Calpersis to withhold its votes from Citigroup Chairman Sanford “Sandy” Weill and Chief Executive Charles Prince to serve as directors of the world’s largest financial services company.
The giant pension fund, which has $167 billion of assets and 26,712,930 Citigroup shares, said Citigroup would be “better served” by having an independent director replace Weill as chairman. It also said it intends to withhold votes for six other Citigroup directors: C. Michael Armstrong, Alain Belda, George David, Kenneth Derr, John Deutch and Roberto Hernandez. Calpers said the 71-year-old Weill, who was Citigroup’s chief executive from 1998 to 2003, “had a significant role” in several scandals affecting the company. It said Weill “should be held accountable for the substantial costs incurred by settling civil investigations of the company’s improper practices and conflicts of interest between the investment research department and the investment banking unit.”
Citigroup last year agreed to pay $400 million, more than any other bank, as part of the $1.4 billion global settlement that regulators reached with 10 banks to resolve charges of biased stock research. Calpers said the 54-year-old Prince, who became chief executive last October, has business relationships with the company that might impair his objectivity. Prince is among Wall Street’s highest-paid executives, having received about $29.2 million of compensation in 2003, Citigroup’s proxy filing shows. Calpers disclosed its voting plans on its Web site.