Citigroup plans to support a non-binding proxy access resolution this year, reversing a position the US banking group has held since last year.
The New York financial giant is the second major US company to do so in as many weeks. According to activist investor James McRitchie, who is currently embroiled in a proxy battle with Citigroup, the move may herald a ‘wave’ of similar announcements by other companies.
Though Citigroup attempted to push its own more limited version of proxy access through in 2014, the bank’s representatives told the Wall Street Journal the group would support a resolution by McRitchie and other investors for proxy access. It is expected that any such resolution will allow shareholders who have held at least 3 percent of the company’s shares for at least three years the right to nominate a director.
Citigroup ‘has always worked to stay at the forefront of good governance, and we value robust engagement with our shareholders,’ the company says in an email statement to the WSJ, confirming its support of the proxy access proposal.
McRitchie submitted a shareholder proposal in October that urged Citigroup to adopt this ‘three for three’ rule. It also called for the right for investors to nominate up to 25 percent of the board. In negotiations with McRitchie, Citigroup countered with a proposal to support proxy access for investors that have owned a minimum of 5 percent of the company’s shares for at least five years, according to McRitchie’s website, corpgov.net.
McRitchie said he changed his proposal to allow investors to nominate only 20 percent of the board before Citigroup agreed to back the resolution.
Citigroup’s support ‘is the beginning of a huge wave’ of similar actions, McRitchie told the WSJ in an interview, confirmed via his Twitter account. He called the decision ‘a clear victory [for] Citigroup shareholders.’
On February 11 General Electric also announced it would allow proxy access to investors that have held a minimum of 3 percent of the company’s shares for at least three years.
