GATX CORP, DEF 14A, 1996-03-18

GATX CORP
DEF 14A, 1996-03-18
TRANSPORTATION SERVICES

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<PAGE> 1

SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant /X/

Filed by a party other than the registrant / /

Check the appropriate box:

/ / Preliminary proxy statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))

/X/ Definitive proxy statement

/ / Definitive additional materials

/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

GATX CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):

/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.

/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------

(5) Total fee paid:
- --------------------------------------------------------------------------------

/ / Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------

/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.

(1) Amount previously paid:
- --------------------------------------------------------------------------------

(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------

(3) Filing party:
- --------------------------------------------------------------------------------

(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2

<TABLE>
<S> <C>
[LOGO] GATX CORPORATION
500 WEST MONROE STREET
CHICAGO, IL 60661
312-621-6200
</TABLE>

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

------------------

To our Shareholders:

The Annual Meeting of the Shareholders of GATX Corporation will be held at
the Company's principal office on the 42nd Floor, 500 West Monroe Street,
Chicago, Illinois 60661, on Friday, April 26, 1996, at 9:00 A.M., for the
purposes of:

1. electing directors;

2. approving the appointment of independent auditors for the year 1996;
and

3. transacting such other business as may properly come before the
meeting.

If you do not expect to attend in person, it will be appreciated if you
will promptly vote, sign, date and return the enclosed proxy.

David B. Anderson
Secretary

March 15, 1996
<PAGE> 3

<TABLE>
<S> <C>
[LOGO] GATX CORPORATION
500 WEST MONROE STREET
CHICAGO, IL 60661
312-621-6200
</TABLE>

March 15, 1996

PROXY STATEMENT
------------------

GENERAL

The enclosed proxy is solicited by the Board of Directors of GATX
Corporation (the "Company") and may be revoked at any time prior to its exercise
by any shareholder giving such proxy. A proxy may be revoked by duly executing a
subsequent proxy relating to the same shares or by attending the Annual Meeting
and voting in person. All shares represented by the proxies received and not
revoked will be voted at the meeting.

All expenses in connection with the solicitation of this proxy will be paid
for by the Company. In addition to solicitation by mail, the Company has
retained Chemical Bank to solicit proxies on behalf of the Board of Directors
for a fee not to exceed $7,500 plus reasonable out-of-pocket expenses and
disbursements. Chemical Bank may solicit proxies by mail, telex, telegraph or
personal call. In addition, officers, directors and regular employees of the
Company, who will receive no extra compensation for their services, may solicit
proxies by mail, telex, telephone, telegraph or personal call. The Annual Report
for the year 1995, including financial statements, was mailed to all
shareholders together with this proxy statement on or about March 15, 1996.

VOTING SECURITIES

Only holders of Common Stock, both series of $2.50 Cumulative Convertible
Preferred Stock and $3.875 Cumulative Convertible Preferred Stock of record at
the close of business on March 8, 1996 will be entitled to vote at the meeting
or any adjournment thereof. As of that date there were 20,148,305 shares of the
Common Stock, 39,120 shares of the $2.50 Cumulative Convertible Preferred Stock
and 3,390,880 shares of the $3.875 Cumulative Convertible Preferred Stock of the
Company issued and outstanding. Each share is entitled to one vote. New York law
and the Company's bylaws require the presence in person or by proxy of shares
representing a majority of the votes entitled to be cast at the annual meeting
in order to constitute a quorum for the annual meeting. Shares represented at
the meeting but as to which votes are withheld from director nominees or which
abstain as to other matters, and shares held by brokers for their customers and
represented at the meeting but as to which the brokers have received no voting
instructions from their customers and thus do not have discretion to vote on
certain matters ("Broker Non-Votes"), will be counted in determining whether a
quorum has been attained.

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<PAGE> 4

Assuming that a quorum is present, the election of directors will require a
plurality of the votes cast and ratification of auditors will require a majority
of the votes cast, with the result that shares as to which votes are withheld or
which abstain from voting on these matters and Broker Non-Votes will not be
counted and thus will not affect the outcome with respect to these matters.

