DEF 14A 1 citi_def14a.htm DEFINITIVE PROXY STATEMENT
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A

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  CITIGROUP INC.  
  (Name of Registrant as Specified In Its Charter)  
 
       
 
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Citigroup Inc.
388 Greenwich Street
New York, NY 10013

March 16, 2016

Dear Stockholder:

We cordially invite you to attend Citi’s Annual Stockholders’ Meeting. The Annual Meeting will be held on Tuesday, April 26, 2016, at 9:00 am in The Grand Ballroom at the University of Miami, Student Center Complex, 1330 Miller Drive, Coral Gables, Florida. Directions to the 2016 Annual Meeting location are provided on pages 103 and 104 of this Proxy Statement.

At the Annual 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.

Thank you for your support of Citi.

Sincerely,


Michael E. O’Neill
Chairman of the Board


 

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LETTER FROM THE BOARD OF DIRECTORS TO OUR STOCKHOLDERS

Operating the business in a decidedly challenging economic, political and social environment, the Citi management team delivered full-year net income of over $17 billion — our best annual profit since the financial crisis — and also reached a number of significant financial milestones. Importantly, our 2015 stress test submission received no objection from the Federal Reserve Board, enabling the firm to return a meaningful amount of capital to its shareholders. A comprehensive Resolution Plan was submitted to the Federal Reserve and the Federal Deposit Insurance Corporation, and we are awaiting their evaluation.

Shortly after Mike Corbat took on the CEO role three-and-a-half years ago, he presented a set of metrics to the Board that he felt the company should use in evaluating its performance. We agreed, and these targets, which management committed to achieve by the end of 2015, were publicly disclosed. As discussed and shown in the charts included in the Compensation Discussion and Analysis section of this proxy, the stated objectives were for the most part achieved, and our overall operating performance in 2015 was more than respectable when compared to those of our eight-firm peer group. We can be proud of what has been accomplished, but the management team and your directors recognize that further improvement in the firm’s financial performance is essential if our shareholders are to be appropriately rewarded.

In the context of the recent market turmoil and decline in bank stocks, including our own, it has obviously been difficult to celebrate the success of the turnaround in the firm’s performance that has occurred in the past three years. Clearly, investors are concerned about the sharp decline in commodity prices, the slowing economic expansion in the emerging markets, and the negative impact on bank profitability were interest rates to remain low for an extended period. We do not dismiss these concerns, but you should take comfort from the firm’s ample capital and liquidity and the fact that a great deal of time and effort has been devoted to building a sound and active risk management function. We are confident that Mike and his team are up to the task of guiding the firm through whatever challenges lie ahead.

The work of embedding a culture of ethical decision-making throughout the organization continued apace in 2015. The firm’s Mission and Value Proposition clearly defines the desired culture, articulates Citi’s purpose and broader role in society, and lays out the firm’s expectation for its employees in fulfilling its purpose and role. Revamped leadership standards, which better reflect our ethics and execution priorities, are an important factor in performance evaluation and compensation decisions. The Board’s Ethics and Culture Committee will continue to monitor management’s initiatives, as well as their implementation and results.

In recent years your directors have spent a considerable amount of time with management reviewing the company’s strategy and exploring alternatives. In the process of these reviews, our strategy has been further refined. The Board believes it builds on the firm’s distinct competitive advantages and provides important diversification benefits. Each of our Institutional and Consumer businesses is expected to generate half of the company’s net income, with half of that income generated in the U.S. and the other half sourced internationally. We operate through a unique international network that enables the firm to transact business in over 160 countries. We have a particular advantage in the emerging markets that are still projected to grow more quickly than the developed markets, including the United States, albeit with greater volatility. We believe we are on the right track and that your investment will be rewarded. Rest assured that we take very seriously our fiduciary obligation to you to ensure that the firm is operated with your interests at heart. We believe the Board, as constituted, has the requisite skills and experience to accomplish that objective.

A short synopsis of management’s Board-supported operating practices in executing the strategy seems in order. The management team has appropriately and adeptly exited businesses that did not and were unlikely to produce adequate returns on invested capital. Though much of the necessary simplification and streamlining of the firm has been accomplished, optimizing the company's portfolio of businesses and support functions is a never-ending process. As a matter of course, management will continue to monitor the performance and prospects of individual businesses, and, after thorough reviews, withdraw capital from those that are unlikely to meet the firm’s return expectations. At the same time, incremental capital will be invested in businesses where we have a competitive advantage and attractive long-term prospects even when such investments do not generate immediate returns (for example, the current investment in our credit card businesses). Lastly and crucially, the return of capital to you our shareholders continues to be a vital component of management’s execution priorities. In the existing and likely-to-continue slow growth

Citi 2016 Proxy Statementii


 

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environment, there are not enough attractive investment opportunities in either our existing businesses or permissible new ventures to fully invest the capital being generated by the firm. Hence, capital return becomes the default course of action. Of course, it will be essential to continue to satisfy the Federal Reserve and other regulators that we are operating in a prudent manner in order to achieve our capital return objectives.

We remain convinced that the strategy we have adopted, and which our management team is executing, continues to be the one that will be the most accretive for our shareholders over time. However, as we have demonstrated in the past, should evidence mount that some of our key underlying assumptions have proven faulty, the Board, working with management, will make whatever mid-course corrections are required.

We believe in the mission of this iconic institution, and we are thankful to have your ongoing support as we work toward achieving our goals. Dialogue with shareholders is a fundamental feature of a healthy, well-governed organization, and we will continue to make it a priority. As always, you are encouraged to write with thoughts, concerns or suggestions to Citigroup Inc. Board of Directors c/o Rohan Weerasinghe, General Counsel and Corporate Secretary, 388 Greenwich Street, New York, New York, 10013.

Michael L. Corbat

Gary M. Reiner

Ellen M. Costello

Judith Rodin

Duncan P. Hennes

Anthony M. Santomero

Peter B. Henry

Joan E. Spero

Franz B. Humer

Diana L. Taylor

Renée J. James

William S. Thompson, Jr.

Eugene M. McQuade

James S. Turley

Michael E. O’Neill

Ernesto Zedillo Ponce de Leon

 

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Citigroup Inc.
388 Greenwich Street
New York, NY 10013

Notice of Annual Meeting of Stockholders

Dear Stockholder:

Citi’s Annual Stockholders’ Meeting will be held on Tuesday, April 26, 2016, at 9:00 am in The Grand Ballroom at the University of Miami, Student Center Complex, 1330 Miller Drive, Coral Gables, Florida. Directions to the 2016 Annual Meeting are provided on pages 103 and 104 of this Proxy Statement. You will need an admission ticket or proof of ownership of Citi stock to enter the meeting. Live audio of the Annual Meeting will be webcast at www.citigroup.com.

At the meeting, stockholders will be asked to:

elect the directors listed in this proxy statement,

 

ratify the selection of Citi’s independent registered public accounting firm for 2016,

 

consider an advisory vote to approve Citi’s 2015 executive compensation,

 

approve additional authorized shares under the Citigroup 2014 Stock Incentive Plan,

 

approve the Amended and Restated 2011 Citigroup Executive Performance Plan,

 

act on certain stockholder proposals, and

 

consider any other business properly brought before the meeting, or any adjournment or postponement thereof, by or at the direction of the Board of Directors.

 

The close of business on February 29, 2016 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, 388 Greenwich Street, New York City, for at least 10 days before the Annual Meeting or any adjournment or postponement thereof.

Citi has utilized the Securities and Exchange Commission rule allowing companies to furnish proxy materials to its stockholders over the Internet. This process allows us to expedite our stockholders’ receipt of proxy materials, lower the costs of distribution, and reduce the environmental impact of our Annual Meeting.

In accordance with this rule, on or about March 16, 2016, we sent to those current stockholders who were stockholders at the close of business on February 29, 2016, a notice of the 2016 Annual Meeting containing a Notice of Internet Availability of Proxy Materials (Notice). The Notice contains instructions on how to access our Proxy Statement and Annual Report and vote online. If you received a Notice and would like to receive a printed copy of our proxy materials from us instead of downloading a printable version from the Internet, please follow the instructions for requesting such materials included in the Notice.

Please vote by telephone, mobile phone, or Internet (instructions are on your proxy card, voter instruction form, or Notice, as applicable), so that your shares will be represented whether or not you attend the Annual Meeting. If you receive your materials by mail, please sign, date, and promptly return the enclosed proxy card in the enclosed envelope.

By order of the Board of Directors,


Rohan Weerasinghe
Corporate Secretary

March 16, 2016

Citi 2016 Proxy Statementiv


 

CONTENTS

 

       

PROXY STATEMENT HIGHLIGHTS

  

ABOUT THE ANNUAL MEETING

  

HOW WE HAVE DONE

  

Annual Report

  

CORPORATE GOVERNANCE

  

Corporate Governance Materials Available on Citi’s Website

  

Corporate Governance Guidelines

  

Director Independence

  

Meetings of the Board of Directors and Committees

  

Meetings of Non-Management Directors

  

Board Leadership Structure

  

Board Diversity

  

Board’s Role in Risk Oversight

  

Committees of the Board of Directors

  

Involvement in Certain Legal Proceedings

  

Certain Transactions and Relationships, Compensation Committee Interlocks, and Insider Participation

  

Indebtedness

  

Business Practices Committees

  

Code of Ethics for Financial Professionals

  

Ethics Hotline

  

Code of Conduct

  

Communications with the Board

  

STOCK OWNERSHIP

  

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

  

PROPOSAL 1: ELECTION OF DIRECTORS

  

Director Criteria and Nomination Process

  

Director Qualifications

  

The Nominees

  

Directors’ Compensation

  

AUDIT COMMITTEE REPORT

  

PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

  

PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S 2015 EXECUTIVE COMPENSATION

  

Our Stockholder Engagement

  

Compensation Discussion and Analysis

  

 

Executive Summary

  

 

2015 Company Performance

  

 

Citi’s Executive Compensation Awards

  
       

 

Risk and Citi’s Incentive Compensation Programs

  

 

Citi’s Additional Executive Compensation Practices

  

 

The Personnel and Compensation Committee Report

  

2015 Summary Compensation Table and Compensation Information

  

 

Management Analysis of Potential Adverse Effects of Compensation Plans

  

PROPOSAL 4: APPROVAL OF ADDITIONAL AUTHORIZED SHARES UNDER THE CITIGROUP 2014 STOCK INCENTIVE PLAN

  

PROPOSAL 5: APPROVAL OF THE AMENDED AND RESTATED 2011 CITIGROUP EXECUTIVE PERFORMANCE PLAN

  

STOCKHOLDER PROPOSALS

  

Submission of Future Stockholder Proposals

  

Cost of Annual Meeting and Proxy Solicitation

  

Householding

  

Directions to Annual Meeting Location

  

ANNEXES

 

 

 

Annex A - Additional Information Regarding Proposal 3

  

 

Scorecard Glossary

  

 

Citigroup — Non-U.S. GAAP Financial Measures Reconciliations

  

Annex B - Additional Information Regarding Proposal 4

  

 

Supplemental Information on Equity Plan Grants

  

 

Description of the Citigroup 2014 Stock Incentive Plan

  

 

Certain U.S. Federal Income Tax Consequences

  

 

Equity Compensation Plan Information

  

 

Citigroup 2014 Stock Incentive Plan (as amended and restated as of April 26, 2016, subject to approval by stockholders)

  

Annex C - Additional Information Regarding Proposal 5

  

 

Description of the Amended and Restated 2011 Citigroup Executive Performance Plan

  

 

2011 Citigroup Executive Performance Plan (as amended and restated as of January 1, 2016)

  

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Citi 2016 Proxy Statement


 

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PROXY STATEMENT HIGHLIGHTS

MEETING AND VOTING INFORMATION

Time and Date

9:00 am, April 26, 2016

Place

University of Miami
The Grand Ballroom at the Student Center Complex
1330 Miller Drive
Coral Gables, FL 33146

Record Date

February 29, 2016

Voting

Stockholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for each Director nominee and one vote for each of the other proposals to be voted on.

Admission

An admission ticket is required to enter Citi’s Annual Meeting.

BOARD AND CORPORATE GOVERNANCE HIGHLIGHTS

Director Nominees

Name

Age

Director
Since

Principal
Occupation

Other Current
Public Company
Directorships

Michael L. Corbat

55

2012

Chief Executive Officer, Citigroup Inc.

None

Ellen M. Costello

61

2016

Former President and CEO, BMO Financial Corporation, and Former U.S. Country Head, BMO Financial Group

DH Corporation

 

Duncan P. Hennes

59

2013

Co-Founder and Partner, Atrevida Partners, LLC

Syncora Holdings, Ltd.

 

Peter B. Henry

46

2015

Dean, New York University, Leonard N. Stern School of Business

None

Franz B. Humer

69

2012

Former Chairman, Roche Holding Ltd

Diageo plc (Chairman)

 

Kite Pharmaceuticals

 

Renée J. James

51

2016

Operating Executive, The Carlyle Group

Oracle Corporation

 

Sabre Corporation

 

Vodafone Group Plc

 

Eugene M. McQuade

67

2015

Former Vice Chairman, Citigroup Inc. and Former CEO, Citibank, N.A.

XL Group plc (Chairman)

 

Michael E. O’Neill

69

2009

Chairman, Citigroup Inc.

None

Gary M. Reiner

61

2013

Operating Partner, General Atlantic LLC

Hewlett-Packard Company

 

Box Inc.

 

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PROXY STATEMENT HIGHLIGHTS

Name

Age

Director
Since

Principal
Occupation

Other Current
Public Company
Directorships

Judith Rodin

71

2004

President, Rockefeller Foundation

Comcast Corporation

 

Anthony M. Santomero

69

2009

Former President, Federal Reserve Bank of Philadelphia

RenaissanceRe Holdings, Ltd.

 

Penn Mutual Life Insurance Company

 

Joan E. Spero

71

2012

Senior Research Scholar, Columbia University School of International and Public Affairs

IBM

 

International Paper

 

Diana L. Taylor

61

2009

Vice Chair, Solera Capital LLC

Brookfield Asset Management

 

Sotheby’s

 

William S. Thompson, Jr.

70

2009

Former CEO, Pacific Investment Management Company

None

James S. Turley

60

2013

Former Chairman and CEO, Ernst & Young

Emerson Electric Co.

 

Intrexon Corporation

 

Northrop Grumman Corporation

 

Ernesto Zedillo Ponce de Leon

64

2010

Director, Center for the Study of Globalization and Professor in the Field of International Economics and Politics, Yale University

Alcoa Inc.

 

Procter & Gamble Company

 

Grupo Prisa

 

Summary of Director Nominees

The nominees for the Board of Directors each have the qualifications and experience to approve and guide Citi’s strategy and to oversee management’s execution of that strategic vision. Citi’s Board of Directors consists of individuals with the skills, experience, and backgrounds necessary to oversee Citi’s efforts toward becoming a simpler, smaller, safer, and stronger financial institution, while mitigating risk and operating within a complex financial and regulatory environment.

