Citigroup Inc. (C) Earnings Call Transcript & Summary

Welcome to the annual meeting for Citigroup Inc. Our host for today's call is John Dugan, Chair of the Board. [Operator Instructions] I will now turn the call over to your host. Mr. Dugan, you may begin, sir.

Thank you very much, and good morning, ladies and gentlemen. My name is John Dugan. I am the Chair of the Board of the Directors of Citigroup. We're pleased that you have joined us virtually at Citi's 2021 Annual Meeting. Given our concerns about the health of our stockholders, directors, officers and employees, Citi thought the safest approach was to host our annual meeting as a virtual meeting this year. We appreciate all of you joining us virtually. Joining me by phone today is Jane Fraser, the newly appointed CEO of Citigroup, for her first annual meeting as Citi's CEO. On behalf of the rest of the Board of Directors, we are very pleased to welcome you to the 2021 Annual Meeting of Stockholders. I will serve as Chair of today's meeting, and Rohan Weerasinghe, our General Counsel and Corporate Secretary, who is also joining me by phone, will act as the secretary of the meeting. At this time, I would like to introduce the members of our Board of Directors who will be standing for reelection and are also joining us virtually at today's annual meeting. Their backgrounds and qualifications are described in detail in the proxy statement you received for today's meeting. In addition to Jane and me, our current directors standing for election are Ellen Costello, Grace Dailey, Barbara Desoer, Duncan Hennes, Peter Henry, Leslie Ireland, Jay Jacobs, Renée James, Gary Reiner, Diana Taylor, James Turley, Deborah Wright, Alexander Wynaendts and Ernesto Zedillo. Finally, we would like to thank Mike Corbat, who retired as CEO and from our Board in February 2021, for his 38 years of outstanding service to Citi. We are also joined today by phone by KPMG, our independent auditors. They are available to respond to questions from stockholders. Mr. Weerasinghe?

Thank you, Mr. Dugan. I am pleased to report that all legal formalities for this meeting have been met and a quorum is present. Citi has appointed Michael Barbera from First Coast Results to act as inspector of elections. Mr. Barbera is joining us virtually today and took the oath of inspector of elections earlier today. I would like to remind you that today's presentation may contain forward-looking statements, which are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results and other financial conditions may differ materially from these statements due to a variety of factors, including those in our SEC filings, including without limitation, the Risk Factors section of our 2020 Form 10-K. In addition, for a reconciliation of non-GAAP financial measures to reported results, please see Citi's fourth quarter 2020 earnings review and Citi's 2020 Form 10-K. These documents are available on Citi's Investor Relations website. At this time, I would like to review for the stockholders the agenda for today's meeting and the procedure for submitting questions. An agenda and the rules of procedure for this meeting are available on the annual meeting web portal at the bottom right corner of the screen. [Operator Instructions] Please direct your question to the Chair or the CEO. We will read the questions aloud and then Mr. Dugan and/or Ms. Fraser will answer them. If your question does not relate to a specific proposal, we will hold it until the general Q&A at the end of the meeting. If we receive similar questions, we may combine them into a single question. Questions that contain derogatory references to individuals, use offensive language or are otherwise out of order or not suitable for the conduct of the annual meeting will not be addressed during the meeting. We will begin by having our CEO, Jane Fraser, give the state of Citi presentation. After the presentation from the CEO, we will turn to the business portion of the meeting, the proposals to be considered. The proxy statement you received for today's meeting describes 10 matters to be voted on. As described in the agenda for today's meeting, we will begin with the presentation of the 4 management proposals. We will introduce all of them at once. We will then respond to questions about any of the 4 management proposals brought before the meeting. After we conclude the discussion of the management proposals, we will then discuss the stockholder proposals. Each stockholder proponent will then have 2 to 3 minutes to present his or her proposal. We will respond to questions from the portal after each one is presented. After the presentation of proposals, we will close the polls. While the votes are being counted, we will respond to any general questions about the company. After the Q&A session, I will report on the vote and the meeting will be adjourned. In accordance with the procedures for this meeting, recording these proceedings is prohibited. If we encounter any technical difficulties and we are unable to proceed with the meeting, please be advised that the notice of the meeting has been properly served. A quorum is present. All proposals will be deemed to be properly before the meeting and the meeting will be adjourned. Please review the annual meeting procedures on the web portal for voting instructions if the meeting is adjourned due to technical difficulties. Thank you. Mr. Dugan?

My apologies, I was on mute. Our new CEO, Jane Fraser, will now give a presentation on the state of Citi. Jane?

Thank you, John, and welcome to all our fellow shareholders who've joined us today. I very much look forward to sharing my thoughts about Citi's recent performance and where we're headed. But first, I want to thank John Dugan and the rest of the Board for putting their trust in me to lead this important global institution. And I also want to thank my predecessor, Mike Corbat, for the gift of a smooth transition, which afforded me time to reflect with fresh eyes on our firm and to solicit input from many of our stakeholders, including a number of you. I'm excited about Citi's future. We have many attributes as a bank that distinguish us: Our global mindset; our ability to anticipate where our industry is heading; our empathy, which gives us deeper insight into our clients. And we are determined to leverage these advantages to close the gap with our peers and improve the returns for our shareholders. Over the course of its 200-plus-year history, Citi has overcome many challenges, but it is fair to say that 2020 tested us like never before. And it is a testament to Citi's disciplined management that we have not only navigated the pandemic but served as a source of strength for our clients, communities and colleagues. At the onset of the pandemic, we undertook a massive effort to ensure our people were safe. And we got nearly 200,000 of them up and running remotely from their homes. We provided special compensation to more than 75,000 of our colleagues to ease their financial burden. And we offered child care options and enhanced educational and health resources to help them manage the stresses of the pandemic world and thereby enable them to focus on our customers and our clients. I'll always be proud that we were the first bank in the U.S. to provide relief programs for our credit card and mortgage customers. Although Citi historically has not been a large lender to small businesses, we have so far funded loans totaling $5.1 billion as part of the U.S. government's Paycheck Protection Program. On average, these small businesses have fewer than 10 employees. On the institutional side, we've helped our clients contend with volatile markets, reconfigure supply chains and access short- and long-term liquidity. And because we take very seriously our responsibility to our communities, we have supported frontline health workers and deployed other resources to help drive the recovery of local economies. More than anything, 2020 demonstrated the value of our diversified and durable business model. Even with the uncertainty and volatility created by the pandemic, we were able to keep revenues in 2020 equal to the banner year of 2019. For the year, we earned $11 billion of net income on revenues of $74 billion, despite the roughly $10 billion increase we took in credit reserves as a result of the pandemic and the impact of new accounting standards. Even after meeting the needs of our clients, we ended the year very well-capitalized, and this allows us to resume the repurchase of common stock, which we had voluntarily paused at the onset of the pandemic. In the first quarter of 2021, our financial performance was better than expected. We reported earnings of $3.62 per share on $7.9 billion in net income. That's a record for net income in the quarter. Driving these results were a couple of factors: number one was strong performance by our Institutional Clients Group, including a record quarter for Investment Banking, which saw a veritable flurry of activity and equity underwriting. We also benefited from active fixed income and equity markets. The second big factor was that in response to a stronger economic outlook, we were able to release $3.9 billion of the credit reserves we had set aside. After a long and challenging year in 2020, we're pretty optimistic about the macro environment and the recovery ahead of us. We're seeing that reflected in the financial health of consumers who are saving more and carrying lower credit card balances. Now of course, lower loan demand did put pressure on revenues in our Global Consumer Bank, which were down quarter-over-quarter. But we still experienced strong growth in our wealth segment and in digital engagement, both of which are central to the consumer franchise we are building. The global health crisis has also been a chance for us to remind the world of the role that Citi has embraced to tackle some of society's long-standing challenges. We don't do these things because they might make us look good. They're embedded in our day-to-day business and they are central to our mission of enabling growth and driving economic progress. Case in point is Citi's leadership in sustainability. Last month, on my first day as CEO, I committed Citi to net-zero emissions by the year 2050. Now this is an ambitious target because it means not only addressing the emissions from our own operations but also those produced by our customer and client portfolio. Citi is one of the biggest financiers of fossil fuel, and in my short time as CEO, I fielded some tough questions about that. But I want to make clear that we understand the responsibility we have. We know that to truly fight climate change, these industries, our clients will need to join us in transitioning to net zero. And as I said on my very first day, we're committed to working relentlessly with our clients to help them get there. To that end, we're also extending our current environmental finance target from $250 billion by 2025 to $500 billion by 2030. That, combined with investments in affordable housing, health care, workforce development, amongst other areas, means that we've now committed $1 trillion in sustainable finance by 2030 to help advance the United Nations' Sustainable Development Goals. We also continue to take meaningful actions to confront systemic inequity in our communities all over the world. In the U.S., in the aftermath of the murder of George Floyd and in response to nationwide calls for social justice, we launched Action for Racial Equity, which encompasses $1 billion in strategic actions to help close the racial wealth gap. As we announced just yesterday, we're already making meaningful progress, including investments in minority-owned depository institutions to strengthen community banking, investments in minority-owned housing developers to build affordable housing and a partnership with the National Urban League to expand access to Citibank's no-fee banking account product. Underpinning our work to promote racial equity is a commitment for us to understand what it takes to be an anti-racist institution and making sure we maintain a culture that not only reflects but also cherishes the diversity of the communities we serve. I could not be more proud of what Citi has achieved over this past year. But of course, there is much more to do. Since becoming CEO, in addition to continuing to support our clients and colleagues through the pandemic, I focused on 2 priorities to improve Citi's competitiveness: First, we're taking a dispassionate look at our global franchise and refreshing our strategy for closing the returns gap with our peers. Central to our thinking is assessing which businesses can retain or secure leading positions and then making sure we direct the right resources to these high-returning businesses. I also see opportunities to improve our service to clients by being simpler and by establishing greater connectivity and synergies across our businesses. Consistent with these principles, we're building an industry-leading wealth management platform to capitalize on the extraordinary wealth creation we're seeing in the U.S. and particularly in Asia. In Asia and EMEA, we have decided to focus our Consumer Banking business on the wealth segment. We will operate this business through a network anchored by 4 wealth hubs in Singapore, Hong Kong, the UAE and London. And to best play to our strengths, we decided that we are exiting 13 consumer franchises in the 2 regions. This shift positions us to capture the full spectrum of the wealth opportunity in Asia and EMEA whilst maximizing synergies with our leading institutional franchise in Asia. My second priority is our transformation program, which is addressing deficiencies outlined in consent orders issued last year but is also ensuring that we're investing in and modernizing our infrastructure. Make no mistake about it, we want nothing less than to achieve a state of excellence in our risk and control environment, in our operations and in our service to clients. And to that end, we're investing in our talent. We're building a culture of accountability, and we're implementing a new strategy to extract the maximum value from the data we have and work with as a global bank. But this transformation isn't solely about responding to our regulators because I have no doubt the investments we're making will modernize the bank and will drive higher returns for our shareholders. We will continue to share information as we make decisions about our transformation program and our ongoing strategy refresh. And we feel good about the path we're on now and the opportunities ahead. We are confident in our efforts to grow our company's earnings and to close the returns gap with our peers. And we're excited to build on our long-standing commitment to our communities and continue our leadership in sustainability, equity and enabling progress. So thank you for this opportunity to share these thoughts with you. And John and I very much look forward to answering your questions later on in the meeting.