ELECTION OF DIRECTORS

Nine directors are to be elected, each for a term of one year, to serve
until the next annual meeting of shareholders or until their successors are
elected and qualified. Unless specified to be voted otherwise, each proxy will
be voted for the election of the nominees named below. Mr. Glasser, who has been
a director since 1974, and Mr. Cozad, who has been a director since 1976, are
not standing for re-election. All of the nominees have consented to serve as
directors if elected. If at the time of the Annual Meeting, any nominee is
unable or declines to serve, the proxies may be voted for any other person who
shall be nominated by the present Board of Directors to fill the vacancy, or the
Board may be reduced accordingly. Shareholders do not have cumulative voting
rights with respect to the election of directors.

NOMINEES FOR DIRECTORS

<TABLE>
<CAPTION>
Shares of
Common Stock
Beneficially
Owned as of
Director March 8,
Name and Principal Occupation Age Since 1996(1)
- ---------------------------------------------------------- --- -------- ------------
<S> <C> <C> <C>
Franklin A. Cole.......................................... 69 1984 2,000
Chairman of the Board, Croesus Corporation
James M. Denny............................................ 63 1995 1,000
Managing Director, William Blair Capital Partners, LLC
William C. Foote.......................................... 45 1994 400
President and Chief Executive Officer, USG Corporation
Deborah M. Fretz.......................................... 47 1993 400
Senior Vice President -- Logistics, Sun Company, Inc.
Richard A. Giesen......................................... 66 1982 700
Chairman of the Board and Chief Executive Officer,
Continental Glass & Plastic, Inc.
Miles L. Marsh............................................ 48 1995 1,000
Chairman of the Board and Chief Executive Officer, James
River Corporation
Charles Marshall.......................................... 66 1989(2) 4,000
Retired; Former Vice Chairman of the Board, American
Telephone and Telegraph Company
</TABLE>

2
<PAGE> 5

- ---------------

(1) Unless otherwise indicated, each nominee either possesses sole voting and
investment power with respect to this stock or shares such powers with a
spouse.

(2) Mr. Marshall previously served as a director of the Company from 1978 to
1982.

(3) This includes 84,000 shares Mr. Zech has the right to acquire within 60 days
of March 8, 1996, under outstanding stock options issued under the Company's
Long Term Incentive Compensation Plan. This also includes 200 shares owned
by adult children with respect to which Mr. Zech disclaims any beneficial
ownership.

ADDITIONAL INFORMATION CONCERNING NOMINEES

Mr. Cole was elected Chairman of the Board of Croesus Corporation, a
private investment and investment management company, in November 1984. Mr. Cole
is also a director of American National Bank & Trust Company of Chicago,
American National Corporation, Aon Corporation, CNA Income Shares, Inc., Peoples
Energy Corporation, Duff & Phelps Utilities Income Inc. and Local Initiatives
Support Corporation.

Mr. Denny was elected Managing Director, William Blair Capital Partners,
LLC in September 1995. Mr. Denny previously served as Vice Chairman of Sears,
Roebuck and Co., a merchandising and financial services company, from February
1992 until August 1995 and as Senior Vice President and Chief Financial Officer
of Sears from February 1988 through January 1992. Mr. Denny is a director of
General Binding Corporation, Allstate Corporation and Gilead Sciences, Inc. Mr.
Denny is also Chairman of the Board of Northwestern Memorial Corporation and
Northwestern Memorial Hospital.

Mr. Foote was named Chief Executive Officer of USG Corporation, formerly
known as United States Gypsum Company, an international manufacturer of building
materials and industrial products, on January 1, 1996, having served as
President and Chief Operating Officer since January 1994. He previously served
as President and Chief Executive Officer of USG Interiors from January 1993 to
December 1993, President & Chief Executive Officer of L&W Supply Corporation
from September 1991 to December 1993, and Executive Vice

3
<PAGE> 6

President and Chief Operating Officer of L&W Supply Corporation from December
1990 to August 1991, all of which are subsidiaries or divisions of USG
Corporation. Mr. Foote is a director of USG Corporation. USG Corporation emerged
from bankruptcy in May of 1993, having filed a voluntary petition for
reorganization in March 1993.

Ms. Fretz was named Senior Vice President-Logistics of Sun Company, Inc.,
an energy company, in August 1994. Ms. Fretz previously served as President of
Sun Pipe Line Company and Sun Marine Terminals, which transport and store crude
oil and refined petroleum products for Sun Company and other energy companies,
from October 1991 to 1994 and as Director of Wholesale Fuels Marketing and
Distribution of Sun Company from September 1988 to October 1991.