Independence

Tenure



 

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PROXY STATEMENT HIGHLIGHTS

Corporate Governance Highlights

Citi is active in ensuring its governance practices are at the leading edge of best practices. Highlights include:

Alignment with Stockholders

The Board supported a Proxy Access Stockholder Proposal in 2015 and subsequently amended its By-laws to grant stockholders the right to have stockholder nominees to the Board included in the Company’s proxy materials

Citi has an independent Chair

If there is no independent Chairman of the Board, Board will appoint a lead independent Director

Majority vote standard for uncontested Director elections

Stockholders have the right to call a special meeting and to act by written consent

No super majority vote provisions in our governing instruments

Compensation Governance

Emphasize pay-for-performance alignment

Base a majority of total compensation on performance

Retention of an independent compensation consultant by the Personnel
and Compensation Committee

Expanded clawback policies for employees

Executive officers and directors are required to retain at least 75% of the equity awarded to them as incentive compensation; Executive officers are required to retain 50% of such equity awards for one year following the termination of their employment

Adhere to Corporate Governance Best Practices

Ethics and Culture Committee of the Board was formed in 2014

Meaningful Political Activities Statement and disclosure of Citi’s political contributions

Posted the names of significant trade and business associations of which Citi is a participant on Citi’s website to provide more transparency

Members of Citi’s Board of Directors and Citi’s executive officers are not permitted to hedge their Citi securities or to pledge their Citi securities as collateral for a loan

 

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ABOUT THE ANNUAL MEETING

Annual Meeting of Stockholders

Time and Date

 

9:00 am, April 26, 2016

Place

 

University of Miami
The Grand Ballroom at the Student Center Complex
1330 Miller Drive
Coral Gables, FL 33146

Record Date

 

February 29, 2016

Voting

 

Stockholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for each Director nominee and one vote for each of the other proposals to be voted on.

Admission

 

An admission ticket is required to enter Citi’s Annual Meeting.

Meeting Agenda and Voting Matters

 

Board Vote Recommendation

Page Reference (for more detail)

Election of Directors

FOR EACH DIRECTOR NOMINEE

27-50

Ratification of KPMG LLP (KPMG) as auditor for 2016

FOR

52-53

Advisory vote to approve Citi’s 2015 executive compensation

FOR

54-76

Approve additional authorized shares under the Citigroup 2014 Stock Incentive Plan

FOR

86-90

Approve the Amended and Restated 2011 Citigroup Executive Performance Plan

FOR

90-92

Stockholder Proposals 6-10

AGAINST

92-102

Transact other business that properly comes before the meeting

 

Who is soliciting my vote?

The Board of Directors of Citigroup Inc. is soliciting your vote at the 2016 Annual Meeting of Citi’s stockholders.

Where and when will the Annual Meeting take place?

The Annual Meeting is scheduled to begin at 9:00 am on April 26, 2016 in The Grand Ballroom at the Student Center Complex of the University of Miami. The Student Center Complex is located on 1330 Miller Drive in Coral Gables, Florida. Please see pages 103 and 104 for directions to the facility. Live audio of the Annual Meeting will be webcast at www.citigroup.com.

Why did I receive a one-page Notice in the mail regarding the Internet availability of proxy materials this year instead of a full set of proxy materials?

Pursuant to rules adopted by the Securities and Exchange Commission (SEC), we have elected to mail to many of our stockholders a Notice of Internet Availability of the Proxy Materials (Notice) instead of a paper copy of the proxy materials. All stockholders receiving the Notice will have the ability to access the proxy materials over the Internet and receive a paper copy of the proxy materials by mail on request. Instructions on how to access the proxy materials over the Internet or to request a paper copy may be found in the Notice. In addition, the Notice contains instructions on how you may access proxy materials in printed form by mail or electronically on an ongoing basis. This process has allowed us to expedite our stockholders’ receipt of proxy materials, lower the costs of distribution and reduce the environmental impact of our Annual Meeting.

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ABOUT THE ANNUAL MEETING

Why didn’t I receive a notice in the mail about the Internet availability of the proxy materials?

We are providing some of our stockholders, including stockholders who have previously asked to receive paper copies of the proxy materials and some of our stockholders who are living outside of the United States, with paper copies of the proxy materials instead of a Notice. In addition, we are providing a Notice by e-mail to those stockholders who have previously elected delivery of the proxy materials electronically. Those stockholders should have received an e-mail containing a link to the website where those materials are available and a link to the proxy voting website.

How can I access Citi’s proxy materials and Annual Report electronically?

This Proxy Statement and the 2015 Annual Report are available on Citi’s website at www.citigroup.com. Click on “About Us,” and then “Corporate Governance.” 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 or until your consent is deemed to be revoked under applicable law. You do not have to elect Internet access each year. To view, cancel or change your enrollment profile, please go to www.InvestorDelivery.com.

What will I be voting on?

Election of Directors (see pages 27-50).

 

Ratification of KPMG as Citi’s independent registered public accounting firm for 2016 (see pages 52-53).

 

An advisory vote to approve Citi’s 2015 executive compensation (see pages 54-76).

 

Approval of additional authorized shares under the Citigroup 2014 Stock Incentive Plan (see pages 86-90).

 

Approval of the Amended and Restated 2011 Citigroup Executive Performance Plan (see pages 90-92).

 

Five stockholder proposals (see pages 92-102).

 

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 29, 2016 (the record date).

How many votes can be cast by all stockholders?

2,941,223,643, 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?

To constitute a quorum to transact business at the Annual Meeting, the holders of a majority of the votes that can be cast, or 1,470,611,823 shares, must be present or represented by proxy at the Annual Meeting. 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 Annual Meeting. Persons voting by proxy will be deemed present at the meeting even if they abstain from voting on any or all of the proposals presented for stockholder action. Shares held by brokers who vote such shares on any proposal will be counted as present for purposes of establishing a quorum, and shares treated as broker non-votes for one or more proposals will nevertheless be deemed present for purposes of constituting a quorum for the Annual Meeting.

Does any single stockholder control 5% or more of any class of Citi’s voting stock?

Yes, there are two stockholders that each control more than 5%. According to a Schedule 13G Information Statement filed by BlackRock Inc. and certain subsidiaries (BlackRock) on January 21, 2016, BlackRock may be

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ABOUT THE ANNUAL MEETING

deemed to beneficially own 6.8% of Citi’s common stock. According to a Schedule 13G Information Statement filed by The Vanguard Group (Vanguard) on February 11, 2016, Vanguard may be deemed to beneficially own 5.50% of Citi’s common stock.

For further information, see Stock Ownership—Owners of More than 5% of Citi Common Stock on page 26 in this Proxy Statement.

How do I vote?

You can vote by proxy whether or not you attend the Annual Meeting. To vote by proxy, stockholders have a choice of voting over the Internet, by mobile phone, by telephone or by using a traditional proxy card.

Vote by Internet

Vote by
Mobile Phone

Vote by Phone

Vote by Mail

Vote in Person






Go to

You can scan this QR code to vote with your mobile phone. You will need the 16 digit number included in your proxy card, voter instruction form, or Notice.

Call the number on your proxy card or the number on your voter instruction form. You will need the 16 digit number included in your proxy card, voter instruction form, or Notice.

Send the completed and signed proxy card or voter instruction form to the address on your proxy card or voter instruction form.

See the below instructions regarding attendance at the Annual Meeting.

To reduce our administrative and postage costs, we ask that you vote through the Internet, by telephone, or by using your mobile phone, all of which are available 24 hours a day. To ensure that your vote is counted, please remember to submit your vote by 11:59 pm ET on April 25, 2016.

If you are a record holder of Citi common stock, you may attend the Annual Meeting and vote in person. If you want to vote in person at the Annual Meeting, and you hold your Citi common stock through a securities broker (that is, in “street name”), you must obtain a proxy from your broker and bring that proxy to the Annual Meeting.

How do I get a printed proxy card?

There are three ways for stockholders to request a proxy card and a full set of materials at no charge if you received a Notice instead of the printed materials. In all three examples you will need the 16 digit Control Number printed on the Notice.

Requesting a proxy card

By telephone: 1-800-579-1639;
By Internet: www.proxyvote.com; or
By e-mail: sendmaterial@proxyvote.com (send a blank e-mail with the 16 digit Control Number in the subject line).

Can I change my vote?

Yes. Just send in a new proxy card or voter instruction form with a later date, 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.

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ABOUT THE ANNUAL MEETING

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 voting instructions, 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 2016, for Citi’s 2015 executive compensation, for an amendment to the Citigroup 2014 Stock Incentive Plan, for the approval of the Amended and Restated 2011 Citigroup Executive Performance Plan, and against the stockholder proposals.

Can my broker vote my shares for me on the election of Directors or executive compensation matters?

No. Please note that the rules that govern when brokers may vote your shares have changed. Brokers may no longer use discretionary authority to vote shares on the election of Directors or on executive compensation matters, including the advisory vote on compensation, the approval of additional authorized shares under the Citigroup 2014 Stock Incentive Plan, and the approval of the Amended and Restated 2011 Citigroup Executive Performance Plan if they have not received instructions from their clients. Please see the following question for an explanation of those matters on which brokers may vote your shares.

Can my shares held in street name be voted if I don’t return my voter instruction 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.

Discretionary Items. KPMG’s appointment is a discretionary item. NYSE member brokers who do not receive instructions from beneficial owners may vote on this proposal as follows: (i) a Citi affiliated member is permitted to vote your shares in the same proportion as all other shares are voted with respect to this proposal; and (ii) all other NYSE member brokers are permitted to vote your shares at their discretion.

Non-discretionary Items. Brokers will not be able to vote your shares on the election of Directors, the advisory vote to approve Citi’s 2015 executive compensation, the approval of additional authorized shares under the Citigroup 2014 Stock Incentive Plan, the approval of the Amended and Restated 2011 Citigroup Executive Performance Plan, and the stockholder proposals if you fail to provide instructions. Generally, broker non-votes occur on a matter when a broker is not permitted to vote on that matter without instructions from the beneficial owner and instructions are not given.

If your shares are registered directly in your name, not in the name of a bank or broker, you must vote your shares or your vote will not be counted. Please vote your proxy so your vote can be counted.

If I hold shares through Citigroup’s employee benefit plans and do not provide voting instructions, how will my shares be voted?

If you hold shares of common stock through Citigroup’s employee benefit plans or stock incentive plans and do not provide voting instructions to the plans’ trustees or administrators, your shares will be voted in the same proportion as the shares beneficially owned through such plans for which voting instructions are received, unless otherwise required by law.

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ABOUT THE ANNUAL MEETING

What vote is required, and how will my votes be counted, to elect Directors and to adopt the other proposals?

The following chart describes the proposals to be considered at the meeting, the vote required to elect Directors and to adopt each of the other proposals, and the manner in which votes will be counted:

Proposal

Voting Options

Vote Required to Adopt the
Proposal

Effect of
Abstentions

Effect of
“Broker
Non-Votes”(1)

Election of Directors.

For, against, or
abstain on each
nominee.

A nominee for Director will be
elected if the votes cast for such
nominee exceed the votes cast
against such nominee.

No effect.

No effect.

Ratification of KPMG.

For, against, or
abstain.

The affirmative vote of a majority
of the shares of common stock
represented at the Annual Meeting
and entitled to vote thereon.

Treated as votes
against.

Brokers have
discretion to
vote.

Advisory vote to
approve Citi’s 2015
executive compensation.

For, against, or
abstain.

The affirmative vote of a majority
of the shares of common stock
represented at the Annual Meeting
and entitled to vote thereon.

Treated as votes
against.

No effect.

Approval of additional
authorized shares under
the Citigroup 2014 Stock
Incentive Plan.

For, against, or
abstain.

The affirmative vote of a majority
of the shares of common stock
represented at the Annual Meeting
and entitled to vote thereon.

Treated as votes
against.

No effect.

Approval of the
Amended and Restated
2011 Citigroup Executive Performance Plan.

For, against, or
abstain.

The affirmative vote of a majority
of the shares of common stock
represented at the Annual Meeting
and entitled to vote thereon.

Treated as votes
against.

No effect.

Five stockholder
proposals.

For, against, or
abstain.

The affirmative vote of a majority
of the shares of common stock
represented at the Annual Meeting
and entitled to vote thereon.

Treated as votes
against.

No effect.

 

(1)

A broker non-vote generally occurs when a broker is not permitted to vote on a matter without instructions from a customer having beneficial ownership in the securities and has not received such instructions. Broker non-votes will not be counted as shares entitled to vote on the proposal.

If a nominee for Director is not re-elected by the required vote, he or she will remain in office until a successor is elected and qualified or until his or her earlier resignation or removal. Citi’s By-laws provide that in the event a Director nominee is not re-elected, 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.

The result of the advisory vote to approve Citi’s 2015 executive compensation is not binding on the Board, whether or not the resolution is passed under the voting standards described above. In evaluating the stockholder vote on the advisory resolution, the Board will consider the voting results in their entirety.

Is my vote confidential?

In 2006, the Board adopted a confidential voting policy as a part of its Corporate Governance Guidelines. Under the policy, except as necessary to meet applicable legal requirements, all votes, whether submitted by proxies, ballots, Internet voting, telephone voting, or otherwise 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, mobile phone, or by the Internet. If you hold your shares in “street name” or through an employee benefit plan or stock incentive 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 and in certain other limited circumstances. For further details regarding this policy, please see the Corporate Governance Guidelines, available on Citi’s website www.citigroup.com.

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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, the Chairman will declare such proposal out of order, and it will be disregarded, or 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.

Do I need a ticket to attend the Annual Meeting?

Yes, you will need an admission ticket or proof of ownership of Citi common stock to enter the Annual Meeting. When you arrive at the Annual Meeting, you may be asked to present photo identification, such as a driver’s license.

If you received a Notice of Internet Availability of Proxy Materials, you must bring the Notice to gain admission to the Annual Meeting.

 

If you did not receive a Notice but received a paper copy of the proxy materials and your shares are held in your name, please bring the admission ticket printed on the top half of the proxy card supplied with your materials.

 

If you did not receive a Notice but received a paper copy of the proxy materials and your shares are held in the name of a bank, broker, or other holder of record, please bring the admission ticket that was enclosed with your materials.

 

If you receive your proxy materials by e-mail, you will need proof of ownership to be admitted to the Annual 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. If you hold your shares in a joint account, both owners can be admitted to the Annual Meeting, provided that proof of joint ownership is given. Citi will not be able to accommodate guests at the Annual Meeting. Any persons needing special assistance should contact Shareholder Relations by phone at 1-860-291-4262 or at the following e-mail address: shareholderrelations@citi.com.

 

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 2015 with them. The 2015 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 SEC’s rules, the Five-Year Performance Graph appears in the 2015 Annual Report on Form 10-K.

