LLC — 1995 to present

•    Chairman of the Investment & Strategy Committee of RHJ International S.A., — 2009 to present

•    Co-CEO & Senior Managing Director, RHJ International S.A. — 2007 to 2009

•    CEO & Senior Managing Director, RHJ International S.A. — 2005 to 2007

•    Managing Director, Onex Corporation — 1990 to 1995

•    Vice President, Lazard Freres & Co., LLC — 1984 to 1990

•    Associate, Booz, Allen & Hamilton, Inc. — 1981 to 1984

•    Financial Planning Manager, Cummins Engine Company — 1974 to 1975 and 1978 to 1980

•    Director of Citigroup since 2009

•    Director of Citibank, N.A. – 2009 to present

•    Other Directorships: RHJ International S.A., Weather Investments S.p.A., and AEG Power Solutions

•    Previous Directorships within the last five years: Readers Digest Association, RSC Holdings Inc., WRC Media Inc., Asbury Automotive Group Inc., Shinsei Bank, Ltd. and Commercial International Bank of Egypt

•    Other Activities: Trilateral Commission (member), Yale Divinity School Advisory Board (member), Yale School of Organization and Management Board of Advisors (member), Overseers of the Weill Cornell Medical College (member), Council on Foreign Relations (member), and Tony Blair Faith Foundation (member)

Jerry A. Grundhofer

65

LOGO

  

Chairman Emeritus

U.S. Bancorp

•    Chairman Emeritus, U.S. Bancorp — 2007 to present

•    Chairman — 2002 to 2007

•    Chief Executive Officer — 2001 to 2006

•    President — 2001 to 2004

•    Director — 1993 to 2007

•    Chairman, President and Chief Executive Officer, Firstar Corporation and Star Banc Corporation (predecessors to U.S. Bancorp) — 1993 to 2001

•    Director of Citigroup since 2009

•    Director of Citibank, N.A. — 2009 to present

•    Other Directorships: Ecolab Inc.

•    Previous Directorships within the last five years: The Midland Company, Inc. and Lehman Brothers Inc.

•    Other Activities: Danny Thompson Charitable Foundation (Director)

 

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Name and Age at

Record Date

  

Position, Principal Occupation, Business Experience

and Directorships

Robert L. Joss

68

LOGO

  

Professor of Finance and Former Dean

Stanford University Graduate School of Business

• Professor of Finance — 2009 to present

• Dean of Stanford University Graduate School of Business — 1999 to 2009

• CEO and Managing Director, Westpac Banking Corporation — 1993 to 1999

• Vice Chairman, Wells Fargo Bank — 1986 to 1993

• Executive Vice President — 1981 to 1986

• Senior Vice President — 1975 to 1981

• Vice President — 1972 to 1975

• Assistant Vice President — 1971 to 1972

• Deputy to the Assistant Secretary for Economic Policy, U.S. Treasury Department — 1969 to 1971

• White House Fellow — 1968 to 1969

• Director of Citigroup since 2009

• Other Directorships: Bechtel Group, Inc., Makena Capital Management, and Macquarie DDR Management Ltd.

• Previous Directorships within the last five years: Agilent Technologies, Inc., Epiphany, Inc., and Wells Fargo & Co.

Andrew N. Liveris

55

LOGO

  

Chairman and Chief Executive Officer

The Dow Chemical Company

• Chairman, Chief Executive Officer and President, The Dow Chemical Company — 2006 to present

• President and Chief Executive Officer — 2004 to 2006

• President and Chief Operating Officer — 2003 to 2004

• Director — 2004 to present

• Joined The Dow Chemical Company — 1976

• Director of Citigroup since 2005

• Director of Citibank, N.A. — 2009 to present

• Other Directorships: — IBM Corporation

• Previous Directorships within the last five years: N/A

• Other Activities: Herbert H. and Grace A. Dow Foundation (Trustee), Tufts University (Trustee), United States Climate Action Partnership (member of CEO Board), The American Australian Association (patron), The Business Council (member), Business Roundtable (Vice Chair), The Institute of Chemical Engineers (Fellow), The Société de Chimie Industrielle (Chairman), and The U.S. - China Business Council (Chairman)

 

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Name and Age at

Record Date

  

Position, Principal Occupation, Business Experience

and Directorships

Michael E. O’Neill

63

LOGO

  

Former Chairman and CEO

Bank of Hawaii Corporation

•    Chairman, Chief Executive Officer and Director, Bank of Hawaii Corporation — 2000 to 2004

•    Elected Chief Executive Officer, Barclay’s PLC — 1999

•    Vice Chairman and Chief Financial Officer, Bank of America — 1995 to 1998

•    Chief Financial Officer, Continental Bank — 1993 to 1995

•    Director of Citigroup since 2009

•    Director of Citibank, N.A. — 2009 to present

•    Other Directorships: FT Ventures (Advisory Board)

•    Previous Directorships within the last five years: Bank of Hawaii Corporation

•    Other Activities: Hawaii Pacific University (Trustee) and Honolulu Academy of Arts (Trustee)

Vikram S. Pandit

53

LOGO

  

Chief Executive Officer

Citigroup Inc.

•    Chief Executive Officer, Citigroup Inc. — December 2007 to present

•    Chairman and Chief Executive Officer, Institutional Clients Group — October 2007 to December 2007

•    Chairman and Chief Executive Officer, Citi Alternative Investments — April 2007 to October 2007

•    Founding member and Chairman of members committee, Old Lane Partners, LP — 2005 to April 2007

•    President and Chief Operating Officer, Institutional Securities and Investment Banking, Morgan Stanley — 2000 to 2005

•    Director of Citigroup since 2007

•    Previous Directorships within the last five years: N/A

•    Other Activities: Columbia University (Trustee), Columbia University Graduate School of Business (member of Board of Overseers), Indian School of Business (member of Governing Board), New York City Partnership (Director) and Financial Services Forum (member)

 

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Name and Age at

Record Date

  

Position, Principal Occupation, Business Experience

and Directorships

Richard D. Parsons

61

LOGO

  

Chairman

Citigroup Inc.

• Chairman, Citigroup Inc. — 2009 to present

• Special Advisor, Providence Equity Partners Inc. — 2009 to present

• Chairman, Time Warner Inc. — 2003 to 2008

• Chief Executive Officer — 2002 to 2007

• Co-Chief Operating Officer — 2001 to 2002

• President — 1995 to 2000

• Director, Time Warner Inc. (or predecessor) — 1991 to 2008

• Chairman and Chief Executive Officer, Dime Savings Bank of New York — 1991 to 1995

• President and Chief Operating Officer — 1988 to 1990

• Associate, Partner and Managing Partner, Patterson, Belknap, Webb & Tyler — 1977 to 1988

• General Counsel and Associate Director, Domestic Council, White House — 1975 to 1977

• Deputy Counsel to the Vice President, Office of the Vice President of the United States — 1975

• Assistant and First Assistant Counsel to the Governor, State of New York — 1971 to 1974

• Director of Citigroup (or predecessor) since 1996

• Citibank, N.A. director — 1996 to 1998

• Other Directorships: The Estee Lauder Companies Inc.

• Previous Directorships within the last five years: Time Warner Inc.

• Other Activities: Apollo Theatre Foundation (Chairman), Museum of Modern Art (Trustee), Howard University (Trustee), American Museum of Natural History (Trustee), New York City Partnership (Director), Smithsonian Institute of African American History and Culture (Co-Chairman of the Advisory Board), Rockefeller Foundation (Trustee), and Jazz Foundation of America (Chairman of the Board)

 

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Name and Age at

Record Date

  

Position, Principal Occupation, Business Experience

and Directorships

Lawrence Ricciardi

69

LOGO

  

Senior Advisor, IBM Corporation, Jones Day and Lazard Frères & Co.

• Senior Advisor, IBM Corporation, Jones Day, Lazard Frères & Co. — 2003 to present

• Senior Vice President and Advisor to Chairman, IBM — 2002

• Senior Vice President and General Counsel, IBM — 1995 to 2001

• Chief Financial Officer, IBM — 1997 to 1998

• President, RJR Nabisco, Inc. — 1993 to 1995

• Co-Chairman and Chief Executive Officer, RJR Nabisco, Inc. — 1993

• Executive Vice President and General Counsel, RJR Nabisco, Inc. — 1989 to 1995

• Executive Vice President and General Counsel, American Express Travel Related Services — 1983 to 1989

• Joined American Express — 1973

• Director of Citigroup — 2008 to present

• Director of Citibank, N.A. — 2009 to present

• Other Directorships: Royal Dutch Shell plc

• Previous Directorships within the last five years: Reader’s Digest Association and Royal Dutch Petroleum

• Other Activities: The Andrew W. Mellon Foundation (Trustee), National Humanities Center (Trustee), and The Morgan Library & Museum (Trustee)

Dr. Judith Rodin

65

LOGO

  

President

Rockefeller Foundation

• President, Rockefeller Foundation — 2005 to present

• President Emerita, University of Pennsylvania — 2004 to present

• President, University of Pennsylvania — 1994 to 2004

• Provost, Yale University — 1992 to 1994

• Director of Citigroup since 2004

• Other Directorships: Comcast Corporation and AMR Corporation

• Previous Directorships within the last five years: Aetna Inc.

• Other Activities: World Trade Memorial Foundation (Director), Carnegie Hall (Director), Brookings Institution (Honorary Director), White House Project (member), Council on Foreign Relations (member), Institute of Medicine (member), and New York City Commission for Economic Opportunity (member)

 

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Name and Age at

Record Date

  

Position, Principal Occupation, Business Experience

and Directorships

Robert L. Ryan

66

LOGO

  

Chief Financial Officer, Retired

Medtronic Inc.

•Senior Vice President and Chief Financial Officer, Medtronic Inc. — 1993 to 2005

•Vice President, Finance and Chief Financial Officer, Union Texas Petroleum Corporation — 1984 to 1993

•Controller — 1983 to 1984

•Treasurer — 1982 to 1983

•Joined Union Texas Petroleum Corporation — 1982

•Vice President, Citibank, N.A. — 1975 to 1982

•Management Consultant, McKinsey & Co. — 1970 to 1975

•Director of Citigroup since 2007

•Director of Citibank, N.A. — 2009 to present

•Other Directorships: Black & Decker, General Mills and Hewlett-Packard

•Previous Directorships within the last five years: UnitedHealth Group

•Other Activities: Cornell University (Trustee) and Harvard Business School (member of Visiting Committee)

Anthony M. Santomero

63

LOGO

  

Former President

Federal Reserve Bank of Philadelphia

•Senior Advisor, McKinsey & Company — 2006 to 2008

•President, Federal Reserve Bank of Philadelphia — 2000 to 2006

•Richard K. Mellon Professor, Finance, The Wharton School at the University of Pennsylvania — 1984 to 2002

•Director of Citigroup since 2009

•Director of Citibank, N.A. — 2009 to present

•Other Directorships: RenaissanceRe Holdings, Ltd., Penn Mutual Life Insurance Company and Columbia Funds

•Previous Directorships within the last five years: N/A

•Other Activities: Drexel University (Trustee), Drexel University College of Medicine (Vice Chair and Trustee) and Ben Franklin Technology Partners of Southeast Pennsylvania (Director)

 

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Name and Age at

Record Date

  

Position, Principal Occupation, Business Experience

and Directorships

Diana L. Taylor

55

LOGO

  

Managing Director

Wolfensohn Fund Management, L.P.

•Managing Director, Wolfensohn Fund Management, L.P. — 2007 to present

•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

•Senior Vice President, Donaldson Lufkin & Jenrette — 1984 to 1988

•Vice President, Lehman Brothers Kuhn Loeb — 1982 to 1984

•Associate, Smith Barney Harris Upham — 1980 to 1982

•Director of Citigroup since 2009

•Other Directorships: Brookfield Properties and Sotheby’s

•Previous Directorships within the last five years: Allianz Global Investors

•Other Activities: Accion International (Chair), AMFAR (Secretary), Columbia Business School (Board of Overseers), Dartmouth College (Trustee), Hudson River Park Trust (Chair), International Women’s Health Coalition (Treasurer), Literacy Partners (member), Mailman School of Public Health (Board of Overseers), New York Women’s Foundation (Vice Chair), The After School Corporation (member), and YMCA of Greater New York (member)

William S. Thompson, Jr.

64

LOGO

  

Chief Executive Officer, Retired

Pacific Investment Management Company (PIMCO)

•Chief Executive Officer, PIMCO — 1993 to 2009

•Salomon Brothers Inc. — 1975 to 1993

•Chairman, Salomon Brothers Asia Ltd — 1991 to 1993

•Head of Corporate Finance, Western Region — 1988 to 1991

•Managing Director and Head of Institutional Sales, Western Region — 1981-1988

•Joined Salomon Brothers — 1975

•Other Directorships: Pacific Life Corporation

•Previous Directorships within the last five years: N/A

•Other Activities: Pacific Symphony Orchestra (Director), Thompson Foundation for Autism (Chair), Thompson Family Foundation (President) and University of Missouri (President’s Financial Advisory Council)

 

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Name and Age at

Record Date

  

Position, Principal Occupation, Business Experience

and Directorships

Ernesto Zedillo

58

LOGO

  

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 — 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 Mexico — Economist, Deputy Manager of Economic Research, Director General of FICORCA, Deputy Director — 1978 to 1987

•   Other Directorships: Alcoa Inc. and Procter & Gamble Company

•   Previous Directorships within the last five years: Electronic Data Systems Corporation and Union Pacific Corporation

•   Other Activities: Member of International Advisory Board of ACE Limited, Rolls-Royce, BP and JPMorgan-Chase. Advisor to the Credit Suisse Research Institute; Foundation Board of the World Economic Forum, the Trilateral Commission, the Global Development Network (Chairman), and Council on Foreign Relations (International Advisory Board)

 

The one-year term of all of Citi’s directors expire at the annual meeting.