Mr. Giesen was elected Chairman of the Board and Chief Executive Officer of
Continental Glass and Plastic, Inc., a packaging distribution company, in August
1988. Since 1988, he has served also as Chairman and Chief Executive Officer of
Continental's parent, Continere Corporation. Mr. Giesen previously served as
Chairman of the Board and Chief Executive Officer of American Appraisal
Associates, Inc., a valuation consulting firm, from October 1984 to April 1993.
From 1983 until April 1993, Mr. Giesen also served as Chairman of the Board and
Chief Executive Officer of American Appraisal's parent, RLM Investments, Inc.
Mr. Giesen is also a director of Stone Container Corporation and Asia House
Funds.

Mr. Marsh was named Chairman of the Board and Chief Executive Officer of
James River Corporation, a producer of consumer and commercial tissue products
and food and consumer packaging, in October 1995. Mr. Marsh previously served as
Chairman of the Board and Chief Executive Officer of Pet Incorporated, a branded
food company, from April 1991 until February 1995, and as President and Chief
Operating Officer of Whitman Corporation, a diversified holding company with
interests in soft drink bottling, automobile services and refrigeration
equipment manufacturing, from September 1989 until March 1991. Mr. Marsh is also
a director of Whirlpool Corporation and Hartmarx Corporation.

Mr. Marshall retired as Vice Chairman of the Board of American Telephone
and Telegraph Company in June 1989. Mr. Marshall is a director of Hartmarx
Corporation, Sonat, Inc., Ceridian Corporation, formerly known as Control Data
Corporation, and Sundstrand Corporation.

Mr. Murphy has served as Vice Chairman, Chief Administrative Officer of
Sara Lee Corporation, a diversified manufacturer of packaged food and consumer
products, since July, 1993 and as its Chief Financial Officer from July 1993 to
November 1994. Mr. Murphy previously served as Executive Vice President, Chief
Financial and Administrative Officer of Sara Lee Corporation since June 1979.
Mr. Murphy is also a director of Sara Lee Corporation.

Mr. Zech was named Chief Executive Officer of the Company on January 1,
1996, having served as President and Chief Operating Officer since July 1994.
Mr. Zech previously served

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<PAGE> 7

as President and Chief Executive Officer of GATX Capital Corporation from 1984
to 1994. Mr. Zech is also a director of McGrath RentCorp and two of the
Company's subsidiaries, General American Transportation Corporation and GATX
Capital Corporation.

COMMITTEES OF THE BOARD

The Company's Audit Committee members are Messrs. Murphy (Chairman), Denny,
Foote and Marsh, and Ms. Fretz. The committee's functions include: (i)
recommending to the Board of Directors the appointment of the Company's
independent auditors; (ii) reviewing and approving in advance of each year the
audit and non-audit services and fees of such auditors; (iii) meeting separately
and privately with the independent auditors and the Company's internal auditors
to ensure that the scope of their activities has not been restricted, and to
consider other matters generally pertaining to their audits; (iv) reviewing the
adequacy of internal financial and accounting controls and the results of the
independent and internal auditors' audits thereof; (v) reviewing matters
relating to corporate financial reporting and accounting policies and
procedures; (vi) ensuring that management and independent accountants perform a
proper review of quarterly results prior to public release; and (vii) reporting
its findings on any of the above to the Board of Directors, as appropriate.
During 1995, there were two meetings of the Audit Committee.

The Company's Compensation Committee members are Messrs. Cozad (Chairman),
Denny, Giesen, Marshall and Murphy. The committee's functions include reviewing
and approving for or recommending to the Board of Directors the compensation of
elected officers, subsidiary presidents and other key management personnel of
the Company and reviewing and approving management proposals regarding key
personnel incentive plans and stock option and/or stock equivalent plans. During
1995, there were four meetings of the Compensation Committee.