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CORPORATE GOVERNANCE

Citigroup Inc. (Citigroup, Citi, or the Company) 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. Below is a compilation of Citi’s Corporate Governance initiatives:

Adopted, in 2015, proxy access;

 

Formed a standing Ethics and Culture Committee of the Board of Directors to oversee management’s efforts to foster a culture of ethics within Citi;

 

Adopted strong executive compensation governance practices, including expanded clawback policies and a requirement that executive officers must hold a substantial amount of vested Citi common stock for at least one year after they cease being executive officers;

 

Amended our Corporate Governance Guidelines to provide that members of Citi’s Board of Directors and Citi’s Executive Officers (i.e., Section 16 Insiders) are not permitted to hedge their Citi securities or to pledge their Citi securities as collateral for a loan;

 

Eliminated super-majority vote provisions contained in our Restated Certificate of Incorporation;

 

Amended our By-laws, after electing an independent Chair in 2009, to provide that if Citi does not have an independent Chairman of the Board, the Board shall elect a lead independent Director;

 

Amended our By-laws to include a majority vote standard for uncontested Director elections;

 

Amended our By-laws to give stockholders of at least 25% of the outstanding common stock the right to call a special meeting;

 

Made the Board and executive officers subject to a stock ownership commitment;

 

Permitted stockholders to act by written consent;

 

Amended our Political Activities Statement (formerly Citi’s Political Contributions and Lobbying Statement) to increase disclosure about our lobbying practices and oversight. The Political Activities Statement provides meaningful disclosure about:

 

our lobbying policies and procedures including grassroots lobbying;

 

payments made by Citi for direct lobbying;

 

trade and business association participation;

 

membership in any tax-exempt group that writes and endorses model legislation; and

 

the Board’s oversight of lobbying activities, trade and business association participation, and political contributions;

 

Amended the charter of the Nomination, Governance and Public Affairs Committee to clarify that the Committee has oversight responsibility for trade association payments in addition to oversight responsibility for political contributions and lobbying activities;

 

Provided more clarity on our political contributions and trade and business association disclosure by:

 

creating a link on our website to federal and state government websites where our lobbying activities are reported;

 

initiating a process to require trade and business associations to which Citi pays dues to attest that no portion of such payments are used for independent expenditures; and

 

listing the names of our significant trade and business associations on Citi’s website.

 

 

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CORPORATE GOVERNANCE

CORPORATE GOVERNANCE MATERIALS AVAILABLE ON
CITI’S WEBSITE

In addition to our Corporate Governance Guidelines, other information relating to corporate governance at Citi is available on the Corporate Governance section of our website, including:

Audit Committee Charter

 

Ethics and Culture Committee Charter

 

Nomination, Governance and Public Affairs Committee Charter

 

Personnel and Compensation Committee Charter

 

Risk Management Committee Charter

 

Code of Conduct

 

Code of Ethics for Financial Professionals

 

Citi’s Compensation Philosophy

 

By-laws and Restated Certificate of Incorporation

 

Corporate Political Activities Statement

 

A list of our 2015 Political Contributions and the names of Citi’s significant trade and business associations

 

Citi stockholders may obtain printed copies of these documents by writing to Citigroup Inc., Corporate Governance, 601 Lexington Avenue, 19th Floor, New York, NY 10022.

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 on Citi’s website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Corporate Governance Guidelines.” 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 Guidelines require that all members of the required committees of the Board (Audit; Nomination, Governance and Public Affairs; and Personnel and Compensation) be independent. Committee members are appointed by the Board upon recommendation of the Nomination, Governance and Public Affairs 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.

The number of other for-profit public or non-public company boards on which a Director may serve is subject to a case-by-case review by the Nomination, Governance and Public Affairs 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).

If a Director has a substantial change in professional responsibilities, occupation or business association, he or she is required to notify the Nomination, Governance and Public Affairs Committee and to offer his or her resignation from the Board. The Nomination, Governance and Public Affairs Committee will evaluate the facts and circumstances and make a recommendation to the Board whether to accept the resignation or request that

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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, Governance and Public Affairs Committee.

Directors are expected to attend Board meetings and meetings of the Committees on which they serve and the Annual Meeting of stockholders. All of the Directors then in office, except for Ernesto Zedillo Ponce de Leon, attended Citi’s 2015 Annual Meeting (either in person or via audioconference). Mr. Zedillo Ponce de Leon was unable to attend the 2015 Annual Meeting as he was unexpectedly called away to participate in a peacekeeping mission in Russia.

The Nomination, Governance and Public Affairs Committee nominates one of the members of the Board to serve as Chairman of the Board on an annual basis. The Nomination, Governance and Public Affairs Committee also conducts an annual review of Board performance, and each standing committee (except for the Executive Committee) conducts its own self-evaluation. As part of the self-evaluation, the Board engages in an examination of its own performance of its obligations on such matters as regulatory requirements, strategic and financial oversight, oversight of risk management, executive compensation, succession planning, and governance matters, among many others topics. The committees evaluate themselves against the requirements of their charters and other aspects of their responsibilities. The full Board and each committee then discuss the results of its own self-evaluation in executive session, highlighting actions to be taken in response to the discussion.

Directors have full and free access to senior management and other employees of Citi. New Directors are provided with an orientation program to familiarize themselves 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 highest quality leadership for Citi. The Board also works with the Nomination, Governance and Public Affairs Committee to evaluate potential successors to the Chief Executive Officer (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 must be reported to the Nomination, Governance and Public Affairs Committee at least annually.

Members of Citi’s Board of Directors and Citi’s executive officers (i.e., Section 16 Insiders) are not permitted to hedge their Citi securities or to pledge their Citi securities as collateral for a loan. 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 from Citi or its subsidiaries to Citi’s Directors and its most senior executives, or immediate family members who share any such person’s household, are prohibited, except for mortgage loans, home equity loans, consumer loans, credit 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 pages 20-22 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 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.

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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.

The Board and the Nomination, Governance and Public Affairs 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 and Citi 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 Director nominees standing for election or re-election is independent:

Ellen M. Costello

 

Duncan P. Hennes

 

Peter B. Henry

 

Franz B. Humer

 

Renée J. James

 

Michael E. O’Neill

 

Gary M. Reiner

 

Judith Rodin

 

Anthony M. Santomero

 

Joan E. Spero

 

Diana L. Taylor

 

William S. Thompson, Jr.

 

James S. Turley

 

Ernesto Zedillo Ponce de Leon

 

The Board has determined that Michael L. Corbat and Eugene M. McQuade are not independent. Mr. Corbat is our Chief Executive Officer and Mr. McQuade previously served as the Chief Executive Officer of Citibank, N.A., our largest banking subsidiary.

Independence Standards

To be considered independent, a Director must meet the following categorical standards as adopted by our Board and reflected in our Corporate Governance Guidelines. In addition, there are other independence standards under NYSE corporate governance rules that apply to all directors and certain independence standards under SEC and FDIC rules that apply to specific committees.

Categorical Standards

Advisory, Consulting and Employment Arrangements

 

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 one of its affiliated legal entities.

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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CORPORATE GOVERNANCE

Business Relationships

 

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.

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.

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: (i) 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; (ii) 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 Federal Deposit Insurance Corporation (FDIC) Guidelines; (iii) when made does not involve more than the normal risk of collectability or present other unfavorable features; and (iv) is not classified by the Company as Substandard (II) or worse, as defined by the Office of the Comptroller of the Currency 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

 

A 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) the Company’s present or former primary outside auditor or (b) any other outside auditor of the Company and personally worked on the Company’s audit, in each case within the three-year period following the auditing relationship.

A 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 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

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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 the 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 stockholder 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.

MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES


The Board of Directors met 20 times in 2015. During 2015, the Audit Committee met 18 times, the Ethics and Culture Committee met six times, the Nomination, Governance and Public Affairs Committee met eight times, the Operations and Technology Committee met six times, the Personnel and Compensation Committee met 13 times, and the Risk Management Committee met 15 times. The Executive Committee did not meet in 2015.

During 2015, Mses. Spero and Taylor and Messrs. Hennes, McQuade, Santomero, Thompson, Turley and Zedillo served on and/or chaired a number of ad hoc committees covering such topics as compliance and M&A matters and international subsidiary governance. In addition, during 2015, Mses. Spero and Taylor and Messrs. Hennes, Henry, McQuade, Reiner, Santomero and Turley served on the Board of Directors of Citibank, N.A., which is a wholly owned subsidiary of Citi.

Each incumbent director attended at least 75% of the meetings of the Board and of the standing committees of which he or she was a member during 2015.

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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 six times each year, and, if the Board convenes a special meeting, the non-management Directors ordinarily meet in executive session. During 2015, Mr. O’Neill presided at each executive session of the non-management Directors. In addition, the independent Directors met in executive session during 2015.

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 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 most appropriate structure at this time, while ensuring that, at all times, there will be an independent Director in a Board leadership position. The Board believes its approach to risk oversight, including, importantly, the reporting line of the Chief Risk Officer to the Risk Management Committee, ensures that the Board can choose many leadership structures without experiencing a material impact on its oversight of risk.

Citi has had an independent Chairman  since 2009.

BOARD DIVERSITY

Diversity is among the critical factors that the Nomination, Governance and Public Affairs Committee considers when evaluating the composition of the Board. For a company like Citi, which operates in more than 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 is comprised of individuals whose backgrounds reflect the diversity represented by our employees, customers and stakeholders. The candidates nominated for election at Citi’s 2016 Annual Meeting exemplify that diversity: five nominees are women (31%) and two nominees (13%) are 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 believes that the current nominees reflect an appropriate diversity of gender, age, race, geographical background and experience and is committed to continuing to consider diversity issues in evaluating the composition of the Board.

Citi recently added two women to our  Board bringing total representation to  5 women of 16 directors, or 31%.

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

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fulfill its business objectives. The Board’s role is to oversee this effort. The Risk Management 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 Chief Risk Officer reports to both the Risk Management Committee and the Chief Executive Officer. The Committee’s responsibilities include reviewing risk management and compliance policies and programs for, and reporting 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 Nomination, Governance and 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 imprudent risk-taking. The Risk Management Committee also meets on a monthly basis to provide oversight over matters related to resolution and recovery planning, Citi’s Comprehensive Capital Analysis and Review (CCAR) practices, Resolution Planning, and Citi’s compliance with the Volcker Rule of the Dodd-Frank Act.

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 Citigroup’s consolidated financial statements, financial reporting process and systems of internal accounting and financial controls; (ii) the performance of the internal audit function (“Internal Audit”); (iii) the annual independent integrated audit of Citigroup’s consolidated financial statements and effectiveness of Citigroup’s internal control over financial reporting, the engagement of the independent registered public accounting firm (“Independent Auditors”) and the evaluation of the Independent Auditors’ qualifications, independence and performance; (iv) policy standards and guidelines for risk assessment and risk management; (v) Citigroup’s compliance with legal and regulatory requirements, including Citigroup’s disclosure controls and procedures; and (vi) the fulfillment of the other responsibilities set out herein. The report of the Committee required by the rules of the Securities and Exchange Commission is included in this Proxy Statement.

The Board has determined that each of Ms. Costello and Messrs. O’Neill, Santomero, and Turley qualifies as an “audit committee financial expert” as defined by the SEC and each such director as well as Mr. Henry are considered “financially literate” under NYSE rules, and, in addition to being independent according to the Board’s independence standards as set out in its Corporate Governance Guidelines, each 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 on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Citigroup Board of Directors’ Committee Charters.”

The Ethics and Culture Committee, which oversees Management’s efforts to foster a culture of ethics within the organization; oversees and helps shape the definition of Citi’s value proposition; oversees Management’s efforts to enhance and communicate Citi’s value proposition, evaluates Management’s progress, and provides feedback on these efforts; reviews and assesses the culture of the organization to determine if further enhancements are needed to foster ethical decision-making by employees; and oversees Management’s efforts to support ethical decision-making in the organization, evaluate Management’s progress, and provide feedback on these efforts. The Committee also reviews Citi’s Code of Conduct and the Code of Ethics for Financial Professionals.

The Ethics and Culture Committee Charter, as adopted by the Board, is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Citigroup Board of Directors’ Committee Charters.”

The Executive Committee, which acts on behalf of the Board if a matter requires Board action before a meeting of the full Board can be held.

The Nomination, Governance and Public Affairs 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

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Board the Corporate Governance Guidelines and monitoring Citi’s compliance with these policies and practices and the Guidelines. The Committee is responsible for reviewing and approving all related party transactions involving a Director 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, in each case, other than certain enumerated ordinary course transactions. See Certain Transactions and Relationships, Compensation Committee Interlocks, and Insider Participation on pages 20-22 of this Proxy Statement for a complete description of the Policy on Related Party Transactions. The Committee, as part of the Board’s executive succession planning process, in conjunction with the Personnel and Compensation Committee, 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. The Nomination, Governance and Public Affairs Committee is also 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 reputational issues facing Citi; reviewing political contributions and lobbying expenditures and payments to trade associations made by Citi, charitable contributions made by Citi and the Citi Foundation; reviewing Citi’s policies and practices regarding supplier diversity; reviewing the work of Citi’s Business Practices Committees; and reviewing Citi’s sustainability policies and programs, including environmental policies. The Committee’s focus is global, reflecting Citi’s global footprint.

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. In addition, 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 other 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, Governance and Public Affairs Committee is independent according to the corporate governance rules of the NYSE.

The Nomination, Governance and Public Affairs Committee Charter, as adopted by the Board, is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Board of Directors’ Committee Charters.”

The Operations and Technology Committee, which is responsible for overseeing the scope, direction, quality, and execution of Citi’s technology strategies formulated by management; and providing guidance on technology as it may pertain to, among other things, Citi business products and technology platforms.

The Personnel and Compensation Committee, which has been delegated broad authority to oversee compensation of employees of the Company and its subsidiaries and affiliates. The Committee will regularly review Citi’s management resources and performance of senior management. The Committee is responsible for determining the compensation for the CEO and approving the compensation of other executive officers of the Company and members of Citi’s Operating Committee. The Committee is also responsible for approving the incentive compensation structure for other members of senior management and certain highly compensated employees (including discretionary incentive awards to covered employees as defined in applicable bank regulatory guidance), in accordance with guidelines established by the Committee from time to time. The Committee also has broad oversight over compliance with bank regulatory guidance governing Citi’s incentive compensation.

The Committee annually reviews and discusses the Compensation Discussion and Analysis required to be included in the Company’s Proxy Statement with management, and, if appropriate, recommends to the Board that the Compensation Discussion and Analysis be included. Additionally, the Committee reviews and

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approves the overall goals of Citi’s material incentive compensation programs, including as expressed through Citi’s Compensation Philosophy and provides oversight for Citi’s incentive compensation programs so that they both (i) appropriately balance risk and financial results in a manner that does not encourage employees to expose Citi to imprudent risks, and (ii) are consistent with bank safety and soundness. Toward that end, the Committee meets periodically with Citi’s Chief Risk Officer to discuss the risk attributes of Citi’s incentive compensation programs.

The Committee has the power to hire and fire independent compensation consultants, legal counsel, or financial or other advisors as it may deem necessary to assist it in the performance of its duties and responsibilities, without consulting or obtaining the approval of senior management of the Company. The Committee has retained Frederic W. Cook & Co. (Cook & Co.) to provide the Committee with advice on Citi’s compensation programs for senior management. The amount paid to Cook & Co. in 2015 is disclosed in the Compensation Discussion and Analysis on page 75 of this Proxy Statement.

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 Internal Revenue Code.

The Personnel and Compensation Committee Charter is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Board of Directors’ Committee Charters.”