Thank you, Jane. We will now turn to the business to be conducted at today's meeting. Mr. Weerasinghe?

Thank you, Mr. Dugan. If you wish to ask a question about the matters we're about to discuss, please enter your questions into the web portal as I described earlier. We understand that some of you may have concerns about your personal financial business, such as a problem with a mortgage or a credit card. As these are not appropriate topics for discussion at the annual meeting and in order that we may assist you, please submit your contact information in the question box on the web portal with a short description of the issue, and we will have our customer service team contact you to address your concerns. I declare that the polls are now open. The polls will remain open until the end of the discussion on the last proposal before the meeting, unless they are closed earlier. Any stockholder who hasn't yet voted or wishes to change their vote may do so by clicking on the voting button on the web portal and following the instructions there. Stockholders who have sent in proxies or voted via telephone or Internet and do not want to change their votes do not need to take any further action. Mr. Dugan?

We will now turn to the management proposals for consideration by stockholders. They are Proposal 1, the election of directors; Proposal 2, the ratification of auditors; Proposal 3, approval of Citi's 2020 executive compensation; and Proposal 4, approval of additional authorized shares under the Citigroup 2019 Stock Incentive Plan. All of these proposals are deemed to be properly before the meeting. The Board recommends that stockholders vote in favor of the management proposals for the reasons stated in the proxy statement. If you have any questions or comments regarding any of the 4 management proposals, please enter your questions into the web portal. Shelley, are there any questions on the management, proposals?

Yes, there are. We have received 4 related questions on the size of our Board and Board compensation and we'll post them together for response. From [ John Fleming ], how are Board members compensated and why does Citi have so many Board members? From [ Howard Glick ], do we really need such a large Board of Directors? If yes, then are they all working a full year's time for us? If a Director works full time for us, shouldn't their salary be reduced by any amount received for work for other companies? From [ Robert Neufell ], why is such a large Board needed? And from [ James Medley ], why do we need 15 Directors?

Well, thank you very much. Let me try to answer the sort of common themes to these 4 questions. On compensation, directors' compensation is determined by the Board on the recommendation of the Nomination, Governance and Public Affairs Committee. Recommendations on the amount and structure of pay incorporate benchmarking assessments from our independent adviser. The committee considers the significant commitment of time associated with Board service, and it is significant, and the competitive positioning of the aggregate and individual components of compensation as well as the mix of pay and structure versus both direct competitors and other comparable organizations. This all is discussed in greater detail in the proxy. Now regarding the size of our Board, Citi is a large organization and the size of our Board reflects the scale of the firm. It reflects the responsibilities of our Board and our Board committee structure. We do have a number of committees and require a sufficient number of directors with the right skills to serve on those committees. I would also note that it is sound corporate governance practice to have an ample pool of directors with the necessary skills to provide oversight of Citi as well as a diversity of backgrounds, experiences and perspectives, all of which we value. And last, I will note that serving on Citi's Board does require a significant time commitment. However, it is not intended to be a full-time job.

John, the next question is from [ Donna Ray ]. The Citi Board is exceptionally well-balanced and well-led. I own 20-plus individual stocks and fee is thesis in my point of view.

Well, thank you, [ Donna ]. Thank you for your comment and your business. We appreciate your taking the time to join us today and for sharing your thoughts with us. Thank you very much.

The next question is from Mike Mayo. How can investors reconcile that Chair John Dugan remains in his position when despite his expertise as head of the OCC during the global financial crisis, it appears that from an outsider's perspective, the Board did not recognize the seriousness of Citi's shortfalls until there was a formal regulatory consent order?

Thank you, Mike. I and the Board did recognize the remediation shortfalls before the consent order. And we did spend a great deal of time overseeing a number of different remediation projects in the last several years. While a lot of work was done and a lot of progress was made, we came to realize that a more fundamental, holistic and systemic change was required, what we now call the transformation. More specifically, we became fully focused on the need for Citi to fundamentally change its risk and control environment. As a result, the Board has formed a Transformation Oversight Committee to oversee these efforts, and it will hold management accountable for the successful execution of the transformation. The Board believes that this change is absolutely critical, not just to remediate deficiencies identified by regulators but to modernize the technology and infrastructure that Citi will need to compete effectively, particularly in the new digital landscape. The Board believes that the transformation is a critical part of Citi's strategy that will produce tangible benefits for our clients and investors and at the same time, strengthen the firm's safety and soundness.

The next question is from Mike Mayo. In light of inappropriate reliance on successful risk management for awarding past compensation, how can investors not expect more changes to the Personnel and Compensation Committee and the Board in general when both remain largely unchanged?

Well, I would say the need to do more to transform our risk management is crystal clear, we understand that. The Board has been and will continue to be absolutely committed to holding management accountable for deficiencies in risk management and control performance and for executing the transformation. That accountability was evident in changes made to our compensation program for the 2020 calendar year and it remains in place for future years. These are changes that involve the direct oversight and involvement of the Personnel and Compensation Committee. Indeed, these changes led to significant reductions in 2020 pay for our most senior executives and managers, including our CEO. The details of how the compensation system has been redesigned to tie compensation outcomes to performance, specifically including risk management and control performance, are detailed in our proxy. As for the second part of your question, I believe we have the right directors on our Personnel and Compensation Committee, including a mix of long-tenured and newer members of the Board, as well as directors with extensive experience in human resources and compensation. The committee deliberates extensively about important matters, gets into the weeds of the compensation process and, believe me, is not shy about challenging management where necessary.