 

Meetings of the Board of Directors and Committees

The board of directors met 30 times in 2009. During 2009, the audit and risk management committee met 11 times, the personnel and compensation committee met 17 times and the nomination and governance committee met 11 times.

 

Each director attended at least 75 percent of the total number of meetings of the board of directors and board committees of which he or she was a member in 2009.

 

Meetings of Non-Management Directors

Citi’s non-management directors meet in executive session without any management directors in attendance each time the full board convenes for a regularly scheduled meeting, which is usually 7 times each year, and, if the board convenes a special meeting, the non-management directors ordinarily meet in executive session. Richard Parsons, as chairman, presided at each executive session of the non-management directors.

 

Board Leadership Structure

Citi currently has an independent chairman separate from the CEO. The board believes it is important to maintain flexibility in its board leadership structure and has had in place different leadership structures over the past few years, 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 chairman, the board shall elect a lead independent director, having similar duties to an independent chairman, including leading the executive sessions of the non-management directors at board meetings. Citi’s chairman provides independent leadership of the board. Having an independent chairman or lead director enables non-management directors to raise issues and concerns for board consideration without immediately involving management. The chairman 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


 

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most appropriate structure at this time, while ensuring that, at all times, there will be an independent director in a board leadership position.

 

Board’s Role in Risk Oversight

The board oversees Citi’s global risk management framework. 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. Global Risk Management, led by the chief risk officer, is a company-wide function that is responsible for an integrated effort to identify, assess and manage 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. In 2010, the board, acting upon the recommendation of the nomination and governance committee, reorganized the audit and risk management committee into two separate committees: the audit committee, and a separate risk management and finance committee. The risk management and finance 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. The committee’s responsibilities include reviewing risk management and compliance policies and programs for, and reports on, Citi and its subsidiaries; approving and adjusting risk limits subject to ratification by the board; and consulting with management on the effectiveness of risk identification, measurement, and monitoring processes, and the adequacy of staffing and action plans, as needed. In addition, the public affairs committee reviews reputational issues and the personnel and compensation committee reviews compensation programs to ensure that they do not, among other things, encourage unnecessary or excessive risk-taking.

 

Committees of the Board of Directors

The standing committees of the board of directors are:

 

The audit committee, which assists the board in fulfilling its oversight responsibility relating to (i) the integrity of Citi’s consolidated financial statements and financial reporting process and Citi’s systems of internal accounting and financial controls; (ii) the performance of the internal audit function—Audit and Risk Review; (iii) the annual independent integrated audit of Citi’s consolidated financial statements and internal control over financial reporting, the engagement of the independent registered public accounting firm and the evaluation of the Independent Auditors’ qualifications, independence and performance; (iv) policy standards and guidelines for risk assessment and risk management; (v) the compliance by Citi with legal and regulatory requirements, including Citi’s disclosure controls and procedures; and (vi) the fulfillment of the other responsibilities set out in its charter, as adopted by the board. 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 Messrs. Collins, Ricciardi, Ryan and Santomero qualifies as an “audit committee financial expert” as defined by the SEC and, in addition to being independent according to the board’s independence standards as set out in its Corporate Governance Guidelines, is independent within the meaning of applicable SEC rules, the corporate governance rules of the NYSE, and the FDIC guidelines.

 

The audit committee charter, as adopted by the board, is available in the “Corporate Governance” section of Citi’s website: www.citigroup.com.

 

The Citi Holdings oversight committee, which is responsible for overseeing the management of the company’s Citi Holdings business segment, which consists of Brokerage and Asset Management, Local Consumer Lending and the Special Asset Pool. The committee monitors management’s strategy for the timely and economically efficient


 

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disposition or optimization of Citi Holdings’ assets and businesses, and monitors management’s execution of that strategy through appropriate milestones and metrics. Periodically, the committee will review and discuss with management the company’s risk exposures with respect to Citi Holdings’ assets and the steps management has taken to monitor and control such exposures.

 

The Citi Holdings oversight committee charter, as adopted by the board, is available in the “Corporate Governance” section of Citi’s website: www.citigroup.com.

 

The nomination and governance committee, which is responsible for identifying individuals qualified to become board members and recommending to the board the director nominees for the next annual meeting of stockholders. It leads the board in its annual review of the board’s performance and makes recommendations as to the composition of the committees for appointment by the board. The committee takes a leadership role in shaping corporate governance policies and practices, including recommending to the board the Corporate Governance Guidelines and monitoring Citi’s compliance with these policies and the Guidelines. The committee is responsible for reviewing and approving all related party transactions involving directors or an immediate family member of a director and any related party transaction involving an executive officer or immediate family member of an executive officer, if the transaction is valued at $50 million or more. See Certain Transactions and Relationships, Compensation Committee Interlocks and Insider Participation on page         of this proxy statement for a complete description of the Policy on Related Party Transactions. The committee, as part of its 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, Citi’s Code of Conduct, the Code of Ethics for Financial Professionals and other internal policies to monitor that the principles contained in the Codes are being incorporated into Citi’s culture and business

practices. The nomination and governance committee may also exercise all powers of the executive committee of the board of directors between meetings of the board.

 

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/or from recruiting firms. To develop internal candidates, Citi engages in 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, accomplishments and goals. This review is conducted at a regularly scheduled board meeting on an annual basis. On an informal basis, members of senior management are periodically asked to make presentations to the board at board meetings and at the board strategy sessions. These presentations are made by senior managers at the various business units as well as those who serve in corporate functions. The purpose of the formal review and informal interaction is to ensure that board members are familiar with the talent pool inside 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.

 

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 and governance 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 IRC.

 

The nomination and governance committee charter, as adopted by the board, is available in the “Corporate Governance” section of Citi’s website: www.citigroup.com.


 

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The personnel and compensation committee, which is responsible for determining the compensation for the CEO, and approving the compensation structure for senior management, including the management executive committee, members of the senior leadership committee, the most senior managers of corporate staff, and other highly paid professionals in accordance with guidelines established by the committee from time to time. The committee annually reviews and discusses the Compensation Discussion and Analysis (CD&A) with management. The committee has also produced the Personnel and Compensation Committee Report that is included in this proxy statement (on page         below).

 

The committee regularly reviews Citi’s management resources, succession planning and development activities, as well as the performance of senior management. The committee is also charged with monitoring Citi’s performance toward meeting its goals on employee diversity.

 

The committee is responsible for evaluating the performance of, and determining the compensation for, the CEO and approving the compensation for the management executive committee. The committee also approves the compensation structure for senior management, including members of the senior leadership committee, the most senior managers of corporate staff and other highly paid professionals, in accordance with guidelines established by the committee from time to time. The committee regularly reviews the design and structure of Citi’s compensation programs to ensure that management’s interests are aligned with stockholders and that the compensation programs are aligned with Citi’s strategic priorities. See the CD&A on page         of this proxy statement.

 

In order to ensure uninterrupted operation of Citi in the event of the unplanned departure or unavailability of Citi’s CEO, Citi’s personnel and compensation committee evaluates a number of individuals who could be asked to assume the CEO’s duties in the event of an unexpected vacancy. The committee then discusses the list with the

board which then formalizes its choices of one or more of such individuals. This process is conducted at a regularly scheduled board meeting on an annual basis.

 

The committee also has the authority to retain and/or engage special consultants or experts to advise the committee, as the committee may deem appropriate or necessary in its sole discretion, and receives funding from Citi to engage such advisors. The committee has retained Independent Compensation Committee Adviser, LLC (ICCA) to provide the committee with advice on Citi’s compensation programs for senior management. ICCA reports solely to the committee and the committee has sole authority to retain, terminate, and approve the fees of ICCA. ICCA does no other work for Citi. The amount the personnel and compensation committee approved for payment to ICCA in 2009 is disclosed in the CD&A on page         of this proxy statement. For 2009, no other compensation consultant has been engaged by the personnel and compensation committee.

 

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 IRC.

 

The personnel and compensation committee charter is available in the “Corporate Governance” section of Citi’s website: www.citigroup.com.

 

The public affairs committee, which 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 responsibility for reviewing public policy and reputation issues facing Citi, reviewing political and charitable


 

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contributions made by Citi and the Citi Foundation, reviewing Citi’s policies and practices regarding supplier diversity, reviewing Citi’s business practices, particularly as they relate to preserving the good reputation of the company, and reviewing Citi’s sustainability policies and programs, including environmental policies and human rights.

 

The public affairs committee charter, as adopted by the board, is available in the “Corporate Governance” section of Citi’s website: www.citigroup.com.

 

The risk management and finance committee, which has the primary responsibility for (1) oversight of Citigroup’s risk management framework, including the significant policies, procedures and practices used in managing credit, market and

certain other risks and (2) oversight of Citigroup’s policies and practices relating to Treasury matters, including capital, liquidity and financing, as well as merger, acquisition, and divestiture activity (M&A). The committee reports to the board regarding Citigroup’s risk profile, as well as its enterprise risk management framework, including the significant policies, procedures, and practices employed to manage risks in Citigroup’s businesses, as well as the overall adequacy of the Risk Management function. The committee’s role is one of oversight, recognizing that management is responsible for executing Citigroup’s risk management, Treasury and M&A policies.

 

The risk management and finance committee charter is available in the “Corporate Governance” section of Citi’s website: www.citigroup.com.

 


 

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The following table shows the current membership of each of the foregoing committees.

 

Committees


  

Current Members


Audit Committee   

Timothy C. Collins

Lawrence Ricciardi (Chairman)

Robert L. Ryan

Anthony M. Santomero

Citi Holdings Oversight Committee   

John M. Deutch

Robert L. Joss

Michael E. O’Neill (Chairman)

Diana L. Taylor

Nomination and Governance Committee   

C. Michael Armstrong

Alain J.P. Belda

John M. Deutch

Jerry A. Grundhofer

Anne M. Mulcahy

Richard D. Parsons (Chairman)

William S. Thompson, Jr.

Personnel and Compensation Committee   

C. Michael Armstrong

Alain J.P. Belda (Chairman)

Anne M. Mulcahy

Richard D. Parsons

William S. Thompson, Jr.

Public Affairs Committee   

Andrew N. Liveris

Judith Rodin (Chair)

Robert L. Ryan

Anthony M. Santomero

Risk Management and Finance Committee   

Jerry A. Grundhofer (Chairman)

Robert L. Joss

Michael E. O’Neill

Anthony M. Santomero

William S. Thompson, Jr.

 

Involvement in Certain Legal Proceedings

There are no legal proceedings to which any director, officer, nominee or principal shareholder, or any affiliate thereof, is a party adverse to Citi or has a material interest adverse to Citi.

 

Directors’ Compensation

Directors’ compensation is determined by the board. Since its 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. The nomination and governance committee makes recommendations to

the board with respect to compensation of directors. The committee periodically reviews benchmarking assessments in order to determine the level of compensation to attract qualified candidates for board service and to reinforce our practice of encouraging stock ownership by our directors. In 2009, the committee reviewed the current compensation program and determined that no changes were appropriate. Effective January 1, 2005, the last time director compensation was adjusted, 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


 

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senior executives. The deferred stock award vests on the second anniversary of the date of the grant, and directors may elect to defer receipt of the award beyond that date. Directors may elect to receive all or a portion of their deferred stock award and cash retainer in the form of common stock, and directors may elect to defer receipt of this common stock.

 

Directors who are employees of Citi or its subsidiaries do not receive any compensation for their services as directors.

 

Except as described below, directors receive no additional compensation for participation on board committees. Committee chairs receive additional compensation of $15,000 per year, except for the chairmen of the audit committee, and risk management and finance committee, who receive additional compensation of $35,000 per year. Before they were disbanded in January 2010, the chairmen of the former audit and risk management subcommittees received an additional $35,000 for their service. This additional compensation is paid in the same manner as the annual cash retainer.

Additional compensation for special assignments may be determined on a case by case basis.

 

In 2009, Messrs. Collins, Grundhofer, Liveris, O’Neill, Ricciardi, Ryan and Santomero were elected to the Citibank, N.A. Board of Directors. Each independent director is entitled to receive $50,000 as an annual retainer; the chairman is entitled to receive an additional $50,000. Committee chairs receive additional compensation of $15,000 per year. All annual retainers and chair fees are paid in four equal quarterly installments per annum. Mr. Deutch served as a director of Citibank from January to July 2009 and received a pro-rated portion of the $50,000 annual retainer. Citibank, N.A. is a wholly-owned subsidiary of Citi.

 

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.


 

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The following table provides information on 2009 compensation for non-employee directors.