The Risk Management Committee, which has been delegated authority to assist the Board in fulfilling its responsibility with respect to (i) oversight of Citigroup’s risk management framework, including the significant policies and practices used in managing credit, market, operational, and certain other risks; (ii) oversight of Citigroup’s policies and practices relating to funding risk, liquidity risk and price risk, which constitute significant components of market risk, and risks pertaining to capital management; and (iii) oversight of the performance of the Fundamental Credit Risk credit review function. The Committee reports to the Board of Directors regarding Citigroup’s risk profile, as well as its risk management framework, including the significant policies and practices employed to manage risks in Citigroup’s businesses, as well as the overall adequacy of the Risk Management function.

The Risk Management Committee Charter is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Board of Directors’ Committee Charters.”

The following table shows the current membership of each of the Committees.

Committees

Current Members

Audit Committee

Ellen M. Costello

Peter B. Henry

Michael E. O’Neill

Anthony M. Santomero

James S. Turley (Chair)

Ethics and Culture Committee

Franz B. Humer (Chair)

Michael E. O’Neill

Judith Rodin

Ernesto Zedillo Ponce de Leon

Executive Committee

Franz B. Humer

Michael E. O’Neill (Chair)

Anthony M. Santomero

Diana L. Taylor

William S. Thompson, Jr.

James S. Turley

Nomination, Governance and Public Affairs

Committee

Michael E. O’Neill

Judith Rodin

Diana L. Taylor (Chair)

Ernesto Zedillo Ponce de Leon

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Committees

Current Members

Operations and Technology Committee

Gary M. Reiner (Chair)

Renée J. James

Personnel and Compensation Committee

Michael E. O’Neill

Judith Rodin

Diana L. Taylor

William S. Thompson. Jr. (Chair)

Risk Management Committee

Duncan P. Hennes

Franz B. Humer

Renée J. James

Eugene M. McQuade

Anthony M. Santomero (Chair)

William S. Thompson. Jr.

James S. Turley

Ernesto Zedillo Ponce de Leon

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

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

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 on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Citi Policies.” Under the policy, the Nomination, Governance and Public Affairs 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 must provide all material information concerning the related party transaction to the Nomination, Governance and Public Affairs Committee. The Nomination, Governance and Public Affairs 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 Public Affairs, is responsible for reviewing and approving all related party transactions valued at less than $50 million involving an executive officer or an immediate family member of an executive officer. The policy also contains a list of categories of transactions involving Directors or executive officers, or their immediate family members who are pre-approved under the policy, and therefore need not be brought to the Nomination, Governance and Public Affairs Committee or the Transaction Review Committee for approval.

The Nomination, Governance and Public Affairs 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;

 

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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.

 

Based on information contained in a Schedule 13G filed with the SEC, BlackRock and Vanguard reported that they beneficially owned 5% or more of the outstanding shares of Citi’s common stock as of December 31, 2015, see Stock Ownership — Owners of More than 5% of Citi Common Stock in this Proxy Statement on page 26. During 2015, our subsidiaries provided ordinary course lending, trading, and other financial services to BlackRock and Vanguard and their respective affiliates and clients. These transactions were entered into on an arm’s length basis and contain customary terms and conditions and were on substantially the same terms as comparable transactions with unrelated third parties.

Citi has established funds in which employees have invested. In addition, certain of our 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 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.

Citigroup Capital Partners II, L.P. and Citigroup Venture Capital International Growth Partnership II, L.P. are funds that were formed in 2006 and 2007, respectively. They invest 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. Citi’s match is made by a loan to the fund. Each eligible 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. In accordance with the funds’ offering memoranda, executive officers are not eligible to participate in the funds on a leveraged basis.

The following distributions exceeding $120,000 with respect to investments in Citigroup Capital Partners II, L.P. and Citigroup Venture Capital International Growth Partnership II, L.P. were made to executive officers in 2015:


     

 

Citigroup Capital
Partners II, L.P.
Cash Distributions

Michael Corbat

$

143,418

 

James Cowles

$

339,585

 

James Forese

$

286,836

 

Manuel Medina-Mora*

$

226,390

 



     

 

Citigroup Venture
Capital International
Growth Partnership II, L.P.
Cash Distributions

James Cowles

$

708,536

 

James Forese

$

314,905

 

Manuel Medina-Mora*

$

629,809

 

William Mills

$

314,905

 

 

*

Mr. Medina-Mora retired from Citigroup in 2015.

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In 2015, Citi performed corporate banking and securities brokerage services in the ordinary course of our business for certain organizations in which some of our Directors are officers or directors. 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 76 of this Proxy Statement are the current members of the Personnel and Compensation Committee. No current or former member of the Personnel and Compensation Committee was a part of a “compensation committee interlock” during fiscal year 2015 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 Personnel and Compensation Committee had any material interest in a transaction with Citi or is a current or former officer of Citi, and no member of the Personnel and Compensation Committee is a current employee of Citi or any of its subsidiaries. In addition, no member of the Board, or any immediate family member of the Board, engaged Cook & Co. for any compensation-related services in 2015.

Mr. Corbat has entered into an Aircraft Time Sharing Agreement with Citiflight, Inc. (a subsidiary of Citigroup Inc.) that allows him to reimburse Citi for the cost of his personal use of corporate aircraft based on the aggregate incremental cost of the flight to Citi. Aggregate incremental cost is calculated based on a cost-per-flight-hour charge developed by a nationally recognized and independent service or, if higher, the charge allowed under Federal Aviation Regulation 91.501(d). Mr. Corbat reimbursed Citi $140,077 related to his personal use of corporate aircraft during 2015.

For a portion of 2015, Mr. McQuade served as the Vice Chairman of Citigroup Inc. Mr. McQuade received approximately $176,164 as compensation for his service as the Vice Chairman of Citigroup from January 1, 2015 to May 1, 2015. Mr. McQuade’s compensation relates solely to his service as an employee and not as a director of Citigroup. His compensation for his service as a director is reported in the Director Compensation Table on pages 47-50 of this Proxy Statement. In 2015, certain previously awarded shares granted to Mr. McQuade when he was an employee of Citigroup vested; this included Performance Share Units and Capital Accumulation Program Awards. On February 19, 2013, Mr. McQuade received from Citi an award of Performance Share Units in a target award of 47,801.15. Based on adjustments due to performance conditions described in the Compensation Discussion and Analysis section of this Proxy Statement, Mr. McQuade was entitled to receive 32,456.98 Performance Share Units on February 19, 2016, when the share units vested. Performance Share Units are paid in cash and Mr. McQuade received a cash payment of $1,315,270 for the share units on February 19, 2016. On February 18, 2014, Mr. McQuade received from Citi an award of Performance Share Units in a target award of 44,398.36. Those share units are scheduled to vest on December 31, 2016. During his employment at Citi, Mr. McQuade also received shares of Citi common stock awarded under the Capital Accumulation Program. Approximately 40,242 shares vested on January 20, 2016, representing the deferred portion of Mr. McQuade’s annual incentive awards for 2011, 2012, and 2013 which was awarded to him under the Capital Accumulation Program. These shares are reported in the Beneficial Ownership Table on page 25 of this Proxy Statement. Mr. McQuade has 34,149 unvested shares remaining from his Capital Accumulation Program Awards. These unvested shares remain subject to fluctuations in Citi’s common stock price as well as the Citi Clawbacks. In addition, Mr. McQuade was granted 100,000 Stock Options in 2011 at a grant price of $49.10, which vested in three equal installments. The expiration date for the Stock Options is February 14, 2017. The Stock Options are reported on page 25 of this Proxy Statement.

An adult child of Mr. Humer, a Director, is employed by Citi’s Institutional Clients Group and received 2015 compensation of $751,082. An adult child of John Gerspach, Citi’s CFO, is employed in Citi’s Compliance function and received 2015 compensation of $129,000. The compensation for these employees was established by Citi in accordance with its employment and compensation practices applicable to employees with equivalent qualifications and responsibilities and holding similar positions. Mr. Humer and Mr. Gerspach do not have a material interest in the employment relationship nor share a household with their respective family members who are employees of Citi.

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.

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CORPORATE GOVERNANCE

Certain transactions in excess of $120,000 involving loans, deposits, credit cards, and sales of commercial paper, certificates of deposit, and other money market instruments and certain other banking transactions occurred during 2015 between Citibank, N.A. 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 collectability or present other unfavorable features. Personal loans made to any Director or an executive officer must comply with Sarbanes-Oxley, Regulation O and the Corporate Governance Guidelines, and must be made in the ordinary course of business.

BUSINESS PRACTICES COMMITTEES

The business practices committees for each of Citi’s businesses and regions review business activities, sales practices, product design, potential conflicts of interest, and other franchise or reputational risk issues escalated to these committees. The business practices committee at the corporate level reviews issues escalated by a business practices committee at the business or regional level that may present franchise, reputational and/or systemic risks. All reviews by the business practices committees are conducted with due consideration of the context and facts presented to the committees.

The business practices committees, which are comprised of our most senior executives, provide the guidance necessary for Citi’s business practices to meet the highest standards of professionalism, integrity, and ethical behavior consistent with Citi’s Mission and Value Proposition. Our business leaders, in addition to confirming our commitment to the principles of responsible finance and protecting Citi’s franchise, are responsible for establishing a framework for compliance with applicable laws and regulations, Citi policies and ethical standards.

Business practices concerns may be raised through a variety of sources, including business practices working groups, other in-business committees, or the control functions. Relevant issues from the business practices committees are reported on a regular basis to the Nomination, Governance and Public Affairs Committee of the Board.

CODE OF ETHICS FOR FINANCIAL PROFESSIONALS

The Citi Code of Ethics for Financial Professionals applies to Citi’s Chief Executive Officer (Principal Executive Officer), Chief Financial Officer (Principal Financial Officer) and Controller (Principal Accounting Officer) and all Finance Professionals and Administrative Staff in a finance role, including Controllers, CSS Finance & Risk Operations (RO), Financial Planning & Analysis, Treasury, Tax, Strategy and M&A, Investor Relations and the Regional/Business teams. Citi expects all of its employees to act in accordance with the highest standards of personal and professional integrity in all aspects of their activities, to comply with all applicable laws, rules and regulations, to deter wrongdoing and abide by the Citi Code of Conduct and other policies and procedures adopted by Citi that govern the conduct of its employees. The Code of Ethics is intended to supplement the Citi Code of Conduct. A copy of the Code of Ethics is available on our website at www.citigroup.com. Click on “About Us” then “Corporate Governance,” and then “Code of Ethics for Financial Professionals.”  We will disclose amendments to, or waivers from, the Code of Ethics, if any, on our website.

ETHICS HOTLINE

Citi expects employees to raise concerns or questions regarding ethics, discrimination or harassment matters, and to promptly report suspected violations of these and other applicable laws, regulations, Citi policies, procedures or standards. Citi offers several channels by which employees and others may report ethical concerns, including, without limitation, concerns about accounting, internal controls or auditing matters. We provide a global Ethics Hotline, a toll-free number that is available 24 hours a day, seven days a week, 365 days a year, and is staffed by live operators who can connect to translators to accommodate multiple languages.

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Calls to the Ethics Hotline are received by a third-party vendor, located in the United States, which reports the calls to the Citi Ethics Office for handling. Ethical concerns may also be reported through a dedicated e-mail address, multi-lingual website submission, fax line, and conventional mailing address. Any individual may also raise a concern by accessing Citi’s public-facing corporate website. Individuals may choose to remain anonymous to the extent permitted by applicable laws and regulations. We prohibit retaliatory actions against anyone who raises concerns or questions in good faith, or who participates in a subsequent investigation of such concerns.

CODE OF CONDUCT

The Board has adopted a Code of Conduct, which provides an overview of the laws, regulations and Citi policies and procedures applicable to the activities of Citi, and sets forth the standards of ethics and professional behavior expected of employees and representatives of Citi. The Code of Conduct applies to every Director, officer and employee of Citi and its consolidated subsidiaries. All Citi employees, directors, and officers are required to read and comply with the Code of Conduct. In addition, other persons performing services for Citi may be subject to the Code of Conduct by contract or other agreement. The Code of Conduct is publicly available in multiple languages at www.citigroup.com. Click on “About Us,” 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, 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., 388 Greenwich Street, New York, NY 10013. 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 Board and executive officers are subject to a stock ownership commitment, which requires these individuals to maintain a minimum ownership level of Citigroup stock. Executive officers are required to retain at least 75% of the equity awarded to them as incentive compensation (net of amounts required to pay taxes and option exercise prices) as long as they are executive officers. In addition, a stock holding period applies after the executive officer leaves Citi or is no longer an executive officer. He or she must retain, for one year after ending executive officer status, 50% of the shares previously subject to the stock ownership commitment. Directors are similarly required to retain at least 75% of the net equity awarded to them, further aligning their interests with stockholders. The Board may revise the terms of the stock ownership commitment from time to time to reflect legal and business developments warranting a change. In addition, Directors and executive officers may not enter into hedging transactions in respect of Citi’s common stock or other securities issued by Citi, including securities granted by the Company to the Director or executive officer as part of his or her compensation and securities purchased or acquired by the Director or executive officer in a non-compensatory transaction.

The following table shows the beneficial ownership of Citi common stock by our Directors and certain executive officers at February 29, 2016. For purposes of this table, “beneficial ownership” is determined in accordance with Rule 13d-3 under the Exchange Act, pursuant to which a person or group of persons is deemed to have “beneficial ownership” of any shares of Common Stock that such person has the right to acquire within 60 days of the date of determination.

Beneficial Ownership Table

                         

Name

Common
Stock
Beneficially
Owned
Excluding
Options(1)

Options
Exercisable
Within 60
Days

Owned by or Tenant
in Common with
Family Member,
Trust, Mutual Fund
or 401(K)(2)

Total
Beneficial
Ownership

Receipt
Deferred(3)

Total

Stephen Bird

 

173,583

   

100,000

   

95,000

   

368,583

   

   

368,583

 

Don Callahan

 

198,973

   

188,982

   

   

387,955

   

   

387,955

 

Ellen M. Costello

 

   

 

   

   

   

4,048

   

4,048

 

Michael Corbat

 

263,281

   

150,000

   

1,781

   

415,062

   

   

415,062

 

James Forese

 

279,371

   

234,490

   

   

513,861

   

   

513,861

 

John Gerspach

 

107,662

   

150,000

   

124,197

   

381,859

   

   

381,859

 

Duncan P. Hennes

 

6,418

   

   

   

6,418

   

4,048

   

10,466

 

Peter B. Henry

 

2,297

   

   

   

2,297

   

4,048

   

6,345

 

Franz B. Humer

 

13,642

   

   

   

13,642

   

4,048

   

17,690

 

Renée J. James

 

   

   

   

   

4,048

   

4,048

 

Eugene M. McQuade

 

23,032

   

100,000

   

72,802

   

195,834

   

4,048

   

199,882

 

Michael E. O'Neill

 

89,587

   

   

53,200

   

142,787

   

   

142,787

 

Gary M. Reiner

 

12,296

   

   

   

12,296

   

4,048

   

16,344

 

Judith Rodin

 

34,456

   

   

36

   

34,492

   

4,048

   

38,540

 

Anthony M. Santomero

 

29,547

   

   

   

29,547

   

4,048

   

33,595

 

Joan E. Spero

 

22,264

   

   

   

22,264

   

4,048

   

26,312

 

Diana L. Taylor

 

21,679

   

   

   

21,679

   

4,048

   

25,727

 

William S. Thompson, Jr.