The next question is from [ Razvan Vada Lucescu ]. In general, independent auditors are changed after a period of time. Five years was/is the norm. How do you justify selecting KPMG for what is as long as I have been a shareholder, which is much longer than 5 years?

Well, let me speak to that. Citi's Audit Committee, as it does every year, carefully consider the selection of our independent auditors. Based on that consideration, the committee concluded that KPMG is independent and that it is in the best interest of shareholders to appoint them as our auditors. As part of its deliberation, the Audit Committee considered the cost and benefits of choosing a different firm as our auditors, and we determined not to do so at this time. We believe that KPMG has the unique ability to provide both the necessary expertise needed to audit Citi's business and to match our global footprint. In addition, and this is important, KPMG's policies include rotation of key audit personnel. There is a new partner in charge at least every 5 years. The Audit Committee has a process in place to annually review KPMG's service and to approve the selection of the lead engagement partner.

The next question is from Mike Mayo. How could comp in 2019 be based on successful risk controls and then not more action get taken with 2020 pay when it turns out that risk controls were not as good as expected? For this, we reference the paragraph on Page 77 of last year's 2020 proxy that addressed 2019 enhancements to Citi's executive pay program, improved articulation of Citi's focus on risk and controls. The Compensation Committee has always considered outstanding risk management performance, including dedication to robust controls, to be a foundation of executive performance evaluations and compensation awards, and the 2019 nonfinancial goals reflect an enhanced emphasis on those considerations. In 2019, the Compensation Committee took into account regulatory risk and control matters as important priorities when awarding incentive compensation.

Well, Mike, in addition to the points I made to your prior question regarding compensation, I would underscore what you quoted from the proxy. That is that the Compensation Committee has always considered risk management performance, including dedication to robust controls, to be a foundation of executive performance evaluations and compensation awards. And as we stated in our proxy statement this year, 2020 pay decisions, as a whole, clearly reflected accountability for the consent orders and for Revlon. Looking at the broader leadership team, half of our executive management team members, our most senior executives, saw a decrease in their pay in 2020 compared to 2019. And for our former CEO, Mike Corbat, there was a reduction of 20% in 2020.

The next question is from Mike Mayo. Per Page 88 of the proxy, how could the Board not reach a judgment that there was a materially imprudent judgment that triggers a clawback for past pay, especially given the Revlon loan fiasco and consent orders?

Well, let me address the clawback question first. In most cases, we can adjust levels of current year compensation to fully address accountability and leadership issues as they arise without the need for clawbacks of previously awarded compensation. That said, we do have the right to claw back deferred compensation previously awarded to employees when they are determined by the Personnel and Compensation Committee to have had and here I quote, "significant responsibility" for events that have material adverse outcomes for Citi. And we also have the right to claw back deferred compensation previously awarded to employees who engaged in or who failed to properly supervise or monitor individuals engaged in materially imprudent judgment that caused harm to the company's business operations, and there are other potentially relevant triggers for clawbacks. For this year, concerning risk and control performance generally, including the consent orders, there were substantial individual and shared impacts applied to 2020 compensation for the executive management team and other senior leaders, and other employees have been held accountable through compensation and other employment decisions. With regard to Revlon specifically, we performed a full accountability review with the assistance of outside counsel to assess accountability and compensation impact for all employees with responsibility related to the Revlon event. And our response to that situation has been consistent with the advice that we received. In sum, we believe these carefully considered compensation decisions appropriately held management accountable without the need for clawback.

The next question is from [ Lucian Schwanier ]. Why is it that the shareholders have to pay the fines imposed upon Citi? Why are they not taken out of compensation?

Well, thank you very much for attending and for your questions. First, just let me note that the fines imposed last year were levied directly against the corporation and not against individuals. However, that said, the conduct and events leading to such fines are absolutely taken into account when making compensation decisions for individuals.

The next question is from [ Marcos Garcia Acosta ]. What is the compensation gap between the CEO, President and the lowest-paid employee? How do you justify that?

The difference in how much we pay our CEO and our least-paid employee is considerable. That difference reflects a variety of factors relating to experience, responsibility, location, tenure as well as other factors. It's really not a meaningful comparison as the factors that go into setting pay for those 2 individuals are so very different. However, in both cases, we are mindful of market levels for pay and individual performance when setting compensation.

The next question is from Gerald Matthews from the United Brotherhood of Carpenters, the carpenter union pension funds with combined assets of $70 billion and have a collective ownership position of 786,400 shares of the company's common stock. First, we would like to congratulate Ms. Fraser on her new role as Chief Executive Officer. As long-term investors, we believe the executive compensation plan should be designed to drive the successful execution of the company's long-term strategic business plan. We appreciate the actions taken by the Compensation Committee to structurally incorporate risk management into compensation plan design and award decisions. Could you or the Chair of the Compensation Committee speak to the actions taken to involve the Chief Risk Officer into the Compensation Committee's work on a regular basis?

Yes, I can, and thank you for your question. Our Chief Risk Officer reports at least twice annually to the Compensation Committee on risk levels and trends across our businesses and on the design and operation of our incentive compensation program. Our CRO has reviewed our incentive compensation program to help ensure that compensation is aligned with long-term performance in a manner that does not encourage imprudent or excessive risk-taking. And beginning in 2021, our Chief Compliance Officer will also report at least twice annually to the Compensation Committee to help the committee understand and assess the interplay between our compliance efforts and our compensation program. The first such report occurred in 2020 and more detail on all of this is available in the proxy.

The next question is from [ Howard Kaplan ]. Does KPMG perform internal control and loan and compliance audit procedures at Cenlar FSB related to their loan servicing of CitiMortgage's home equity lines of credit? Or do you rely upon procedures performed by Cenlar's auditor or their internal audit department?

Thank you. The KPMG Citi team does not test directly at Cenlar, but we do rely on SOC1 performed by Cenlar's auditors.

John, there are no more questions related to the management proposals at this time.

Okay. In order to be sure we have time to discuss the stockholder proposals, we will end the discussion of the management proposals now. We will respond to general questions about the company during the general Q&A session later in the meeting. We will now have the presentations of the stockholder proposals to be voted upon at today's meeting. I will call on the proponent of each stockholder proposal to make a statement. We begin with a stockholder proposal requesting an amendment to Citi's proxy access bylaw provision pertaining to the aggregation limit. Operator, is John Chevedden on the line?

Hello. This is John Chevedden. Can you hear me okay?

Yes, I can.

Proposal 5, improve our Catch-22 proxy access. This proposal received 37% Citigroup shareholder approval in 2020 in spite of the oversized management influence on the vote. This was up 14% from 2019. Citigroup's stock is down from $79 in late 2019. If you have voted against this proposal, please consider changing your vote before the polls close. This is the proposal. Shareholders request that our Board of Directors take the steps necessary to enable as many shareholders as may be needed to combine their shares to equal 3% of our stock owned continuously for 3 years in order to enable shareholder proxy access. Proxy access allows a group of shareholders to nominate a director who will compete with management-nominated directors to see who gets the most votes. Competition is good for our Board of Directors. Currently, a strict limit of 20 shareholders must have owned $4 billion of Citigroup's stock for an unbroken 3 years in order to nominate 1 candidate for the Board under our current proxy access rules. A strict limit of 20 extremely deep-pocket shareholders does not allow for a diverse group of shareholders. It is disappointing that management does not support the diversity that this proposal calls for. As a practical matter, it's unlikely that more than 50 shareholders would participate in nominating a director using proxy access with this proposal. There was hardly any administrative difference in 20 shareholders submitting proof of owning $4 billion of our stock compared to 50 shareholders submitting proof of owning $4 billion of our stock. And adopting this proposal would show management's commitment to diversity. This proposal is asking for so little. The beauty of a good governance proposal like this proposal is that it would not result in more cost because the mere presence of good governance serves as a guardrail to make sure that management elects the best directors on their own. Because if management does not elect the best directors, then shareholders have a remedy with teeth to make their director nominations known to management. Our current proxy access is way out of balance. There has not been one proxy access candidate placed on a ballot of any company during the past 5 years. There have been 500 companies with a shareholder right for proxy access during these 5 years. 500 companies times 5 years equals 2,500 company years without 1 proxy access candidate. This means that Citigroup, under the current rules, would not accept 1 proxy access candidate during the next 2,500 years. This is way out of balance as far as shows our concern. Plus a proxy access candidate then has a formidable challenge at getting more votes than at least 1 established director. This would require impressive shareholder support over an incumbent director and would be a clear indication that an incumbent director needed to be replaced. If you have voted against this proposal, please change your vote before the polls close in a few minutes. Please vote yes, improve our Catch-22 proxy access, Proposal 5.

