Citigroup

Broadening Ownership and Controlling Excessive Pay

WHEREAS, Citigroup aims to exemplify America's best values while also creating economic value for shareholders;

WHEREAS, fast-widening economic disparities and growing financial insecurity are endangering Citigroup's broad customer base:

• the financial wealth of the richest 1% of U.S. households now exceeds the combined wealth of the bottom 95%;
• the nation's median household financial wealth is less than $15,000. In the event of job loss, the average American family has enough savings to maintain their current standard of living for just 36 days;
• the 1999 compensation of the average large company CEO is 419 times that of the average manufacturing worker, up from just 42 times as recently as 1980;
• the median weekly wage is 7% lower than in 1973 on an inflation-adjusted basis;

WHEREAS, these economic disparities are replicated within Citigroup: á Citigroup's co-CEO Sanford Weill received the third highest compensation among American CEOs in 1998, more than $167 million; á The gains from this one employee's exercised stock options since 1996 equaled $462 million;

WHEREAS, if three-quarters of the options exercised by this single employee had been divided among all of Citigroup's 170,000 employees, each would have received, on average, over $2,000, still leaving Mr. Weill with $115 million, more than 7,700 times the financial wealth of the median American household;

WHEREAS, Citigroup's 1998 annual report prominently features information on the company's commitment to employee ownership, including a forecast that 50% of employees will be owners by the end of 1999;

WHEREAS, employee ownership firms grow faster, create more jobs, foster more employee wealth, attract and retain higher quality employees, and take a longer-range perspective;

WHEREAS, research confirms that sustained superior corporate performance is due to contributions across a broad range of employee skills along with shared values within a firm, and not to the efforts of a single employee;

WHEREAS, employee ownership is a positive national trend, with 10,000 companies sponsoring employee stock ownership plans and 31% of large firms offering broad-based stock options, up from 13% in 1995;

RESOLVED, that the Board simultaneously address excessive executive compensation and foster a broad-based ownership culture by creating an employee stock ownership plan (ESOP) or similar vehicle, in which all employees participate. The ESOP would be funded with an annual stock contribution at least equal to the value of the equity-based compensation of Citigroup's corporate officers (including stock options, restricted stock awards and stock appreciation units).

SUPPORTING STATEMENT

Adoption of this resolution would achieve two important ends:

• Extending the power of ownership to all Citigroup workers, a goal which Citigroup management appears to support. An ownership culture enhances economic performance, customer service, employee retention and social responsibility.
• Controlling executive compensation practices (for which our company has often been criticized) by significantly raising the cost of excessively compensating corporate officers.

Please vote FOR this resolution.

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