 

2,974

   

   

90,815

   

93,789

   

4,048

   

97,837

 

James S. Turley

 

7,543

   

   

   

7,543

   

4,048

   

11,591

 

Ernesto Zedillo Ponce de Leon

 

20,332

   

   

   

20,332

   

4,048

   

24,380

 

Total (29 Directors and Executive Officers as a group)

 

1,962,620

   

1,233,313

   

459,214

   

3,655,147

   

56,672

   

3,711,819

 

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STOCK OWNERSHIP

 

(1)

The stock reported for certain directors in this column includes deferred common stock which is fully vested and which the director or directors have the right to acquire within 60 days.

(2)

Stock 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 common stock.

(3)

Amounts represent Directors’ deferred common stock. The deferred common stock vests immediately; however, if a Director retired or resigned from the Board during the year of grant, the Director would forfeit a pro rata portion of the award.

At February 29, 2016, no Director or executive officer owned as much as 1% of Citi’s common stock.

At February 29, 2016, all of the Directors and executive officers as a group beneficially owned approximately 0.13% of Citi’s common stock.

Mr. Reiner also owns 485 depositary shares of Citi’s 5.9% Fixed/Float Non-Cumulative Preferred Stock, Series B, which represents 0.065% of such series of preferred stock.

Mr. Thompson also owns 18,768 depositary shares of Citi’s 6.875% Fixed/Float Non-Cumulative Preferred Stock, Series K, which represents .03% of such series of preferred stock.

Mr. Callahan also owns 4,170 depositary shares of Citi’s 6.3% Noncumulative Preferred Stock, Series S, which represents 0.01% of such series of preferred stock.

Mr. Mills also owns 1,000 depositary shares of Citi’s 5.95% Fixed/Floating Rate Noncumulative Preferred, Series Q, which represents 0.08% of such series of preferred stock.

Owners of More than 5% of Citi Common Stock

         

Name and Address of Beneficial Owner

Beneficial Ownership

Percent of Class

BlackRock Inc(a)
55 East 52nd Street, New York, NY 10055
Amount beneficially owned

 

201,894,757

   

6.8

%

The Vanguard Group Inc(b)
100 Vanguard Blvd., Malvern, PA 19355
Amount beneficially owned

 

163,849,049

   

5.5

%

 

(a)

Based on the Schedule 13G filed with the SEC on January 21, 2016 by BlackRock and certain subsidiaries, BlackRock reported that it had sole voting power over 175,501,366 shares; shared voting power over 138,851 shares; had sole dispositive power over 201,755,906 shares; and shared dispositive power over 138,851 shares. The Schedule 13G states that the shares are beneficially owned by funds and accounts managed by BlackRock and any economic interests of the securities covered is held by BlackRock for the benefits of the funds and accounts and not for BlackRock’s own account.

(b)

Based on the Schedule 13G filed with the SEC on February 11, 2016 by Vanguard and certain subsidiaries, Vanguard reported that it had sole voting power over 5,536,750 shares; sole dispositive power over 157,971,836 shares; shared voting power over 304,100 shares; and shared dispositive power over 5,877,213 shares. Vanguard Fiduciary Trust Company, a wholly owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 4,628,966 shares or .15% of Citi’s Common Stock as a result of its serving as investment manager of collective trust accounts. In addition, Vanguard Investments Australia, Ltd., a wholly owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 2,156,031 shares or .07% of Citi’s Common Stock as a result of its serving as investment manager of Australian investment offerings.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires Citi’s officers and Directors, and persons who own more than 10% of a registered class of Citi’s equity securities, to file reports of ownership and changes in ownership with the SEC and the NYSE, and to furnish Citi with copies of the forms. Based on its review of the forms it received, or written representations from reporting persons, Citi believes that, during 2015, each of its officers and Directors complied with all such filing requirements.

Citi 2016 Proxy Statement26


 

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Proposal 1: Election of Directors

The Board has nominated all of the current Directors for re-election at the 2016 Annual Meeting. Each of the Director nominees that currently served on the Board was elected by the stockholders at the 2015 Annual Meeting of Stockholders, except for Ms. Costello, Ms. James and Mr. McQuade, who were previously elected by the Board in 2015. Mses. Costello and James were identified as potential Directors by Egon Zehnder, the Board’s nominating consultant. Mr. McQuade was recommended as a candidate for election to the Citigroup Board by his fellow directors on the Citibank Board, all of whom are members of Citigroup’s Board. If elected, each nominee will hold office until the 2017 Annual Meeting or until his or her successor is elected and qualified.

The one-year term of all of Citi’s Directors expires at the Annual Meeting.

DIRECTOR CRITERIA AND NOMINATION PROCESS

The Nomination, Governance and Public Affairs Committee considers all qualified candidates identified by members of the Nomination, Governance and Public Affairs Committee, by other members of the Board, by senior management and by security holders. During 2015, the Committee engaged Egon Zehnder to assist in identifying and evaluating potential nominees. Stockholders who would like to propose a Director candidate for consideration by the Nomination, Governance and Public Affairs Committee may do so by submitting the candidate’s name, résumé and biographical information to the attention of the Corporate Secretary, Citigroup Inc., 388 Greenwich Street, New York, NY 10013. All proposals for nominations received by the Corporate Secretary will be presented to the Committee for its consideration.

The Nomination, Governance and Public Affairs 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 Nomination, Governance and Public Affairs 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 across many regulatory jurisdictions and regions 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 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.

 

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ELECTION OF DIRECTORS

Application of these factors involves the exercise of judgment by the Nomination, Governance and Public Affairs Committee and the Board.

Based on its assessment of each candidate’s independence, skills and qualifications and the criteria described above, the Nomination, Governance and Public Affairs Committee will make recommendations regarding potential Director candidates to the Board.

The Nomination, Governance and Public Affairs 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 2016 Annual Meeting, Citi did not receive notice from any stockholders regarding a nomination to the Board of Directors.

DIRECTOR QUALIFICATIONS

The nominees for the Board of Directors each have the qualifications and experience to approve and guide Citi’s strategy and to oversee management’s execution of that strategic vision. Citi’s Board of Directors consists of individuals with the skills, experience and backgrounds necessary to oversee Citi’s efforts toward becoming a simpler, smaller, safer, and stronger financial institution, while mitigating risk and operating within a complex financial and regulatory environment.

The nominees listed below are leaders in business, the financial community, and academia because of their intellectual acumen and analytic skills, strategic vision, ability to lead and inspire others to work with them, and 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 professional obligations, the ability to maintain a collegial environment, and the experience of having served as a Board member of a sophisticated global company.

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 are outlined below as being of critical importance to Citi’s proper operation and success. For the purposes of its analysis, the Board has determined that nominees who have served as a chief executive officer or a 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.

In evaluating the composition of the Board, the Nomination, Governance and Public Affairs 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 more than 100 countries around the globe. The Committee has determined it is critically important to Citi’s proper operation and success that its Board has, in addition to the qualities described above, expertise and experience in the following areas:


Compensation. Citi’s Personnel and Compensation Committee is responsible for determining the compensation of the CEO and approving the compensation of other executive officers of the Company and members of Citi’s Operating Committee. 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 imprudent risk-taking or simply having short-term goals.

 

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ELECTION OF DIRECTORS


Consumer Business. With more than 200 million customer 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 Affairs. Citi’s reputation is a vital asset in building trust with its clients and other stakeholders, and Citi makes every effort to communicate its corporate values to its stockholders and clients, its achievements in the areas of corporate social responsibility, sustainability, 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.

 


Institutional 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; and global transaction services, including treasury and trade solutions and securities and fund services. 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 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 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.

 


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 stockholder ratification. The Board must include members with direct or supervising experience in the preparation of financial statements, as well as finance and accounting expertise.

 


Financial Services Industry. Citi is a global diversified bank whose businesses provide a broad range of financial services to consumer and institutional customers, making it critically important that its Board include members who have deep financial services backgrounds. The nominees include many individuals with extensive financial institution experience.

 


International Business or Economics. As a company with a broad international reach, Citi’s Board values the perspectives of Directors with international business or governmental experience or expertise in international economics. Citi’s presence in markets outside the United States is an important competitive advantage for Citi, because it allows us to serve U.S. and foreign businesses and individual clients whose activities span the globe. Directors with international business experience can use the experience 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. Directors with international economics expertise can help guide Citi management in developing its global strategy.

 

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ELECTION OF DIRECTORS


Legal Matters. In addition to the regulatory supervision described below, Citi is subject to myriad laws and regulations and is party to various legal actions 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.

 


Operations and Technology. Citi has a long history as a technology innovator — Citibank, N.A. was one of the first banks to offer automatic teller machines for its customers during the 1970s. Since then, Citi has expanded its technology to include such products as online banking; mobile and tablet banking; mobile check deposit; eBills; and Popmoney®. Financial institutions rely on gathering, processing, analyzing, and providing information in order to meet the needs of their customers, and, for Citi, it is crucial to be at the forefront of technology innovations. Citi must be able to use and protect its data and must be able to access its data to ensure that it complies with regulatory requirements including anti-money laundering, sanctions, and other security issues. In addition, Citi must ensure that its operations are efficient, enhancing productivity to meet our strategic goals. The Board must include members that have knowledge and experience in technology, including such technology-driven issues as privacy and cybersecurity, data management, and the changing supervisory and regulatory technology landscape, as well as customer-friendly technology, and operations. Members of the Board provide oversight of Citi’s technology initiatives to service its consumer and institutional clients; the maintenance of Citi’s technology platforms; Citi’s compliance with regulatory requirements; Citi’s efficiency and productivity strategies; and the use and protection of customer data.

 


Regulatory Compliance. Citi and its subsidiaries are regulated and supervised by numerous regulatory agencies, both domestically and internationally, including in the U.S. the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Consumer Financial Protection Bureau, state banking and insurance departments, as well as international financial services authorities. Having Directors with experience interacting with regulators or operating businesses subject to extensive regulation is important to furthering Citi’s continued compliance with its many regulatory requirements and fostering productive relationships with its regulators.

 


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 its efforts to properly identify, measure, monitor, report, analyze, and control or mitigate risk.

 

 

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ELECTION OF DIRECTORS

THE NOMINEES

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

Each nominee’s biography highlights his or her particular skills, qualifications and experience that support the conclusion of the Nomination, Governance and Public Affairs Committee that the nominee is extremely qualified to serve on Citi’s Board.

BOARD RECOMMENDATION

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

Michael L. Corbat
55

Chief Executive Officer
Citigroup Inc.

Chief Executive Officer, Citigroup Inc. – October 2012 to Present

 

Chief Executive Officer, Europe, Middle East and Africa – December 2011 to October 2012

 

Chief Executive Officer, Citi Holdings – January 2009 to December 2011

 

Chief Executive Officer, Citi’s Global Wealth Management – September 2008 to January 2009

 

Head of Global Corporate Bank and Global Commercial Bank – March 2008 to September 2008

 

Head of Global Corporate Bank – April 2007 to March 2008

 

Head of Global Relationship Bank – March 2004 to April 2007

 

Head of EM Sales & Trading and Capital Markets, FICC – October 2001 to March 2004

 

Head of EM Sales & Fixed Income Origination – March 1988 to October 2001

 

Director of Citigroup since 2012

 

Other Directorships: None

 

Previous Directorships within the last five years: EMI

 

Other Activities: British/American Business, Inc. (Director), New York City Partnership (Director), The U.S. Ski & Snowboard Team Foundation (Director), The Clearing House Association (Member of the Supervisory Board), Financial Services Forum (Member), Institute of International Finance (Board Member), and International Business Council of WEF (Member)

 

 

Skills and Qualifications

Mr. Corbat 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., his prior experience as Citi’s CEO of Europe, Middle East and Africa, and his extensive career at Citi he has gained experience in all of Citi’s business operations, including consumer banking, corporate and investment banking, securities and trading and private banking services. In these roles, Mr. Corbat has gained extensive financial services, financial reporting, corporate business, and risk management experience. Additionally, in his role as CEO of Citi Holdings, Citi’s portfolio of non-core businesses and assets, he oversaw the divestiture of more than 40 businesses, including the IPO and sale of Citi’s remaining stake in Primerica. Mr. Corbat also successfully oversaw the restructuring of Citi’s consumer finance and retail partner cards businesses and divested more than $500 billion in assets, reducing risk on the Company’s balance sheet and freeing up capital to invest in Citi’s core banking business.

 

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ELECTION OF DIRECTORS

 

Name and Age
at Record Date

Position, Principal Occupation, Business Experience and Directorships

Ellen M. Costello
61

Former President, Chief Executive Officer, BMO Financial Corporation and Former U.S. Country Head, BMO Financial Group

President and CEO, BMO Financial Corporation and U.S. Country Head, BMO Financial Group – 2011 to July 2013

 

Group Head, Personal and Commercial Banking, U.S. and President and Chief Executive Officer, BMO Harris Bank N.A., BMO Financial Group – 2006 to 2011

 

Vice Chairman and Head, Securitization and Credit Investment Management, Merchant Banking and Head of N.Y. Office, Capital Markets Group, BMO Financial Group – 2000 to 2006

 

Executive Vice President, Strategic Initiatives, Capital Markets Group, BMO Financial Group – 2000

 

Executive Vice President and Head, Global Treasury Group, BMO Financial Group – 1997 to 1999

 

Senior Vice President and Deputy Treasurer, Global Treasury Group, BMO Financial Group – 1995 to 1997

 

Managing Director and Regional Treasurer, Asia Pacific, Global Treasury Group, BMO Financial Group – 1993 to 1994

 

Managing Director and Head, North American Financial Product Sales, Global Treasury Group, BMO Financial Group – 1991 to 1993

 

Director of Citigroup since 2016

 

Director of Citibank, N.A. since 2016

 

Other Directorships: DH Corporation

 

Previous Directorships within the last five years: BMO Financial Corporation

 

Other Activities: The United Way of Metropolitan Chicago (Board), Chicago Council on Global Affairs (Board), Economic Club of Chicago (Member)

 

 

Skills and Qualifications

Ms. Costello is an experienced financial services executive and has been nominated to serve on the Board because of her extensive skills and experience in the areas of Financial Services, Risk Management, Institutional and Consumer Businesses, Financial Reporting and Regulatory Compliance. In her 30 years at BMO Financial Group, a Global Financial Institution, Ms. Costello acquired extensive experience in personal and commercial banking, wealth management and capital markets businesses in Canada, Asia and the U.S. In her roles in Global Treasury and Global Capital Markets, she gained experience in corporate, institutional and investment banking, securities, trading and asset management. As CEO of BMO Harris Bank N.A., Ms. Costello gained experience in personal and commercial banking, strategic planning, marketing, regulatory compliance, financial reporting and personnel matters. Additionally, as CEO, BMO Financial Corporation and U.S. Country Head, she gained further experience in regulatory compliance, including capital and resolution planning, risk management and governance. Her board service at DH Corporation gives her experience with global operations and financial technologies businesses. Ms. Costello’s extensive financial services background also adds significant value to Citi’s and Citibank’s relationships with various regulators and stakeholders.

