It’s proxy vote season, and concerned investors are bringing up important matters for CitiGroup’s upcoming shareholder meeting. Read about the issues below to make an informed vote, then use the OpenInvest app to vote.
Citi is one of the biggest financiers of the Dakota Access Pipeline, a natural gas infrastructure project that threatens Sioux Nation sacred land and water access, as well as increasing the global impact of carbon emissions. Citi’s shareholders argue that the company’s involvement in the project has resulted not only in the degradation of Sioux peoples and their land but also the company’s reputation and shareholder value. Protests at Standing Rock, where the Pipeline was under construction, sparked a wave of divestments, including from the financial institutions like Citi that backed the project.
Shareholders suggest that Citi’s existing human rights policies were written for certain kinds of financial transactions, and are therefore ignored when Citi makes “direct corporate loans for general purposes”, such as the loans it made to the company building the Pipeline. This shareholder resolution asks Citi Group to establish a Human and Indigenous Peoples’ Rights Policy to ensure that international policies on the preservation and prioritization of indigenous peoples (such as those from the UN Declaration on the Rights of Indigenous Peoples) are considered when making all financial decisions.
Like investors from a number of other companies, some of Citi’s shareholders have requested that Citi disclose its lobbying expenses in an annual report. According to the proposal, Citi spent over $35 million on federal lobbying from 2010 to 2016, plus additional expenses on state lobbying. Citi is also a member of the Chamber of Commerce, which spends millions on lobbying each year.
While Citi has some internal regulations about its influence spending, and does disclose some spending, it does not disclose its payments to trade groups and those subsequent expenses on lobbying. Shareholders believe that Citi should make the following clear to shareholders:
- Citi’s policy governing both direct and indirect lobbying and grassroots lobbying communication
- Any payments used for direct and indirect lobbying and grassroots lobbying communication
- Descriptions of the decision making processes and oversight for approving those payments
Investors have proposed two measures that would better enable shareholders to make a positive impact at Citi.
Common shareholders are often limited in their ability to nominate potential board members. Currently, shareholders who would like to nominate a board member must hold an aggregate of 3% of stock. Citi shareholders are requesting that:
- Citi remove the limit on the number of shareholders who can aggregate their stock to reach 3%
- At least 2 shareholder-nominated candidates appear in proxy materials when the board has less than 12 members, or 3 candidates when it has more than 12
Common shareholders are allowed to meet and vote on company matters only when the Board of Directors sets a meeting or when shareholders holding an aggregate of 25% of the company request one. Citi shareholders are requesting that:
- Aggregate ownership of the company needed to call a special meeting be reduced to 15%.