Welcome to the annual meeting for Citigroup. Our host for today's call is John Dugan, Chair of the Board of Directors. I will now turn the call over to your host, Mr. Dugan. You may begin.
Good morning, ladies and gentlemen. My name is John Dugan. I am the Chair of the Board of Directors of Citigroup. Citi is hosting our annual meeting as a virtual meeting this year. We appreciate all of you joining us virtually. Joining the meeting today is Jane Fraser, CEO of Citigroup. On behalf of the rest of the Board of Directors, we are very pleased to welcome you to the 2025 Annual Meeting Of Stockholders. I will serve as Chair of today's meeting, and Brent McIntosh, our Chief Legal Officer and Corporate Secretary, 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 re-election and are also joining us 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 Titi Cole, Ellen Costello, Grace Dailey, Duncan Hennes, Peter Henry, Renée James, Gary Reiner, Diana Taylor, James Turley, and Casper von Koskull. I want to say a special thank you to Barbara Dessor, who is not standing for re-election, having reached the board's retirement age, and Leslie Ireland, who has determined not to stand for re-election. We appreciate their many outstanding contributions and their years of dedicated service to Citigroup. We are also joined today by KPMG, our independent auditors. They are available to respond to questions from stockholders. Mr. McIntosh.
Thank you, Mr. Dugan. I'm 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 Election. Mr. Barbera is joining us at today's meeting and took the oath of Inspector of Election 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, such as the risk factor section of our 2024 Form 10-K. In addition, for a reconciliation of non-GAAP financial measures to reported results, please see Citi's Fourth Quarter 2024 Earnings Review and Citi's 2024 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 half of the screen. Also, on the bottom half of the screen is the question box. Stockholders can enter questions at any point during the meeting. Please direct your question to the Chair or the CEO. We will read the questions aloud, and then Mr. Dugan or Ms. Fraser or both will answer them. We will respond to questions and comments from stockholders for the management proposals and each of the stockholder proposals when each such proposal is before the meeting. General questions and comments will be addressed during the general Q&A period.
If we receive questions covering the same subject matter, we may combine them into a single question. Questions that contain derogatory references to individuals or the company, 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. Shelley Dropkin will read aloud the questions asked by our stockholders on the Broadridge portal. We understand that some of you may have concerns about your personal financial business, such as an issue 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'll have our customer service team contact you to address your concerns.
We will begin by having our CEO, Jane Fraser, give the State of Citi presentation. After the presentation from the CEO, we'll turn to the business portion of the meeting with proposals to be considered. The proxy statement you received for today's meeting describes eight matters to be voted on. We will begin with the presentation of four management proposals. We'll introduce all of them at once. We'll then respond to questions about any of the four management proposals brought before the meeting. After we conclude the discussion of the management proposals, we will discuss the stockholder proposals. Each stockholder proponent will have two to three minutes to present his or her proposal. We'll respond to the questions from the portal related to each proposal after each proposal is presented. After the presentation of the proposals, we'll close the polls.
While the votes are being counted, we'll 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. 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 are deemed 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.
Thank you, Mr. McIntosh. Our CEO, Jane Fraser, will now give a presentation on the State of Citi. Jane.
Thank you, John, and a very warm welcome to our shareholders joining from across the United States and around the world. Today, I am pleased to update you on Citi's progress, on the path we're forging, and the opportunities that we're seizing on your behalf. First, I want to make some comments about the broader environment we're operating in. Citi has been in business since 1812. In more than two centuries of serving our clients, we've navigated market shocks, natural disasters, and political upheavals. In recent years, it's been COVID and the war in Ukraine. Once more, the world is on the cusp of deep structural change, the kind that reshapes how markets move and businesses operate. Right now, the world is in a wait-and-see mode as geopolitical tensions and evolving economic policies create new and uncharted territory for countries and companies.
Although I expect the U.S. will retain its economic advantages, we are moving to a more multipolar world. New lanes and partnerships are forming within financial, trade, defense, energy, and technology. The changes will extend far beyond trade and tariffs. In the U.S., for example, regulation and tax policy are both likely to look different in a year's time. These changes will not only have economic impacts but geopolitical and cultural ones as well. In short, there is a lot that's yet to unfold. The good news is that our clients, both corporate and consumer, are resilient and are in good financial health. At Citi, we are not distracted. We're staying focused on executing our strategy, advancing the transformation, and above all, supporting our clients. This is precisely the time when Citi's new model proves its worth.
Our global footprint, diversified business mix, and robust balance sheet allow us to navigate a variety of environments from a position of strength. With our strategic changes locked in and our new organizational structure in place, we are on the front foot. We are leaning in. Our markets business is supporting clients with hedging and funding approaches. Our treasury and trade solution teams are helping them reassess their supply chains. Banking is advising on their strategic agendas. Wealth and our US personal bank are providing individuals with markets insight and advice. The deep knowledge and the sheer breadth of capabilities Citi has from decades on the ground in so many local markets are real points of distinction when serving our clients. That's our edge, and it is in high demand.
These core strengths have underpinned our strategy to reshape Citi into a simpler and stronger institution and to fulfill the vision that we set out at our Investor's Day three years ago: to be the preeminent banking partner for institutions with cross-border needs, a global leader in wealth management, and a valued personal bank in our home market. We have made meaningful progress turning that vision into reality. Today, we are a fundamentally different bank: simpler, more focused, and above all, better aligned with what you, our shareholders, expect from us. Let me bring that to life. First, we have focused our business mix. We now operate through five interconnected businesses. Each has a clear path to greater growth, share, and returns. As part of this work, we have nearly completed the divestitures of our consumer franchises internationally.