Thank you for your presentation. The Board of Directors recommends that stockholders vote against this proposal for the reasons stated in the proxy statement. Shelley, are there any questions on this proposal?

No, John, there are no questions on this proposal.

Okay. The next item is a stockholder proposal requesting an independent Board Chairman. John Chevedden, you may present the second proposal on behalf of Kenneth Steiner at this time.

Proposal 6, independent Board Chairman. Can you hear me okay?

Yes, I can.

The shareholders request the Board of Directors adopt a policy to require that the Chair of the Board of Directors be an independent member of the Board whenever possible. Giving the chairmanship job to the CEO can simply be an ego trip for the CEO. The CEO can then think that the CEO's vision for the company is invincible and this could blind the CEO to emerging problems. The role of the CEO and management is to run the company. The role of the Board of Directors is to provide independent oversight of management and the CEO. Thus, there is a conflict of interest for the CEO to have the role of Chair. Shareholders are best served by an independent Board Chair who can provide a balance of power between the CEO and the Board. A CEO serving as Chair can result in excessive management influence on the Board and weaker oversight of management. Numerous institutional investors recommend independence for these 2 roles. For example, California Retirement Systems (sic) [ California Public Employees' Retirement System ] encourages separation of the Chair and CEO roles even when a lead -- even when there is a lead director. And Citi does not have a lead director. If you voted against this proposal, please change your vote before the polls close in about 3 minutes. Please vote yes, independent Board Chairman, Proposal 6.

Thank you for your presentation. The Board of Directors recommends that stockholders vote against this proposal for the reasons stated in the proxy statement. Shelley, are there any questions on this proposal?

Yes. We have a question from [ Marcos Garcia Acosta ]. Why did you recommend against an independent Chairman?

Thank you. Well, since 2009, including today, Citi has had an independent Chair separate from the Chief Executive Officer. I would note that this is different from most companies in America where the CEO and Chair are typically the same person. As a general matter, our Board firmly supports having an independent director and a Board leadership position at all times. And that is why Citi's Board, on December 15, 2009, adopted a bylaw amendment that provides that if Citi does not have an independent Chair as we do now, the Board will elect any independent lead director having similar duties to an independent Chair, including leading the executive sessions of the nonmanagement directors at Board meetings. At the present time, Citi's Board has determined that the current structure, an independent Chair separate from the CEO, is the most appropriate structure. But we believe that this may not always be the case. And that as a result, the company should have the flexibility to do otherwise. Since Citi's Board has adopted a framework that provides for either an independent Chair or an independent lead director, the Board believes that this proposal is simply not necessary.

There are no other questions on this proposal, John.

Okay. The next item is a stockholder proposal requesting nonmanagement employees on Director Nominee candidate lift. Operator, is James McRitchie on the line?

First, I'd like to thank Citi for passing on investments in coal last year. Now on to Proposal #7. We're asking Citi to put workers in the initial candidate pool of directors. Giving workers a formal voice allows companies to raise more capital, reduces turnover, leads to better-informed decision-making, better monitoring and management and a longer-term focus. Polling finds public support for workers on corporate Board. Citi opposes because Citi's employees have numerous opportunities to express their views and concerns. Mentioned in the opposition statement are opportunities, including town halls, diversity events, surveys and ethic hotlines. Notice that none of those opportunities provide a mechanism for ongoing dialogue. I'm not sure that there's one director responsible for reviewing employee input, but my guess would be Peter Blair Henry, who heads the Ethics and Culture Committee, or Lew Jacobs, who heads the Personnel and Compensation Committee. The median employee at Citigroup earns $55,000 a year while Mr. Henry earns $339,000 for part-time work as a director and Mr. Jacobs earns $382,000. How much time do directors spend communicating with employees? And how well can they relate to typical employees or customers? Director worldviews are probably closer to our CEO's who earned $23 million last year, than our employees, customers or communities. Is it likely that a Citigroup employee will bring more fresh insights to the Board than another typical director? My proposal is an opening move. I would have written -- withdrawn it if the Board had agreed to any significant steps to increase voice. Of course, a worker in the candidate pool would have done the trick, but also a workforce advisory panel or a designated director liaison with workers. An employee stock ownership plan with trustees elected by employees could have a real influence on Board composition. Any of these changes would engage and empower workers, leading to a better place to work and a more profitable company. Instead, our Board refused to talk. As I indicated, this proposal is an opening move. I'm interested in hearing from other shareholders and especially Citigroup employees, e-mail me at [email protected]. That's J-M at C-O-R-P G-O-V dot net. If you haven't voted in favor of Proposal #7, please do so now, that is if our company will actually allow you time to change your vote. Thank you.

Thank you for your presentation. The Board of Directors recommends that stockholders vote against this proposal for the reasons stated in the proxy statement. Shelley, are there any questions on this proposal?

No, John, there are no questions on this proposal.

Okay. The next item is a stockholder proposal requesting a report disclosing information regarding Citi's lobbying payments, policies and activities. Operator, is Patricia Seabrook on the line?

Good morning. Can you hear me?

Yes, I can. Please proceed.

Great. Mr. Chairman and members of the Board, fellow shareholders. My name is Patricia Karr Seabrook. I am making the statement on behalf of Miller/Howard Investments and the Greater Manchester Pension Fund. I hereby move Proposal 8 requesting a report on Citigroup's lobbying payments, policies and activities. Information about Citigroup's lobbying activities is decision-useful for investors striving to make informed strategic investment choices aligned with their preferred risk profile and to align their investments with personal priorities and values. In light of the events over the past few years, this is the time to push for transparency and good information. We know that certain U.S. politicians and groups provided cover and support to anti-democratic violence. When Citi suspended political donations after the violence of January 6, it seemed to be conceiving that some sort of an internal pause and review was in order. And from a lobbying perspective, investors need information. Among the things that Citi does not provide to its investors, a full roster of its current trade association memberships, a full accounting of payments made to trade associations nor the portions of those payments used for lobbying, a clear and full discussion of the scope and policy priorities of its international lobbying, including amounts activities and partners, its top lobbying priorities year-over-year, one place to go to get all the information with information that is current and clearly labeled so. Citi needs to commit to full corporate transparency by disclosing all of its payments to third-party groups that use our money to influence policy. Without such disclosure, investors are left without the information that could ensure justified confidence about the political impacts and activities of their investments. Some of the reasons this might matter to you. You see that Citigroup's trade association memberships and payments used for lobbying pose reputational risks and risks to long-term sustainable growth when the lobbying of its trade association contradicts Citigroup's public positions on things such as climate, racial justice and worker safety. You want information to make your decisions. You want to know what impacts your investment dollars are having via lobbying, domestically and internationally. You try to figure out the scope of Citi's lobbying activities and expenditures just at the state level. And when you open the tenth browser window to look at disclosures at yet a different state's website, with the quality and standards varying across nearly every state, you realize that this is ridiculous. Citi engages in activities. Those activities have impacts and investors have a right to the information. Citigroup's inadequate lobbying disclosure practices highlight the critical need for the company to move -- to improve its lobbying disclosures and increase transparency around its lobbying policies, procedures and spending details. For all the reasons stated, we urge you to vote for Proposal 8, the shareholder proposal requesting a report on the company's lobbying expenditures. Thank you.

Thank you for your presentation. The Board of Directors recommends that stockholders vote against this proposal for the reasons stated in the proxy statement. Shelley, are there any questions on this proposal?

No, John. No questions on this proposal.

