Citi's chairman floats idea of holding future annual meetings online

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Near the end of Citigroup’s annual meeting on Tuesday, it came time to read the preliminary results on votes on board nominees and shareholder proposals.

Board Chairman John Dugan asked the bank’s corporate secretary to share the vote tallies. Several seconds of silence passed. Dugan repeated his request. More silence. Someone suggested that the missing executive’s line might be on mute. After a minutelong delay, Citi’s deputy corporate secretary volunteered to read the results.

The technical glitch seemed like an appropriate end to Citi's first-ever virtual shareholder meeting. The $1.96 trillion-asset bank, which had originally planned to meet Tuesday in Houston, is one of many banks that switched to an online format in response to nationwide stay-at-home orders brought on by the coronavirus pandemic.

John Dugan has been Citi's chairman since early last year.
John Dugan has been Citi's chairman since early last year.

When Citi’s vote results were eventually announced, they did not include any surprises. Based on the preliminary tallies, all of the 16 bank’s directors were re-elected with at least 95% of the vote. Three shareholder proposals that were opposed by the bank’s board were defeated by varying margins.

One of those proposals — to make it easier for smaller shareholders to put forward their own candidates for the company’s board — got roughly 37% of the vote. Another shareholder measure — to require Citi to disclose more information about its lobbying activities — garnered approximately 15% support.

Some U.S. companies were switching to virtual annual meetings even before the pandemic, which some outsiders saw as a way to control the message and muffle critics. Dugan, a former comptroller of the currency who has been Citi's chairman since the start of last year, said Tuesday that the online format has both advantages and disadvantages.

“One of the advantages is that we can hear from shareholders in faraway places,” he said. “I think that’s one of the things that we’ll look back on and take into account as we examine the pluses and minuses of acting virtually with respect to the annual meeting.”

During the hourlong meeting, top Citi officials spoke about the impact that the COVID-19 crisis has had on the New York-based bank, which has operations around the globe. Citi’s net income declined by 46% in the first quarter, as the bank set aside $7.03 billion to cover potential losses on loans.

“Given the global nature of our firm, this wasn’t just really a March event. We had the ability to see this coming in Asia,” CEO Michael Corbat said Tuesday. “I think it’s likely that the recovery, both from a health and an economic perspective, will be uneven. I think we will see some countries, some communities come back faster.”

Citi, which repurchased around $18 billion in company stock last year, announced in March that it was suspending share buybacks. Corbat said Tuesday that it is unclear when buybacks will resume.

He also stated that while the bank intends to continue paying dividends to its shareholders, the Citi board will revisit that question on a quarterly basis.

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Corporate governance Citigroup Michael Corbat Coronavirus