April 17, 2014
Directorships, 2008 – 2012: 5*
Total director compensation, 2008 – 2012: $3,626,109**
Average annual director compensation, 2008 – 2012: $725,222
Average compensation per full year of service as director: $244,276
*Zedillo was a director of the Electronic Data Systems Corporation from October 2007 to August 2008; however, compensation for his service in 2008 is not available and therefore not included in the above calculations.
**Grupo Prisa, a Spanish firm, denotes its director compensation in Euros. Zedillo’s 2011 and 2012 compensation is converted into US dollars using the IRS’ Yearly Average Currency Exchange Rates. Prisa’s 2010 director compensation is reported in aggregate rather than individually—therefore, Zedillo’s compensation for that year is not included in the above calculations.
Ernesto Zedillo was the president of Mexico from December 1994 to 2000, the last of a line of presidents who, with the Institutional Revolutionary Party, held a monopoly of state power for the majority of the twentieth century. He had previously served as Undersecretary of Budget, Secretary of Economic Programming and the Budget, and Secretary of Education.
Following his term as president, Zedillo joined the faculty at Yale, where he is currently the director of the Center for the Study of Globalization. Zedillo also received M.A. and Ph.D. degrees from Yale. From 2004 to 2010, Zedillo chaired the Global Development Network, an international organization that aims to train economists and social scientists in developing countries. He also served on the International Commission for the Reform of the World Bank in 2008 and 2009, and since 2002 he has served as a member of the Foundation Board of the World Economic Forum.
Early in his term as president, Mexico’s economy went into a tailspin that was widely referred to as the “Tequila Crisis,” caused largely by the liberalization of capital inflows in previous years and the U.S. Federal Reserve’s decision to hike short-term interest rates. Responding to the crisis, Zedillo signed a $20 billion bailout package that Treasury Secretary Robert Rubin orchestrated. The deal helped Mexico pay back its debts, including those to the biggest banks in the United States. Rubin, like Zedillo, would go on to serve on Citigroup’s board of directors.
Zedillo was elected to Citigroup’s board of directors in April 2010. Two years later, in an extraordinary move, shareholders voted by a margin of 55-45 percent to reject the board of directors’ $14.9 million pay package. Less than 3.0 percent of CEO pay packages received a no vote from shareholders that year. The stunning, albeit nonbinding, rejection of the directors’ and CEO’s performance was understandable, given that in the 12 months since the previous shareholders meeting Citigroup had woefully underperformed the S&P average. During Zedillo’s tenure thus far as a Citigroup director, the financial giant has fared far worse than the S&P average.
Zedillo is also a director of Alcoa, which he joined in 2002. While the company’s stock price has performed below the S&P average for much of that time, in 2009 and 2010 Alcoa’s stock closely tracked the average. For those years, CEO Klaus Kleinfeld was paid $11.9 million and $13.3 million, respectively. Over the following two years—2011 and 2012—Alcoa’s stock performed much worse than the S&P. Yet Zedillo and the board of directors awarded Kleinfeld with pay packages worth $14 million and $14.3 million. Part of Kleinfeld’s raise after 2010 may have been due to the fact that former CEO Alain Belda, who continued to receive paychecks as Executive Chairman after handing Kleinfeld the reigns in May 2008, stepped down at the 2010 annual shareholder meeting. (Belda was paid $10.2 million for his service as chairman in 2009, a year during which he also received just shy of half a million dollars for his role as chairman of IBM and Citigroup’s compensation committees.)
Zedillo has also been a director of Procter & Gamble since 2001. Since the end of the recession in early 2009, the company’s stock price has grown significantly slower than the S&P average. From July 1, 2009 to June 30, 2010, CEO Robert A. McDonald’s first year leading the company, P&G’s stock tracked the S&P average for much of the year but trailed below towards the end. For his services, the board rewarded McDonald with $13.1 million. The following year, when the company’s stock fared far worse than the average, McDonald made $16.2 million, representing a 23.4% raise.