 

Non-Employee Director Compensation Table

 

Name  

Fees

Earned

or Paid

in Cash

($)(a)

 

Stock

Awards

($)(a)(b)

 

Option*

Awards

($)(c)

 

Non- Equity

Incentive Plan

Compensation

($)

 

Change in

Pension Value

and

Nonqualified

Deferred

Compensation

Earnings

($)

 

All Other

Compensation

($)

 

Total

($)

C. Michael Armstrong(d)

  $ 75,000   $ 150,000   $ 0   $ 0   $ 0   $ 3,162   $ 228,162

Alain J.P. Belda

  $ 0   $ 240,000   $ 0   $ 0   $ 0   $ 0   $ 240,000

Timothy C. Collins

  $ 62,500   $ 75,000   $ 0   $ 0   $ 0   $ 0   $ 137,500

Kenneth T. Derr(e)

  $ 18,750   $ 37,500   $ 0   $ 0   $ 0   $ 0   $ 56,250

John M. Deutch

  $ 138,750   $ 150,000   $ 0   $ 0   $ 0   $ 0   $ 288,750

Jerry A. Grundhofer

  $ 123,750   $ 112,500   $ 0   $ 0   $ 0   $ 0   $ 236,250

Roberto Hernández Ramirez(e)(f)

  $ 0   $ 0   $ 0   $ 0   $ 0   $ 494,000   $ 494,000

Robert L. Joss (g)

  $ 0   $ 112,500   $ 0   $ 0   $ 0   $ 100,000   $ 212,500

Andrew N. Liveris

  $ 135,000   $ 150,000   $ 0   $ 0   $ 0   $ 0   $ 285,000

Anne M. Mulcahy

  $ 92,500   $ 150,000   $ 0   $ 0   $ 0   $ 0   $ 242,500

Michael E. O’Neill

  $ 25,000   $ 193,750   $ 0   $ 0   $ 0   $ 0   $ 218,750

Richard D. Parsons

  $ 0   $ 240,000   $ 0   $ 0   $ 0   $ 0   $ 240,000

Lawrence R. Ricciardi

  $ 125,000   $ 150,000   $ 0   $ 0   $ 0   $ 0   $ 275,000

Judith Rodin

  $ 90,000   $ 150,000   $ 0   $ 0   $ 0   $ 0   $ 240,000

Robert L. Ryan

  $ 125,000   $ 150,000   $ 0   $ 0   $ 0   $ 0   $ 275,000

Anthony M. Santomero

  $ 32,500   $ 172,500   $ 0   $ 0   $ 0   $ 0   $ 205,000

Diana L. Taylor

  $ 37,500   $ 75,000   $ 0   $ 0   $ 0   $ 0   $ 112,500

Franklin A. Thomas(e)

  $ 22,500   $ 37,500   $ 0   $ 0   $ 0   $ 0   $ 60,000

William S. Thompson, Jr.

  $ 0   $ 168,750   $ 0   $ 0   $ 0   $ 0   $ 168,750

 

(a) Directors may elect to receive all or a portion of the cash retainer in the form of common stock and may elect to defer receipt of common stock. The Stock Awards column in the Non-Employee Director Compensation Table also includes shares of common stock that directors elected to receive in exchange for all or a portion of their cash retainer and chair fees, as applicable. These directors also elected to defer receipt of the shares. The following

directors elected to receive all or a portion of their Citigroup 2009 retainer in deferred stock: Mr. Belda (100%); Dr. Joss (100%); Mr. O’Neill (100%); Mr. Parsons (100%); Dr. Santomero (100%); and Mr. Thompson (100%). The number of shares they received was: Mr. Belda 34,201; Dr. Joss 8,802; Mr. O’Neill 20,045; Mr. Parsons 34,201; Dr. Santomero 15,123; and Mr. Thompson 14,177.


 

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The aggregate number of deferred stock outstanding at the end of 2009 was:

 

Mr. Armstrong

   157,276

Mr. Belda

   104,591

Mr. Collins

   16,361

Mr. Deutch

   47,724

Mr. Grundhofer

   37,276

Dr. Joss

   16,361

Mr. Liveris

   36,180

Mrs. Mulcahy

   53,007

Mr. O’Neill

   57,321

Mr. Parsons

   112,555

Mr. Ricciardi

   36,255

Dr. Rodin

   51,658

Mr. Ryan

   37,803

Dr. Santomero

   52,400

Ms. Taylor

   16,361

Mr. Thompson

   37,276

 

(b) The values in this column represent the aggregate grant date fair values of the 2009 deferred stock awards. The grant date fair value is based on a grant date of January 14, 2009 and a grant price determined by the average NYSE closing price of Citi’s common stock for the 5 trading days from January 12, 2009 to January 16, 2009. The amounts in the below chart represent deferred stock awards only and not shares awarded in lieu of the cash retainer and/or committee chair fees. The grant date fair value of those awards are set forth below:

 

    

Deferred Stock

Granted in 2009 (#)

  

Grant Date

Fair Value ($)

Armstrong

   32,106    $150,000

Belda

   32,106    $150,000

Collins

   16,361    $  75,000

Derr

     8,026    $  37,500

Deutch

   32,106    $150,000

Grundhofer

   37,276    $112,500

Joss

   16,361    $  75,000

Liveris

   32,106    $150,000

Mulcahy

   32,106    $150,000

O’Neill

   37,276    $112,500

Parsons

   32,106    $150,000

Ricciardi

   32,106    $150,000

Rodin

   32,106    $150,000

Ryan

   32,106    $150,000

Santomero

   37,276    $112,500

Taylor

   16,361    $  75,000

Thomas

     8,026    $  37,500

Thompson

   37,276    $112,500

 

(c) Beginning in 2009, directors were no longer able to elect to receive any of their compensation in the form of options to purchase shares of common stock.

 

(d) Travelers Property Casualty Corp., formerly a subsidiary of Citi, sponsored a Director’s Charitable Award Program originally adopted by The Travelers Corporation, a Citi predecessor, under which all members of its board of directors were eligible, subject to certain vesting requirements, to have the program make charitable contributions to eligible tax-exempt organizations recommended by the directors up to an aggregate of $1,000,000. In connection with Citi’s distribution of shares of Travelers to its stockholders, at which time Travelers became a separate public company, Citi assumed responsibility under the program with respect to the vested interests of all participants in the program. Travelers initially funded the program through the purchase of life insurance policies on the lives of the directors. Generally, eligible directors were paired for purposes of buying second-to-die life insurance policies. The proceeds of these policies are used to fund the contributions to the organizations selected by the directors immediately upon the death of both vested directors in five equal, annual installments. Mr. Armstrong, a current member of Citi’s board, was a director of Travelers and a participant in the Director’s Charitable Award Program. The annual costs Citi incurs in connection with the administration of this program which are attributable to Mr. Armstrong amount to $3,162.

 

(e) Kenneth Derr, Roberto Hernández Ramirez and Franklin A. Thomas retired from the board on April 21, 2009.

 

(f) In consideration of his service as non-executive chairman of Banco Nacional de México, an indirect wholly owned subsidiary of Citi, and other duties and services performed for such entity and its affiliates during the period he served as a director of Citi in 2009, including governmental and client relations and strategic development, Citi, or certain of its Mexico affiliates, provided certain security services to Roberto Hernández and members of his immediate family as well as office, secretarial and


 

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related services, and aircraft usage for Citi business-related purposes. The aggregate amount of such expenses for Mr. Hernández for January 1 – April 21, 2009 is estimated to be approximately $494,000. Included in this amount are salary and benefits expenses incurred by the company in connection with the employment of security

personnel engaged to provide protective services to Roberto Hernández and members of his immediate family and expenses associated with the ownership, operation and maintenance of armored vehicles.

 

(g) Dr. Joss was paid $100,000 for consulting services provided to the company during 2009.


 

The following chart shows the amount of dividend equivalents and interest paid to the non-employee directors in 2009 with respect to shares of Citi common stock held in their deferred stock accounts.

 

Director   

Dividend Equivalents and

Interest Paid on

Deferred Stock

Account(A)

C. Michael Armstrong

   $ 1,561

Alain J.P. Belda

     699

Timothy C. Collins

     0

Kenneth T. Derr

     815

John M. Deutch

     474

Jerry A. Grundhofer

     0

Roberto Hernández Ramirez

     0

Robert L. Joss

     0

Andrew N. Liveris

     359

Anne M. Mulcahy

     530

Michael E. O’Neill

     0

Richard D. Parsons

     778

Lawrence R. Ricciardi

     360

Judith Rodin

     513

Robert L. Ryan

     394

Anthony M. Santomero

     0

Diana L. Taylor

     0

Franklin A. Thomas

     328

William S. Thompson

     0

 

(A) Dividend equivalents are paid quarterly, in the same amount per share and at the same time as dividends are paid to stockholders. Interest accrues on the amount of the dividend equivalent from the payment date until the end of the quarter, at which time the dividend equivalent is either distributed to the director in cash or reinvested in additional shares of deferred stock. Since February 2009, Citi has not paid dividends or dividend equivalents on its common stock. Differences in the amounts paid to directors can be attributed to a variety of factors

including length of service and elections made by individual board members with respect to the form in which they receive their cash retainers or deferred stock awards. Generally, directors who have served on the board for longer periods of time have accumulated more shares in their deferred stock accounts than directors with a shorter tenure and as a result receive higher dividend equivalent payments. The number of shares owned by each director is reported on page     .


 

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Director Stock Option Grant Table

 

Director   

Date of

Grant

  

Number of

Shares

Outstanding
at 12/31/09

  

Expiration

Date

  

Shares

Exercisable

as of

12/31/09

C. Michael Armstrong

   7/18/2000    2,680    7/18/2010    2,680
     1/16/2001    5,361    1/16/2011    5,361
     2/13/2002    5,361    2/13/2012    5,361
     1/20/2004    5,000    1/20/2010    5,000
     1/18/2005    4,736    1/18/2011    4,736
     1/17/2006    4,599    1/17/2012    4,599
     1/16/2007    2,758    1/16/2013    2,758

Alain J.P. Belda

   7/18/2000    2,680    7/18/2010    2,680
     1/16/2001    12,929    1/16/2011    12,929
     2/13/2002    14,266    2/13/2012    14,266
     1/20/2004    5,000    1/20/2010    5,000
     1/17/2006    9,198    1/17/2012    9,198
     1/16/2007    8,275    1/16/2013    8,275
     1/22/2008    18,404    1/22/2014    0

Kenneth T. Derr

   7/18/2000    2,680    7/18/2010    2,680
     1/16/2001    5,361    1/16/2011    5,361
     2/13/2002    9,813    2/13/2012    9,813
     1/20/2004    5,000    1/20/2010    5,000

John M. Deutch

   7/18/2000    2,680    7/18/2010    2,680
     1/16/2001    9,144    1/16/2011    9,144
     2/13/2002    9,813    2/13/2012    9,813
     1/20/2004    5,000    1/20/2010    5,000

Andrew N. Liveris

   1/1/2006    2,318    1/1/2012    2,318
     1/17/2006    9,198    1/17/2012    9,198
     1/16/2007    8,275    1/16/2013    8,275
     1/22/2008    36,809    1/22/2014    0

Richard D. Parsons

   7/18/2000    2,680    7/18/2010    2,680
     1/16/2001    5,361    1/16/2011    5,361
     2/13/2002    5,361    2/13/2012    5,361
     1/20/2004    5,000    1/20/2010    5,000
     1/18/2005    18,947    1/18/2011    18,947
     1/17/2006    18,397    1/17/2012    18,397

Judith Rodin

   1/17/2006    9,198    1/17/2012    9,198
     1/16/2007    8,275    1/16/2013    8,275
     1/22/2008    18,404    1/22/2014    0

Franklin A. Thomas

   7/18/2000    2,680    7/18/2010    2,680
     1/16/2001    11,718    1/16/2011    11,718
     2/13/2002    10,347    2/13/2012    10,347
     1/20/2004    5,000    1/20/2010    5,000

 

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Audit Committee Report

 

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 four 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 us 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 on 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’s independent auditors all communications required by generally accepted auditing standards.

 

The Committee reviewed and discussed the audited consolidated financial statements of Citigroup as of and for the year ended December 31, 2009 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 related and tax compliance services. The Committee concluded that the provision of services by the independent auditors is compatible with the maintenance of 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, 2009 for filing with the SEC.

 

THE AUDIT COMMITTEE:

 

Timothy C. Collins

Lawrence R. Ricciardi (Chairman)

Robert L. Ryan

Anthony M. Santomero

 

 

Dated: February 23, 2010

 

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Executive Compensation

 

Compensation Discussion and Analysis

 

Overview

Citi is committed to responsible compensation practices and structures. For 2009 Citi has balanced the need to reward its employees fairly and competitively based on their performance, while assuring that their compensation reflects principles of risk management and performance metrics that reflect long-term contributions to sustained profitability, as well as fidelity to the values and rules of conduct expected of them.

 

Exceptional employees, and exceptional efforts by those employees, have been required to move Citi towards enhanced profitability at a time of intense worldwide competition for proven talent in the financial services industry. While recognizing these market factors, Citi has compensated executives within regulatory restrictions and has implemented several important protections for stockholders and other stakeholders to focus executives on long-term performance, as described below.

 

 

The Special Master’s decisions governed the amount and structure of Citi’s executive compensation for 2009. The Office of the Special Master for TARP Executive Compensation (the Special Master) determined the maximum amount and structure of the 2009 compensation paid to Citi’s senior executive officers and next 20 most highly compensated employees and determined the structure of 2009 compensation for Citi’s next 75 most highly compensated employees. All of the named executive officers were in one of those two groups. Citi agreed to comply with the Special Master’s compensation determinations for 2009 even though Citi was no longer a recipient of exceptional governmental assistance at December 31, 2009; in December 2009, Citi repaid $20 billion of funds invested in the company by the US government through the Troubled Asset Relief Program (TARP) and exited the loss-sharing agreement with the government. The Special Master’s determinations followed extended discussions with Citi regarding executive compensation, as explained below under “Process for determining executive officer compensation.”

 

 

No cash bonuses were paid to the named executive officers. While Citi has long awarded a significant percentage of incentive compensation to senior management in stock, the percentage was increased this year. One hundred percent of all incentive compensation awarded to the named executive officers was awarded in stock. With the exception of CEO Vikram Pandit, who declined all incentive compensation for 2009, 95 percent of the aggregate total compensation paid to the named executive officers was awarded in Citi stock. The incentive award portion of the compensation payable to the named executive officers is subject to a stock ownership commitment, and Citi has trading policies which prevent hedging or other strategies that undercut the purpose of the stock ownership commitment. In addition, many executives remain at risk after termination of employment through stock that vests or is subject to sale restrictions after termination of employment and through stock options that depend on Citi’s share price for value.