That includes in Mexico, where we've separated Banamex into a new entity, a key step towards its upcoming IPO. In India, the benefits of this strategy are already tangible. Two years after selling our retail bank there, our franchise in India is actually bigger than it was before the sale. That is the proof of the power of focus. Second, we've reduced the bank's risk profile. By focusing our business mix and exiting businesses that weren't aligned to our new strategy, we have made Citi more resilient. We have focused on clients that fit our core mission and, given our capital, liquidity, and reserves, we've significantly strengthened our ability to navigate through periods of volatility. Third, we've made Citi more connected. All parts of the firm are working more closely together. For example, our retail bank is an important source of referrals for our wealth business.
Banking and markets are teaming up to provide structured foreign exchange solutions around M&A transactions. It's this type of connectivity, the ability to bring the full power of Citi to bear, that is increasingly a differentiator. Fourth, we've prioritized improving returns and growing fee-based revenues across our businesses. That commitment is now embedded in our culture and how we incentivize and reward our senior leaders. Earlier this year, we adjusted our ROTCE target for 2026 to 10-11%. Now, that's slightly lower than before, but our long-term ambitions remain high. We are absolutely determined to grow our returns further over time, and we'll hold ourselves accountable every step of the way. Fifth, we've changed how we run the bank. Under our new organizational structure, our leadership is closer to clients. Our teams are more agile. We're moving faster and smarter.
Our transformation effort is making us a better-controlled bank with stronger risk management and automated processes and controls. We are not stopping there. We are unlocking the power of data, a resource that, properly managed, can be one of our greatest assets. Sixth, we have raised the bar on ourselves. We have redefined how we measure success: new scorecards, new expectations. We have brought in top-tier talent, particularly in banking, wealth, and technology, to drive greater intensity and to up our execution game. With these foundations in place, we are unwavering in our focus on two priorities: improving business performance and executing the transformation. We are seeing real results. In 2024, all five of our businesses delivered solid earnings. Services, wealth, and our US personal bank posted record revenues. We achieved positive operating leverage in every business and across the firm overall.
We returned nearly $7 billion to common shareholders through common dividends and share repurchases. Momentum has continued into 2025. In the first quarter, we grew our returns across all five businesses whilst maintaining discipline around expenses, which declined by 5% year over year. We also returned $2.8 billion to shareholders, which included $1.75 billion in share repurchases as part of our $20 billion buyback plan. Now, let me take a few minutes just to dig more deeply into our five core businesses. I'll start with services. The undisputed industry leader, our services business continues to win new mandates and grow share, a result of our relentless focus on improving the client experience. During a record-breaking year for the business, we introduced new digital asset offerings such as Citi Token Services. We rolled out our Citi Payments Express platform, extending our leadership in e-commerce. Next, markets.
Our markets business is a top-three franchise globally, driven by our leading position in fixed income and with our corporate clients. In equities, we continue growing our prime business to complement our strengths in derivatives. No other bank matches our product breadth and geographic reach for corporate and investor clients. As to banking, our corporate bank remains a key strength given our global network. We continue to build up our commercial bank to support mid-market companies going global. Our investment bank is quickly gaining wallet share and advising on headline-making transactions. We also launched an innovative $25 billion private credit direct lending program with Apollo, opening new avenues to serve clients. In wealth, we've emphasized investments as a key lever of growth. Andy Sieg has assembled an exceptional team to deliver.
Last year was a turning point as net new investment asset flows grew by 40%, and we generated record revenue. With very few truly global wealth platforms in the market, the opportunity for us is simply enormous. Finally, U.S. personal banking. Over the past year, we've launched the Enhanced Citi Strata Premier Card and FlexPay on Apple Pay. We extended and expanded our iconic partnership with American Airlines. In our retail bank, we converted 4 million customers to our simplified banking platform, making everyday banking easier and more intuitive. We've reshaped the front of the house. At the same time, we're rebuilding the foundations. That is what the transformation is all about. This effort is broader than addressing the 2020 consent orders. It's fixing decades of under-investment and ensuring that Citi competes and leads in a digital-first world. It's a very large body of work.
I am pleased with the progress that we've made. We're consolidating systems. We're retiring legacy technology. We're standardizing our risk management structure. We've bolstered our controls, both preventative and detective controls. Every day, we're seeing more benefits in how we run the bank. Still, we recognize the path isn't linear. We fell behind in some areas last year, particularly around data as it relates to regulatory reporting. As a result, we have reviewed our entire data program. We've retooled our governance and increased investments in the technology and talent needed to meet our obligations. We took action. I'm now confident in how this work is progressing. Today, in many parts of risk management and compliance, we are operating at or near our target state. At the heart of our work to modernize the firm is our investment in artificial intelligence.
We have equipped our developers with sophisticated tools to write code. We have launched GenAI tools that are boosting efficiency for more than 150,000 of our colleagues. We are committed to becoming one of the industry's first truly AI-ready workforces. We are well on our way. As we look to the future of the world around us, we do so with clarity and conviction. We are not at the end of a cycle. We are at the start of something transformational. Put differently, this is not a passing phase. It is a permanent shift in the global dynamics. Citigroup was built for this. Our strategy has been designed to perform across a wide range of conditions. We have the capital, the liquidity, and the reserves to manage whatever comes next. We have the leadership and the experience to meet the moment and the next one.
