Citigroup investors should vote against re-electing four of 14 board members, including John Deutch and Michael Armstrong, to improve management of the company’s risks, says RiskMetrics.
Bloomberg reports that Deutch, former U.S. Central Intelligence Agency director, Armstrong, former AT&T CEO, and Alain Belda, chairman of Alcoa, should be opposed “for poor risk oversight.”Xerox CEO Anne Mulcahy should be re-elected because she sits on more than three boards, which many limit her effectiveness, chided RiskMEtrics.
The pattern of chronic oversight failure at Citi and the magnitude of the corresponding shareholder losses warrant removal from the board of directors most responsible for risk oversight,” RiskMetrics said in the statement. “A vote against a director may have real consequences.”
In January, Citigroup named Parsons, former Time Warner CEO, to replace Win Bischoff as chairman. Bischoff, Robert Rubin, Roberto Hernandez Ramirez, Franklin Thomas, and Kenneth Derr will retire from the board, the company said last month.
“Despite the fact that the board has many incumbent directors that have been successful in their respective fields and have been on the board for some time, their track record taken as a whole is dismal given that the company is currently surviving on federal assistance,” RiskMetrics said. “Although responsibility for this lies with the whole board, we do not believe that removing the whole board would be in the best interests of the shareholders at this critical juncture.”
Citigroup picked former finance-industry executives Jerry Grundhofer, Michael O’Neill, William S. Thompson and Anthony Santomero as new nominees last month. RiskMetrics said the new directors “seem to fit” the company’s guidelines for board members to have financial expertise.
Citigroup’s annual meeting is scheduled for April 21 in New York. RiskMetrics also recommended that shareholders vote for requiring the company to disclose information on its compensation consultant and that senior executives be required to retain 73 percent of the shares acquired through compensation plans for two years after they leave the company.