 

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ELECTION OF DIRECTORS

 

Name and Age
at Record Date

Position, Principal Occupation, Business Experience and Directorships

Duncan P. Hennes
59

Co-Founder and Partner
Atrevida Partners, LLC

Co-Founder and Partner, Atrevida Partners, LLC – June 2007 to Present

 

Co-Founder and Partner, Promontory Financial Group – 2000 to 2006

 

Chief Executive Officer, Soros Fund Management – 1999 to 2000

 

Executive Vice President/Treasurer, Bankers Trust Company – 1987 to 1999

 

Audit Manager, Arthur Andersen & Co. – 1979 to 1987

 

Director of Citigroup since 2013

 

Director of Citibank, N.A. since 2013

 

Other Directorships: Syncora Holdings, Ltd.

 

Previous Directorships within the last five years: None

 

Other Activities: Freeman & Co. (Advisory Board)

 

 

Skills and Qualifications

Mr. Hennes is an experienced financial services 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, Institutional Business, Regulatory Compliance, and Corporate Affairs. In his role as the Co-Founder of Atrevida Partners, LLC and his prior experience at Promontory Financial Group and Bankers Trust Corporation, he has gained extensive experience in financial services, regulatory compliance, corporate and investment banking, and securities and trading. While at Bankers Trust Corporation, Mr. Hennes was Chairman of Oversight Partners I, the consortium of 14 firms that participated in the equity recapitalization of Long-Term Capital Management. As the Chairman of Oversight Partners I, Mr. Hennes gained experience in credit and risk management, and personnel matters. Additionally, in his role as CEO of Soros Fund Management, Mr. Hennes gained experience in investing, operational infrastructure, and trading, including arbitrage activities. Mr. Hennes’s experience as a Certified Public Accountant has also given him audit, financial reporting, and risk management expertise.

 

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ELECTION OF DIRECTORS

 

Name and Age
at Record Date

Position, Principal Occupation, Business Experience and Directorships

Peter B. Henry
46

Dean
New York University, Leonard N. Stern School of Business

Dean, New York University, Leonard N. Stern School of Business – January 2010 to Present

 

Faculty Member, Stanford University – 1997 to 2009

 

Fellow, National Science Foundation – 1993 to 1996

 

Director of Citigroup since 2015

 

Director of Citibank, N.A. since 2015

 

Other Directorships: None*

 

Previous Directorships within the last five years: Kraft Foods Inc. and Kraft Foods Group, Inc. (split into two companies in October 2012)

 

Other Activities: British-American Business Council, Council on Foreign Relations (Board), National Bureau of Economic Research (Board), and the Economic Club of New York (Board)

 

 

Skills and Qualifications

Dr. Henry, a leading academic and seasoned international economist, has been nominated to serve on the Board because of his extensive expertise in the areas of International Business and Economics, Financial Services, Risk Management, Financial Reporting, Consumer Business, Corporate Affairs, and Governance. As a renowned international economist, he shares important perspectives with the Board on emerging markets, which is a focus of Citi’s strategy. The experience he has gained in his role as Dean of the Leonard N. Stern School of Business enables him to provide an important perspective to the Board’s discussions on public affairs, financial and operational matters. As a former member of the Board of Kraft Foods Group, Inc. and its Audit and Governance Committees, Dr. Henry has gained valuable insights about the Consumer Business environment, financial reporting, and governance. Dr. Henry’s governmental advisory roles, including leadership of President Obama’s Transition Team’s review of international lending agencies and his service as an economic advisor to governments in developing and emerging markets, have given him valuable insights and perspectives on international business and financial services. Dr. Henry brings to the Board extensive experience in executive leadership at a large private university, including a robust understanding of the issues facing companies and governments in both mature and emerging markets around the world.

 

*

Dr. Henry has been nominated to serve on the Board of General Electric Company (“GE”). The shareowners of GE will vote on his election at their 2016 Annual Meeting.

 

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ELECTION OF DIRECTORS

 

Name and Age
at Record Date

Position, Principal Occupation, Business Experience and Directorships

Franz B. Humer
69

Former Chairman
Roche Holding Ltd

Chairman, Roche Holding Ltd – 2008 to March 2014

 

Chairman & Chief Executive Officer, Roche Group – 2001 to 2008

 

Chief Executive Officer, Roche Group – 1998 to 2001

 

Chief Operating Officer, F. Hoffmann-La Roche Ltd – 1996 to 1998

 

Head of Pharmaceuticals, F. Hoffmann-La Roche Ltd – 1995 to 1996

 

Director of Citigroup since 2012

 

Other Directorships: Diageo plc (Chairman) and Kite Pharmaceuticals

 

Previous Directorships within the last five years: Roche Holdings Inc.

 

Other Activities: International Centre for Missing and Exploited Children (Chairman), Humer Foundation, Bial Pharmaceuticals, Chugai Pharmaceuticals Ltd., and WISeKey (Member of the Board)

 

 

Skills and Qualifications

Mr. Humer is an experienced executive and has been nominated to serve on the Board because of his extensive experience in the areas of International and Consumer Business, Financial Reporting, Risk Management, Compensation, Regulatory Compliance, and Corporate Governance. Mr. Humer gained extensive experience in international and consumer business, risk management, compensation, regulatory compliance, financial reporting, and corporate governance in his roles as CEO and Chair of Roche Holding and other executive positions at Roche, his roles as an executive at GlaxoSmithKline Plc and Schering Plough, as well as in his service as Chair of Diageo plc. With his many years of experience leading large, complex global organizations in the U.S. and in Europe in an extensively regulated industry, Mr. Humer is able to offer insights on the implementation of business strategies in major global markets, advise on regulatory compliance, and provide strategic guidance on the development and expansion of important franchises and brands. As a former member of the International Advisory Board of Allianz, and as a member of several philanthropic organizations, he is able to provide important perspectives on international and consumer business and corporate affairs.

 

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ELECTION OF DIRECTORS

 

Name and Age
at Record Date

Position, Principal Occupation, Business Experience and Directorships

Renée J. James
51

Operating Executive
The Carlyle Group

Operating Executive, The Carlyle Group – February 2016 to Present

 

President, Intel Corporation – 2014 to 2016

 

Executive Vice President and Head, Group GM Intel Software and Services Business – 2004 to 2013

 

Group Vice President and Division General Manager, Sales and Marketing; Group and General Manager, Microsoft Program Office, Intel – 2001 to 2004

 

Division Chief Operating Officer, Intel Online Solutions – 1999 to 2001

 

Chief of Staff to Intel Chairman and CEO Andrew Grove – 1995 to 1999

 

Director of Citigroup since 2016

 

Other Directorships: Oracle Corporation, Sabre Corporation and Vodafone Group Plc

 

Previous Directorships within the last five years: VMware, Inc.

 

Other Activities: President’s National Security Telecommunications Advisory Committee (Vice Chair)

 

 

Skills and Qualifications

Ms. James is an experienced executive and has been nominated to serve on the Board because of her experience in the areas of Technology, and International and Consumer Businesses. Ms. James is currently an Operating Executive with The Carlyle Group in their Media and Technology practice. She is a seasoned technology executive with broad, international experience managing large scale, complex global operations. She had a twenty-eight year career at Intel where she held a variety of positions spanning R&D leadership in both software and hardware and management of global manufacturing. She also has significant experience in emerging technologies and has gained extensive leadership, consumer industry, and technical expertise through the positions she held at Intel and her service on the boards of public technology companies. Ms. James’s expansive knowledge of cybersecurity through the positions she has held at Intel and as the Vice Chair of the National Security Telecommunications Advisory Committee to the President of the United States, will serve Citi well in its next chapter of innovation and in meeting the challenges of operating a financial services company in the 21st century. Through her services on the boards of other prominent international companies (Oracle Corporation, Sabre Corporation and Vodafone Group Plc), Ms. James has developed additional leadership and corporate governance expertise.

 

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ELECTION OF DIRECTORS

 

Name and Age
at Record Date

Position, Principal Occupation, Business Experience and Directorships

Eugene M. McQuade
67

Former Vice Chairman, Citigroup Inc. and
Former Chief Executive Officer, Citibank, N.A.

Vice Chairman, Citigroup Inc. – 2014 to May 2015

 

Chief Executive Officer, Citibank, N.A. – July 2009 to April 2014

 

Vice Chairman and President, Merrill Lynch Bank – 2008 to 2009

 

President and Chief Operating Officer, FreddieMac – 2004 to 2007

 

President, Bank of America – 2004

 

President and Chief Operating Officer, FleetBoston Financial – 2002 to 2004

 

Vice Chairman and Chief Financial Officer, FleetBoston Financial – 1997 to 2002

 

Director of Citigroup Inc. since 2015

 

Director of Citibank, N.A. since 2009

 

Other Directorships: XL Group, plc (Chairman)

 

Previous Directorships within the last five years: None

 

Other Activities: Promontory Financial Group (Vice Chairman), Boys and Girls Club (Governor), American Ireland Fund (Director), and Catholic Charities of New York (Director)

 

 

Skills and Qualifications

Mr. McQuade is an experienced financial services executive and has been nominated to serve on the Board because of his extensive skills and experience in the areas of Financial Services, Risk Management, Institutional and Consumer Business, Financial Reporting and Regulatory Compliance. As the former Chief Executive Officer of Citibank, N.A., he has a deep understanding of all aspects of Citi’s institutional and consumer businesses and has managed Citibank’s capital structure, regulatory compliance, operational risk, and strategic planning. He supervised Citibank’s financial reporting and provided oversight of Citi’s CCAR process. Mr. McQuade has extensive experience and financial expertise through his service in management positions such as CEO, president, vice chairman, chief financial officer and chief operating officer of several global, publicly traded financial institutions. He has gained broad experience in consumer banking and commercial banking through his previous experience at Bank of America, FleetBoston Financial, and Merrill Lynch. In addition, his board service at XL Group, plc gives him experience with global operations and regulated businesses. Through his service on Citi’s Risk Management Committee, he has deepened his risk management experience. Mr. McQuade’s extensive financial services background also adds significant value to Citi’s and Citibank’s relationships with various regulators and stakeholders.

 

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ELECTION OF DIRECTORS

 

Name and Age
at Record Date

Position, Principal Occupation, Business Experience and Directorships

Michael E. O’Neill
69

Chairman
Citigroup Inc.

Chairman, Citigroup Inc. – April 2012 to Present

 

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

 

Elected Chief Executive Officer, Barclays 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

 

Other Directorships: None

 

Previous Directorships within the last five years: None

 

Other Activities: University of Virginia, Darden Graduate School of Business Foundation (Trustee), Economic Club of New York (Trustee), The National WWII Museum (Trustee), USO of Metropolitan New York (Trustee), and FTV Capital (Advisory Board)

 

 

Skills and Qualifications

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, Institutional 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 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. Furthering his regulatory compliance expertise, while at the Bank of Hawaii, Mr. O’Neill served as the 12th District representative 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.

 

Citi 2016 Proxy Statement38


 

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ELECTION OF DIRECTORS

 

Name and Age
at Record Date

Position, Principal Occupation, Business Experience, and Directorships

Gary M. Reiner
61

Operating Partner
General Atlantic LLC

Operating Partner, General Atlantic LLC – September 2010 to Present

 

Senior Vice President and Chief Information Officer, General Electric Company – 1996 to 2010

 

Partner, Boston Consulting Group – 1986 to 1991

 

Director of Citigroup since 2013

 

Director of Citibank, N.A. since 2013

 

Other Directorships: Hewlett-Packard Company and Box Inc.

 

Previous Directorships within the last five years: None

 

Other Activities: Norwalk Hospital (Member)

 

 

Skills and Qualifications

Mr. Reiner is an experienced executive and has been nominated to serve on the Board because of his experience in the areas of Operations and Technology, Financial Reporting, Corporate Governance, and International and Consumer Business. In his current role as Operating Partner of General Atlantic LLC, he has continued to broaden his considerable expertise in technology and management. Through his tenure as Chief Information Officer at General Electric, Mr. Reiner gained extensive experience in the management of a large, complex, multi-national operation, developing technology innovations, strategic planning and marketing to an international consumer and institutional customer base. He also has significant experience in information technology through his many years of experience as a partner of Boston Consulting Group, where he focused on strategic issues for technology businesses. Mr. Reiner’s expertise as an innovative technology leader assists Citi in meeting the challenges of operating a financial services company in the 21st century. Through his service on the Hewlett Packard Board of Directors, Mr. Reiner has developed additional leadership and corporate governance expertise as the Chair of its Nominating, Governance and Social Responsibility Committee.

 

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ELECTION OF DIRECTORS

 

Name and Age
at Record Date

Position, Principal Occupation, Business Experience and Directorships

Judith Rodin
71

President
Rockefeller Foundation

President, Rockefeller Foundation – March 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

 

Previous Directorships within the last five years: AMR Corporation

 

Other Activities: World Trade Memorial Foundation (Director), Carnegie Hall (Director), Laureate Education, Inc. (Director), White House Project (Member), Council on Foreign Relations (Member), and National Academy of Sciences Institute of Medicine (Member)

 

 

Skills and Qualifications

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 from 1994 until her retirement in 2004, and as Provost of Yale University from 1992 to 1994, together with 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 Chair of the Compensation Committee of Comcast Corporation, and as a Director of Comcast Corporation and Laureate Education, 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 has deepened her understanding of corporate affairs on local and global scales.

 

Citi 2016 Proxy Statement40


 

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ELECTION OF DIRECTORS

 

Name and Age
at Record Date

Position, Principal Occupation, Business Experience and Directorships

Anthony M. Santomero
69

Former President
Federal Reserve Bank of Philadelphia

Senior Advisor, McKinsey & Company – 2006 to January 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. since 2009

 

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

 

Previous Directorships within the last five years: B of A Fund Series Trust

 

Other Activities: Columbia Funds Series Trust

 

 

Skills and Qualifications

Dr. Santomero is a seasoned economist and economic policy advisor and has been nominated to serve on the Board because of his extensive experience in the areas of Risk Management, Regulatory Compliance, Corporate Governance, 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 to 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 Audit Committees as well as the Investment and Risk Management Committee of RenaissanceRe Holdings, he has deepened his risk management experience.

 

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ELECTION OF DIRECTORS

 

Name and Age
at Record Date

Position, Principal Occupation, Business Experience and Directorships

Joan E. Spero
71

Senior Research Scholar
Columbia University School of International and Public Affairs

Senior Research Scholar, Columbia University School of International and Public Affairs – November 2010 to Present

 

Visiting Fellow at the Foundation Center – 2009 to 2010

 

President and CEO, Doris Duke Charitable Foundation – 1997 to 2008

 

Under Secretary of State, Economics, Business and Agricultural Affairs – 1993 to 1997

 

Executive Vice President, Corporate Affairs and Communications, American Express – 1991 to 1993

 

Senior Vice President and Treasurer, American Express – 1989 to 1991

 

Vice President, Corporate Affairs, American Express – 1983 to 1989

 

Vice President, Corporate Strategic Planning, American Express – 1981 to 1983

 

Director of Citigroup since 2012

 

Director of Citibank, N.A. since 2012

 

Other Directorships: IBM and International Paper

 

Previous Directorships within the last five years: ING Groep N.V.