Time and again, we've shown we can be a port in the storm for our clients, for global markets, and indeed for the broader economy. This time, we'll be no different. We're not distracted by uncertainty. We've simplified our structure, strengthened our foundation, and built a platform for durable long-term performance. We know what we're here to do. We are delivering for our clients, for our communities, and for you, our shareholders. Thank you for your continued confidence in Citi. I look forward to answering your questions later in the meeting.
We will now turn to the business to be conducted at today's meeting. Mr. McIntosh,
I declare that the polls are now open. The polls will remain open until the end of the discussion of 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 by 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 2024 executive compensation. Proposal 4, approval of additional shares for 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 management proposals 1 through 4 for the reasons stated in the proxy statement.
If you have any questions or comments regarding any of the four management proposals, please enter your questions into the web portal. Ms. Dropkin, are there any questions on the management proposals?
We have received two related questions on Proposal 3. I will ask both of them. The first is from Robert Parr. Given regulatory fines related to long-standing open sanctions by regulators specifying lack of satisfactory progress against addressing these issues, controls, data integrity, etc., how can the board of directors allow any rewards under the compensation plan related to the transformation? Citi's senior management is incredibly well compensated, and there is no need for additional bonus opportunity. The second is from James Rich. How did you spend almost a billion dollars on bonuses that did not provide any benefit to stockholders?
This was a gross mistake that management should be punished for with no bonuses or stock incentives for three years.
The transformation bonus program was established to incentivize effective execution of Citi's transformation. Many of the planned activities within this body of work have been completed. We are now focused on continued enterprise-wide deployment and adoption of the completed work. We have acknowledged that despite making important progress in advancing the transformation, including remediating the consent orders, there were areas where we have not made progress quickly enough, such as in our data quality management related to governance and regulatory reporting. The board held senior management accountable for this by substantially reducing the payout for the last tranche of the program award to 53%. Full details around the payout are laid out in our proxy. A transformation of this size and scale is never linear.
Our efforts are addressing decades of underinvestment in Citi's infrastructure, including unifying disparate tech platforms and streamlining complex processes. The board and senior management remain fully committed to the success of the transformation and believe this program effectively supported the firm's ability to drive the leadership and collaboration necessary to get this work done. I'll end by saying that this was the third and final year of the program, which will not be renewed.
The next question is on Proposal 4 and comes from David Dedose. Why do we give shares to executives and directors? Pay them and allow them to purchase shares at a reduced rate, 75%-85% of the current price, and require them to hold the shares for a specified period of time depending on the discount.
Giving away shares that are created for such use diminishes the equity and voting power of each shareholder. All shares used for such purposes should be purchased by the company on the open market.
Our current share request related to this management proposal is consistent with our long-standing practice of requesting shares annually. It also reflects the board's focus on aligning executive compensation with the interests of our shareholders. Without approval of this management proposal, we would need to replace stock-based awards with cash awards, which would not be in our shareholders' interest. We therefore hope you will vote for this proposal, given the importance of aligning employee compensation with our shareholders.
The next question is on Proposal 3 and was submitted by Michael Picciorillo. My name is Michael Picciorillo from the United Brotherhood of Carpenters Pension Fund.
The calculation of the CEO compensation actually paid total in the pay versus performance table for the past several years can dramatically differ from the CEO total compensation amount in the summary compensation table. Does the compensation committee use the compensation actually paid total compensation figure in setting the CEO target total compensation award amount for the upcoming year?
You are correct that there are two different numbers. One reflects the amount awarded to the executive for this compensation year, and the rationale for that award is provided in the proxy. That compensation number includes awards that will vest in future years. I would encourage you to focus on this table to understand compensation provided to our executives this year. The other chart you're referring to is provided to comply with a regulatory requirement where we detail how much is actually transferred to the executive this year.
That number includes grants awarded in previous years that vest this year, for example. I hope that this answers your question. However, if it still remains unclear, please reach out to shareholder relations, and we'll walk you through this further.
Mr. Dugan, there are no further questions on the management proposals. As there are no further questions on the management proposals, we will now have the presentations of the stockholder proposals to be voted on at today's meeting. I will call on the proponent of each stockholder proposal to make a statement. The proxy statement you received for today's meeting included four shareholder proposals. We will begin with stockholder proposal 5, requesting a shareholder vote regarding excessive golden parachutes. Operator, is John Chavedan on the line.
Hello, this is John Chavedan. Proposal 5, shareholder vote regarding excessive golden parachutes.
Charles requested the board seek shareholder approval of any senior manager's new or renewed pay package that provides for termination payments with an estimated value exceeding 2.99 times the sum of the executive's base salary plus target short-term bonus. This proposal only applies to the named executive officers. This proposal shall at least be included in the governance guidelines of Citigroup and be readily accessible on the company website. The board shall retain the option to seek shareholder approval after material terms are agreed upon. Unfortunately, many companies only limit cash golden parachutes to the 2.99 figure, which means that there is no limit on non-cash golden parachutes for which shareholders have no voting power. This proposal is relevant even if there are current golden parachute limits. A limit on golden parachutes is like a speed limit.
A speed limit by itself does not guarantee that the speed limit will never be exceeded. Like this proposal, the rules associated with the speed limit provide consequences if the limit is exceeded. With this proposal, the consequences are a non-binding shareholder vote is required for unreasonably rich golden parachutes. This proposal places no limit on long-term equity pay or any other type pay. This proposal thus has no impact on the ability to attract executive talent and does not discourage the use of long-term equity pay because it places no limit on golden parachutes. It simply requires that overly rich golden parachutes be subject to a non-binding shareholder vote at a shareholder meeting already scheduled for other matters. This proposal is relevant because the annual say on executive pay vote does not have a separate section for approving or rejecting golden parachutes.
