Citigroup: Proponent Argument to SEC, January 31, 2000

Mark Latham, Ph.D.
The Corporate Monitoring Project
10 Miller Place #1701
San Francisco, CA 94108, USA

Phone: (415) 391-7198
Fax: (415) 680-1521


January 31, 2000

Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: Shareowner Proposal of Mark Latham to Citigroup

Ladies and Gentlemen:

I am writing in response to the January 24, 2000 letter (the "2nd Citigroup Letter") submitted to the Commission by Citigroup Inc. ("Citigroup" or the "Company").

I submit that my January 10 letter was responsive to the arguments for omission presented in Citigroup’s petition of December 22, 1999. Some of my responses are reiterated below. The revisions I suggested for maintaining precatory language were not in direct response to concerns raised in the Citigroup petition, but provide a clarification that may be legally significant and thus worthwhile. The January 10 "Revised Proposal" is attached.

Rule 14a-8(i)(7) -- ‘ordinary business’

The Citigroup petition contends that the Revised Proposal may be omitted under Rule 14a-8(i)(7) because it "would infringe upon management’s decision-making functions concerning … retention of consultants." My response is that while most hiring of consultants is indeed ordinary business, the hiring of a proxy advisor for shareowner voting is not; hence the relevance of my emphasizing that the Revised Proposal "would not restrict the Company from hiring any other external consultants."

I concur that "the Proxy Statement is not the appropriate forum for a Consumer Reports guide to proxy advisory firms". Consumer Reports has an enviable reputation for the independence of its recommendations; management does not. As for providing shareowners "sufficient material to make an informed decision", consider the information proxy statements typically provide about director candidates. While it may be accurate, it is not sufficient for discerning a candidate’s effectiveness and degree of loyalty to shareowner interests. That is why shareowner voting on directors remains a mere formality in all but a few cases. By contrast, shareowners could become informed about proxy advisor reputations, because there would be fewer of them nationwide than director candidates. Advisor reputations would not be determined solely (or even primarily) in proxy statements, but rather in independent business media. But once shareowners have chosen a proxy advisor, the voting advice it provides on other proxy matters will have the independence that management’s advice lacks.

Rule 14a-8(i)(4) -- ‘personal interest’

References in the supporting statement to websites and published articles are of substantial benefit to Citigroup shareowners seeking further information to help them weigh the pros and cons of the Revised Proposal. This provides an important response to concerns raised in the Rule 14a-8(i)(3) section of the 2nd Citigroup Letter, regarding purported ambiguities and lack of clarity. Like the rest of the Revised Proposal, inclusion of these references is designed entirely for the benefit of Citigroup shareowners.

Nonetheless, if the Commission staff deems it necessary that I omit any or all website references from the Revised Proposal in order to have it included with the proxy materials, I would be willing to do so.

Rule 14a-8(i)(3) -- ‘false and misleading’

I believe that my January 10 letter’s description of how shareowners could learn about proxy advisors’ reputations is sufficient and logical. Within the 500-word limit, the Revised Proposal makes several important references relating to this:

1. "WHEREAS proxy advisory firms have established reputations for giving sound independent advice to many institutional investors on how to vote their shares;"

2. website addresses for the three leading American proxy advisory firms;

3. Wall Street Journal articles about proxy advisory firms; and

4. research articles in business journals, which discuss these matters in more detail.

If the Commission staff nonetheless considers any part of the Revised Proposal to be false or misleading, I would be willing to delete such part.


Based on the foregoing, I respectfully request that the Commission staff find that Citigroup lacks sufficient grounds for excluding the Revised Proposal from its proxy statement. Please call me at (415) 391-7198, or e-mail me at, with any questions about this submission.

Please acknowledge receipt of this submission by date-stamping and returning the enclosed photocopy of this letter to me in the enclosed stamped, self-addressed envelope.

Very truly yours,


Mark Latham


cc: Ms. Stephanie B. Mudick
General Counsel, Corporate Law
Citigroup Inc.
153 East 53rd Street
New York, NY 10043