AFSCME Urges Two Citi Bank Directors to Step Down

http://blog.riskmetrics.com/2009/05/001323print.html

Submitted by: Ted Allen, Publications
The American Federation of State, County, and Municipal Employees (AFSCME) is calling for the resignation of two Citigroup directors who apparently were reelected with the help of broker votes.

In a 10-Q filing on May 11, the company reported that director C. Michael Armstrong received 2.652 billion “for” votes and 1.116 billion “against” votes (or 29.6 percent opposition) at the company’s April 21 annual meeting, while director John M. Deutch received 2.763 billion “for” votes and 1.083 billion “against” votes (28.2 percent dissent).

However, the labor union calculates that Armstrong and Deutch would have received only 920 million and 1.031 billion votes, respectively, if the 1.732 billion uninstructed “broker” votes had been excluded from their tallies. On this basis, AFSCME estimates that Armstrong actually received 54.8 percent opposition while Deutch had 51.2 percent dissent. Citigroup, which has a majority threshold voting standard in its bylaws, has reported that all 14 management nominees were elected.

“We will be calling for the resignation of Armstrong and Deutch based on the repudiation by active shareholders,” Richard Ferlauto, AFSCME’s director of corporate governance, told RiskMetrics.

In response, Shelley J. Dropkin, Citigroup’s general counsel for corporate governance, noted that “all of our directors received a significant majority of votes cast.” “It would undermine the principle of majority rule for a director who receives 70 percent of the vote to resign because 30 percent voted against him,” she told RiskMetrics.

FULL story at link.