This proposal topic received between 51% and 65% support at FedEx, Spirit AeroSystems, Alaska Air, and Freserve. Please vote yes, shareholder vote regarding excessive golden parachutes proposal 5.
The board of directors recommends that stockholders vote against this proposal for the reasons stated in the proxy statement. Ms. Dropkin, are there any questions on this proposal?
Mr. Dugan, there are no questions on this proposal.
The next item is stockholder proposal 6, requesting a report on the effectiveness of Citi's policies and practices in respecting Indigenous peoples' rights in Citi's existing and proposed financing. Operator, is Olivia Bisset on the line?
Good morning, Citigroup board and shareholders. Olivia Bisset-Dirgo, an Indigenous leader from the Peruvian Amazon, will present on behalf of the Congregation of the Sisters of St. Joseph of Peace, long-term shareholders, to request a report on how effectively Citi respects Indigenous peoples' rights.
We encourage investor support for proposal number 6. Olivia's community, the Chopra, and neighboring communities, the Achuar and One Piece, are impacted by Citi's financing. Her following message will be translated to English from Spanish. [Foreign Language] Good morning. My name is Olivia Bisset-Dirgo. I am the president of the autonomous territorial government of the Chopra Nation, located in the district of Morona, province of Datem del Marañón, department of Loreto in Peru. [Foreign Language] We urge Citi to please stop financing oil companies that are destroying our forests. They are killing us little by little. [Foreign Language] Oil is poison.
Oil destroys everything in its path: biodiversity, human life, and thus worsens climate change. We urge you to search within your heart so that we can protect the only thing of value we have left, which is our lives. [Foreign Language] We are protectors of life, of species, of humanity, and we will not allow you to finance PetroPerú and other companies. We will not allow extractivism in our territory. [Foreign Language] We are uniting the three nations, Achuar, the One Piece, and the Chopra, to resist and take a stand to say no to the exploitation of Block 64. [Foreign Language] We are firmly determined to defend even our own lives.
Please, gentlemen of the bank and shareholders of Citi, you are also human beings. You have children, you have siblings, and you are parents. Let's not destroy our lives because if there is no forest, then there is no river, there is no land, and no one will survive. [Foreign Language] No matter how much money you have, we'll be able to survive when the land no longer provides food to feed us, when the air is polluted, and when there is no water to drink. Let us all come together to defend the land. [Foreign Language] Invest in life. Do not finance death. Financing oil companies, especially oil extraction in the Amazon, is financing death and destruction.
[Foreign Language] Let us be doctors of the earth, not murderers of the earth. To end, we encourage all investors to support the proposal and for the board to seriously examine Citi's impacts on Indigenous rights.
The board of directors recommends that stockholders vote against this proposal for the reasons stated in the proxy statement. Ms. Dropkin, are there any questions on this proposal?
Yes, we have a question from Mary Maharas. Just months after Citi released its Indigenous rights report, a Citi client, PetroPerú, was responsible for another spill from its North Peruvian pipeline in the Amazon. The spill poisoned rivers and lagoons, leading to an alarming humanitarian crisis in Indigenous communities, which had limited sources of drinking water and readily accessible food for multiple weeks.
As of this month, community leaders now say that adults and minors are experiencing severe rashes. What steps does Citi take to address these salient, real-time, and life-threatening issues related to its clients?
While we do not comment on specific clients or projects by name as a practice, we very much consider Indigenous peoples' rights in general corporate purpose transactions, and that falls under our long-standing environmental and social risk management policy areas of high caution. Last year, we published a report that really provides the details on the international human rights frameworks that we align with, and it details our processes for identifying transactions that could have potential risks to Indigenous peoples' rights. We really believe this report is a very positive contribution to the field because it really helps clarify how banks assess and measure against risk in this area. I encourage you to read the report.
It really goes into quite a lot of detail. It's readily available on our website. Now, regarding the oil and gas industry in the Amazon, this is an area where we have continued very strong diligence and discussions at senior levels. Our ESRM policy areas of high caution flag transactions with any potential activity related to the Amazon for enhanced due diligence. In addition, last year, we clarified in our policy framework that we do not participate in project-related finance for expansion of oil and gas operations in the Amazon.
Mr. Dugan, there are no further questions on this proposal.
The next item is stockholder proposal 7, requesting a report to shareholders on financial statement assumptions and climate change. Operator, is Stefan Padfield on the line.
My name is Stefan Padfield, and I am the executive director of the Free Enterprise Project, which is part of the National Center for Public Policy Research. The National Center is the proponent of proposal 7, which asks the company to seek an audited report assessing how applying the findings of the Energy Policy Research Foundation and similar studies would affect the assumptions, costs, estimates, and valuations underlying its financial statements. Why is such a report necessary? A recent article by Dr. Bjorn Lomborg, who was once named one of Time magazine's 100 most influential people in the world and who is currently a visiting fellow at Stanford University's Hoover Institution, can provide a good bit of the answer.
The article is titled, "Time to Pull the Plug on Corporate Virtue Signaling," with a subtitle that reads, "The Era of Being Cheered On for Every Green Promise and Vow, Regardless of How Silly or Self-Defeating Has Come to an End." In the article, Dr. Lomborg notes that many banks who had a fling with green policies have now dumped them, with Wells Fargo officially abandoning its goal of achieving net-zero emissions across its financial portfolio by 2050. Why? Because the truth is that these energy transition promises were always an inefficient way of helping the planet and very short-sighted. To put it in my own words, companies should stop undermining our growth and security, as well as the innovation that is tied to them, in pursuit of some utopian net-zero quest that is utterly meaningless so long as China and other large nations refuse to similarly hobble themselves.