 

Other Activities: Council of American Ambassadors (Member), Academy of Diplomacy (Member), American Philosophical Society (Member), Wisconsin Alumni Research Foundation (Trustee), International Center for Transitional Justice (Trustee), Columbia University (Trustee Emeritus), Amherst College (Trustee Emeritus), Council on Foreign Relations (Trustee Emeritus) and Brookings Institution (Trustee Emeritus)

 

 

Skills and Qualifications

Ms. Spero has wide-ranging experience, having served as a senior government official, a financial services executive, an academic, a seasoned board member, and as a leader in the not-for-profit sector. She has been nominated to serve on the Board because of her Corporate Governance, Regulatory Compliance, International Business and Economics, Consumer Business, Financial Services, Corporate Affairs, Compensation, and Financial Reporting experience. Ms. Spero gained extensive regulatory compliance and international business experience during her tenure as U.S. Under Secretary of State for Economic, Business and Agricultural Affairs and U.S. Ambassador to the United Nations for Economic and Social Affairs. As an executive at American Express Company, including her roles as Executive Vice President of Corporate Affairs and Communications and as Senior Vice President and Treasurer, she developed expertise in financial services, consumer business and corporate affairs. As a current or former member of the Boards of Directors of IBM, International Paper, ING, Delta Airlines, and First Data Corporation, including her service on the Compensation and Audit Committees of IBM, the Governance Committee of International Paper, and the Public Policy and Environment Committee of International Paper, she gained extensive experience in corporate governance, consumer business, financial reporting, compensation, and corporate affairs. Her roles as the President of the Doris Duke Foundation, the visiting fellow at the Foundation Center, where she conducted research on the role of American Private Foundations in U.S. foreign policy and in the global system, and senior research scholar at Columbia University School of International and Public Affairs, where she researches and writes about international philanthropy and its role in the global system — as well as her other service in the non-profit sector — have given her extensive insights into corporate affairs matters.

 

Citi 2016 Proxy Statement42


 

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ELECTION OF DIRECTORS

 

Name and Age
at Record Date

Position, Principal Occupation, Business Experience and Directorships

Diana L. Taylor
61

Vice Chair
Solera Capital LLC

Vice Chair, Solera Capital LLC – July 2014 to Present

 

Managing Director, Wolfensohn Fund Management, L.P. – 2007 to 2014

 

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

 

Director of Citigroup since 2009

 

Director of Citibank, N.A. since 2013

 

Other Directorships: Brookfield Asset Management and Sotheby’s

 

Previous Directorships within the last five years: Brookfield Office Properties

 

Other Activities: Accion (Chair), AMFAR, Columbia Business School (Board of Overseers), Dartmouth College (Trustee), Girls Educational & Mentoring Services (GEMS) (Member), Hudson River Park Trust (Chair), Friends of Hudson River Park, Ideas42, International Women’s Health Coalition, Mailman School of Public Health (Board of Overseers), Mayo Clinic (Member), The After School Corporation (Member), Economic Club of New York, and Council on Foreign Relations (Member)

 

 

Skills and Qualifications

Ms. Taylor is an experienced financial services executive and regulator and has been nominated to serve on the Board because of her wide-ranging experience in the areas of Financial Services, Institutional Business, Regulatory Compliance, Risk Management, Corporate Affairs, Compensation, Corporate Governance, Financial Reporting, and Legal Matters. Ms. Taylor has extensive bank regulatory and risk management 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 Vice Chair at Solera Capital LLC and 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 a member of the Audit Committee of, the Dartmouth Board of Trustees, and as chair of Accion and the Hudson River Park Trust, and former chair of the New York Women’s Foundation, and the YMCA of Greater New York, Ms. Taylor has gained additional experience in corporate affairs, corporate governance, financial reporting, compensation, and legal matters.

 

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ELECTION OF DIRECTORS

 

Name and Age
at Record Date

Position, Principal Occupation, Business Experience and Directorships

William S. Thompson, Jr.
70

Former Chief Executive Officer
Pacific Investment Management Company (PIMCO)

Chief Executive Officer, PIMCO – 1993 to January 2009

 

Chairman, Salomon Brothers Asia Ltd. – 1991 to 1993

 

Salomon Brothers Inc. – 1975 to 1993

 

Director of Citigroup since 2009, Chairman, Personnel and Compensation Committee since 2014

 

Other Directorships: None

 

Previous Directorships within the last five years: None

 

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

 

 

Skills and Qualifications

Mr. Thompson 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, Institutional 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 institutional, consumer and international business, skills and experience. As a former Chief Executive Officer, and through his service as a member of the Risk Management Committee, Personnel and Compensation Committee with Citi, and previously Lead Director of Pacific Life Corporation, Mr. Thompson developed extensive skills and experience in corporate governance, financial reporting, compensation, and legal matters.

 

Citi 2016 Proxy Statement44


 

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ELECTION OF DIRECTORS

 

Name and Age
at Record Date

Position, Principal Occupation, Business Experience and Directorships

James S. Turley
60

Former Chairman and CEO
Ernst & Young

Chairman and CEO, Ernst & Young – 2001 to June 2013

 

Regional Managing Partner, Ernst & Young – 1994 to 2001

 

Director of Citigroup since 2013

 

Director of Citibank, N.A. since 2013

 

Other Directorships: Emerson Electric Co., Intrexon Corporation and Northrop Grumman Corporation

 

Previous Directorships within the last five years: None

 

Other Activities: Boy Scouts of America (Board Member), Boy Scouts of Greater St. Louis (Board Member), World Scout Foundation (Board Member), Committee for Economic Development (Trustee), Theatre Forward (Chair), and Municipal Theatre Association of St. Louis (Board Member)

 

 

Skills and Qualifications

Mr. Turley, the retired Global Chair and CEO of Ernst & Young, brings to Citi his insights and expertise from his exceptional career in the accounting profession, both in the U.S. and internationally, as well as his executive experience from leading a major public accounting firm. Mr. Turley has been nominated to serve on the Board because of his extensive knowledge and expertise in the areas of Financial Reporting, Legal Matters, International Business, Regulatory Compliance, and Risk Management. As Chair of the Audit Committee and a member of the Risk Management Committee, Mr. Turley adds significant value to the Board’s oversight of financial reporting, regulatory matters, compliance, internal audit, legal issues and risk. Having served as Chair and CEO of Ernst & Young, he has developed significant expertise in the areas of compensation, litigation, corporate affairs, and corporate governance. Mr. Turley, the former Chairman of the Board of Catalyst, recognized as a champion of diversity, having received the prestigious Crystal Leadership Award for his support of equal marketplace access for women and the groundbreaking programs he oversaw at Ernst & Young that enable the strategic development of women-owned businesses, provides guidance to Citi on diversity matters as well.

 

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ELECTION OF DIRECTORS

 

Name and Age
at Record Date

Position, Principal Occupation, Business Experience and Directorships

Ernesto Zedillo
Ponce de Leon
64

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 – September 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

 

Director of Citigroup since 2010

 

Other Directorships: Alcoa Inc., Procter & Gamble Company, and Grupo Prisa

 

Previous Directorships within the last five years: None

 

Other Activities: BP (Member of International Advisory Board), Credit Suisse Research Institute (Advisor), The Group of Thirty (Member), Inter-American Dialogue (Co-Chair of Board), and Natural Resource Governance Institute (Chair of the Board), and Presidential Counselor of Laureate International Universities

 

 

Skills and Qualifications

Mr. Zedillo Ponce de Leon is the former President of Mexico, a seasoned economist and academic. He has been nominated to serve on the Board because of his extensive experience in the areas of International Business and Economics, 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 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. His service as Chair of the Global Development Network, as Chair of the High Level Commission on Modernization of World Bank Group Governance, on the Group of Thirty, and on the International Advisory Boards of BP and the Coca-Cola Company, has given him extensive international business, financial services, and corporate affairs experience. As a member of the Board of Alcoa Inc., he serves on the Audit Committee and Public Issues Committee, and at Procter & Gamble Company, he is a member of the Governance and Public Responsibility Committee, and a member of the Innovation and Technology Committee, Grupo Prisa of Spain 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 Ponce de Leon has gained experience in financial reporting, risk management, corporate governance, and corporate affairs.

 

Citi 2016 Proxy Statement46


 

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ELECTION OF DIRECTORS

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, Governance and Public Affairs 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 2015, the Committee received benchmarking assessments of peer company director compensation from outside expert advisors. After reviewing the current compensation program against the assessment and taking account of such factors as it considered relevant, the Committee determined that no changes were appropriate.

Key features of our non-employee Director Compensation Program:

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 senior executives. The deferred stock award generally becomes distributable on the second anniversary of the date of the grant, and Directors may elect to defer receipt of the award beyond that date. Starting with the 2011 deferred stock award grant, in the event a Director leaves the Board for personal reasons prior to the conclusion of the deferral period and before age 72, the Director will not forfeit the deferred stock and the prorated award will be distributed as scheduled. Directors may elect to receive all or a portion of their 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.

 

Citi’s Chairman receives annual compensation in the form of a $500,000 Chairman’s Fee, payable 75% in deferred shares of Citi common stock and 25% in cash or deferred shares of Citi common stock.

 

The Chairs of the Audit Committee and the Risk Management Committee receive additional compensation of $50,000 per year. The Chairs of the Ethics and Culture Committee; the Nomination, Governance, and Public Affairs Committee; the Operations and Technology Committee; and the Personnel and Compensation Committee receive additional compensation of $35,000. In addition, Chairs of the Ad Hoc Committees also receive additional compensation of $35,000.

 

If a director serves on more than two Committees of the Citigroup Board, or on the Citibank Board and more than one Committee of the Citigroup Board, the director will receive a $25,000 Incremental Fee for each additional Committee of the Citigroup Board on which the director serves. Additional compensation for special assignments may be determined on a case-by-case basis.

 

Mses. Costello, Spero, and Taylor and Messrs. Hennes, Henry, McQuade, Reiner, Santomero, and Turley serve on Citibank’s Board of Directors. Each non-employee Director of Citibank is entitled to receive $25,000 as an annual cash retainer.

 

All annual retainers and chair fees are paid in cash or stock in four equal quarterly installments per annum. These fees are reported in the Non-Employee Director Compensation Table below.

 

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.

 

Mses. Costello, James, Spero, and Taylor and Messrs. Hennes, Henry, McQuade, Santomero, Thompson, and Zedillo have served on and/or chaired a number of ad hoc committees covering such topics as compliance matters and international subsidiary governance.

 

 

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ELECTION OF DIRECTORS

The following table provides information on 2015 compensation for non-employee Directors.

2015 Director Compensation

                 

Name

Fees
Earned
or Paid
in Cash
($)(1)

Stock
Awards
($)(1)(2)(3)(7)

All Other
Compensation
($)

Total
($)

Duncan P. Hennes

$

232,500

 

$

150,000

   

 

$

382,500

 

Peter B. Henry

$

62,500

 

$

75,000

   

 

$

137,500

 

Franz B. Humer

$

110,000

 

$

150,000

   

 

$

260,000

 

Eugene M. McQuade(4)

$

80,000

 

$

75,000

   

 

$

155,000

 

Michael E. O’Neill(5)

$

500,000

   

   

 

$

500,000

 

Gary M. Reiner

$

135,000

 

$

150,000

   

 

$

285,000

 

Judith Rodin

$

100,000

 

$

150,000

   

 

$

250,000

 

Robert L. Ryan(6)

$

65,000

 

$

37,500

   

 

$

102,500

 

Anthony M. Santomero

$

240,000

 

$

150,000

   

 

$

390,000

 

Joan E. Spero

$

155,000

 

$

150,000

   

 

$

305,000

 

Diana L. Taylor

$

210,000

 

$

150,000

   

 

$

360,000

 

William S. Thompson

$

135,000

 

$

150,000

   

 

$

285,000

 

James S. Turley

$

205,000

 

$

150,000

   

 

$

355,000

 

Ernesto Zedillo Ponce de Leon

$

100,000

 

$

150,000

   

 

$

250,000

 

 

(1)

Directors may elect to receive all or a portion of the cash retainer in the form of Citi common stock and may elect to defer receipt of Citi common stock. Certain directors elected to defer receipt of the shares. Ms. Spero and Dr. Rodin elected to receive all or a portion of their Citigroup 2015 cash retainer and/or Chair fee in deferred stock as represented in the below chart. Mr. O’Neill elected to receive his Chair Fee in deferred stock as represented in the below chart. Messrs. Henry, Reiner and Thompson elected to receive their cash retainers in stock (100%). Messrs. Henry, Reiner, and Thompson did not elect to defer their retainers; therefore, their 955, 2,059 and 2,528 shares, respectively, were distributed to them quarterly on January 1, April 1, July 1, and October 1. The share price used for the deferred stock was the average consolidated NYSE closing price of Citigroup common stock for the first ten days of the last month of the quarter.

 

             

 

 

Deferred Fees
To Be Paid in Stock

Name

Fees Paid
Currently in Cash

Number of
Units

Value of
Units

Duncan P. Hennes

$

232,500

   

   

 

Peter B. Henry

$

12,500

   

   

 

Franz B. Humer

$

110,000

   

   

 

Eugene M. McQuade

$

80,000

   

   

 

Michael E. O’Neill

 

   

9,368

 

$

500,000

 

Gary M. Reiner

$

25,000

   

   

 

Judith Rodin

 

   

1,873

 

$

100,000

 

Robert L. Ryan

$

65,000

   

   

 

Anthony M. Santomero

$

240,000

   

   

 

Joan E. Spero

$

25,000

   

2,447

 

$

130,000

 

Diana L. Taylor

$

210,000

   

   

 

William S. Thompson

 

   

   

 

James S. Turley

$

205,000

   

   

 

Ernesto Zedillo Ponce de Leon

$

100,000

   

   

 

 

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ELECTION OF DIRECTORS

 

(2)

The values in this column represent the aggregate grant date fair values of the 2015 deferred stock awards. The grant date fair value is based on a grant date of February 18, 2015 and a grant price determined by the average NYSE closing prices of Citi’s common stock on the immediately preceding five trading days. Mr. Henry, for whom the grant date was July 1, 2015 and Mr. McQuade, for whom the grant date was October 1, 2015 at a grant price determined by the average NYSE closing prices of Citi’s common stock on the immediately preceding five trading days, immediately preceding the dates of their service as Board members. Mses. Costello and James did not receive grants of deferred shares in 2015 because their Board service did not commence until January 15, 2016. The amounts in the below chart represent deferred stock awards only and not shares awarded in lieu of the cash retainer and/or Chair or Committee Chair fees. The grant date fair value of the deferred stock awards are set forth below:

 

         

Director

Deferred Stock
Granted in 2015
(#)

Grant Date
Fair Value
($)

Duncan P. Hennes

 

2,966

 

$

150,000

 

Peter B. Henry*

 

1,342

 

$

75,000

 

Franz B. Humer

 

2,966

 

$

150,000

 

Eugene M. McQuade*

 

1,516

 

$

75,000

 

Michael E. O'Neill

 

   

 

Gary M. Reiner

 

2,966

 

$

150,000

 

Judith Rodin

 

2,966

 

$

150,000

 

Robert L. Ryan**

 

741

 

$

37,500

 

Anthony M. Santomero

 

2,966

 

$

150,000

 

Joan E. Spero

 

2,966

 

$

150,000

 

Diana L. Taylor

 

2,966

 

$

150,000

 

William S. Thompson

 

2,966

 

$

150,000

 

James S. Turley

 

2,966

 

$

150,000

 

Ernesto Zedillo Ponce de Leon

 

2,966

 

$

150,000

 

 

*

The Deferred Stock Awards granted to Messrs. Henry, and McQuade were prorated based on the dates they commenced service on Citi’s Board.