The Company's Nominating Committee members are Messrs. Marshall (Chairman),
Cole, Giesen and Ms. Fretz. Mr. Glasser is an ex-officio member of the
committee. The committee's functions include: (i) recommending to the Board of
Directors nominees for election as Director; (ii) reviewing the performance of
all members of the Board of Directors in their capacities as Directors,
including attendance and contributions to the Board of Directors deliberations,
and making such recommendations to the Board of Directors as may be appropriate;
(iii) recommending appointments to all Board Committees; (iv) reviewing and
approving acceptance of any outside directorship or trusteeship by senior
Company officers; and (v) making such recommendations to the Board of Directors
as it may deem appropriate from time to time with respect to the size and makeup
of the Board of Directors and related matters. During 1995, the Nominating
Committee held four meetings. The committee will consider nominees recommended
by shareholders of the Company. Such nominations should be submitted to the
Nominating Committee, c/o David B. Anderson, 500 West Monroe Street,

5
<PAGE> 8

Chicago, Illinois 60661, with a complete resume of the candidate's
qualifications and background as well as a written statement from the candidate
consenting to be a nominee and, if nominated and elected, to serve as director.

The Company's Retirement Funds Review Committee members are Messrs. Foote
(Chairman), Cole, Cozad and Marsh. The committee's functions include: (i)
monitoring overall investment performance and receiving reports from the
Company's Retirement Funds Investment Committee pertaining thereto; (ii)
approving recommended changes in broad asset allocation; (iii) approving
recommended changes of investment managers; and (iv) approving recommended
selections of trustees for the retirement plans. During 1995, there was one
meeting of the Retirement Funds Review Committee.

During 1995, there were eight meetings of the Board of Directors of the
Company: the regular annual meeting and seven special meetings.

COMPENSATION OF DIRECTORS

Each non-officer director receives an annual retainer of $24,000, which is
prorated quarterly for a term of less than one year, a Board meeting attendance
fee of $750 and a committee meeting attendance fee of $750 for each meeting of a
committee of the Board of which the director is a member. The chairman of each
committee receives $1,250 for each meeting attended. The Company maintains a
Deferred Fee Plan whereby each non-officer director may elect to defer receipt
of the director's retainer, meeting fee, or both. The amount so deferred
accumulates interest at a rate equal to the 20-year U.S. government bond rate.
One director has elected to participate in this plan for 1995.

Directors who participated in the Executive Deferred Income Plans ("EDIPs";
see page 13) who remain on the Board of Directors until age 65 will be entitled
to payments in amounts which will provide the participant with a maximum yield
of 24% on the fees deferred, with the exact yield dependent upon the age of the
director at the time of his or her participation. Participants who resign their
directorships before age 65 will receive a single payment in the amount of the
fees deferred, plus interest at 10%. If (a) a participant terminates his or her
membership on the Board during the two year period following a "change in
control" of the Company (as described below) other than by reason of retirement,
death, disability or a violation of certain provisions of the EDIPs, or (b)
prior to such event the director has (i) terminated his or her membership on the
board and (ii) reached age 65, the Compensation Committee may, if the director
has executed the amendment to the EDIPs referred to on page 14, direct that the
participant receive a single payment in the amount of the fees deferred, plus
interest, less any amount previously paid under the EDIPs, in lieu of the
scheduled annual payments. The Company has purchased, and is the sole owner and
beneficiary of, life insurance on the lives of participants in amounts that, in
the aggregate, are expected to cover

6
<PAGE> 9

all of the Company's liabilities under the EDIPs, absent a change in the federal
tax laws. During 1995, pursuant to fee deferrals previously made under the 1984,
1985 and 1987 EDIPs and applicable interest thereon, Mr. Cozad received $41,899.

Non-employee directors of the Company are eligible to participate in the
Director Retirement Program adopted by the Company during 1992. Under the terms
of the program, a non-employee director who has a minimum of five years service
on the Board is entitled to receive annual payments equal to the amount of the
director's retainer payable at the time of the director's retirement from the
Board. The number of payments is equal to the number of years the director
served on the board, to a maximum of ten years. Payments begin on the later of
age 70 or the date on which the director retires, and will be made to the
director's surviving spouse should the director die prior to the expiration of
the payment term.