Returning to Dr. Lomborg, he concludes in part by arguing that shareholders need to ask hard questions about what these policies really do for the planet and what they add to the bottom line, and that is precisely what we are doing here. In conversations with Citi, I was told that there are no citations in our public reports to the EPRF, which questions the climate hysteria assumptions underlying net-zero commitments, while the IEA, which supports such commitments, at least as interpreted, is cited at least 11 times. Is anyone else starting to think, "Echo Chamber"? We have not even touched on the issue of potentially de-banking legitimate and necessary fossil fuel providers, an issue raised in our proposal but notable only for its absence in the company's opposition. For all these reasons, I ask you to vote in favor of proposal 7.
The board of directors recommends that stockholders vote against this proposal for the reasons stated in the proxy statement.
Ms. Dropkin, are there any questions on this proposal?
Mr. Dugan, there are no questions on this proposal.
The next item is stockholder proposal 8, requesting a report disclosing the board's oversight regarding material risks associated with animal welfare. Operator, is Brianna Harrington on the line?
Good morning. I'm Brianna Harrington, the shareholder advocacy coordinator and research analyst at Harrington Investments.
Citi claims to have robust policies and procedures in place to address the material risks posed to the company, including attention to areas of high caution, risks to biodiversity and flora and fauna, but then perplexingly backtracks stating, "Should animal welfare-related risks become material to Citi's operations or clients, our existing stakeholder engagement and risk management processes would enable us to identify, evaluate, and address these risks accordingly." Animal welfare risks associated with cruelty to animals are, in fact, very material to our company, and the contradictory statements made by Citi in this very proxy statement are an insult to the intelligence of all stakeholders. Which is it, Citi? Do you have adequate oversight and/or risk management processes already in place, or do you deem animal welfare-related risks immaterial?
Still, we have yet to receive a definitive answer or genuine transparency on what our company is doing, if anything, to conduct sufficient due diligence. Ethicalconsumer.org lists Citigroup as being among the worst banks for animal exploitation, noting their heavy financial involvement in the factory farming industry. BanksforAnimals.org, a project of international organization Synergy Animal, hosts a database of financial institutions methodically evaluating them in relation to animal welfare oversight. Out of 100 points, Citigroup earns zero. Just this morning, I did a quick online search. Does Citigroup care about animal cruelty? My search engine's AI overview produced this response.
While Citigroup has not explicitly stated a policy against animal cruelty, there's evidence to suggest it may not adequately address the issue." It continues, "Its investments and activities may contribute to issues related to animal cruelty, particularly through its support of industry linked to factory farming." When addressing the scope of animal welfare, factory farming is but one facet, yet inextricably linked to other material concerns, including availability and access to resources, impact on global food systems, health and safety/disease, and climate change. Simply, animal cruelty is not just bad for business; it is bad business. This statement might come off a bit harsh, but our intent is to press for progress towards a more humane society and encourage Citi to set a standard. We're not trying to hurt any feelings. However, corporations don't have feelings. Corporations don't feel pain and suffering. Animals, they do. Thank you.
The board of directors recommends that stockholders vote against this proposal for the reasons stated in the proxy statement. Ms. Dropkin, are there any questions on this proposal?
Mr. Dugan, there are no questions on this proposal.
If you have not done so already, please vote now on the portal. I declare the polls closed. While the votes are being counted, we will respond to questions about the company. Ms. Dropkin, are there any questions?
Yes. The first question relates to financial performance. There are three questions on this subject, and we will take a representative question, which comes from Fabien Mendy. As a shareholder, I recognize 2024 shows a much better performance than 2023. My question is, how are you doing to enhance the shareholder value and make the bank what it used to be, the best global bank?
Thank you very much for the question.
We're a fundamentally better bank today than we were a few years ago, and our recent results are another set of proof points that the new strategy we put in place is improving returns and it is delivering for our shareholders. In 2024, we had our highest revenue since 2010 and delivered positive operating leverage for the firm overall and in every one of our five businesses. This is a streak that continued in the first quarter. We also increased our returns in each of our five businesses during the first quarter. Now, all this earnings power has enabled us to generate additional capital for our shareholders. This past quarter, you saw that we returned $2.8 billion in capital, and that included $1.75 billion of buybacks as part of our $20 billion plan.
That's about $250 million more than we had originally guided, and it's our highest quarterly amount since 2022. What it demonstrates is our commitment to buying back stock, especially given where we're trading. Now, as structural changes likely reshape the global trade and economic landscape, Citi's core advantages, which is our global footprint, and just the sheer breadth and depth of our products and services uniquely differentiate us in serving our core clients. With our robust balance sheet and an organizational structure that now fits our strategy, we can navigate through any environment from a position of strength as the preeminent banking partner for clients with cross-border needs.
Our next question comes from Susan Ramsack. When will Citi do a stock split to offset the reverse split they did years ago? The current price is basically the same as it was when the reverse split occurred.
Our portfolio needs the stock price to be $500 per share just to break even. A normal stock split would help tremendously.
We don't believe that this is something that would make sense at this time. The management team and I are highly focused on generating the returns that our shareholders expect and deserve going forward, and our recent results are proof points that the new strategy is indeed improving returns and delivering for our shareholders.
We have received two questions on EPA funds and will take a representative question, which comes from Gregg Spooner. Citigroup signed a contract with the federal government in 2024 to help make funds for green banking, as provided for in the Inflation Reduction Act. Citigroup has recently refused to honor that agreement and is not providing those government dollars to the nonprofit awardee.