 

 

Citi’s executive compensation structure for 2009 is aligned with risk mitigation principles through clawbacks and deferrals. The structure of compensation for the senior executive officers and top 100 most highly compensated employees, including the named executive officers, emphasizes deferrals (including sale restrictions) and clawbacks. If 2009 performance turns out to be based on materially inaccurate performance criteria, incentive compensation for 2009 will be forfeited or recovered (i.e., is subject to a “clawback”). Malfeasance is not required for a clawback, and in addition Citi has imposed a unique clawback on incentive compensation that is applicable if an executive materially violates risk limits. In addition, Citi provides for deferrals or sale restrictions on significant amounts of incentive compensation, meaning that for as long as the stock cannot be transferred, the value of the executive’s award is at risk if Citi’s stock

 

price declines. For 2009, 95 percent of the aggregate total compensation awarded to the named executive officers is either deferred or subject to a clawback, or both.


 

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Citi has a strong compensation governance process. The composition of the Personnel and Compensation Committee (the committee) reflects its strong governance focus; each committee member is a non-executive independent director with CEO experience. Citi is a diversified financial services company with staff in over 100 countries around the world, and given the complexities that stem from local market and legal requirements, we have made important strides to promote consistency and transparency in our approach to compensation. We have a common set of compensation principles and a primary incentive compensation program, which accounts for over 80 percent of annual incentive award payments.

 

 

Involvement of independent risk management function. Citi’s Chief Risk Officer (CRO) and Citi’s independent risk management function have important roles in evaluating the performance of senior management and the top 100 highly compensated employees by providing specific ratings on their risk management practices. The committee also conducted an extensive and multi-layered review of risk in compensation plans throughout Citi in 2009, thereby integrating Citi’s independent risk function into compensation governance and oversight. As explained in detail in the Personnel and Compensation Committee Report, beginning on page     , Citi’s CRO conducted a review of risk in Citi’s compensation plans and concluded that the plans do not pose unnecessary or excessive risks to the company.

 

 

Citi’s CEO declined incentive pay for 2008 and 2009. As announced in February 2009, CEO Vikram Pandit will earn base pay at a rate of $1 per year and no incentive compensation until Citi returns to profitability. The committee determined that Mr. Pandit’s performance in 2009 merited an incentive award, but the committee respected Mr. Pandit’s commitment and awarded no incentive compensation.

 

 

Independent compensation consultant. For the 2009 compensation year, the only consultant retained by the committee to advise the committee on its compensation determinations

   

was Independent Compensation Committee Adviser, LLC (ICCA). ICCA performs no work for Citi other than its assignments for the committee.

 

Objectives of Citi’s executive compensation programs.    The committee made compensation decisions consistent with the objectives of Citi’s executive compensation programs. The programs aim to attract and retain the best talent, motivate and reward executives to perform by linking incentive compensation to demonstrable performance-based criteria, align the long-term interests of management with those of stockholders and other stakeholders, and deliver compensation at levels that are competitive within the financial services market. Citi’s compensation programs are designed to effect the following:

 

 

Facilitate competitiveness. Compensation structure and amounts should be competitive within the global financial services market. Compensation programs must support the attraction and retention of talented employees. Citi should provide fixed compensation at a level commensurate with the market.

 

 

Reward performance over an appropriate period. Incentives should be based on financial measures that best reflect the state of ongoing operations, including risk-related metrics. Performance rewards must balance financial and non-financial measures. Compensation for senior executives should be subject to a clawback.

 

 

Promote meritocracy by recognizing employee contributions. Individual compensation decisions should be differentiated based on financial and non-financial performance and reflect current or prospective contributions to the value of Citi. Unit and corporate goals should be balanced depending on an individual’s role within the organization. Compensation awards should vary considerably depending on actual contribution and performance.

 

 

Enhance Citi franchise value. Compensation should align the long-term interests of management with stockholders by having them share both upside opportunities and downside risk. Citi’s compensation structure must support


 

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and promote company integrity and stability by encouraging sustainable business performance and long-term retention of key employees. Strong partnership across internal businesses and regions is critical. In addition, expatriates provide expertise, enhance partnership and serve as a leadership pipeline; the expatriate program is necessary to protect employees from being disadvantaged as they relocate their families to a foreign country.

 

 

Discourage unnecessary or excessive risk-taking. Programs should be designed to avoid unnecessary or excessive risks that can harm the franchise while encouraging appropriate entrepreneurial activity to improve Citi’s performance.

 

Key 2009 accomplishments. The committee made executive compensation decisions for 2009 in the context of Citi’s performance in 2009. In awarding compensation to the named executive officers for 2009, the committee took into account the substantial progress made against Citi’s strategic priorities. Citi is focusing on its core historical strengths and clients’ needs, with an emphasis on the growing segments of financial services. Citi is committed to generating long-term profitability and growth from Citicorp, which comprises its core franchise, as well as managing and optimizing the assets and businesses within Citi Holdings.

 

 

In 2009, Citi built its financial strength. Citi substantially increased its capital and improved its liquidity position. Citi significantly increased its Tier 1 Common and Tangible Common Equity (TCE) ratios during 2009. At December 31, 2009, Citi’s Tier 1 common ratio was 9.6 percent and its TCE ratio was 10.9 percent, compared to 2.3 percent and 3.1 percent at December 31, 2008, respectively. Structural liquidity (defined as deposits plus long-term debt plus equity as a percent of total assets) improved to 73 percent at year-end 2009 compared to 66 percent at year-end 2008. Citi had $193 billion of cash and deposits with banks at December 31, 2009. In addition, firm-wide deposits increased by $62 billion in 2009, to a total of $836 billion as of year-end. Citi also

   

reduced expenses by 20 percent during the year, excluding the impact of goodwill impairment in 2008.

 

 

Demonstrated strength of the core Citicorp franchise. Despite very difficult market and economic conditions, Citicorp remained profitable during 2009 with $14.8 billion in net income compared to $6.2 billion in 2008. Regional consumer banking deposits grew 12 percent, and Securities and Banking revenues were $29.4 billion (excluding credit value adjustments (CVAs)), up 23 percent compared to 2008. Transaction Services net income increased by 12 percent during 2009.

 

 

Citi continued to successfully execute on its strategy to wind down Citi Holdings. Citi Holdings assets declined $168 billion or 23 percent in 2009, and have declined by $351 billion from peak levels in the first quarter of 2008.

 

 

Citi is uniquely positioned as a global organization. At its core, Citicorp is a global bank for businesses and consumers, with an unmatched global network and emerging markets footprint. Citi believes it is well-positioned to leverage this global network and emerging markets footprint to service the needs of retail, private banking and commercial customers around the world.

 

 

TARP repayment. In December 2009, Citi repaid $20 billion of funds invested in the company by the US government through TARP and exited the loss-sharing agreement with the US government. The repayment of this investment and exit of the loss-sharing agreement follow the successful completion of securities offerings in which Citi raised an aggregate of approximately $21.0 billion, including $17.5 billion in common shares and $3.5 billion in tangible equity units. Following these transactions, the US Treasury continues to hold approximately 7.7 billion shares of common stock, warrants to purchase approximately 465.1 million shares of Citi common stock, and trust preferred securities with an aggregate liquidation amount of $5.3 billion. The US Treasury has stated that it intends to sell its common stock holdings in Citi in 2010, subject to the expiration of a lock-up agreement expiring on March 16, 2010.


 

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Awards made by the committee for 2009

 

The committee approved the following compensation amounts for 2009 to the named executive officers:

 

Name  

Cash

Salary

  Cash
Bonus
  Salary
Stock
 

Stock
Incentive

Award

  Long Term
Restricted
Stock Award
  Total

Vikram Pandit

  $ 125,001   $ 0   $ 0   $ 0   $ 0   $ 125,001

John Gerspach

  $ 416,667   $ 0   $ 2,916,666   $ 0   $ 1,666,667   $ 5,000,000

Edward Kelly

  $ 270,833   $ 0   $ 5,062,500   $ 0   $ 2,666,667   $ 8,000,000

John Havens

  $ 500,000   $ 0   $ 475,000   $ 6,150,000   $ 2,375,000   $ 9,500,000

Manuel Medina-Mora

  $ 521,797   $ 0   $ 450,000   $ 5,778,203   $ 2,250,000   $ 9,000,000

Alberto Verme

  $ 266,667   $ 0   $ 4,683,333   $ 0   $ 2,475,000   $ 7,425,000

Gary Crittenden

  $ 277,778   $ 0   $ 0   $ 0   $ 0   $ 277,778

 

The terms of these awards are described in the next section. The table shows how the committee viewed its compensation decisions for 2009, but is not a replacement for the disclosure required by the Summary Compensation Table. More detail on the differences between the committee’s decisions and the disclosure in the Summary Compensation Table is included in the 2009 equity awards section of this Compensation Discussion and Analysis below.

 

Compensation structure

 

The compensation structures for 2009 for the named executive officers are described below. These structures were governed by the determination memoranda issued by the Special Master in October and December 2009. On October 22, 2009, the Special Master issued his determination memorandum regarding the amount and structure of 2009 compensation for the 2009 senior executive officers and next 20 most highly compensated employees for 2009 (the Top 25). Senior executive officers for 2009 are those executives appearing as named executive officers in the Citi proxy statement filed in March 2009 and any other executive who served as CFO during any portion of 2009. Of the named executive officers, Mr. Pandit, Mr. Gerspach, Mr. Kelly, Mr. Verme and Mr. Crittenden were in the Top 25 for 2009. On December 11, 2009, the Special Master issued his determination memorandum regarding the structure of 2009 compensation for the next 75 most highly compensated employees for 2009 (the Next 75). Of the named executive officers, Mr. Havens and Mr. Medina-Mora were in the

Next 75 for 2009. Together, the Top 25 and the Next 75 constitute the Top 100. The Top 100 employees were identified based on 2008 compensation determined under SEC rules governing proxy disclosures.

 

 

Mr. Pandit. In February 2009, CEO Vikram Pandit advised Citi’s board that he would accept no incentive compensation and would accept base pay at a rate of $1 per year until Citi returns to profitability. Cash salary amounts above $1 shown in the tables are attributable to compensation already paid in 2009 before Mr. Pandit made his commitment. Based on Mr. Pandit’s performance against the company’s strategic priorities, the committee determined that Mr. Pandit merited consideration for an incentive award for 2009; however, based on Mr. Pandit’s commitment, the committee agreed to award him no incentive compensation for 2009.

 

 

Other named executive officers. The other named executive officers received approximately 95 percent of their 2009 aggregate total compensation in stock that is subject to deferral (including sale restrictions) or clawback, or both, as explained in more detail below:

 

   

Cash base salary. As determined by the Special Master, Citi limited the cash base salary of each such officer to $500,000 annually. The payment of cash compensation reflects the need to provide some liquidity to attract and retain executives.


 

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Salary stock. The Special Master determined that compensation in the form of immediately vested stock (salary stock) was consistent with the public interest if structured in the long-term interest of stakeholders. Accordingly, the salary stock awarded to the Top 25 net of tax withholdings is transferable in 36 monthly installments beginning in January 2011, with each installment transferable one year early if Citi repays any portion of its TARP obligations (as occurred in December 2009, so monthly installments commenced becoming transferable in January 2010). The salary stock awarded to Mr. Havens and Mr. Medina-Mora net of tax withholdings is transferable over a 12-month period beginning in January 2010. There are no provisions for early release of these transfer restrictions in the event of retirement, involuntary termination of employment or change in control, or any other reason.

 

   

Long-term restricted stock. Annual incentive awards for 2009 were awarded to all of the named executive officers other than Mr. Pandit in the form of “long-term restricted stock” (LTRS). These awards are based on performance against objective performance criteria that were developed and reviewed in consultation with the Special Master, as described in more detail below under “Process for determining executive officer compensation.” The maximum amount of these awards was determined by the Special Master, and the committee reserved discretion to award lesser amounts. The LTRS will not vest unless the employee remains employed until January 20, 2013. Vested awards become transferable in 25 percent installments as each 25 percent of Citi’s TARP obligations is repaid. The LTRS awards are subject to clawbacks satisfying legal requirements and an additional clawback for noncompliance with risk policies. LTRS awards are the only incentive compensation payable to the 2009 senior executive officers and Top 25, in accordance with the Emergency Economic Stabilization Act of 2008, as amended (EESA). There are no provisions for early vesting of

   

LTRS in the event of retirement, involuntary termination of employment or change in control, but early vesting will occur upon death or disability.

 

   

Stock incentive awards. As members of the Next 75, Mr. Havens and Mr. Medina-Mora received incentive awards other than and in addition to LTRS. Although the Special Master determined that a portion of the incentive compensation payable to the Next 75 could have been paid in cash, the committee determined that none of the named executive officers should receive any cash incentive awards to align their interests with stockholders and other stakeholders. Accordingly, a portion of incentive compensation awarded to Mr. Havens and Mr. Medina-Mora was instead awarded in fully vested common stock which is immediately transferable. The Special Master determined that 50 percent of total compensation for the Next 75 should become transferable after three years, and accordingly, a portion of the incentive awards for Mr. Havens and Mr. Medina-Mora are payable in fully vested Citi common stock (a stock incentive award) that becomes transferable on the third anniversary of the date of grant. These incentive awards are also subject to Citi’s extensive clawbacks. There are no provisions for early release of sale restrictions in the event of retirement, involuntary termination of employment or change in control, or any other reason.