Okay. The next item is a stockholder proposal requesting a racial equity audit, analyzing Citi's adverse impacts on nonwhite stakeholders and communities of color. Operator, is Tejal Patel on the line.

Thank you, Chairman Dugan. On behalf of the CtW Investment Group, I hereby move Proposal 9, requesting the Board of Directors to oversee a racial equity audit based on input from stakeholders. A racial equity audit will help Citi identify, remedy and avoid adverse impacts on nonwhite stakeholders and communities of color, particularly in light of its $1 billion commitment to address racial inequality. When it comes to addressing racial inequality in the communities it serves, Citi has a controversial past. Over the years, regulators have levied numerous fines against the bank related to racial imbalances in its mortgage lending practices. We continue to see that Citi's policies have had an effect on minority-owned businesses, as shown by the bank's inequitable application requirements for PPP loans during the early days of the COVID-19 pandemic. During a time when law enforcement agencies are being scrutinized for discrimination and excessive use of force against black and brown communities, Citi has supported police foundations. These foundations have been viewed as a subversive means of funding surveillance equipment used by police departments against communities of color. There's also a lack of racial diversity in the bank's senior leadership, and Citi appears to be failing to hire, develop and retain employees of color amongst its management ranks. As with any other operational or financial review, the real benefit of the racial equity audit lies in its independence. The auditor must have a civil rights background in order to produce credible and useful information. The objective, perspective and civil rights expertise required cannot be provided by management, internal counsel or the Board. For Citi and its investors, the racial equity audit is an important risk management tool. In the banking industry, trust is paramount. Changes in public, consumer and employee sentiment have put systemic racism and racial injustice at the forefront of our national dialogue. Concerns about reputation and talent attraction have prompted other major consumer-facing companies such as Facebook, Starbucks and Airbnb to conduct these types of audits. The racial equity audit is an important investment in Citi's long-term sustainability and value protection. An audit of this nature would provide an objective assessment of the bank's lending, human capital management and philanthropic practices. The proposal looks to evaluate the effectiveness of the company's policies in addressing racial justice. No existing regulatory requirement or inspection is sufficient to ensure that Citi is meeting its commitments. The Community Reinvestment Act does not evaluate discrimination based on race alone. And while data collected from Consumer Financial Protection Board examinations may be helpful in assessing if Citi is meeting minimum standards, it's not sufficient to stay ahead of the risks. Citi has committed $1 billion to addressing racial inequality. Given such a significant sum, investors need assurances that the bank's policies are effective at addressing these issues and that Citi is not acting in other ways that negate any positive impact. Therefore, we urge shareholders to vote for Proposal 9, requesting that the Board oversee a racial equity audit. Thank you.

Thank you for your presentation. The Board of Directors recommends that stockholders vote against this proposal for the reasons stated in the proxy statement. Shelley, are there any questions on this proposal?

Yes, John. There is a question. Please explain why the recommendation to vote against proposal item #9. Question was submitted by [ Vivian Folks ].

Jane, would you like to take that question?

Thank you very much. Can you hear me?

Yes, I can.

And this is on Proposal 9?

Yes.

Yes. So while we disagree with the need for a third-party audit, we are aligned with the goal of addressing racial inequity. Citi is and has been a very active participant in the movement for social justice and racial equity within the financial sector, both in the U.S. and around the world. And over the past decade, Citi and the Citi Foundation have invested nearly $100 million in programs and partnerships aimed at closing the racial wealth gap. In 2020, as John referred to, we've announced our action for racial equity initiatives, and that's pledged more than $1 billion in strategic initiatives in the U.S. to help close the racial wealth gap and increase economic mobility. We announced earlier updates on this work just yesterday. So reports on Citi's ongoing work in this area are widely available. And given Citi's commitment to addressing racial disparities, social justice and the racial wealth gap and the resulting reports Citi publishes, I would say that Citi is already addressing this proposal, although we fully recognize that there is a lot more work to do, and we're committed to continue doing so.

Thank you, Jane. Shelley, are there any other questions on this proposal?

No other questions on this proposal, John?

Okay. The next item is a stockholder proposal requesting that the Board approve an amendment to Citi's Certificate of Incorporation to become a public benefit corporation and to submit the proposed amendment to stockholders for approval. Operator, is [ Sarah Murphy ] on the line?

Hello, can you hear me?

Yes, I can. Please proceed.

Thank you. This is Proposal 10, requesting a change in Citi's organizational form. In August 2019, our company's CEO signed a statement on the purpose of a corporation, ostensibly committing Citi to all stakeholders and to supporting the communities in which Citi works and protecting the environment by embracing sustainability practices across Citi's businesses. Inconsistent with our company's purported commitment to stakeholders, Citi is one of the world's top funders of fossil fuels, and from 2016 through 2019, provided more than $237 billion in fossil fuel financing with no specific policy constraining fossil fuel financing in our bank's Certificate of Incorporation or bylaws. The Intergovernmental Panel on Climate Change has determined that if we're to prevent catastrophic climate change impacts, we'll have to cut greenhouse gas emissions by 45% from 2010 levels. And we have only 11 years left to make this happen. These facts are evidence of incongruity between statements made by our CEO and the Board as fiduciaries, as reflected in our company's governance documents, including bylaws, Articles of Incorporation and Committee Charters and Delaware law. The shareholder proposal in 2020 requested that the Board review the statement on the purpose of a corporation to conduct a review of Citi's governance documents and make recommendations to shareholders as to how the statement could be implemented by management. The Board opposed the resolution, however, and took no action. Fortunately, the state of Delaware in 2013 enacted a law to permit Delaware corporations to amend their Certificates of Incorporation to become a public benefit corporation. Public benefit corporation form encourages corporations to operate in a manner that is in the best interests of those material affected by their conduct, which includes other stakeholders in addition to shareholders. Conventional corporations by contrast are required to privilege shareholder interests over those of stakeholders in cases where those conflict. Citi's existing policies and practices failed to address this conundrum. A few minutes ago, our CEO mentioned Citi's commitment to net 0 greenhouse gas emissions, for instance. But as Olivier Elamine, CEO of Alstria, recently noted, if reaching the goals of the Paris agreement was a good business opportunity, it would be happening at a much faster pace already. We need to acknowledge that somewhere along the line, it stops being about the business opportunity, that good business decisions alone won't get us there. And we need to accept collectively that it will come at a cost. Only then will we be able to achieve it. And just this month, a team of leading climate scientists explained that the concept of net zero emissions is a dangerous trap. The scientists said net zero policies will not keep warming to within 1.5 degrees Celsius because they were never intended to do so. They were and still are driven by a need to protect business as usual, not the climate. And yet, Citi demonstrates in its opposition statement that it has not even considered the gap between what it can do to address stakeholder interests in its current conventional corporate form and what it would be able to do as a public benefit corporation. So long as this is the case, our company's rhetorical commitment to stakeholders will remain an empty promise. Delaware adopted new amendments to the public benefit law that make the adoption of the new structure more attractive and accessible. This law is consistent with our company's commitment to the statement on the purpose of the corporation, providing the opportunity for the Board to legally articulate the purpose of our corporation in a manner that would reconcile accountability to stakeholders. Shareholders request the Board to approve an amendment to the company's Restated Certificate of Incorporation to become a public benefit corporation pursuant to Delaware law and to submit the proposed amendment to the shareholders for approval. Such a change would enable the company to operate in a responsible and sustainable manner that balances the stockholders pecuniary interests and the best interests of those stakeholders affected by the corporation's conduct. I hereby move item #10.

Thank you for your presentation. The Board of Directors recommends that stockholders vote against this proposal for the reasons stated in the proxy statement. Shelley, are there any questions on this proposal?

No, John. There are no questions on this proposal. We did get a question on...

Are there any questions -- please, go. Just ask, are there any questions on any of the other proposals?

Yes, we did receive one additional question on an earlier proposal. Why did the company not engage with McRitchie on potentially new employee engagement empowerment actions? Question came from [ Carl Hagberg ], a very long-term investor.

Let me just say that we generally reach out to shareholders to engage on proposals, and we would be happy to discuss this proposal with Mr. McRitchie.

I have no further questions.

So are there any other questions?

No other questions, John.