7
<PAGE> 10

COMPENSATION OF EXECUTIVE OFFICERS

The Company's executive officers participate in various incentive
compensation programs more fully described below under the caption "Compensation
Committee Report on Executive Compensation". The table below sets forth the
annual and long-term compensation paid or deferred by the Company to or for the
account of the chief executive officer and each of the other named four most
highly compensated executive officers for the years indicated.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Long-Term
Compensation
-----------------------
Awards Payouts
------------ -------
Annual Compensation Securities
---------------------------------------- Underlying
Other Annual Options/SARs LTIP All Other
Name and Bonus Compensation (# of Payouts Compensation
Principal Position Year Salary ($) ($)(1) ($) shares) ($) ($)(2)
- ---------------------- ---- ---------- ------- ------------ ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
James J. Glasser -- 1995 655,008 439,039(4) 99,127 30,000 502,209 17,220
Chairman of the 1994 610,008 443,689 116,430 30,000 0 4,500
Board(3) 1993 610,008 313,697 65,338 30,000 0 41,559
Ronald H. Zech -- 1995 400,008 247,493 136,972(5) 20,000 179,011 5,972
President and 1994 326,672 303,058 252,175(5) 20,000 0 4,500
Chief Executive
Officer(3)
David B. Anderson -- 1995 142,797 316,115 1,641 20,000 0 0
Vice President,
Corporate Development,
General Counsel and
Secretary(6)
David M. Edwards -- 1995 214,167 109,892 17,887 10,000 0 4,790
Vice President, 1994 196,668 129,475 51,092 10,000 0 4,500
Finance & Chief
Financial Officer
William L. Chambers -- 1995 218,338 100,828 3,625 8,000 0 4,500
Vice President, Human 1994 215,004 103,006 3,625 8,000 0 0
Resources 1993 71,668 30,826 0 12,000 0 0
</TABLE>

- ---------------
(1) Amounts reflect bonus payments earned for the years set forth opposite the
specified payments.
(2) Includes, for 1995, contributions made by the Company to the Company's
Salaried Employees Retirement Savings Plan (the "Savings Plan") in the
amount of $4,500 for Messrs. Glasser, Zech, Edwards and Chambers plus, in
the case of Messrs. Glasser, Zech and Edwards, above-market amounts earned,
but not currently payable, on compensation previously deferred under the
Company's 1984 Executive Deferred Income Plan in amounts of $12,720, $1,472
and $290, respectively.

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<PAGE> 11

(3) Effective January 1, 1996, Mr. Zech was named Chief Executive Officer to
succeed Mr. Glasser, who will cease to be Chairman of the Board immediately
following the 1996 Annual Meeting and will retire effective July 1, 1996.
(4) A portion of Mr. Glasser's bonus was deferred to comply with the
requirements of the Omnibus Budget Reconciliation Act of 1993.
(5) Includes for 1995 and 1994 respectively, $55,433 and $102,240 paid by the
Company to Mr. Zech for relocation expenses and, for the same periods,
$43,643 and $96,602 for tax payments related to relocation.
(6) Mr. Anderson joined the Company on June 26, 1995. The amount shown for Mr.
Anderson in the bonus column includes $175,000 to compensate him for the
loss of benefits he would have received from his former employer had he not
accepted employment with the Company.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

The table below sets forth information concerning individual grants of
stock options made during 1995 to each of the named executive officers.

<TABLE>
<CAPTION>
Potential Realizable
Value at
Individual Grants Assumed Annual
- ----------------------------------------------------------------------------- Rates of
Number of Stock Price
Securities % of Total Appreciation
Underlying Options/SARs for Option
Options/SARs Granted to Exercise or Term(3)
Granted Employees in Base Price Expiration ----------------------
Name (#)(1) Fiscal Year ($/Share)(2) Date 5% ($) 10% ($)
- ------------------------------------ ------------ ------------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
James J. Glasser........ 30,000 9.5% 47.5625 10/27/05 897,354 2,274,071
Ronald H. Zech.......... 20,000 6.3% 47.5625 10/27/05 598,236 1,516,048
David B. Anderson....... 10,000 3.2% 50.5625 07/28/05 317,985 805,836
10,000 3.2% 47.5625 10/27/05 299,118 758,024
David M. Edwards........ 10,000 3.2% 47.5625 10/27/05 299,118 758,024
William L. Chambers..... 8,000 2.5% 47.5625 10/27/05 239,294 606,419
</TABLE>

- ---------------
(1) Except as noted below, 50% of all options granted may be exercised
commencing one year from the date of grant, an additional 25% commencing two
years from the date of grant, and the remaining 25% commencing three years
from the date of grant. Mr. Glasser's options may be exercised in full
commencing June 30, 1996.