 

   

Other compensation and perquisites. Citi has imposed substantial limits on perquisites for many years, as Citi believes that perquisites are in most cases inconsistent with its philosophy of pay for performance. At the same time, we recognize that incidental perquisites may have advantages to Citi if they enable a senior executive to fulfill his or her employment duties. Except in unusual or special circumstances, Citi’s executive perquisites have in the past been less than $25,000 annually for each named executive officer, and for 2009, consistent with the


 

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Special Master’s determination, Citi limited perquisites to $25,000 annually except through approved expatriate arrangements. Citi’s Expatriate Program covers a relatively small number (approximately 600) of senior and high potential employees and is a fundamental component of Citi’s global strategy, as it enables Citi’s leaders to gain global management experience without the administrative burdens and legal constraints of local employment. One named executive officer, Mr. Verme, is a participant in Citi’s Expatriate Program. The Special Master approved additional compensation of up to $350,000 annually under Citi’s Expatriate Program in recognition of the legitimate purpose of the program.

 

   

No supplemental executive retirement plans (SERPS) or nonqualified retirement plans. Citi does not generally provide for current benefit accruals under nonqualified executive retirement programs except to specified grandfathered and expatriate populations. None of the named executive officers were eligible for additional benefit accruals under any of these plans in 2009, although Mr. Gerspach is eligible for certain grandfathered benefits that were frozen at December 31, 2001.

 

   

Severance or change in control payments. The named executive officers are not eligible for any severance upon termination of employment due to EESA restrictions and have no “golden parachute” agreements. Mr. Crittenden did not receive any compensation upon his resignation from Citi and he forfeited all his nonvested equity awards.

 

 

Qualified retirement plans. The Special Master authorized participation in qualified retirement plans. The purpose of these plans is to provide employees with tax-advantaged savings opportunities and income after retirement or other termination from Citi. Eligible pay under these plans is limited to Internal Revenue Code (IRC) annual limits ($245,000 for 2009). Eligible Citi employees, including the named executive

   

officers, will receive a matching contribution for 2009 under the Citigroup 401(k) Plan. For 2009, the 401(k) plan provides a matching contribution of up to 6 percent of eligible pay to all US employees, subject to IRC annual limits, and that maximum has been reduced to 4 percent of eligible compensation for 2010. The matching contributions made to the named executive officers’ 401(k) plan accounts for 2009 are disclosed in the All Other Compensation column of the Summary Compensation Table, and the named executive officers participate in the 401(k) plan on the same terms and conditions as those made available to other eligible US employees. The Citigroup Pension Plan was closed to new entrants after December 31, 2006; accordingly, Mr. Pandit, Mr. Kelly, Mr. Havens and Mr. Crittenden are not eligible to participate in the plan. The Citigroup Pension Plan ceased cash balance accruals for all eligible participants, including the eligible named executive officers, effective December 31, 2007. In addition, Mr. Medina-Mora is eligible for the broad-based retirement benefits available to Mexico employees and is not eligible for US retirement benefits.

 

 

Health and insurance plans. Other than Mr. Medina-Mora, the named executive officers are eligible to participate in the company-sponsored US benefit programs for active employees on the same terms and conditions as those made available to US salaried employees or expatriates generally. Mr. Medina-Mora is eligible to participate in the company-sponsored benefit programs for active Mexico employees on the same terms and conditions as those made available to Mexico salaried employees. Basic health benefits, life insurance, disability benefits and similar programs are provided in the US, in Mexico, and to expatriates to ensure that employees have access to healthcare and income protection for themselves and their family members. Under Citi’s US 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.


 

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Clawbacks applicable to executive compensation. All incentive compensation payable to the Top 100 employees, including the named executive officers, in respect of 2009 is subject to “clawback” in a variety of circumstances. Unvested amounts are forfeited and Citi has the right to recover vested amounts if the incentive award was based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria, or if the employee is terminated due to misconduct that occurred during the period in which the incentive award was earned. Specifically, incentive awards to this group are also subject to cancellation, forfeiture or recovery by Citi if the committee determines that the employee (a) received an award based on materially inaccurate financial statements (which includes, but is not limited to, statements of earnings, revenues, or gains) or any other materially inaccurate performance metric criteria, (b) knowingly engaged in providing inaccurate information (including knowingly failing to timely correct inaccurate information) relating to financial statements or performance metrics, or (c) materially violated any risk limits established or revised by senior management, a business head and/or risk management, or any balance sheet or working or regulatory capital guidance provided by a business head. Incentive compensation is also subject to cancellation by Citi if the employee’s employment terminates on account of misconduct.

 

In addition, since 2008, any bonus or incentive compensation for members of the senior leadership committee is subject to recovery by Citi (e.g., by forfeiture of nonvested awards or repayment of vested awards) if such compensation is based on statements of earnings, gains or other criteria that are later shown to be materially inaccurate, without regard to whether the inaccuracy arose from any misconduct. (The senior leadership committee is a group of about 45 executives that includes business leaders and leaders of control functions.) A substantial portion of the incentive compensation for the senior leadership committee is also deferred.

 

Since 2002, the board has had in effect a narrower “clawback” policy based upon SARBANES-OXLEY.

As part of Citi’s Corporate Governance Guidelines, Citi has required reimbursement, in all appropriate cases, of any bonus or incentive compensation awarded to an executive officer or effecting the cancellation of nonvested restricted or deferred stock awards previously granted to the executive officer if: (a) the amount of the bonus or incentive compensation was calculated based upon the achievement of certain financial results that were subsequently the subject of a restatement, (b) the executive engaged in intentional misconduct that caused or partially caused the need for the restatement, and (c) the amount of the bonus or incentive compensation that would have been awarded to the executive had the financial results been properly reported would have been lower than the amount actually awarded.

 

Process for determining executive officer compensation

 

The role of the Personnel and Compensation Committee.    The committee regularly reviews the design and structure of Citi’s compensation programs to ensure that management’s interests are aligned with stockholders and other stakeholders and that the compensation programs are aligned with Citi’s strategic priorities. The committee is responsible for evaluating the performance of and determining the compensation for the CEO, and, in accordance with guidelines established by the committee, approves the compensation for the senior leadership committee. In 2009, the committee also approved the compensation for the Top 100.

 

In furtherance of these goals, the committee has retained ICCA to provide independent evaluations and advice regarding executive compensation. ICCA does no other work for Citi, reports directly to the chair of the committee and meets with the committee in executive session, without the presence of Citi management. ICCA was asked to review the committee’s process, its decisions regarding the compensation of members of senior management, and the reasons for reaching those decisions.


 

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Compensation process and approach for 2009.    The timing and approach to executive compensation for 2009 was driven by compliance with EESA and the Treasury regulations issued thereunder (the Compensation Regulations) as well as discussions with the Special Master. In February 2009, EESA was amended to govern the structure of compensation for the Top 25. In June 2009, the Department of the Treasury adopted the Compensation Regulations, which enabled Citi to determine who the Top 25 would be for 2009 and which also set forth additional restrictions on compensation. The Compensation Regulations also created the Office of the Special Master for TARP Executive Compensation and provided for Special Master review of the compensation for the Top 100.

 

The Special Master required Citi to present a proposal for 2009 compensation for the Top 25 by August 11, 2009, and accordingly, the committee, ICCA and management met frequently during the summer to consider alternative structures for compensation based on discussions held by management with the Special Master. None of the named executive officers participated in these discussions. As part of these discussions, the Special Master reviewed the form of the balanced scorecard, including the objective criteria, used in the performance evaluations of the Top 100. As explained in more detail below, the balanced scorecard shows a variety of objective criteria to be used in awarding compensation (e.g., financial measures are to be balanced with risk and quality considerations). The committee, ICCA and management also met frequently during the year to develop compensation proposals for the Next 75.

The committee ultimately approved the submissions made to the Special Master and the compensation amounts and structures set forth in the Special Master’s determination memoranda. The committee also reviewed the requirements of the Compensation Regulations and adopted restrictions on compensation consistent with such regulations, such as limitations on perquisites and prohibitions on impermissible tax gross-ups.

 

In December, the committee met with management to review preliminary financial data and management’s estimates of company-wide bonus

pools and the bonus pools for senior management. In January, the committee determined the size of the bonus pool for the senior leadership committee and the Top 100. Although the value of the company-wide discretionary bonus pool was 28.8 percent higher than the pool for similar positions in 2008, it was 28 percent lower than such pool for 2007.

 

The committee devoted a substantial amount of time to analyzing risk in Citi compensation programs throughout the 2009 compensation process. Full details of the committee’s analysis of risk in compensation programs are included in the compensation committee report following this Compensation Discussion and Analysis.

 

Performance evaluations and determination of incentive compensation.    Incentive compensation for 2009 was awarded to the named executive officers other than Mr. Pandit at the discretion of the committee, up to the maximum amounts set forth in the Special Master’s determination letters.

 

The committee used a balanced scorecard in determining compensation for the applicable named executive officers. The scorecard provides information on the 2009 results for the businesses led by the executive using objective metrics, including percentage increases or decreases in the item from the prior year. For the named executive officers, the metrics were:

 

 

Revenue (unadjusted for marks, but stated with and without credit valuation adjustments (CVAs))

 

 

Non-incentive Compensation Expense (expenses other than incentive compensation)

 

 

Cost of Credit (credit write-offs and provisions for credit losses, net of credit recoveries)

 

 

Pre-tax pre-bonus income (Revenue less Non-incentive Compensation Expense less Cost of Credit)

 

 

Total Expenses (includes all expenses — compensation and non-compensation — managed by the business)


 

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Net Income (Revenues less Total Expenses less Cost of Credit less taxes)

 

 

Efficiency Ratio (Total Expenses divided by Revenues)

 

 

Risk Capital (measures the potential unexpected loss of economic value over one year, calculated at a very high confidence level)

 

 

Return on Risk Capital (Net Income divided by Risk Capital)

 

 

GAAP Assets (assets valued according to GAAP)

 

 

RAP Assets (risk-weighted assets, net of credit default swap hedges)

 

 

Headcount (full-time employees)

 

The scorecard also includes (a) ratings from Citi’s independent risk management function on the executive’s risk knowledge, appropriate risk mitigation, and overall risk management, (b) information on performance against objective control metrics, such as internal audit scores, major business issues cited in internal audits, and (c) relative scores on qualitative measures, such as client service, teamwork and partnership, producing results with integrity, and leadership. Finally, the scorecard contains information on prior years’ compensation and market compensation data.

 

The committee reviewed general market data regarding compensation trends in the financial services industry as well as market data that was used in the scorecards. This data was collected by management from publicly available sources and third-party proprietary databases, and Bank of America/Merrill Lynch, Barclays, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and UBS were the companies considered to be comparable. The market information was developed based on parameters set by management. The market information provided background and context for committee decisions; the information regarding pay practices of the peer group informed but did not govern the committee’s award determination for any particular named executive officer or any other executive.

 

The committee then determined the nominal amount of each named executive officer’s compensation, based on recommendations made by the CEO. Each of the factors comprising the performance results was considered by the

committee in determining compensation amounts, but the committee used its business judgment in making compensation determinations taking into account the limitations and structures imposed by the Special Master, competitive marketplace for individuals with widely differing job responsibilities at Citi, length of service, size of the business or function for which they are responsible, and tenure in the financial services industry. In addition, the committee considered and discussed scorecard ratings on risk management and control metrics. Evaluations of executives in corporate functions were necessarily based more on performance against non-financial goals. Formulaic approaches were not used to weight the factors shown on the scorecard, consistent with the committee’s and Citi’s belief that the adoption of any given formula could inadvertently encourage undesirable behavior (e.g., favoring one financial measure to the exclusion of other important metrics and values). Accordingly, although the objective performance criteria listed above were a basis for determining incentive compensation, no specific performance targets were used in developing specific compensation recommendations, approving specific compensation amounts, or in any other aspect of Citi’s executive compensation process.

 

The committee followed a similar process in evaluating the recommendations made by management regarding compensation for the Top 100. The same scorecard was used for the Top 100, except that executives in the Global Banking business used a more detailed scorecard that was tailored to the financial metrics used in that business. These metrics included information on percentage of overall industry fees, industry rankings, and volume metrics, by products.

 

UK regulatory process. Discussions with Citi’s UK regulator, the Financial Services Authority (FSA), informed the decision-making process for


 

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2009 for executives based in the UK. Mr. Verme, who is based in London and Dubai, was subject to the FSA process, and no other named executive officers were covered by the FSA process. The FSA issued its final rules on financial sector compensation in August 2009 and required that relevant regulated entities operating in the UK discuss and obtain agreement on their 2009 discretionary incentive and retention remuneration proposals with the FSA prior to finalization and communication. Citi therefore worked with the FSA, in parallel with Citi’s internal review process and timelines, to review provisional recommendations and the structures and proportions of deferrals so as to ensure that the incentive awards ultimately approved by the committee for UK-based employees also met with the FSA’s approval.

 

In addition to reviewing matters relating to governance, metrics and the determination of discretionary remuneration pools, the FSA determined compliance against its code by reference to a structural framework for mandatory deferrals. Consistent across all the relevant financial sector regulated entities in the UK, the FSA stipulated minimum deferral requirements based on a combination of total compensation thresholds, the level of 2009 awards relative to base salary and whether an individual’s role involved managing material risk and/or fulfilled certain FSA registered significant influence functions. For individuals covered by the FSA’s criteria, minimum mandatory deferrals were stipulated as either 60 percent or 40 percent of incentive and retention awards, with 75 percent or more of the mandatory deferral deferred into a performance adjusted plan, an equity plan, a phantom equity plan or combinations thereof.

Finally, the FSA stipulated that mandatory deferrals should vest no more quickly than ratably over three years.

 

As well as promoting compensation policies and practices that are generally consistent with and promote effective risk management, the specific focus on minimum mandatory deferrals into equity and performance plans for employees receiving material awards or in key roles is designed to ensure that these employees will receive sizeable portions of their incentive awards over time and that the amounts ultimately received from these deferrals will be influenced by performance and/or by movements in Citi’s stock price. Accordingly, the interests of these employees are directly and materially aligned with their performance and with Citi’s performance over the medium to long term.

