Citigroup Inc.'s board asked shareholders to vote down three shareholder proposals at its upcoming annual shareholders meeting, which is set for April 16.
The first proposal, submitted by John Chevedden, said Citi should place no limits on the number of shareholders who may aggregate their holdings to reach the 3% threshold for nominating directors. The current limit of 20 shareholders allowed to form a group for this purpose is too restrictive and prohibits all but Citi's largest shareholders — the ones least likely to use the proxy-access provision — from using it.
Citi said its current proxy access rules allowing a group of up to 20 shareholders who own at least 3% of the company's outstanding common stock for at least three years is in line with the majority of its peers.
The second proposal, submitted by the AFL-CIO Reserve Fund, calls for Citi to ban equity-based incentives to senior executives who voluntarily resign to join government service.
Citi's board responded that the alternative career provision, which is available to all employees eligible for deferred compensation awards, is a tool that allows the company to hire the best employees.
The third proposal, submitted by Kenneth Steiner, calls for giving shareholders holding 15% of the company's outstanding shares the ability to call a special shareholders' meeting. The current 25% threshold is unreachable due to time constraints and technical requirements that can disqualify shareholders from meeting the threshold, Steiner argued.
The board said in response to a vote at the 2018 shareholders' meeting, which saw the same proposal garner 49.9% support, they lowered the threshold to 20%, and the new threshold strikes a balance between shareholders' rights to address important issues and the administrative and financial burdens of holding these meetings.