Okay. All right. Well, what I would say then is to all our shareholders, if you have not done so already, please vote now on the portal. And I will pause for a minute in order to be sure we have enough time to do so. [Voting]

Okay. In order to be sure we have enough time for the Q&A session, I declare the polls closed. So while the votes are being counted, we will respond to questions about the company. Please adhere to the guidelines for questions and comments that Mr. Weerasinghe and I have outlined. As mentioned earlier, please provide your first and last name when you enter your questions into the web portal. Shelley, are there any questions?

Yes. The first question is from [ Mike Mayo ], and it is directed to Jane. What do you think is the optimum CEO, Chair relationship? In what ways do you think you will interact differently with John and the rest of the Board than your predecessors and CEOs at other firms?

Well, thank you very much for the question. I believe that the Board, including the Chair and the CEO should have a relationship that's really based on a combination of both oversight and collaboration. This type of relationship makes very good corporate governance, and it makes -- helps make sure that the firm succeeds. So this is the case here at Citi. And I would say we have an active and engaged Board that asks the right questions and including all the hard ones.

The next question is from [ Laurence Clark ]. Any plans for branch expansion in the U.S.?

Great question. We're very committed to our U.S. retail banking franchise and growing it, as I mentioned in our earnings call earlier this month. In the U.S., we are continuing to execute a largely digitally led, very client-centric strategy. And we've broadened out our digital capabilities to extend from deposits to investments and wealth management to mortgage lending as well as our already very strong digital card capabilities. But that said, over time, we are very actively exploring adapting our branch footprint and adding physical locations, both in our existing footprint as well as in other parts of the country as it makes sense.

The next question is from [ Norman Hacker ]. Citi continues to maintain a significant risk to its Mexican consumer franchise. What is your ongoing risk assessment of continuing this single-country exposure versus a more diversified sovereign exposure, excluding your Asian consumer risk profile?

Well, thank you very much for the question. We have a very strong franchise and position in Mexico that is very beneficial for the firm, and importantly, for our shareholders. And that's because there are huge advantages to the scale and the diversity that we have in this market. We continue to see growth prospects in Mexico, and we believe that Citibanamex is well positioned to support our customers there. And we're very disciplined around the target market client. We target a higher-quality customer segment than our local competitors. And we continue to be very optimistic about opportunities in Mexico, given its connectivity to the U.S. and the new trade deal, the continued expansion of the middle class and the very rapid digitization we're seeing in the market. Given the underpenetration in the banking sector, we see that changing rapidly. So in terms of geographic diversification, our firm continues to operate in nearly 160 markets around the world. And as such, we're extremely well-diversified.

The next question is from [ Peter Jadrosich ]. How does Citi plan on addressing growing competitive pressure from disruptive digital banking start-ups?

Yes. This is a very good question. It's one we spend a lot of time on. And it is our priority to make Citi itself a digital-first bank. It's our view that positioning the bank to be successful and to win rests on the belief that the architecture of the financial system that largely is operated for the last century is being largely replaced with a new architecture that is born for more digital. So some of our businesses have already made that leap, but this will impact many more dimensions of the world of finance in the decade ahead from digital currencies, to payments, lendings and deposits. Every financial services company today must provide a fantastic client experience, and they have to be able to do this at scale. We know that in this day and age, you can't do both unless you're fully digital. So as part of our model, we're going to be competing and collaborating with fintech firms through whichever model is most advantageous to our customers and to our clients. But this theme continues to be a top priority for our businesses, and it's a critical part of our business going forward.

The next question is from [ Tushin Chatterjee ]. Why hasn't the online customer graphic user interface been updated? Chase seems to have a better interface.

Well, first of all, thank you very much for being a customer and sharing this. We continually upgrade our online and mobile experiences. Improving and simplifying our customer experience is absolutely core to our strategy. I would note that in the U.S., our mobile app ratings are 4.9 out of 5 for iOS and 4.7 out of 5 for Android, and they're among the highest rated in the industry. But make no mistake about it, this is a story of continuous improvement and something that we are, and we're going to continue being relentlessly focused on.

The next question is from [ Biplab Srivastava ]. What is Citi doing about long-pending poor customer service complaints?

Thank you for joining us and for this question. We do endeavor to very quickly answer and, most importantly, fully resolve all customer inquiries and complaints. So please do provide us with your preferred contact information through the virtual meeting portal, and we will get in touch with you to discuss the challenge you're facing and resolve it for you.

The next question, we have 2 questions on the same topic, and we'll pose them together. The first is from [ John Hoscum ]. Will the stock price ever be over $300 per share, so I can breakeven on the money I invested? And from [ Kartikeyan Vera ], please do something to improve the price performance of the stock, talk to the Feds and clear any bottleneck along the way. Did the currency valuation reach $1 trillion without any support like big established banks, either a policy to match, eclipse the fund growth or observe the technical challenges into current model?

Well, we appreciate you both taking the time to join us today and for your questions. We firmly believe that our share price is not reflective of the underlying fundamentals of our business. And that our stock price will adjust itself accordingly as we move past the pandemic and that we continue to execute against the strategy refresh and our transformation. And I and the rest of our management team as well as the Board are fully committed to delivering the returns we know the firm is capable of producing and that our investors expect of us.

The next question is from [ Ron Collins ]. I was one of the many who suffered a financial loss when Citi did a reverse 7-for-1 split a while back. Will there ever be given any compensation to us because of this split, which hurt some of my retirement plans at that time.

Well, thank you for your question. The reverse split was back in 2011, and it did not generate any financial loss for the shareholders. Over 90% of shareholders approved the reverse split twice. So while we agree to disagree on the need for that reverse split, we are well past it now. And instead, the management team and I are highly focused on generating the returns our shareholders expect going forward.

The next question is from [ John Turner ]. What about splitting the shares?

Well, thank you very much for joining us. This is not something we are considering at this time.

The next question is from [ Jason Palmer ]. Please explain why consumer business, retail banking and credit card fees and interest rates continue to rise, given that the increase in automation and self-service should be reducing the cost of delivering new services. It seems incongruous that with savings rates near 0, that retail banking fees continue to climb and that credit card interest rates can exceed 24%. The delta is too high. I would like to see Citibank move more towards a cost-plus model instead of an industry practices, market will bear pricing model and become more fee-sensitive for consumers and small businesses. If charging such high fees, particularly on credit products, why is that profit not being put back towards higher interest rates on savings products?

Well, thank you for sharing your thoughts with us and for this question. But let me start by noting that we have not raised our fees in retail banking. We endeavor to provide competitive and compelling product offerings for our customers. And as you can imagine, many factors go into our pricing models and fee structures and that includes credit risk. And as you note, digital does positively impact our cost to serve, and we do indeed take this into account as one of those factors.

The next question, we have 2 questions on the same topic. The first from [ Jonathan Finger ]. Please explain why your dividend payout ratio is lower than some of the larger money center banks? Why do you think it is better to buy back stock at prices higher than tangible book value instead of paying out excess capital in the form of higher dividends, either as regular quarterly dividends or a special annual dividend? Buying stock -- buying back stock rewards only selling stockholders. Please increase the dividend rather than buying back stock. And the second related question from [ John Redkey ]. Interested in Board's outlook on raising dividend and share buybacks.

John, you're on mute.

Sorry. I will take these 2 questions. So overall, the Board and management are always looking to strike the right balance between dividends and buybacks. Management will look to invest some of our excess capital in growth opportunities. From there, we weigh dividend versus buybacks. And you've seen Citi bring its dividend yield in line with peers over the past few years, which is an important driver for a certain segment of investors. And you've also seen us devote the majority to buybacks as the stock has been trading below book value. That will be accretive to the share price in the long term. It's also worth pointing out that the Fed announced that restrictions on payouts will remain in place in the second quarter. But generally speaking, we weigh all of these factors with management, and we will try to continue to strike that right balance going forward.