**

Mr. Ryan’s Deferred Stock Award was prorated because his service on the Board terminated on April 28, 2015.

 

 

The aggregate number of shares of deferred stock outstanding at the end of 2015 was:

 

     

Name

Number of
Shares

Duncan P. Hennes

 

6,418

 

Peter B. Henry

 

1,342

 

Franz B. Humer

 

13,643

 

Eugene M. McQuade

 

1,516

 

Michael E. O'Neill

 

60,888

 

Gary M. Reiner

 

5,986

 

Judith Rodin

 

34,456

 

Anthony M. Santomero

 

29,546

 

Joan E. Spero

 

21,265

 

Diana L. Taylor

 

21,680

 

William S. Thompson

 

6,006

 

James S. Turley

 

6,006

 

Ernesto Zedillo Ponce de Leon

 

20,333

 

 

(3)

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.

(4)

Mr. McQuade served as Vice Chairman of Citigroup from January 1, 2015 to May 1, 2015. His compensation for services as an employee of the Company and his fiscal year-end holdings of outstanding Performance Share Units, Capital Accumulation Program Awards, and Stock Options are reported under the Certain Transactions and Relationships section of this Proxy Statement on page 22.

(5)

Mr. O’Neill receives a Chairman’s Fee of $500,000 annually for his service as Citi’s Chairman.

(6)

Mr. Ryan retired from the Board on April 28, 2015.

 

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ELECTION OF DIRECTORS

 

(7)

The following chart shows the amount of dividend equivalents and interest paid to the non-employee Directors in 2015 with respect to shares of Citi common stock held in their deferred stock accounts.

 

     

Director

Dividend Equivalents and
Interest Paid on Deferred
Stock Account*

Duncan P. Hennes

$

995

 

Peter B. Henry

$

134

 

Franz B. Humer

$

2,149

 

Eugene M. McQuade

$

76

 

Michael E. O’Neill

$

8,923

 

Gary M. Reiner

$

1,097

 

Judith Rodin

$

5,313

 

Robert L. Ryan

$

1,380

 

Anthony M. Santomero

$

4,698

 

Joan E. Spero

$

3,129

 

Diana L. Taylor

$

3,432

 

William S. Thompson

$

929

 

James S. Turley

$

1,098

 

Ernesto Zedillo Ponce de Leon

$

3,217

 

 

*

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. 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 25 of this Proxy Statement.

 

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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 five 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 PCAOB Auditing Standard Nos. 16 and 18.

The Committee reviewed and discussed the audited consolidated financial statements of Citigroup as of and for the year ended December 31, 2015 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 did not impair 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, 2015 for filing with the SEC.

The Audit Committee:

James S. Turley (Chair)
Ellen M. Costello
Peter B. Henry
Michael E. O’Neill
Anthony M. Santomero

Dated: February 23, 2016

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

The Audit Committee has selected KPMG LLP (KPMG) as the independent registered public accounting firm of Citi for 2016. KPMG has served as the independent registered public accounting firm of Citi and its predecessors since 1969.

Arrangements have been made for representatives of KPMG to attend the annual meeting. The representatives will have the opportunity to make a statement, if they desire to do so, and will be available to respond to appropriate stockholder questions.

DISCLOSURE OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FEES

The following is a description of the fees earned by KPMG for services rendered to Citi for the years ended December 31, 2015 and 2014:

         

 

2015

2014

 

(in millions of dollars)

Audit Fees

$

67.5

 

$

65.3

 

Audit-Related Fees

$

21.0

 

$

26.7

 

Tax Fees

$

9.9

 

$

7.0

 

All Other Fees

$

 

$

 

Total Fees

$

98.4

 

$

99.0

 

Audit fees. This includes fees earned by KPMG in connection with the annual integrated audit of Citi’s consolidated financial statements, internal control over financial reporting under Sarbanes-Oxley Section 404, audits of subsidiary financial statements, comfort letters and consents related to SEC registration statements and other capital-raising activities and certain reports relating to Citi’s regulatory filings, reports on internal-control reviews required by regulators, accounting advice on completed transactions and reviews of Citi’s interim financial statements.

Audit-related fees. This includes fees for services performed by KPMG that are closely related to audits and in many cases could only be provided by our independent registered public accounting firm. Such services may include due diligence services related to contemplated mergers and acquisitions, accounting consultations, internal control reviews not required by regulators, securitization-related services, employee benefit plan audits, and certain attestation services, as well as certain agreed upon procedures.

Tax fees. This includes preparation and review of corporate tax returns, tax audits, expense allocation reports for tax purposes, and other tax compliance services.

All other fees. Citi did not engage KPMG for any services other than those described above.

APPROVAL OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM SERVICES AND FEES

Citi’s Audit Committee has reviewed and approved all fees earned in 2015 and 2014 by Citi’s independent registered public accounting firm and actively monitored the relationship between audit and non-audit services provided. The Audit Committee has concluded that the fees earned by KPMG were consistent with the maintenance of the external auditors’ independence in the conduct of its auditing functions.

The Audit Committee must pre-approve all services provided and fees earned by Citi’s independent registered public accounting firm. The Audit Committee annually considers the provision of audit services and, if appropriate, pre-approves certain defined audit fees, audit-related fees, and tax-compliance fees with specific

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PROPOSAL 2

dollar-value limits for each category of service. The Audit Committee also considers on a case-by-case basis specific engagements that are not otherwise pre-approved (e.g., internal control and certain tax compliance engagements) or that exceed pre-approved fee amounts. On an interim basis, any proposed engagement that does not fit within the definition of a pre-approved service may be presented to the Chair of the Audit Committee for approval and to the full Audit Committee at its next regular meeting.

The Accounting Firm Engagement Directive is the primary basis upon which management ensures the independence of its independent registered public accounting firm. Administration of the Directive is centralized in, and monitored by, Citi senior corporate financial management, which reports the engagements earned by KPMG throughout the year to the Audit Committee. The Directive also includes limitations on the hiring of KPMG partners and other professionals to ensure that Citi satisfies applicable auditor independence rules.

KPMG has served as the independent registered public accounting firm of Citi and its predecessors since 1969. As in prior years, Citi and its Audit Committee have engaged in a review of KPMG in connection with the Audit Committee’s consideration of whether to recommend that shareholders ratify the selection of KPMG as Citi’s independent auditor for the following year. In that review, the Audit Committee considers both the continued independence of KPMG and whether retaining KPMG is in the best interests of Citi and its stockholders. Citi’s management prepares an annual assessment of KPMG for the Audit Committee that includes (i) the results of a management survey of KPMG’s overall performance, (ii) an analysis of KPMG’s known legal risks and significant proceedings that may impair KPMG’s ability to perform Citi’s annual audit; and (iii) KPMG’s fees and services provided to Citi both on an absolute basis, noting, of course, that KPMG does not provide any non-audit services, other than those described in the Proxy Statement, to Citi, and compared to services provided by other auditing firms to peer institutions. In addition, KPMG reviews with the Audit Committee its analysis of its independence in accordance with the Accounting Firm Engagement Directive and PCAOB Rule 3526. In performing its analysis, the Audit Committee considered the length of time KPMG has been Citi’s independent auditor, the breadth and complexity of Citi’s business and its global footprint and the resulting demands placed on its auditing firm in terms of expertise in Citi’s businesses, the quantity and quality of staff and global reach. The Audit Committee recognized the unique ability of KPMG to provide both the necessary expertise to audit Citi’s business and the matching global footprint to audit Citi worldwide and other factors, including the policies that KPMG follows with respect to rotation of the key audit personnel, so that there is a new partner-in-charge at least every five years. The Audit Committee also reviewed external data on audit quality and performance, including recent PCAOB reports on KPMG and its peer firms. Based on the results of its review this year, the Audit Committee concluded that KPMG is independent and that it is in the best interests of Citi and its investors to appoint KPMG to serve as Citi’s independent registered accounting firm for 2016.

Citi’s Audit Committee oversees the process for, and ultimately approves, the selection of the independent auditor’s lead engagement partner at the five-year mandatory rotation period. At the Audit Committee’s instruction, KPMG selects candidates to be considered for the lead engagement partner role, who are then interviewed by members of Citi’s senior management. After considering the candidates recommended by KPMG, senior management makes a recommendation to the Audit Committee regarding the new lead engagement partner. After discussing the qualifications of the proposed lead engagement partner with the current lead engagement partner, the members of the Audit Committee, individually and/or as a group, interview the leading candidate. The Audit Committee then considers the appointment and votes as an Audit Committee on the selection.

BOARD RECOMMENDATION

The Board recommends that you vote FOR ratification of KPMG as Citi’s independent registered public accounting firm for 2016.

 

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Proposal 3: Advisory Vote to Approve Citi’s 2015 Executive Compensation

We are seeking an advisory vote approving the compensation of named executive officers as disclosed in this Proxy Statement, as required by Rule 14a-21(a) of the Securities Exchange Act of 1934. You are being asked to vote on the following advisory resolution:

RESOLVED, that the compensation paid to Citi’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables, and narrative discussion, is hereby APPROVED.

We have asked for this advisory vote on an annual basis, and we will continue to do so at least until the next advisory vote on the frequency of our say-on-pay votes (which will occur next year under SEC rules).

BOARD RECOMMENDATION

The Board recommends that you vote FOR Proposal 3, which is advisory approval of Citi’s executive compensation as disclosed in this Proxy Statement. We strongly urge stockholders to review our entire Compensation Discussion and Analysis, which provides detailed information on the compensation awarded to the named executive officers and the reasoning supporting those awards.

Our Stockholder Engagement

Our Board and management seek to have a meaningful, ongoing dialogue with stockholders on many issues, including executive compensation matters. To that end, the Board and senior management have embarked on a multi-year program of stockholder engagement, led recently by Mr. Thompson, the Chairman of the Compensation Committee, with active participation from Mr. O’Neill, our Board Chairman. Last spring and consistent with our practice over the past four years, we held discussions with 18 stockholders who collectively held approximately 27.7% of Citi’s common shares. We also spoke with proxy advisors to provide information on our executive compensation programs and address their questions. Stockholder perspectives are reflected in the design of our program, and we have received favorable say-on-pay votes of 84.6% and 84.5% in 2014 and 2015, respectively. Our executive compensation program includes the following features:

Objective compensation framework. Through our engagement efforts, we learned that stockholders view our objective compensation framework favorably; accordingly, we continued to use that framework in awarding executive compensation for 2015 performance. Incentive awards for 2015 performance were based on a scorecard of specific metrics-based financial and non-financial goals. The same metrics are used when we evaluate the performance of our businesses. As a result, our executive incentive awards are expressly linked to our financial and non-financial performance.

 

Explanation of the use of judgment in determining compensation. Our stockholders have asked for comprehensive explanations of how we make compensation decisions, especially when the use of judgment is involved. On pages 64-70, our Compensation Discussion and Analysis provides a detailed review of the factors considered by the Compensation Committee in awarding executive compensation.

 

Performance-based compensation. In addition to objective business metrics used to assess executive performance, our program design and compensation policies have multiple performance-based features and clawbacks, as expected by our stockholders. Over 90% of each named executive officer’s total annual compensation is variable, and the entire deferred portion of the variable award has performance-based vesting and other performance-based characteristics such as clawbacks.

 

Simplified alignment with stockholder interests through revised performance share units. Citi’s performance share unit program was established in 2013 in response to feedback from our stockholders, who expressed a preference for changes in our compensation programs that would improve alignment with their interests. Grants under the performance share unit program were made in February 2013, February 2014, and February 2015. Executives earn those performance share units over a three-year performance period based on Citi’s average return on assets and Citi’s relative total shareholder return as compared to peers. This year, we modified our performance share unit program in several respects. The most significant change is that performance share units awarded in February 2016 for 2015 performance

 

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COMPENSATION DISCUSSION AND ANALYSIS

will be earned exclusively based on relative total shareholder return over a three-year performance period. Through its exclusive focus on returns to stockholders, the new design simplifies the award’s alignment with stockholder interests and reflects views expressed by many of Citi’s larger stockholders during our engagement with them over the past four years. Our Executive Summary discusses the changes on pages 57-58.

Our continuing focus on risk management. Our comprehensive approach to awarding incentive compensation reduces the potential for imprudent or excessive risk-taking that may undermine our business goals. In particular, the scorecard for each named executive officer includes important risk and control goals.

 

Our good governance practices. The governance associated with our compensation programs includes a number of strong policies and practices, as described on pages 73-76.

 

COMPENSATION DISCUSSION AND ANALYSIS

Our Compensation Discussion and Analysis reviews:

Citi’s compensation program and 2015 CEO pay in an executive summary (pages 55-59);

 

Citi’s 2015 business performance and total shareholder return, each as compared to peers, to provide context for our compensation decisions (pages 60-61);

 

Awards made by the Compensation Committee to our named executive officers for 2015 performance, using our compensation framework and scorecards (page 63);

 

Our continued focus on risk and incentive compensation (pages 72-73); and

 

Our strong executive compensation practices (pages 73-76).

 

The 2015 Summary Compensation Table and related compensation information begin on page 77.

Executive Summary

Citi’s solid 2015 operating performance. Citi delivered solid operating results in 2015, improving performance over 2014 across key operational metrics and comparing well to peers. The $17.2 billion generated in net income was the highest since 2006, even though today Citi is a very different company in terms of headcount, footprint, mix of businesses, and assets. These results were achieved despite market volatility, macroeconomic uncertainties, and slower global growth. Citi has continued to become a simpler, smaller, safer, and stronger bank under Mr. Corbat’s leadership.

Operating efficiency. During 2015, we grew revenues(1) while reducing overall expenses, thereby improving our efficiency ratio(2) as compared to 2014. We ended 2015 with the best efficiency ratio among our peers, and we rank third in net income to common shareholders, as shown on page 60. We achieved those results while continuing to absorb increased regulatory and compliance costs and to make ongoing business investments. The expense reductions were driven by significantly lower legal and related expenses and lower repositioning costs as compared to 2014.

 

Balance sheet strength. In 2015, we continued to achieve a key strategic goal of reducing the size of Citi Holdings, which constituted only 4% of Citigroup’s total GAAP assets at the end of the year. Loans and deposits in Citicorp each grew during 2015 while Citi’s overall balance sheet decreased.(3) Citi has generated over $50 billion in regulatory capital over the last three years.

 

(1)

Excluding the impact of CVA/DVA and foreign currency translation into U.S. dollars for reporting purposes (FX translation).

(2)

Efficiency ratio is total operating expenses divided by total revenues (net of interest expense). As a result, a lower efficiency ratio is generally better than a higher efficiency ratio.

(3)

Each excluding the impact of FX translation.

 

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