Will Citi honor their contractual agreement to manage and disburse those green banking funds according to the law?
This matter is in litigation, so I'm limited in what I can say. I want to reiterate what we have said publicly. Citi was named the financial agent of the U.S. for the Greenhouse Gas Reduction Fund. In this capacity, we have a fiduciary responsibility to the U.S. government, and we have been working to address their concerns regarding the federal grant program. I want to be very clear. Our role as a financial agent does not involve any discretion over which organizations receive grant funds. Citi will, of course, abide by the law, and we are very hopeful that this matter will be resolved in a timely fashion.
The next question comes from Bob Long. Why do we need 16 executive officers?
As our stakeholders know, last year, we aligned our organization structure with our strategy to build a simpler, less bureaucratic Citi. Part of that took out four layers of the organization and flattened it. As a result, we now have 17 executive officers, including myself, and each member plays a very important role in executing Citi's strategy and delivering on our top two priorities: improving business performance and executing the transformation. Importantly, the leaders of our five core businesses now sit on my leadership team, and they have a direct line to me. We did this very deliberately to ensure these leaders are fully engaged and accountable for how we run the bank.
I'm very confident we have the right leadership team in place to continue driving the businesses forward with conviction and to lead clients from the front, and that our continued earnings momentum is a proof point that this approach is proving to be very effective.
We have received five questions related to climate change, and we will take a representative question, which comes from Fabien Mendy. What are your views in terms of climate change? I think the decision to say the SEC climate rules is adequate, and they should be revoked. It is impossible for banks to be the global arbitrators in terms of climate change through control of Scope 3 emissions. What are your thoughts in this regard? Do you have a significant climate change contingency or liability?
Citi's climate strategy is to support our clients through the transition and help them deliver the low-carbon solutions of the future, whilst also managing climate risk and supporting energy security and affordability. Our approach reflects the need to transition whilst continuing to meet the world's current and future energy needs. We very much recognize the path may not be the same for developed and emerging markets. As we are supporting clients in their transitions across different regions, we are also supporting clean energy solutions through our trillion-dollar sustainable finance goal, which we are more than halfway to meeting, as well as our work on our net-zero commitment. Transition finance to help decarbonize high-emitting industries is a multi-trillion-dollar opportunity for the global economy over the next few decades.
The role of finance is to make capital available, and we believe that Citi is well-positioned for this opportunity around the world, and we're going to support our clients accordingly.
We have received four questions related to fossil fuel financing and our business in Israel. We're going to take a representative question from Yousef Maneer, the Youth Climate Finance Alliance, who states that they are representing questions from young people and students, who would like Citi to address its position on the following topics: fossil fuel financing and Citi's work on behalf of Israel.
Thank you for the questions. I'll begin with fossil fuel and then turn to our business in Israel. On fossil fuel, there are several factors, and that includes AI and the digital economy. They've just led to a surge in global electricity demand.
We want to ensure that the electricity that is produced is as clean as possible. There simply isn't enough renewable energy to meet today's current demands in the world. We need massive investments in energy to sustain the world's current and growing needs. In other words, energy security and the energy transition are not mutually exclusive. We have to solve for them simultaneously, and Citi's approach is centered on this belief. We're working with our clients as they decarbonize their businesses and support clean energy solutions through our trillion-dollar sustainable finance goal. As I just mentioned, we're very proud that we're more than halfway to meeting this commitment. Public policies that incentivize investments in clean energy technologies and that incentivize the critical upgrades to our electric grids and transmission systems are going to be absolutely essential to meeting our energy needs whilst modernizing our energy system.
To this end, we are working with the Glasgow Financial Alliance for net-zero to focus on public-private partnerships that can provide access to private finance at scale and that can address barriers to mobilizing capital in emerging markets. Transition finance is a multi-trillion-dollar opportunity for the global economy over the next few decades. The role of financial institutions is to make capital available, and as a leading global bank, Citi has an important role to play in that. Now, turning to the second part of the question regarding our business in Israel, Citi has had a presence on the ground in Israel for 25 years. We are the only American bank in the country, and this continues to be a tremendous source of pride for our firm. We support Israeli clients in the public and in the private sector, as well as multinational companies who do business there.
Citi maintains a general practice of not commenting on specific companies or projects or transactions out of respect for confidentiality. This principle applies regardless of whether we're involved in financing a particular company or not. We do take our commitment to evaluating human rights very seriously. Our engagement with clients is guided by our environmental and social risk management framework, and that helps us evaluate the risks associated with particular client transactions and activity, and that includes weapons. As a global company, our colleagues represent the full spectrum of faith and nationalities. We have colleagues in Israel, in Jordan, in Egypt, throughout the region. Our priority, first and foremost, is to support our people in any way we can. We operate the bank independent of religious and political views, and we stand united against anti-Semitism, Islamophobia, and acts of hatred in any form.
The next question comes from Isaac Wheeler. Given the cascade of financial institutions, from Chase to Schwab, adopting explicit guarantees of non-discriminatory de-banking policies in response to shareholder concern, would Citigroup consider adopting a similar guarantee? We do not discriminate. We serve a very wide range of customers, including small businesses and religious organizations, and our goal is simply to serve them with excellence whilst continuing to attract new ones. We operate the bank independent of religious and political views, and we prohibit discrimination. We never want to turn customers away, and we never want to close accounts unnecessarily. We have a lot of processes and controls in place to support this. We do appreciate the frustration that customers feel when we have to end our relationship with them, and we are prevented from fully explaining why.