(2) The exercise price is equal to the average of the high and low price of the
Company's Common Stock on the New York Stock Exchange on the date of grant.

(3) The dollar amounts under these columns are the result of calculations at
assumed annual rates of appreciation of 5% and 10% as prescribed by the
proxy rules of the Securities and Exchange Commission for the ten year term
of the stock options and, therefore, are not intended to forecast possible
future appreciation, if any, of the Company's stock price. No

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<PAGE> 12

gain to the optionees is possible without an increase in the price of the
Common Stock, which will benefit all shareholders commensurately. A zero
percent gain in the price of the stock will result in no gain for the
optionee.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

The table below sets forth certain information concerning the exercise of
stock options during 1995 by each of the named executive officers, the number of
unexercised options and the 1995 year-end value of such unexercised options
computed on the basis of the difference between the exercise price of the stock
option and the $48.625 closing price of the Company's Common Stock at year-end.

<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised In-
Shares Options/SARs at Fiscal the-Money Options/SARs at
Acquired on Year-End (#) Fiscal Year-End ($)
Exercise Value ---------------------------- ----------------------------
Name (#) Realized ($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------------- --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James J. Glasser........ 30,000 784,163 165,000 30,000 2,835,900 31,875
Ronald H. Zech.......... 0 0 84,000 20,000 1,438,555 21,250
David B. Anderson....... 0 0 0 20,000 0 10,625
David M. Edwards........ 0 0 29,500 10,000 497,616 10,625
William L. Chambers..... 0 0 20,000 8,000 185,750 8,500
</TABLE>

- ---------------
(1) Amounts represent the aggregate before-tax dollar value realized upon the
exercise of stock options as measured by the difference between the exercise
price of the stock option and the market value of the Company's Common Stock
on the date of exercise of such option.

LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR

The table below sets forth certain information regarding long-term
incentive plan awards (expressed in number of units each representing a share or
share equivalent of Common Stock) made to certain named executive officers
during 1995:

<TABLE>
<CAPTION>
Estimated Future
Payouts Under
Number of Performance Non-Stock Price-Based
Shares, or Other Plans(1)
Units or Period Until ----------------------
Other Rights Maturation or Target Maximum
Name (#) Payout (#) (#)
- ------------------------------------------ ------------ ------------- ------ -------
<S> <C> <C> <C> <C>
James J. Glasser.......................... 2,718 1995-1997 2,718 8,154
Ronald H. Zech............................ 1,560 1995-1997 1,560 4,680
David M. Edwards.......................... 702 1995-1997 702 2,106
William L. Chambers....................... 718 1995-1997 718 2,154
</TABLE>

- ---------------

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<PAGE> 13

(1) Payouts are based on the Company achieving pre-established levels of return
on common equity ("ROE") and are paid in Common Stock and cash following
completion of the three year performance period. No payout will be made
unless a target level of performance is achieved. The target amount, plus an
amount equal to reinvested dividends, will be earned if 100% of target ROE
is achieved; the maximum amount plus an amount equal to additional units
representing reinvested dividends, will be earned if target ROE is exceeded
by a specified amount.

TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS

The Company entered into agreements with Messrs. Glasser, Zech, Edwards and
Chambers as of January 1, 1995 and Mr. Anderson as of July 1, 1995, which
provide certain benefits upon termination of employment after a "change of
control" of the Company. All agreements provide for employment with the Company
at salaries to be determined from time to time by the Board of Directors and
with incentive compensation and employee benefits commensurate with the
executives' salaries and positions. Each agreement provides that the executive's
employment may be terminated at will by the Company but, if terminated or
"constructively terminated" within two years following a "change of control" for
any reason other than cause or the executive's death, retirement or disability,
the executive will be entitled to: (A) a lump sum payment equal to (a) twice his
annual salary plus (b) the bonus that would have been payable for the year in
which termination or constructive termination occurs (assuming a bonus of 100%
of target under the Management Incentive Plan ("MIP") or any comparable
successor thereto), less other payments made in accordance with the Company's
standard severance policy; (B) continued participation in the Company's medical,
disability and life insurance plans for up to two years after termination; (C)
financial counseling and tax preparation services; (D) reimbursement for
outplacement services; (E) retirement income benefit equal to the difference
between (i) the monthly retirement benefits the executive would have received if
employment had terminated two years after actual termination and accordingly the
executive had accumulated two additional years of credited service under the
Company's retirement plans at the same compensation (including an amount equal
to the average of the bonuses paid during the five year period preceding
termination which may be considered for purposes of calculating the pension
benefit) in effect on the date of termination, and (ii) any monthly retirement
benefits actually received, commencing no sooner than two years after
termination and payable at the same time and in the same manner as the
executive's other retirement benefits; and (F) if any payment made under the
agreements constitutes an "excess parachute payment" under section 280G of the
Internal Revenue Code of 1986, an additional amount (the "Gross-Up Amount")
which, after payment of all Federal and state income taxes thereon and payment
of the excise tax on the Gross-Up Amount, will be equal to the excise tax
payable by the executive on such excess parachute payment. "Cause" means a
willful and material breach of employment obligations likely to materially
damage the Company;

11
<PAGE> 14

"a change of control" occurs upon: (1) receipt by the Company of a Schedule 13D
confirming that a person or group owns beneficially 20% or more of the Company's
stock; (2) any purchase under a non-Company tender or exchange offer following
which the offeror owns beneficially 20% or more of the Company's stock; (3)
shareholder approval of any merger in which the Company is not the surviving
corporation or survives only as a subsidiary of another corporation,
consolidation or sale of all, or substantially all, of the Company's assets; and
(4) a change in the majority of the Board of Directors of the Company not
recommended by the incumbent directors; and "constructive termination" includes,
unless otherwise agreed to by the executive, a significant reduction in the
nature or scope of authority, duties or responsibilities, a material change in
location, a reduction in perquisites or compensation, the imposition of
unreasonable travel requirements, a diminution in employee welfare plans, a
diminution in eligibility to participate at the same level in bonus, stock
option and other similar plans or a reasonable determination by the executive
that a change in circumstances affecting the Company or its management prevents
the executive from effectively exercising his authorities, duties, functions and
responsibilities. Mr. Chambers' agreement is supplemented by an agreement dated
August 17, 1993 which provides that if, prior to Mr. Chambers reaching age 65,
the Company terminates Mr. Chambers' employment other than for cause, death or
change in control, the Company shall pay Mr. Chambers, at the time of such
termination and in lieu of any other severance payment to which he would be
entitled under policies of the Company then in effect, a lump sum payment equal
to the lesser of (a) twice his then current annual salary or (b) the amount of
his then current monthly salary multiplied by the number of months then
remaining until he reaches age 65, plus in either case, an amount equal to the
product of his then current salary multiplied by his target percentage under the
MIP. Mr. Anderson's agreement is supplemented by an agreement dated May 31, 1995
which provides that in the event of his death or termination for reasons other
than cause prior to his attaining five years of service, the Company will pay
Mr. Anderson or his spouse a payment equal to the benefit he or his spouse would
have been eligible to receive under the terms of the GATX Non-Contributory
Pension Plan for Salaried Employees had he attained five years service prior to
the occurrence of such events. The agreement further provides that if during the
five year period beginning on Mr. Anderson's date of hire Mr. Zech is not Chief
Executive Officer and Mr. Anderson is terminated for reasons other than cause,
the Company will provide a termination payment equal to one year's base salary
and target bonus. The appropriate maximum amount that would be payable under
each of the foregoing agreements (excluding the Gross-Up Amount, if any, payable
thereunder, which is not determinable at this time) on the date hereof, is as
follows: Mr. Glasser ($1,883,245); Mr. Zech ($1,341,180); Mr. Anderson
($771,628); Mr. Edwards ($625,141); Mr. Chambers ($716,861).

