Shareholders Ask Citigroup Board to Explore Structural Changes
BOSTON, MA, NOVEMBER 14, 2012: Trillium Asset Management LLC, on behalf of the Benedictine Sisters of Mount St. Scholastica, along with the AFSCME Employees Pension Plan recently filed a shareholder proposal with Citigroup Inc. (NYSE: C) asking the company’s board of directors to explore a possible separation of one or more of its business units.
Citigroup’s shares have consistently traded below book value since late 2008, it failed the Federal Reserve’s CCAR stress tests in March 2012, and regulators continue to forbid it from returning significant capital to stockholders due to concerns over its financial stability.
“Despite some positive steps taken since the start of the financial crisis, we believe Citigroup’s progress toward simplifying and de-risking its business has been slow and incomplete. Citigroup boasts many attractive attributes, but remains burdened by excessive complexity, as well as the stigma and risks associated with being named a ‘too big to fail’ institution.”, said Matthew Patsky, CEO of Trillium Asset Management. “These factors could threaten stockholder return through breakdowns in risk management, increased regulatory scrutiny, higher litigation expense, greater capital requirements and poor public perception, among other challenges”.
The resolution specifically requests that the Board of Directors appoint a committee, composed exclusively of independent directors, to explore extraordinary transactions that could enhance stockholder value, including the separation of one or more of Citigroup’s businesses. The resolution also requests that the committee publicly report on its analysis to stockholders no later than 120 days after the Citigroup’s 2013 Annual Meeting of Stockholders.
“There is a gap of almost $50 billion between what Citi says its assets are worth and what the market is saying,” said Lee Saunders, Chairman of the AFSCME Employees Pension Plan’s Board of Trustees. “It is high time that the board gave shareholders a plan for recovering this value.”
At this time, the Board of Directors of Citigroup would best serve their shareholders by studying the merits of various strategic restructuring scenarios closely to determine the correct path forward.
ABOUT TRILLIUM ASSET MANAGEMENT, LLC Trillium Asset Management, LLC is the oldest independent investment advisor devoted exclusively to sustainable and responsible investing. With over $1 billion in assets under management, Trillium has been managing equity and fixed income investments for high net worth individuals, foundations, endowments, religious institutions, and other nonprofits, since 1982. A leader in shareholder advocacy and public policy work, Trillium’s goal is to deliver both impact and performance to its investors.
ABOUT THE AFSCME EMPLOYEES PENSION PLAN The AFSCME Employees Pension Plan provides retirement benefits for employees of the American Federation of State, County and Municipal Employees, AFL-CIO, a public services employees union with more than 1.6 million members who provide the vital services that make America happen. With members in hundreds of different occupations — from nurses to corrections officers, child care providers to sanitation workers — AFSCME advocates for fairness in the workplace, excellence in public services and prosperity and opportunity for all working families.
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The views expressed are those of the authors as of the date referenced and are subject to change at any time based on market or other conditions. These views are not intended to be a forecast of future events or a guarantee of future results. These views may not be relied upon as investment advice. The information provided in this material should not be considered a recommendation to buy or sell any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. To the extent specific securities are mentioned, they have been selected by the authors on an objective basis to illustrate views expressed in the commentary and do not represent all of the securities purchased, sold or recommended for advisory clients. The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy, and is not a complete summary or statement of all available data. This piece is for informational purposes and should not be construed as a research report.
For more information, please contact:
Randy Rice: Trillium Asset Management, (617) 532-6680, rrice@trilliuminvest.com
Charles Jurgonis: AFSCME Employees Pension Plan, (202) 429-1007