We next have a series of 4 related questions. The first from [ Carina Campo Basso ]. Please describe the steps that Citigroup Inc. is taking to fight climate change, including reducing its carbon footprint, reducing the amount of solid waste it generates, reducing its use of virgin resources, supporting governmental policies that advance these goals and evaluating every project it considers financing in light of the damage the project would do to the planet's climate. From [ Lidya Heinrich ], Trinity College University of Cambridge. In 2020, Citi funneled $38.3 billion in financial services to fossil fuel companies making Citi the second biggest funder of fossil fuel operations in the world. Indeed, according to Rainforest Action Network, Citi's funding of the Top 100 fossil fuel expanders, oil, coal and gas companies that are continuing to expand their current fossil fuel reserves has actually risen in the last year from $27.9 billion in 2019 to $30.27 billion in 2020. In light of the fact that we have only until 2030 to avoid a catastrophic rise in global temperatures and of Citi's own recent commitment to net zero financed emissions by 2020 (sic) [ 2050 ], does Citi has any plans to halt the provision of financial services to the fossil fuel industry? And if so, on what time line? Then we have from [ Ben Cushing ], and I'm attending today on behalf of the Sierra Club, America's oldest and largest grassroots environmental organization. The Sierra Club notes that Citi has achieved net zero from its pledge, but does not go nearly far enough -- or fast enough to address the firm's role in the climate crisis. A recent report that Citi provided $237 billion in lending and underwriting to fossil fuel industry, making it the world's second largest funder of fossil fuels in the 5 years since the adoption of the Paris Climate Agreement, which the firm claims to support. How does Citi plan to take action this year to begin phasing out fossil fuel financing in order to provide a credible pathway to reach the firm's long-term climate commitment. And then does Citi have any plans to immediately halt the provision of financial services to the fossil fuel industry? And if so, on what time line?

So it's -- thank you very much indeed for those questions. As I mentioned in my opening remarks, our sustainability commitments are embedded in our day-to-day business, and we view them as being central to our mission of enabling growth and progress around the world. And as you noted, last month, which was my first day as CEO, I committed Citi to net zero emissions by the year 2050. And this is an ambitious target because it means not only addressing emissions from our own operations, but also those produced by our client portfolio. And we know that to truly fight climate change, many industries and our clients, they're going to need to join us in transitioning to these goals and to net zero. And as I said on that first day, we're committed to working relentlessly with our clients to help them get there. So to that end, we're extending our current environmental finance target from $250 billion by 2025 to $500 billion by 2030. And regarding supporting governmental policies to advance these objectives, which is a critical part of the equation, we were the first bank to sign the We Are Still In declaration in support of the Paris agreement. We're members of the CEO climate dialogue, which is working to advance durable climate policy solutions in the U.S. And we've just become a founding member of the Net-Zero Banking Alliance to further advance and accelerate this important initiative. So I think it's fair to say that the steps Citi is taking to fight climate change are extensive, but most importantly, they're going beyond words to real actions and to help support this very important transition.

The next 2 questions are related. The first from [ Mike Mayo ]. How are your initiatives proceeding as they relate to climate change? And how do you know, i.e., how can you measure this? And how does Citi evaluate the sustainability of industries and clients, and that comes from [ Mike Telford ].

Okay. Yes, these are great questions. And it's an area that we, along with many of our peers, are really trying to put considerable effort and brain power in, so that we can measure this properly. As you know, data and metrics are very important to us and to everyone so that we can measure our progress on many strategic fronts. And climate change is, of course, no exception to this. We track our financing activity towards our environmental finance target goal, and we've already begun reporting this on an annual basis on both the financing and on the environmental and social impacts. I'd point out that we publish extensive information on environment metrics already in our annual ESG report and in our TCFD climate reporting. It's the second year that we have published this report. We've also been measuring and reporting on the environment footprint of our own facilities, and we've done that since 2002. We're beginning work on our net zero plan, and we intend to publish this initial plan by early 2020 at the latest. In it, we'll start by measuring the financed emissions associated with our energy and our power sector portfolios around the world, and we'll be setting 2030 emission targets for those sectors. You can expect Citi continue at the forefront of disclosures and transparency in this area, and you will continue to see us helping to shape global, measurable and most importantly, comparable standards for the industry.

I just want to note that we received a few more questions on the portal regarding our transition away from financing fuels, which Jane has addressed in her previous 2 answers. And so to make sure we can cover other topics on questions we've received, we're going to go on to the next one, which is another fossil fuels question. This comes from [ Bradford Schenkel ]. Given the bank's stated commitment to support reduction in climate change producing elements, please state what percentage of the current loan portfolio represents loan or other bank investments in fossil fuel-related industries, defined as producers, pipeline operators, builders and related fossil fuel industry participants?

Well, thank you for joining us today and for your question. As you know, and as I've talked about, we are fully committed to addressing climate change. And most importantly, how we support our clients, transition from a high carbon economy to a net 0 carbon economy. You'll find our credit exposure climate risk heat map. The map provides details on our credit exposure to all of our sectors and subsectors, together with the climate risk associated with these sectors in the 2020 TCFD report I referred to earlier. And that's available on our website at citigroup.com. I would note we've also joined the Partnership for Carbon Accounting Financials, and we are working with others in our sector to finalize a methodology for carbon accounting for loans. So please, you can expect us to continue providing full transparency through this transition.

The next question is from [ Marcos Garcia Acosta ]. How is the company investing and promoting a reduction in the use of plastic and extraction of fossil products such as coal, gas and oil?

Thank you for the question. Well, let me begin with our very own facilities. We have established a set of environmental footprint goals that include reducing our energy use, our water use and waste that's sent to landfills. And we also have initiatives to reduce our consumption of single-use plastic. For example, we've installed bottle filling stations in our U.S. and Mexico facilities. And in our headquarters building here in New York, these bottle filling stations reduced our plastic bottle use by more than 86,000 bottles each month. Over the past year, we have updated our ESRM policy fossil fuel sector standards. And this is a policy, those that aren't familiar with it, that has a few parts. So it includes a policy for the coal-fired power sector, and it sets out our expectations for our clients to decarbonize in that sector. There is a policy for thermal coal mining that includes staged phaseout for investment banking and credit between 2025 and 2030. And there are project finance prohibitions for thermal coal mining, coal-fired power plants and Arctic oil and gas exploration and production. And our most recent commitment to net zero emissions by 2050 will accelerate all these efforts, of course. I do want to be clear, though, these commitments are not about cutting off financing for carbon-intensive sectors such as energy and power, which are essential for the continued functioning of our global economy. What it is about is a transition, and we've made the commitment to help our clients transition to net 0 with us.

The next question is from [ Narayana Mysore ]. Did Citi lose money on the margin call to Archegos Capital?

Thank you very much for the question. We do not comment on single entity relationships or exposures. However, let me assure you that had there been any material impact, we would certainly have shared it with you, and we'll let you draw your own conclusions.

The next question is from [ Peter Bone ]. With the upcoming infrastructure plan, what role will Citibank play with regards to their business customers and their lending needs in the U.S. market?

Yes, the gap between what is needed to fix America's infrastructure and current plans for investment is large. It now stands at about $2.6 trillion over the next 10 years. And that gap is -- means that you'll see slower economic growth and development unless it's closed. Citi works with governments all around the world to support financing of their infrastructure programs, and we are actively working across all levels of the U.S. government to find solutions to help close this gap. And while our country hasn't been making infrastructure investments at the pace that we need it to, we are proud to have financed through Citi, many of the marquee transportation infrastructure projects around the country from San Francisco's seismically resilient Bay Bridge to LaGuardia Airport's new central terminal. We're a market leader in social infrastructure as well. We've just been named the #1 lender for affordable housing in the U.S. for the 11th consecutive year, financing over $7 billion worth of affordable housing in 2020. And we finance at a minimum $20 billion per year in infrastructure-related projects in the U.S. So what does all that means? Bottom line, you can expect us to play a very active role in supporting our clients and the government in addressing the infrastructure investment gap in this country.

We have received a number of questions regarding the Georgia voting law, and we'll ask 2 representative questions. From [ Kerry Lidl ], how much money has Citi given to candidates or causes that have or are currently supporting voter suppression laws. I will no longer support companies that aid the GOP's efforts to curtail voting rights. And from [ Robert Drummond ], stay out of political decisions. Georgia voting decisions and other politically charged decisions can easily lose customers. Let the voters decide, not the corporations.

I'd like to start by just thanking everyone for sharing their views and sharing the various questions with us on this topic. The right to vote is the foundation of American democracy. I'm a proud American. I became a citizen in 2001, and that was a fantastic day. Citi supports the fundamental right to vote by registered voters. And we've taken steps to encourage our colleagues within Citi to vote such as providing paid time off for the 2020 election. We think we should be doing everything we can to encourage registered voters to exercise this fundamental right.

