Shareholders Challenge Citigroup on Social Responsibility

Press Release
For Immediate Release - April 11, 2001
Contact: Betsy Leondar-Wright
(617) 423-2148 x113

Shareholders Challenge Citigroup on Social Responsibility

CEO's Pay Doubled in 2000 While Criticism Mounted

"There are hundreds and hundreds of organizations across the country that now believe Citigroup will do everything for a buck."

–Martin Eakes, Self-Help Credit Union, in The New York Times

Citigroup’s latest ad campaign enjoins customers to "live richly," but some shareholders question "who’s living richly off of whom?" At Citigroup’s annual meeting on Tuesday, April 17, 2001, at Carnegie Hall in New York City, Martin Eakes, founder of Self-Help Credit Union, will present a Responsible Wealth resolution linking CEO pay to accountability on issues such as predatory lending, racial discrimination, and environmental abuses.

In 2000, while Citigroup’s Sandy Weill was the second highest paid CEO in the U.S., Citigroup was charged by the EEOC with racial discrimination at the company’s Salomon Smith Barney subsidiary. Citigroup was also criticized for weak environmental lending standards and its role in such controversial projects as China’s Three Gorges Dam.

Associates First Capital, owned by Citigroup and one of the nation’s largest consumer lenders, was charged last month by federal regulators with routinely deceiving and lying to customers and tricking them into costly loan refinancings. Associates’ practices primarily victimized poor borrowers, Federal Trade Commission officials told the New York Times.

The proposed resolution provides a mechanism to evaluate the company’s officers on meeting social responsibility objectives and gives company leaders a positive incentive to ensure that Citigroup meet its responsibilities to employees, customers, the community and the environment. "In a year when the company faced a race discrimination suit, a consumer
boycott by environmentalists and a pending suit by the Federal Trade Commission, Mr. Weill’s bonus and restricted stock payments both doubled. Citigroup hasn’t disclosed whether these ethical lapses played a role in setting his pay," said Scott Klinger, co-director of Responsible Wealth.

PHOTO OPPORTUNITY: Citigroup will also be challenged outside the meeting by activists carrying the company’s signature red umbrellas.

Responsible Wealth has filed shareholder resolutions related to executive compensation at seven companies: Disney, FleetBoston, Raytheon, Household International, Exxon Mobil and AT&T, as well as Citigroup. Supporting the resolutions is a recent study by Scott Klinger which concludes that skyrocketing CEO pay foreshadows poor stock performance. The report and the texts of the shareholder resolutions can be found at: www.responsiblewealth.org.

Responsible Wealth, a project of United for a Fair Economy, is a growing network of over 450 businesspeople, investors and affluent Americans in the top 5 percent of income and wealth who work to promote widely shared prosperity.

United for a Fair Economy is a national, independent non-profit that spotlights growing economic inequality and inspires action to narrow the wage gap.

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