 

The FSA undertook to understand and assess the 2009 compensation structures for those in the Top 25 and the Next 75 to the extent that these structures were applicable to individuals within the scope of the FSA’s review of relevant UK employees. Since these structures generally met or exceeded the minimum requirements mandated by the FSA’s criteria, no further adaptations were required to the relevant compensation structures on account of the FSA’s review.

 

Citi actively participated in the consultative process prior to the issuance of the FSA’s code in August 2009 and, as the FSA has indicated that the code will be reviewed and potentially revised during 2010 to take account of developments since August 2009, Citi intends to continue to participate in any consultation on the code initiated by the FSA during 2010.


 

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2009 Equity Awards

 

In December 2009, the SEC issued final regulations generally requiring that the grant date fair value of equity awards be disclosed in the Summary Compensation Table for the year in which the equity awards were granted. As a result, the equity awards for two performance years are shown as 2009 compensation in the 2009 Summary Compensation Table: (1) the awards granted in January 2009 in connection with performance in 2008, and (2) the awards granted for 2009 performance to the named executive officers in December 2009 in accordance with the Special Master’s December 11, 2009 determination memorandum. The table set forth below

summarizes the difference between the equity award values granted by the committee for performance during 2009 and the aggregate equity award values appearing in this year’s Summary Compensation Table. The first column (after the executives’ names) below shows values for the stock awards that were made by the committee for 2009. The second column shows the values for stock awards required to be shown in the Summary Compensation Table in accordance with SEC rules. The last column shows the difference between the first column (the values for 2009) and the second column (values required by SEC rules to be included in the Summary Compensation Table).


 

Name


   Stock
Awarded

for 2009

   Value of
Stock Awards
Shown in

2009
Summary

Compensation
Table


   Difference
Between Stock
Awarded for
2009 and

Summary
Compensation
Table Values


 

Vikram Pandit

   $ 0    $ 0    $ 0   

John Gerspach

   $ 4,583,333    $ 4,583,333    $ 0   

Edward Kelly

   $ 7,729,167    $ 9,170,843    $ (1,441,676

John Havens

   $ 9,000,000    $ 10,327,374    $ (1,327,374

Manuel Medina-Mora

   $ 8,478,203    $ 9,328,010    $ (849,807

Alberto Verme

   $ 7,158,333    $ 7,158,333    $ 0   

Gary Crittenden

   $ 0    $ 0    $ 0   

 

The values for the 2009 stock option awards disclosed in the Summary Compensation Table also differ from committee action for the 2009 performance year. As shown in the table below, the options shown in the 2009 Summary Compensation Table were awarded in January 2009 in connection with 2008 performance.

 

Name


   Options
Awarded
for 2009


   Value of
Options

Shown in
2009
Summary

Compensation
Table


   Difference
Between Options
Awarded for
2009 and

Summary
Compensation
Table Values


 

Vikram Pandit

   $ 0    $ 0    $ 0   

John Gerspach

   $ 0    $ 0    $ 0   

Edward Kelly

   $ 0    $ 471,785    $ (471,785

John Havens

   $ 0    $ 434,380    $ (434,380

Manuel Medina-Mora

   $ 0    $ 361,984    $ (361,984

Alberto Verme

   $ 0    $ 0    $ 0   

Gary Crittenden

   $ 0    $ 0    $ 0   

 

 

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Important compensation policies affecting named executive officers for 2009

 

 

Limits on bonus pools. On June 9, 2009, Citi entered into a definitive agreement (the Exchange Agreement) with the Department of the Treasury (Treasury) pursuant to which Treasury exchanged a portion of its preferred securities for Citi common stock equal to approximately 34 percent of Citi’s then-outstanding shares of common stock. In connection with that agreement, Citi launched exchange offers for publicly held convertible and non-convertible preferred and trust preferred securities. Under the terms of the Exchange Agreement, the bonus pool for 2009 for members of the senior leadership committee is limited to 60 percent of such pool for 2007. The compensation for the named executive officers who are members of the senior leadership committee was structured to comply with this limitation on the bonus pool. In addition, the Special Master directed the committee to impose a limit on the incentive compensation pool for the Next 75. The committee limited this pool to 3 percent of eligible earnings, defined as pre-tax net income from Citicorp’s continuing operations plus the proposed total discretionary incentive compensation pool. This limit was selected by looking at company performance, market factors, and individual performance of the Next 75. After evaluating Citi’s performance, the incentive compensation actually awarded to the Next 75 was approximately 1.3 percent of eligible earnings.

 

 

Stock ownership commitment. While stock ownership commitments recently have become widely recognized hallmarks 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 members of the management executive committee are generally required to retain at least 75 percent of the equity awarded to them as incentive compensation (other than cash equivalents and net of amounts required to pay

   

taxes and exercise prices) as long as they are members of senior management. Members of the senior leadership committee are also required to retain at least 50 percent of the same categories of net equity awards for the same period of time. This policy has always been intended to align the interests of senior management even further with the interests of stockholders.

 

 

Personal trading and anti-hedging policies. Citi has adopted a personal trading policy which limits trading by management and other employees in Citi stock and prohibits covered employees from engaging in hedging, derivative or other transactions that have an economically similar effect that would undermine the incentives created by deferred stock compensation structures. The named executive officers and the Top 100 employees are among those covered by these policies.

 

 

Dividend equivalents. As authorized by its stockholder-approved stock incentive plans, Citi pays dividend equivalents on nonvested restricted or deferred stock awards under the Capital Accumulation Program (CAP) and certain other stock awards on the same basis to all employees receiving such awards, which includes a significant percentage of all employees worldwide. Outstanding option awards are not eligible for dividend equivalents. In addition, certain outstanding senior executive incentive awards, such as the performance vesting stock awards made in respect of 2008 performance, do not pay dividend equivalents on nonvested stock. Where dividend equivalents are paid on equity awards, the dividend rate is the same for the named executive officers as for other stockholders. This practice is consistent with and furthers the goal of aligning the interests of employees with those of stockholders. Furthermore, since February 2009, Citi has not paid dividends or dividend equivalents on its common stock. Accordingly, the named executive officers and other employees have received and will continue to receive a direct decrease in income, in proportion


 

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to their share holdings. In 2009, the named executive officers received the following dividend equivalents:

 

Name


   Amount Paid as
Dividend Equivalents
in 2009 on Restricted
and/or Deferred
Stock Awards

Vikram Pandit

   $ 7,975

John Gerspach

   $ 547

Edward Kelly

   $ 362

John Havens

   $ 0

Manuel Medina-Mora

   $ 1,966

Alberto Verme

   $ 3,185

Gary Crittenden

   $ 3,949

 

 

Timing of awards. The incentive awards to the named executive officers for performance in 2009 were made on December 30, 2009 in advance of year end and the customary award date in January for the preceding year. These awards were made in December to facilitate compliance with EESA and the Special Master’s determination memorandum of December 11, 2009. The closing price of Citi common stock on the date of grant was used to price all stock awards in respect of 2009 granted to the named executive officers.

 

 

Grants of stock options. In accordance with the determination of the Special Master, the committee did not award any options to the named executive officers for 2009. However, in January 2009, the committee awarded performance priced options in respect of 2008 performance. The committee believes that performance priced options can be an important component of aligning executives’ interests with those of stockholders by compensating executives only if the stock price attains specified targets. None of the named executive officers received reload options in 2009, which would have been issued only with respect to rights granted as part of earlier option grants and under Citi’s stockholder-approved equity compensation plans. Since 2003, Citi has not granted reload options to anyone except to the extent required by the terms of previously granted options. In 2009, Citi made a broad-based discretionary option grant to employees,

   

but none of the named executive officers, Top 100 employees, or senior leadership committee members were eligible for that option grant.

 

 

Pricing of stock options. To facilitate compliance with SEC disclosure rules, Citi’s current equity plan generally provides that for executive officers, the exercise price of options is no less than the closing price of a share of Citi common stock on the NYSE on the date on which the option was granted. For other employees, the exercise price is no less than the closing price of a share of Citi common stock on the NYSE on the trading date immediately preceding the date on which the option was granted, so that on the date of grant, the committee has information available that describes the cost of the actual grant. Citi believes that both pricing approaches are appropriate measures of fair market value for options with exercise prices that are intended to be at (and not above) market on the date of grant.

 

 

Use of compensation consultants. The committee charter provides that its compensation determinations regarding the CEO and other members of senior management should reflect the advice of an independent compensation consultant. The committee retained ICCA starting in 2006 as part of its effort to ensure the independence of the advice it receives. ICCA advises the committee on its compensation decisions regarding executive compensation and other compensation matters as requested by the committee. ICCA performs no work for Citi other than its assignments from the committee, and received total fees of $23,900 in respect of all its services for the 2009 compensation year. ICCA meets separately with the committee and its chair outside the presence of management at meetings at which compensation decisions are made. For the 2009 compensation year, the committee did not engage any other compensation consultant.

 

 

Tax deductibility of the named executive officers’ incentive and retention compensation. Under EESA, Citi must not claim deductions for federal income tax purposes in excess of $500,000


 

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for any senior executive officer’s compensation that would not be deductible under IRC section 162(m)(5). While Citi currently seeks to preserve deductibility of compensation paid to the named executive officers to the extent permitted by law, Citi has retained the flexibility to provide nondeductible compensation arrangements necessary to recruit and retain its executives. As detailed above, non-deductible compensation was paid to some named executive officers for 2009 in order to compensate fairly the executives considered to be critical to managing and improving Citi’s performance in the future.

 

 

Policy on tax “gross-ups. Citi does not allow tax gross-ups, either directly or indirectly, for any of the named executive officers or any other member of the Top 100 employees, except through bona fide tax equalization programs for expatriates as expressed in Citi’s Expatriate Program. The tax equalization policies are designed so that expatriate employees will bear the same or similar tax burdens as they would if they were employed in their referenced home country. Expatriates are also eligible for certain other benefits designed to facilitate their (and their families’) transition to expatriate status and to minimize additional costs and hardships that may be experienced while living and working in the assignment country. These benefits include cash allowances and reimbursements for moving, housing, cost-of-living, and expenses to travel home. Citi pays all taxes on these benefits because they are unique to the expatriate assignment and would not be provided had the expatriate remained employed in his or her home country.

 

 

Change in control agreements. Citi’s omnibus 2009 Stock Incentive Plan provides that no awards made under that plan may be paid solely as a result of a change in control of Citi. In

   

addition, under EESA and the rules established by the Special Master, none of the named executive officers are eligible to receive any payments resulting from a change in control of Citi. In 2002, Citi’s board adopted a resolution specifically prohibiting cash payments to a departing executive officer in the event of a change in control that would equal or exceed three times the executive officer’s annual income. Citi generally does not provide for change in control protection as part of individual employment arrangements.

 

 

Policy on severance pay and “golden parachutes.” As explained in more detail in the Potential Payments upon Termination or Change in Control section, the named executive officers cannot receive any severance pay or accelerated vesting of equity or deferred cash awards in connection with their termination of employment or in connection with a change in control of Citi.

 

 

Policy on employment agreements. Citi will enter into a new employment agreement with an executive officer or a candidate only when necessary to attract or retain exceptional personnel. Any employment agreement with an executive officer (a) must be approved by the committee; (b) should have as short a term as possible and provide as few terms and conditions as are necessary to accomplish its purpose; and (c) if required by law to be available for public review, must be filed promptly with the appropriate regulatory authority. Employment agreements with executive officers may not provide for post-retirement personal benefits of a kind not generally available to employees or retirees, except with the express prior approval of the board.


 

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Compensation Information

 

For a complete understanding of actions taken by the committee with respect to compensation awards for 2009, please see the “Awards made by the Committee for 2009” section of the Compensation Discussion and Analysis.

 

Summary Compensation Table

 

The following table shows Citi’s compensation for any person serving as Chief Executive Officer or Chief Financial Officer during 2009 and Citi’s three other most highly compensated executive officers, with their titles in effect on December 31, 2009. The form and content of the table is prescribed by SEC regulations.

 

Name and

Principal Position

  Year  

Salary

($)

   

Bonus

($)

   

Stock

Awards

($)(1)

   

Stock

Options

($)(2)

   

Non-

Equity

Incentive

Plan

Compen-

sation

($)

 

Change
in

Pension

Value

and Non-

qualified

Deferred

Compen-

sation

Earnings

($)(3)

 

All Other

Compen-

sation

($)(4)

 

Total

($)

Vikram Pandit

CEO

  2009   $ 125,001 (5)    $ 0      $ 0      $ 0      $ 0   $ 0   $ 3,750   $ 128,751
  2008   $ 958,333      $ 0      $ 28,830,000 (6)    $ 8,432,911 (7)    $ 0   $ 0   $ 16,193   $ 38,237,437
  2007   $ 250,000      $ 0      $ 2,914,320      $ 0      $ 0   $ 0   $ 0   $ 3,164,320

John Gerspach(8)

CFO

  2009   $ 416,667      $ 0      $ 4,583,333      $ 0      $ 0   $ 49,117   $ 14,700   $ 5,063,817

Edward Kelly(9)

Vice Chairman

  2009   $ 270,834      $ 0      $ 9,170,843 (10)    $ 471,785 (11)    $ 0   $ 0   $ 14,000   $ 9,927,462

John Havens(8)

CEO—Clients Group

  2009   $ 500,000      $ 0      $ 10,327,374 (12)    $ 434,380 (11)    $ 0   $ 0   $ 14,700   $ 11,276,454

Manuel Medina-

Mora(8)—Chairman and CEO

Latin America and Mexico

  2009   $ 546,966 (13)    $ 0      $ 9,328,010 (14)    $ 361,984 (11)    $ 0   $ 163,047   $ 0   $ 10,400,007

Alberto Verme(8)

Co-CEO of EMEA

(Central and Eastern Europe)

  2009   $ 266,667      $ 0      $ 7,158,333      $ 0      $ 0   $ 12,794   $ 364,700   $ 7,802,494

Gary Crittenden(15)

Former CFO

  2009   $ 277,778      $ 0      $ 0      $ 0      $ 0   $ 0   $ 39,700   $ 317,478
  2008   $ 500,000      $ 0      $ 9,941,667 (16)    $ 0      $ 0   $ 0   $ 140,056   $ 10,581,723
  2007   $ 403,410      $ 14,030,000 (17)    $ 17,400,907 (18)    $ 0      $ 0   $ 0   $ 85,224   $ 31,919,541

(1)

The values in this column represent the aggregate grant date fair values of the awards, as described in more detail in the applicable footnotes below. The values shown include salary stock amounts awarded consistent with the determinations made by the Special Master. Salary stock awards were granted to the named executive officers as follows: $2,916,666 to Mr. Gerspach, $5,062,500 to Mr. Kelly, $475,000 to Mr. Havens, $450,000 to Mr. Medina-Mora, and $4,683,333 to Mr. Verme.