The next question is from [ Mike Degio ]. Why is Citi continuing to donate thousands, if not millions, to politicians who tried to interfere in a legal fair election in 2020 and then incited the January 6 insurrection?

Let me be very clear in response to the question. We are disgusted by the actions of those who stormed the U.S. Capitol on January 6. In light of the events, we paused our PAC contributions immediately. And our PAC contributions continue to be suspended, and we are still in the process of reviewing our approach to them going forward.

The next question is from [ Julio Mora ]. There are too many management officials in Corporate Operations and Technology. Why does Citi have so many layers of management in Corporate O&T?

Thank you for sharing your comment. We endeavor to have the appropriate management structure in place across every business and function in Citi. And at the same time, we need to make sure our teams are appropriately resourced.

The next question is from [ James Burley ]. Where in your annual report or elsewhere do I find a listing of your contributions to lobbyists, political and social entities? What committee is responsible for your company positions on the redistribution of wealth, your positions on social justice, support of radical, social and political entities and organizations, i.e., Black Lives Matter and TIFA, Southern Poverty Law Center and similar organizations. Thank you in advance for your expeditious handling of my request.

Well, thank you for joining us and for your questions. We annually list our political contributions and lobbying disclosures on the Corporate Governance section of our corporate website. And the second part of the question, the committee that provides oversight of political contributions, lobbying and trade associations is our Nominations, Governance, Public Affairs Committee.

The next question is from [ Tushin Chatterjee ]. Why is Citi leaving foreign countries? Half the reason I have a Citi account is so that I can access services and branches in foreign countries.

Well, thank you, first of all, for your business and for your questions. Let me be very clear on one point. Citi is not leaving any of the countries that we are pursuing a sale of our retail franchises in. We will continue to be focused in investing in our commercial bank, our corporate and our private banking franchises in all of those countries. In terms of our retail franchises that we are selling, while these are excellent franchises, we don't have the scale we need to compete. And we've decided we simply aren't the best owners of them over the longer term. We will be endeavoring to find buyers who will be investing in these franchises, and we'll continue to serve our customers and look after our people and the communities that we serve in them.

The next question is from [ Nestor Lim ]. I'm Nestor Lim, a shareholder from the Philippines. I'm also a retail bank account holder here in the Philippines. When the new CEO announced that they will be shutting down their consumer banking in our country, almost no one knows what's going to happen. Employees are frightened they will lose their job soon. Panic ensued, and I personally need to stop what I'm doing to withdraw and avoid a bank run. I believe this communication was not properly handled. My question to the Board is how do we ensure that such panic-triggering information is properly cascaded globally next time in order to take into consideration all stakeholders, customers, employees, et cetera, and not just shareholders?

Well, thank you for your business and for sharing your experience with us. And I apologize for the concern and inconvenience this has caused you and take note of your feedback. We do endeavor to make sure that decisions that we make as a firm are communicated clearly, effectively and transparently to all of our shareholders and stakeholders. Our priority through this process is to find a buyer who is going to look after our employees, look after our customers and invest in the franchises and take them forward. So as far as your account and how we serve you, nothing is changing. We are not shutting this business down, and we'll be very diligent in looking after it through the sales process and mindful of these concerns.

The next question is, how many attendees at the virtual annual meeting? How many attendees cast votes while the meeting was in progress?

Thank you, Shelley. There are currently approximately 320 attendees at the meeting. And thus far, over 35,000 votes have been cast.

The next question. Good morning, Mr. Chairman. The topic of stakeholder capitalism as an alternative to shareholder capitalism has received considerable attention recently. As long-term pension fund investors, The Carpenters Fund appreciate the sentiment embodied in the stakeholder capitalism perspective, but feel that execution could be complicated. Could you discuss the -- I think, that's Board's perspective on the concept of stakeholder capitalism and what principles the Board would use to balance the interest of various stakeholders as it develops and implements the company's long-term business strategy. Thank you, Mr. Chairman.

Well, thank you very much. Our environmental, social and governance agenda, which is consistent with the focus on stakeholder capitalism is embedded within our business. And we view it as complementary to our focus on our shareholders. Take, for example, our focus on environmental finance. These are business transactions, and our ability to grow our targets for financing this sort of work has grown because market demand has grown. Likewise, as Jane mentioned earlier, we are the nation's top affordable housing lender for the 11th consecutive year. This work helps ensure families across the U.S. have a safe and stable place to call home, but it is also a $7 billion-plus business for us. So we very much view our focus on stakeholders as consistent with our focus on shareholders.

If I bought the stock 3 years ago, how much has my return been versus how much the CEO has made over that period?

I thank you for the question. I don't have the share price from 3 years ago handy at the moment. But let me answer accordingly. The compensation for Mike Corbat and the rationale for it over that 3-year period can be found in the proxy. My compensation is also detailed in the proxy and, obviously, will be going forward along with my scorecard. That being said, I want to acknowledge the sentiment behind your question regarding our share price performance and executive compensation. As I said earlier, we firmly believe our share price isn't reflective of the underlying fundamentals of our business and that our stock price will adjust itself accordingly as we move past the pandemic, and we execute against our strategy refresh and the transformation work. And because those 2 are both intended in part to unlock value for shareholders as well as for our clients and address the concerns that they'll be regulated. So I and the rest of our -- of the management team at Citi as well as the Board are very much committed to delivering those returns. And it's that the returns which we know the firm is capable of producing and that our investors expect of us. With respect to executive compensation, our approach to this is designed to attract and to retain the best talent at Citi. We align those compensation programs with shareholder and stakeholder interest. And our approach to compensation also reinforces the importance of operating with high ethical standards and with strong risk management. There is a lot more detail on the factors that go into determining executive compensation in our proxy, and I hope you can find it there.

Thank you, Jane. It's now just after 10:45, and we are going to close the Q&A session and announce the vote results. If we did not get a chance to answer your question and your question complies with the guidelines in the annual meeting procedures, we will respond to you at the e-mail address you provided. So I will now ask the secretary to report on the vote taken at today's meeting.

Thank you, Mr. Dugan. Based on the proxies voted prior to today's meeting and the votes cast at today's meeting, I'm able to report that on the proposal for the election of directors, each of the nominees has been elected, each nominee having received more for votes than against votes and each nominee having received over 95% of the votes cast. Proposal 2 relating to the ratification of KPMG LLP as Citigroup's independent registered public accounting firm has passed, having received approximately 88% of the votes cast in favor of the proposal. Proposal 3 relating to the approval of Citi's 2020 executive compensation has passed, having received approximately 86.6% of the votes cast in favor of this proposal. Proposal 4 relating to the approval of additional authorized shares under the Citigroup 2019 stock incentive plan has passed, having received approximately 96% of the votes cast in favor of this proposal. Proposal 5, requesting an amendment to Citi's proxy access bylaw provisions has not passed, with approximately 32% of the votes cast in favor of this proposal. Proposal 6, requesting an independent Board Chairman has not passed with approximately 18.3% of the votes cast in favor of this proposal. Proposal 7, requesting the inclusion of nonmanagement employees on director nominee candidate list has not passed, with approximately 5.9% of the votes cast in favor of this proposal. Proposal 8, requesting a report disclosing information regarding Citi's lobbying payments policies and activities has not passed, with approximately 23% of the votes cast in favor of this proposal. Proposal 9, requesting a racial equity audit analyzing Citi's adverse impacts on nonwhite stakeholders and communities of color has not passed with approximately 37.8% of the votes cast in favor of this proposal. Proposal 10, requesting that the Board approve an amendment to Citi's Certificate of Incorporation to become a public benefit corporation and to submit the proposed amendment to stockholders for approval has not passed, with approximately 2.5% of the votes cast in favor of this proposal. These numbers are preliminary. The official report of the inspector of election will be filed with our corporate records and reported on a Form 8-K filed with the SEC. Mr. Dugan?

If you have a question but did not get a chance to ask it, please follow the procedure for sending questions to the Board described in the proxy statement. At this time, I will entertain a motion to adjourn.

So moved.

Second.

All in favor? [Voting]

Thank you. I declare the meeting adjourned.

This now concludes the meeting. Thank you for joining, and have a pleasant day.