We are working with the federal government to change the regulatory dynamics that cause these sorts of issues. We have a full suite of current policies that is posted to our website, and I encourage you to read them. We are also looking at several policies in light of Washington's concerns about what's being called de-banking to make sure that they are clear that we do not discriminate.
Our next question is from Kathleen Devaray. What is the bank's plan to cope with the current uncertainty affecting U.S. and global markets?
We are very deeply engaged with our clients all around the world. I have to say, CEOs seem to be getting their arms around issues rather quickly.
While deals are still happening, what we're seeing in most clients are pausing plans given the current uncertainty and volatility, and that can be in their CapEx or other major strategies they have. With that said, we do expect a lot of activity as the growth rates and employment outlook get clearer. That may take some time. While the mix of business at Citi will be different depending on how all this plays out, we do expect it to be an active environment. It is going to be busy as the clarity emerges. On the consumer front, the consumers are discerning in their spend at the moment. They're really displaying good financial discipline. Overall, they are resilient. They're in good financial health.
We simply don't know the impact of the different changes on the economy yet, and this is going to take a few quarters to really play out. If I take the step back, and I've talked about this several times, Citi is uniquely positioned to support our cross-border clients who are at the heart of our strategy and who need our help to adapt to this new world order because that is what this is. We are in a strong financial position to help them through this. We're very well capitalized. We have high reserves. We have good business momentum. We have the right leadership team in place to drive the businesses forward with conviction and to lead clients from the front. Whether it was COVID, regional banking crisis, the war in Ukraine, our businesses perform well through volatility and uncertainty.
We are a port in the storm for our clients. We are confident that our performance in the current environment is going to be no different. We remain focused on delivering for our clients as only Citi can.
The next question is from Alan Crim. Will you return to holding in-person annual meetings at Citigroup headquarters' offices next year? Important to do so.
While no decision about next year has been made, virtual meetings offer numerous benefits, we think, including enhanced flexibility, cost savings for our stockholders, reduced travel expenses, and greater comfort and security for our stockholders and employees while enabling stockholders from around the world to join the meeting. At our virtual meetings, stockholders can listen, they can vote, and they can submit questions on the virtual meeting platform from the comfort of their homes or offices or wherever they may be.
Hosting a live meeting is significantly more expensive than a virtual meeting and is, frankly, not the best use of stockholder resources. Having received supportive feedback from our stockholders, we decided to continue using the virtual format this year. We note that our peers at other financial institutions and major corporations also elect the virtual format by a wide margin. We will continue to assess the format of our annual meeting, of course, taking into account feedback from you and other stockholders, and we'll make the choice that we believe is in the best interest of our stockholders.
Our next question comes from Jim Marek. With the soft data showing a weakening of the consumer, what is Citi seeing with the strength of the consumer?
It is early days to know what the impact of the shifts in policy in the U.S. are.
What we see at the moment is consumers being resilient. They're broadly in good financial health. As I've said, they're discerning in their spend. They're thoughtful about where they're putting their dollars, and they are displaying very good financial discipline. The early data from April continues in line with what we were expecting. Spend has held up. We saw essentials running ahead of travel and entertainment. We saw some pockets of softness in discretionary categories like electronics and furniture. We saw that particularly in our Citi retail services portfolio. Consistent with what we've seen for a while, those with lower incomes are more cautious. They're more deliberate with their spending, but there's certainly no signs of distress. We believe there has been some pull forward in spend as consumers digest the tariff situation and look at pulling forward some of their acquisitions.
On the consumer credit side, it's performing well. All of the credit metrics we see are stable. They're trending in line with our expectations and just following the typical seasonality trends at this time of year, and delinquencies are stabilizing. For the rest of 2025, we simply don't know yet the impact of all the changes on the economy and what they're going to be in terms of spend, employment and unemployment, tax cuts. This is going to take quite a few quarters to play out. We are well positioned if we do see a deteriorating environment. Both of our card portfolios are very well reserved as an aggregate, 8.2%. Eighty-five percent of our customers are prime. We've also been proactive in the last couple of years, tightening risk in acquisitions and our existing programs.
We feel well positioned for what's going on, and we hope that the consumer continues to be resilient and in good financial health.
Our next question is from Mindy Wasserman. Do you see an improvement in commercial real estate, especially office and apartments, and the regional banks overseeing much of this this year or next?
Look, our exposure hasn't changed materially since the data that was provided in our 10-K. We've been disciplined with our loan portfolio and growth, and it's consistent with our risk appetite framework. That framework includes credit risk limits that take into consideration concentrations, including country, industry, credit rating. Importantly, these limits apply across the firm in aggregate, and we continuously analyze our portfolios under a range of different stress scenarios. Given all of that, what does it mean for the portfolio?
We are confident about the quality of our own commercial real estate portfolio. We are relatively small in office, so I feel very comfortable here.
Our next question is from Neil Johnson. The transformation process launched at Citi in 2022 laid out investments aimed at improving operations and creating efficiencies. What is the status of the process now? Are the investments likely to decrease now? Can management be confident that there will be no more Revlon, miscrediting accounts for internal control fines from regulators?
Thank you for the question. It's an important one. Our transformation is indeed that. It's a transformation. It's a very large body of work because we are overhauling our infrastructure. We're reducing and modernizing our applications. We're simplifying our processes, putting in the right culture, and making sure that our risk and controls are in strong shape.