(2)

The values in this column represent the aggregate grant date fair values of the awards, as described in more detail in the applicable footnotes below. The assumptions made when calculating the amounts in this column for 2009 and 2008 awards are found in footnote 8 to the Consolidated Financial Statements of Citigroup Inc. and its Subsidiaries, as filed with the SEC on Form 10-K for 2009.

 

(footnotes continued on following page)

 

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(footnotes continued from previous page)

 

(3)

These amounts are the increases in the present value of pension benefits for Mr. Gerspach, Mr. Medina-Mora and Mr. Verme, as more fully described in the Pension Benefits table. Mr. Gerspach’s benefit under The Citigroup Pension Plan increased $30,275 and his benefit under the Supplemental ERISA Compensation Plan of Citibank, N.A. and Affiliates increased $18,842. Mr. Medina-Mora’s benefit under the Banamex Pension Plan increased by $162,282 and his statutory seniority premium increased by $765. The amount of each named executive officer’s above-market or preferential earnings on compensation that was deferred on a basis that was not tax-qualified was $0.

(4)

Set forth below is a breakdown of All Other Compensation (including personal benefits):

 

Name   

Security

Services/

Systems

($)

  

Aircraft

($)

  

Ground

Transportation

($)

  

Financial and

Tax Planning

($)

  

Medical

and
Dental

Benefits

($)

  

Hart-Scott-

Rodino

Filing Fees

($)

Vikram Pandit

   $ 0    $ 0    $ 0    $ 0    $ 0    $ 0

John Gerspach

   $ 0    $ 0    $ 0    $ 0    $ 0    $ 0

Edward Kelly

   $ 0    $ 0    $ 0    $ 0    $ 0    $ 0

John Havens

   $ 0    $ 0    $ 0    $ 0    $ 0    $ 0

Manuel Medina-Mora

   $ 0    $ 0    $ 0    $ 0    $ 0    $ 0

Alberto Verme

   $ 0    $ 0    $ 0    $ 0    $ 0    $ 0

Gary Crittenden

   $ 0    $ 0    $ 25,000    $ 0    $ 0    $ 0
Name   

401(k) Plan

Matching

Contributions

($)

  

Temporary

Living and

Home
Leave

($)

  

Housing/

Cost of

Living

Allowance

($)

  

Tax

Reimbursements

($)

  

Other

Income

($)

   Total ($)

Vikram Pandit

   $ 3,750    $ 0    $ 0    $ 0    $ 0    $ 3,750

John Gerspach

   $ 14,700    $ 0    $ 0    $ 0    $ 0    $ 14,700

Edward Kelly

   $ 14,000    $ 0    $ 0    $ 0    $ 0    $ 14,000

John Havens

   $ 14,700    $ 0    $ 0    $ 0    $ 0    $ 14,700

Manuel Medina-Mora

   $ 0    $ 0    $ 0    $ 0    $ 0    $ 0

Alberto Verme

   $ 14,700    $ 0    $ 350,000    $ 0    $ 0    $ 364,700

Gary Crittenden

   $ 14,700    $ 0    $ 0    $ 0    $ 0    $ 39,700

 

Mr. Crittenden’s ground transportation was provided under the terms of his employment agreement dated February 23, 2007, pursuant to which Citi was obligated to provide a car and driver for Mr. Crittenden’s personal use. The amount listed is the amount Citi reimbursed Mr. Crittenden under this arrangement and was attributable to personal use prior to his resignation effective July 21, 2009.

 

The named executive officers (other than Mr. Medina-Mora) received 401(k) plan matching contributions pursuant to the formula available to all eligible US employees.

 

Mr. Verme’s housing benefits and cost of living allowances are delivered pursuant to Citi’s formal Expatriate Program available to all participants who are transferred from the US on temporary assignments to other countries. As Co-CEO for EMEA, Mr. Verme has been assigned as an expatriate employee to London and Dubai pursuant to the terms of Citi’s Expatriate Program. In addition to providing developmental opportunities to employees and filling specific business needs, the purpose of the Expatriate Program is to neutralize the tax and other financial advantages or disadvantages of accepting an assignment outside an employee’s home country, thereby removing personal financial considerations from the decision of whether to accept an assignment. Expatriates are eligible for certain

 

(footnotes continued on following page)

 

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(footnotes continued from previous page)

 

personal benefits intended to minimize the disruption of a temporary assignment. Under Citi’s tax equalization policies for expatriates, Citi pays all taxes on these benefits because they are unique to the expatriate assignment and would not be provided had the expatriate remained employed in his or her home country. There are no amounts reported as tax payments or reimbursements made in respect of 2009 due to the fact that Mr. Verme received no benefit from the tax equalization arrangement in 2009. This arrangement could result in benefits to Mr. Verme in future years and will be disclosed accordingly if Mr. Verme is a named executive officer in such years.

(5)

Mr. Pandit agreed to accept $1 per year in salary effective in February 2009. Amounts in excess of $1 reflect compensation paid in 2009 prior to his announcement.

(6)

In connection with his appointment as CEO, the committee made equity awards to Mr. Pandit in January 2008 that were designed to incentivize and reward him based on the future performance of Citi. The awards of 1 million shares, with an aggregate grant date fair value of $26,330,000 on the award date, had a market value of $3,310,000 on December 31, 2009.

(7)

These performance-priced options were granted in connection with Mr. Pandit’s promotion to CEO and have a ten-year term. One-third of the options have an exercise price equal to the grant date price ($24.40), one-third have an exercise price that is 25 percent above the grant date price ($30.50), and one-third have an exercise price that is 50 percent above the grant date price ($36.60). The options will only have value to the extent that the Citi stock price exceeds each exercise price after the vesting of such options, and they currently have no intrinsic value.

(8)

Compensation for Mr. Gerspach, Mr. Havens, Mr. Medina-Mora and Mr. Verme is provided only for 2009 because they were not named executive officers in prior years.

(9)

Mr. Kelly was CFO from March 20, 2009 through July 9, 2009 and accordingly is listed in the Summary Compensation Table and subsequent compensation tables. Compensation for Mr. Kelly is provided for 2009 only because he was not a named executive officer in prior years.

(10)

This amount includes $1,441,676 attributable to a performance-vesting equity award made to Mr. Kelly in January 2009 in connection with 2008 performance. See “General Discussion of the Summary Compensation Table and Grants of Plan-Based Awards Table” following the Grants of Plan Based Awards Table.

(11)

These performance-priced options were awarded in January 2009 in connection with 2008 performance and have exercise prices of $10.61 or $17.85. See “General Discussion of the Summary Compensation Table and Grants of Plan-Based Awards Table” following the Grants of Plan Based Awards Table.

(12)

This amount includes $1,327,374 attributable to a performance-vesting equity award made to Mr. Havens in January 2009 in connection with 2008 performance. See “General Discussion of the Summary Compensation Table and Grants of Plan-Based Awards Table” following the Grants of Plan Based Awards Table.

(13)

Mr. Medina-Mora’s base salary was targeted at $500,000 but exceeded such amount due to foreign currency fluctuations. The Special Master approved the excess attributable to such fluctuations.

(14)

This amount includes $849,807 attributable to a performance-vesting equity award made to Mr. Medina-Mora in January 2009 in connection with 2008 performance. See “General Discussion of the Summary Compensation Table and Grants of Plan-Based Awards Table” following the Grants of Plan Based Awards Table.

(15)

Mr. Crittenden voluntarily resigned from the company effective July 21, 2009.

(16)

Of this amount, shares with a grant date fair value of $6,743,750 were forfeited upon Mr. Crittenden’s resignation.

(17)

This amount includes a sign-on award of $11,180,000 paid in respect of equity awards that were forfeited upon resignation from his former employer.

(18)

Of this amount, shares with a grant date fair value of $2,914,320 were forfeited.

 

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Table of Contents

Grants of Plan-Based Awards

The table below provides information regarding equity awards made by the committee in 2009, including each award’s grant date fair value. The awards made in January 2009 were made for the 2008 performance year and the awards granted in November and December of 2009 were made for the 2009 performance year. The table accordingly shows equity awards attributable to more than one year, in accordance with SEC requirements.

 

       

Estimated Future

Payouts Under

Non-Equity
Incentive

Plan Awards

 

Estimated Future

Payouts Under

Equity Incentive

Plan Awards

 

All Other

Stock

Awards:

Number

of

Shares

of Stock

or Units

(#)

   

All Other

Option

Awards:

Number

of

Securities

Under-
lying

Options

(#)

   

Exercise

or Base

Price of

Option

Awards

($/Sh)

 

Grant

Date Fair

Value of

Stock and

Option

Awards

Name   Grant Date  

Thresh-

old

($)

 

Target

($)

 

Maxi-

mum

($)

 

Thresh-

old

(#)

 

Target

(#)

   

Maxi-

mum

(#)

       

Vikram Pandit

  —     —     —     —     —     —        —     —        —          —       —  

John Gerspach

  11/30/2009   —     —     —     —     —        —     709,651 (1)    —          —     $ 2,916,666
    12/30/2009   —     —     —     —     —        —     502,008 (2)    —          —     $ 1,666,667

Edward Kelly

  1/14/2009   —     —     —     —     627,674 (3)    —     —        —          —     $ 1,441,676
    1/14/2009   —     —     —     —     —        —     —        331,356 (4)    $ 10.61   $ 307,084
    1/14/2009   —     —     —     —     —        —     —        331,356 (4)    $ 17.85   $ 164,701
    11/30/2009   —     —     —     —     —        —     1,231,751 (1)    —          —     $ 5,062,500
    12/30/2009   —     —     —     —     —        —     803,212 (2)    —          —     $ 2,666,667

John Havens

  1/14/2009   —     —     —     —     577,910 (3)    —     —        —          —     $ 1,327,374
    1/14/2009   —     —     —     —     —        —     —        305,085 (4)    $ 10.61   $ 282,738
    1/14/2009   —     —     —     —     —        —     —        305,085 (4)    $ 17.85   $ 151,642
    12/30/2009   —     —     —     —     —        —     715,361 (2)    —          —     $ 2,375,000
    12/30/2009   —     —     —     —     —        —     715,361 (6)    —          —     $ 2,375,000
    12/30/2009   —     —     —     —     —        —     1,137,048 (5)    —          —     $ 3,775,000
    12/30/2009   —     —     —     —     —        —     143,072 (1)    —          —     $ 475,000

Manuel
Medina-Mora

  1/14/2009   —     —     —     —     369,988 (3)    —     —        —          —     $ 849,807
    1/14/2009   —     —     —     —     —        —     —        254,238 (4)    $ 10.61   $ 235,615
    1/14/2009   —     —     —     —     —        —     —        254,238 (4)    $ 17.85   $ 126,369
    12/30/2009   —     —     —     —     —        —     677,710 (2)    —          —     $ 2,250,000
    12/30/2009   —     —     —     —     —        —     677,710 (6)    —          —     $ 2,250,000
    12/30/2009   —     —     —     —     —        —     1,062,711 (5)    —          —     $ 3,528,203
    12/30/2009   —     —     —     —     —        —     135,542 (1)    —          —     $ 450,000

Alberto Verme

  11/30/2009   —     —     —     —     —        —     1,139,497 (1)    —          —     $ 4,683,333
    12/30/2009   —     —     —     —     —        —     745,481 (2)    —          —     $ 2,475,000

Gary Crittenden

  —     —     —     —     —     —        —     —        —          —       —  

(1)

This award is fully vested as “salary stock” and is subject to transfer restrictions for up to 36 months from the date earned. See discussion above under “Compensation Structure — Salary Stock.” The award was made under the 2009 Stock Incentive Plan.

(2)

This award of LTRS vests at least three years after the grant date and is subject to transfer restrictions and clawbacks. See discussion above under “Compensation Structure — Long Term Restricted Stock.” The award was made under the 2009 Stock Incentive Plan.

(3)

This award was made in respect of performance during 2008 and vests only if Citi stock attains certain price targets. See discussion of 2008 Performance-Vesting Stock below. The award was made under the 1999 Stock Incentive Plan.

 

 

(footnotes continued on following page)

 

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Table of Contents

(footnotes continued from previous page)

 

(4)

This award was made in respect of performance during 2008. See discussion of 2008 Performance-Priced Options below. The award was made under the 1999 Stock Incentive Plan.

(5)

This stock incentive award is immediately vested and is not subject to transfer restrictions but is subject to clawbacks. See discussion above under “Compensation Structure — Stock Incentive Awards.” The award was made under the 2009 Stock Incentive Plan.

(6)

This stock incentive award is immediately vested and subject to transfer restrictions and clawbacks. See discussion above under “Compensation Structure — Stock Incentive Awards.” The award was made under the 2009 Stock Incentive Plan.

