The California Public Employees’ Retirement System (CalPERS) today announced its opposition to the re-election of two Citigroup Inc., directors – in part for their accountability in the financial crisis.
CalPERS will cast “withhold” votes for Citigroup board nominees A. Liveris and J. Rodin at the company’s annual shareowners’ meeting on Tuesday. Both incumbents served on the company’s audit and risk committee before the financial crisis when appropriate risk management governance practices were lacking.
“Moreover, Mr. Liveris is a current chief executive officer while serving on an excessive number of public company boards,” said Anne Simpson, the Senior Portfolio Manager who heads the CalPERS corporate governance program. “We appreciate the need for continuity, but the board renewal at Citigroup must be completed sooner rather than later - it's time for new blood in the boardroom.”
CalPERS also opposes Citigroup’s proposal for an advisory vote on executive compensation. Generally, CalPERS supports shareowners’ right to cast nonbinding advisory votes on executive compensation plans. However, the Citigroup proposal fails to adequately disclose the compensation process.
“The company is disclosing very little for shareowners to make a sound decision,” Simpson said. “In effect, there’s no beef there.”
The pension fund’s Citigroup action follows an engagement campaign begun this year with eight major financial sector firms over key corporate governance issues.
CalPERS owns approximately 61.2 million shares of Citigroup. Its proxy votes are on the System’s Web site at www.calpers-governance.org.
With approximately $212 billion in assets, CalPERS is the nation’s largest public pension fund. It administers retirement benefits for more than 1.6 million active and retired State, public school, and local public agency employees and their families on behalf of 2,600 California public employers. For more information about CalPERS, visit www.calpers.ca.gov.