I feel very good about the progress that we've made, and I'm really seeing more and more benefits just in how we run the bank. Now, we fell behind in data last year, particularly regarding regulatory reporting, and we took action to get that into good shape, and we are confident in how that is now progressing. This year, we do expect our transformation investments to increase to address specific areas such as data and regulatory reporting, as well as some areas in risk and controls. I fully recognize that our transformation investments, therefore, remain elevated. We do expect them to come down in 2026 and beyond as more and more of the programs of work are completed.
In many parts of risk management and compliance programs, for example, we are already operating at or close to the target states that we laid out, and the focus is now making sure that they're actually delivering the full risk reduction and outcomes that are expected in a sustainable way. If you've heard from me over the last couple of quarters, I'm pretty excited about the work we've been doing on automating and enhancing our controls. That includes simplifying and standardizing controls across common activities. We've put a lot more preventative and detective controls in place, and we're upgrading others that weren't effective enough, and we're driving the automation and straight-through processing of our end-to-end actions across the bank. We have spoken consistently about the work to make our technology infrastructure modern and simple. That's what you'll continue hearing me talk about in the next few quarters.
Many of these efforts at modernizing and simplifying our overall infrastructure are impacting how we run the bank better and more efficiently. I really believe we have the right plan that we're focused on executing to getting the various articles to closure, to getting to the target states for our overall infrastructure and risk and controls. We will be a better bank for our clients, for our shareholders, as well as for our regulators. We're well down the path.
Next question is from Mindy Wasserman. What deregulation of the banking industry do you expect in 2025?
Citi has, and we continue to fully support the efforts to strengthen regulations that promote the safe and sound operation of banks and the stability of the U.S. financial system, particularly in light of a lot of the innovations that are occurring in the digital asset and in the technological arena.
I have to say I'm really encouraged by the conversations in D.C. that the administration is aligned with the principle that regulation should focus on true safety and soundness. We're also hopeful that we'll see improvements to our capital requirements that will level the playing field so we can lend more money, we can support growth, ensure the access to credit for consumers and small businesses here at home in the States, as well as being internationally competitive. I very much hope to see the delivery against the different areas that the administration have laid out. I'm optimistic.
You received four questions related to our work in the Gulf South. I'm going to read a representative question from Hannah Figal on behalf of Rochetta Ozine, co-director of the Gulf South Fossil Finance Hub.
Can you provide specific examples of how your bank is actively addressing its role in funding projects that contribute to environmental racism in the Gulf South, and what measures are being implemented to ensure accountability for these investments?
We strongly disagree with the premise of the question. That said, as part of our long-standing environmental and social risk management policy, we closely review any project-related financing, and we consider our ESRM policy areas of high caution on human rights concerns. That includes environmental justice concerns, and we look at these very carefully before we proceed with any financing. We require environmental and social assessment information, and that includes information on the socioeconomic aspects of the surrounding community, as well as how project sponsors engage on project impacts and provide grievance mechanisms on an ongoing basis.
We have received two questions on buybacks from S.H. Holt and Kathleen Devaray.
How much spent on dividends in 2024, and how much on share buybacks? How exactly do share buybacks benefit to shareholders who don't sell?
In 2024, we returned $7 billion in capital, and that was in the form of dividends and in buybacks, of which buybacks were $2.5 billion. Now, given where we're trading, buybacks are accretive to earnings per share and returns, and they benefit shareholders. We are strongly committed to making buybacks, and we expect to and look forward to fulfilling the $20 billion buyback plan that our board approved.
Our next question is from Jeff Piggott. Later today, the U.S. House of Representatives Financial Services Committee will hold a hearing entitled, "Exposing the Proxy Advisory Cartel: How ISS and Glass Lewis Influence Markets." What is the company's view on the influence of these two firms on the proxy voting process?
We are very aware that this is a matter that Congress is looking into, and I assure you we will monitor those deliberations and pay very close attention to the actions taken by Congress.
Mr. Dugan, there are no further questions.
I will now ask the secretary to report on the votes taken at today's meeting.
Thank you. Based on the proxies voted prior to today's meeting and the votes cast at today's meeting, I'm able to report that for Proposal 1, relating to the election of directors, each nominee has been elected with at least 94.9% of the votes cast voting in favor of each nominee. Proposal 2, relating to the ratification of KPMG as Citigroup's independent registered public accounting firm, has passed with approximately 93.2% of the votes cast voting in favor of this proposal.
Proposal 3, relating to the approval of Citi's 2024 executive compensation, has passed with approximately 91.3% of the votes cast voting in favor of this proposal. Proposal 4, relating to the approval of additional shares for the Citigroup 2019 stock incentive plan, has passed with approximately 71.9% of the votes cast voting in favor of this proposal. Proposal 5, a stockholder proposal requesting a shareholder vote regarding excessive golden parachutes, has not passed with approximately 31.7% of the votes cast voting in favor of this proposal. Proposal 6, a stockholder proposal requesting a report on the effectiveness of Citi's policies and practices in respecting Indigenous Peoples' Rights, has not passed with approximately 13.3% of the votes cast voting in favor of this proposal.
Proposal 7, a stockholder proposal requesting a report to shareholders on financial statement assumptions and climate change, has not passed with approximately 1.11% of the votes cast voting in favor of this proposal. Proposal 8, a stockholder proposal requesting a report disclosing the board's oversight regarding material risks associated with animal welfare, has not passed with approximately 6.2% of the votes cast voting 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 8K 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.
Move it.
Second.
All in favor?
Aye.
Thank you. Thank you.
I declare the meeting adjourned.
This now concludes the meeting. Thank you for joining, and have a pleasant day.
The host has ended this call. Goodbye.