 

General discussion of the Summary

Compensation Table and Grants of Plan-Based

Awards Table

 

Set forth below is a discussion of the awards disclosed in the Summary Compensation Table and the Grants of Plan-Based Awards Table, to the extent not described in the Compensation Discussion and Analysis.

 

2008 Performance-Vesting Stock.    Members of the management executive committee as of January 2009 (except the CEO and CFO) received 30 percent of their total annual incentive awards for performance in 2008 as performance-vesting equity awards. These awards are intended to link incentive compensation for Citi’s senior executives to the performance of Citi. The awards were made to balance the need to compensate key executives, who (if they received any awards at all) received significantly reduced total annual incentive awards at market levels while linking their compensation to Citi’s future performance.

 

These performance-vesting stock awards vest if the price of a share of Citi common stock meets specified price targets prior to January 14, 2013 (the delivery date), with a minimum one-year vesting period. Half of each executive’s award has a price target of $17.85 and half has a price target of $10.61, with the price target deemed met only if the NYSE closing price of Citi stock equals or exceeds the applicable price target for at least 20 NYSE trading days within any period of 30 consecutive NYSE trading days ending on or before the delivery date. These price targets were chosen based on the conversion prices of the warrants to purchase common stock issued by Citi to Treasury on

October 28, 2008 and on December 31, 2008. Any shares that have not vested by the delivery date will vest according to a fraction, the numerator of which is the share price on the delivery date and the denominator of which is the price target of the nonvested shares. Vested shares are not distributed to the executive until the delivery date, and no dividend equivalents are paid on these awards prior to vesting. If a named executive officer who received an award resigns or is involuntarily terminated before the delivery date, all nonvested shares are forfeited; however, some or all of the shares will vest and become immediately deliverable if the executive terminates employment prior to the delivery date due to death or disability, and shares will remain eligible to vest upon retirement for any executive who was not a named executive officer on the grant date after meeting an age and service rule, provided that the executive does not compete with the company’s business operations. The age and service rules are described in the narrative following the Nonqualified Deferred Compensation Table.

 

2008 Performance-Priced Options.    Members of the management executive committee as of January 2009 received 10 percent of their total annual incentive awards for performance in 2008 as performance-priced stock options, which have an exercise price that places the awards significantly “out of the money” on the date of grant. These options have the same purposes as the performance-vesting stock awards. Half of each executive’s options have an exercise price of $17.85


 

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and half have an exercise price of $10.61 (as determined pursuant to the terms of the awards), and were granted on January 14, 2009, when the

closing price of Citi common stock was $4.53. The named executive officers who received awards accordingly will receive value from the options only if the Citi stock price increases significantly over its current price. The options have a 10-year

term and vest ratably over a four-year period. If the named executive officer resigns, retires or is involuntarily terminated before the delivery date, all nonvested options are forfeited; however, the options will vest if the executive terminates employment prior to the vesting date due to death or disability.


 

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Table of Contents

Outstanding Equity Awards at Fiscal Year-End

 

The market values in this table were computed using the closing price of a share of Citi common stock on December 31, 2009, which was $3.31.

 

                  Option Awards                 Stock Awards      
       

Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable(1)

 

 

Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(2)

 

 

Equity

Incentive

Plan
Awards:
Number of
Securities
Underlying
Unexercised
Options (#)

 

Option
Exercise
Price ($)

 

Option
Expiration
Date

 

Number of
Shares or
Units of Stock
That Have
Not Vested (#)

   

Market Value
of Shares or
Units of Stock
That Have
Not Vested (#)

 

Equity
Incentive
Plan
Awards:

Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested (#)

   

Equity
Incentive
Plan
Awards:

Market or
Payout
Value of
Unearned
Shares,
Units
or Other
Rights That
Have Not
Vested ($)

Name   Grant Date   Initial     Reloads   Initial     Reloads              
Vikram Pandit   1/22/2008   250,000 (3)    —     750,000      —     —     $ 30.5000   1/22/2018   —          —     —          —  
    1/22/2008   250,000 (3)    —     750,000      —     —     $ 36.6000   1/22/2018   —          —     —          —  
    1/22/2008   250,000 (3)    —     750,000      —     —     $ 24.4000   1/22/2018   —          —     —          —  
    1/22/2008   —        —     —        —     —       —     —     47,474 (4)    $ 157,139   —          —  
    1/22/2008   —        —     —        —     —       —     —     500,000 (5)    $ 1,655,000   —          —  
John Gerspach   1/16/2001   16,082 (6)    —     —        —     —     $ 49.5477   1/16/2011   —          —     —          —  
    2/13/2002   3,860 (7)    —     —        —     —     $ 42.1097   2/13/2012   —          —     —          —  
    1/6/2004   —        12,331   —        —     —     $ 49.7900   4/18/2010   —          —     —          —  
    1/20/2004   16,000 (8)    —     —        —     —     $ 49.5000   1/20/2010   —          —     —          —  
    1/23/2004   —        3,433   —        —     —     $ 50.6900   2/13/2012   —          —     —          —  
    5/1/2006   —        8,274   —        —     —     $ 49.9500   4/18/2010   —          —     —          —  
    10/6/2006   —        10,447   —        —     —     $ 50.9900   2/13/2012   —          —     —          —  
    1/22/2008   —        —     —        —     —       —     —     11,393 (9)    $ 37,711   —          —  
    12/30/2009   —        —     —        —     —       —     —     502,008 (10)    $ 1,661,646   —          —  
Edward Kelly   2/4/2008   —        —     —        —     —       —     —     27,124 (11)    $ 89,780   —          —  
    1/14/2009   —        —     —        —     —       —     —     —          —     627,675 (12)    $ 2,077,604
    1/14/2009   —        —     331,356 (13)    —     —     $ 10.6100   1/14/2019   —          —     —          —  
    1/14/2009   —        —     331,356 (13)    —     —     $ 17.8500   1/14/2019   —          —     —          —  
    12/30/2009   —        —     —        —     —       —     —     803,212 (10)    $ 2,658,632   —          —  
John Havens   1/14/2009   —        —     —        —     —       —     —             —     577,910 (12)    $ 1,912,882
    1/14/2009   —        —     305,085 (13)    —     —     $ 10.6100   1/14/2019   —          —     —          —  
    1/14/2009   —        —     305,085 (13)    —     —     $ 17.8500   1/14/2019   —          —     —          —  
    12/30/2009   —        —     —        —     —       —     —     715,361 (10)    $ 2,367,845   —          —  

 

68

 

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Table of Contents
                  Option Awards                 Stock Awards      
       

Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable(1)

 

 

Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(2)

 

 

Equity

Incentive

Plan
Awards:
Number of
Securities
Underlying
Unexercised
Options (#)

 

Option
Exercise
Price ($)

 

Option
Expiration
Date

 

Number of
Shares or
Units of Stock
That Have
Not Vested (#)

   

Market Value
of Shares or
Units of Stock
That Have
Not Vested (#)

 

Equity
Incentive
Plan Awards:

Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested (#)

   

Equity
Incentive
Plan
Awards:

Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested ($)

Name   Grant Date   Initial     Reloads   Initial     Reloads              
Manuel Medina-Mora   10/16/2001   107,219 (14)    —     —        —     —     $ 41.7833   10/16/2011   —          —     —          —  
    2/13/2002   107,219 (7)    —     —        —     —     $ 42.1097   2/13/2012   —          —     —          —  
    2/13/2002   16,259 (15)    —     —        —     —     $ 41.8971   2/13/2012   —          —     —          —  
    1/20/2004   31,256 (8)    —     —        —     —     $ 49.5000   1/20/2010   —          —     —          —  
    1/20/2004   70,000 (8)    —     —        —     —     $ 49.5000   1/20/2010   —          —     —          —  
    1/17/2006   95,176 (16)    —     31,725      —     —     $ 48.9200   1/17/2012   —          —     —          —  
    1/22/2008   —        —     —        —     —       —     —     56,969 (9)    $ 188,567   —          —  
    1/22/2008   —        —     —        —     —       —     —     45,575 (4)    $ 150,853   —          —  
    1/22/2008   73,630 (17)    —     220,890      —     —     $ 24.4500   1/22/2014   —          —     —          —  
    1/14/2009   —        —     254,238 (13)    —     —     $ 10.6100   1/14/2019   —          —     —          —  
    1/14/2009   —        —     254,238 (13)    —     —     $ 17.8500   1/14/2019   —          —     —          —  
    1/14/2009   —        —     —        —     —       —     —             —     369,988 (12)    $ 1,224,660
    12/30/2009   —        —     —        —     —       —     —     677,710 (10)    $ 2,243,220   —          —  
Alberto Verme   1/16/2001   42,887 (6)    —     —        —     —     $ 49.5477   1/16/2011   —          —     —          —  
    1/20/2004   42,152 (8)    —     —        —     —     $ 49.5000   1/20/2010   —          —     —          —  
    1/20/2004   22,446 (8)    —     —        —     —     $ 49.5000   1/20/2010   —          —     —          —  
    1/17/2006   —        —     —        —     —       —     —     4,271 (18)    $ 14,137   —          —  
    5/1/2006   —        21,572   —        —     —     $ 49.9500   4/18/2010   —          —     —          —  
    10/5/2006   —        42,929   —        —     —     $ 51.0300   2/13/2012   —          —     —          —  
    1/16/2007   —        —     —        —     —       —     —     9,793 (19)    $ 32,415   —          —  
    7/17/2007   —        10,385   —        —     —     $ 52.4600   2/13/2012   —          —     —          —  
    1/22/2008   —        —     —        —     —       —     —     9,577 (9)    $ 31,700   —          —  
    1/22/2008   —        —     —        —     —       —     —     178,788 (4)    $ 591,788   —          —  
    12/30/2009   —        —     —        —     —       —     —     745,481 (10)    $ 2,467,542   —          —  
Gary Crittenden   —     —        —     —        —     —       —     —     —          —     —          —  

(1)

The options shown in this column are vested as of December 31, 2009.

(2)

The options shown in this column are nonvested as of December 31, 2009.

 

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Table of Contents
(3)

This option granted on January 22, 2008 vests in four equal annual installments beginning on January 22, 2009.

(4)

This stock award granted on January 22, 2008 vests in two equal annual installments beginning on January 20, 2009, except the award granted to Mr. Pandit which vests in two equal annual installments beginning on January 22, 2009.

(5)

This stock award granted on January 22, 2008 vests in four equal annual installments beginning on December 11, 2008.

(6)

This option granted on January 16, 2001 vested in five equal annual installments beginning on July 16, 2002.

(7)

This option granted on February 13, 2002 vested in five equal annual installments beginning on July 13, 2003.

(8)

This option granted on January 20, 2004 vested in three equal annual installments beginning on July 20, 2005.

(9)

This stock award granted on January 22, 2008 vests in four equal annual installments beginning on January 20, 2009.

(10)

This stock award granted on December 30, 2009 vests on January 20, 2013.

(11)

This stock award granted on February 4, 2008 vests in four equal annual installments beginning on February 4, 2009.

(12)

This stock award granted on January 14, 2009 vests only if Citi stock attains certain price targets measured over a specified period of time. See Performance Vesting Stock above.

(13)

This option granted on January 14, 2009 vests in four equal annual installments beginning on January 14, 2010.

(14)

This option granted on October 16, 2001 vested in five equal annual installments beginning on October 16, 2002.

(15)

This option granted on February 13, 2002 vested in five equal annual installments beginning on February 13, 2003.

(16)

This option granted on January 17, 2006 vested in four equal annual installments beginning January 20, 2007.

(17)

This option granted on January 22, 2008 vests in four equal annual installments beginning January 20, 2009.

(18)

This stock award granted on January 17, 2006 vests in four equal annual installments beginning on January 20, 2007.

(19)

This stock award granted on January 16, 2007 vests in four equal annual installments beginning on January 20, 2008.

 

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Shares that are subject to a Rule of 60 or Rule of 75 provision and that are held by named executive officers who have met the Rule of 60 or the Rule of 75 are not shown as outstanding in the Outstanding Equity Awards at Fiscal Year-End Table. For a full discussion of the Rule of 60 and the Rule of 75, see the Nonqualified Deferred Compensation Table below.

 

The Outstanding Equity Awards at Fiscal Year-End Table describes options as either “initial” or “reload.” Initial option grants made in 2003 or later do not have a reload feature; however, options granted prior to 2003 retain that feature, as do any options granted upon exercise of an option using the reload feature. The grant of a reload option is not a discretionary award for the year in which the reload right is exercised; rather, the grants are made pursuant to the terms of previously granted options. Under the reload program, if shares of Citi common stock that have been owned for at least six

months are used to pay the exercise price of an option and the income taxes due on exercise of the option, the option holder will receive a new reload option to make up for the shares the option holder used to pay the purchase price and tax withholding obligations. The reload option does not vest (i.e., become exercisable) for six months and expires on the expiration date of the initial grant. A reload option will not be granted upon the exercise of an option with a reload feature unless the market price of Citi common stock on the date of exercise is at least 20 percent greater than the option exercise price. The purpose of granting reload options was to maintain the option holder’s commitment to Citi by maintaining as closely as possible the option holder’s net equity position — the sum of shares owned and shares subject to option.


 

Option Exercises and Stock Vested

 

     Option Awards

   Stock Awards

Name   

Number of Shares

Acquired on

Exercise

(#)

  

Value Realized

on Exercise

($)

  

Number of Shares

Acquired

on Vesting

(#)

  

Value Realized

on Vesting

($)

Vikram Pandit

   0    $ 0    297,474    $ 1,132,504

John Gerspach(1)

   0    $ 0    725,681    $ 2,981,248

Edward Kelly

   0    $ 0    1,240,792    $ 5,095,366

John Havens

   0    $ 0    1,995,481    $ 6,625,000

Manuel Medina-Mora

   0    $