Messrs. Glasser, Zech, Anderson, Edwards, and Chambers also participate in
the Company's Long Term Incentive Compensation Plan ("LTICP") under which the
Company's executive officers and certain key employees may receive Stock
Options, Stock Appreciation

12
<PAGE> 15

Rights ("SARs"), Restricted Stock Rights, Restricted Common Stock, Performance
Awards and Individual Performance Units ("IPUs"). The LTICP provides for a
special acceleration of awards upon a "change of control" as described above.
Upon the occurrence of such event, (i) all outstanding Stock Options and SARs
held by executive officers for a period of six months become immediately
exercisable; (ii) optionees will have the right for a period of thirty days
following such event to have the Company purchase or to exercise for cash (a)
Non-Qualified Stock Options (granted without SARs) and SARs (granted in tandem
with Non-Qualified Stock Options) at a per share price (the "Acceleration
Price") equal to the excess over the option price of the highest of (1) the
highest reported price of the Company's Common Stock in the prior sixty days,
(2) the highest price included in any report on Schedule 13D referred to above
paid within the prior sixty days, (3) the highest tender offer price paid and
(4) the fixed formula per share price in any merger, consolidation or sale of
all or substantially all of the Company's assets, and (b) incentive stock
options granted without SARs and SARs granted in tandem with incentive stock
options at a per share price equal to the difference between the then fair
market value of the Common Stock and the option price, provided, however, that
during such thirty day period the Company may purchase any such incentive stock
option or SAR at the Acceleration Price; (iii) all Restricted Stock Rights which
have been outstanding for at least six months will be immediately exchanged for
Common Stock and all Restricted Common Stock held by the Company for
participants will be distributed free of any further restrictions, together with
all accumulated interest, dividends and dividend equivalents, and all earned
Performance Awards; and (iv) all IPUs shall be immediately redeemed on the same
basis as if the performance goals (as hereinafter described) had been achieved,
and for purposes of calculating the redemption value, the fair market value of
the Company's Common Stock will be equal to the average price of the Common
Stock during the five business days immediately preceding such event.

Mr. Glasser will retire from the Company effective July 1, 1996. In
recognition of his many years of service as Chairman and Chief Executive
Officer, outstanding leadership and long-term contributions to the Company, the
Compensation Committee granted to Mr. Glasser an additional option to purchase
50,000 shares of the Company's Common Stock with an exercise price of $46.3125
under the Long Term Incentive Compensation Plan and accelerated the vesting of
that option and the options granted to him in October 27, 1995 to June 30, 1996.
In addition, the Company will provide to Mr. Glasser an office and secretarial
support for a period of five years and access to a Company automobile and driver
for a period of eighteen months after his retirement.

The Company adopted Executive Deferred Income Plans effective September 1,
1984 (the "1984 EDIP"), July 1, 1985 (the "1985 EDIP") and December 1, 1987 (the
"1987 EDIP") (collectively the "EDIPs"). The EDIPs permitted directors to defer
receipt of their fees and certain employees (including executive officers of the
Company) to defer receipt of up to 20% of their annual base salaries from
compensation earned during the year following the effective

13
<PAGE> 16

date of the EDIP pursuant to participation agreements entered into between the
Company and each participant. EDIP participants were offered an opportunity to
amend their participation agreements to provide for a determination by the
Compensation Committee, within ten days following a "change of control" as
described above, whether agreements with participants who accepted the amendment
will either (a) continue to provide for the payment of benefits thereunder in
installments as described in the agreement or (b) terminate and provide a single
lump sum payment to participants. Participants are no longer making deferrals
for EDIPs.

EMPLOYEE RETIREMENT PLANS

NON-CONTRIBUTORY PENSION PLAN FOR SALARIED EMPLOYEES

The Company's Non-Contributory Pension Plan for Salaried Employees (the
"Pension Plan") covers salaried employees of the Company and most of its
domestic subsidiaries. Subject to certain limitations imposed by law, pensions
are based on years of service and average monthly compensation during (i) the 5
consecutive calendar years of highest compensation during the last 15 calendar
years preceding retirement or the date on which the employee terminates
employment or (ii) the 60 calendar months preceding retirement or the date on
which the employee terminates employment, whichever is greater. Illustrated
below are estimated annual benefits payable upon retirement to salaried
employees, including executive officers, assuming normal retirement at age 65,
without giving effect to the limitations set forth below. Benefits are
calculated on a straight life annuity basis, but the normal form of payment is a
qualified joint and survivor pension. Benefits under the Pension Plan are not
subject to any deduction for Social Security or other offset amounts.

<TABLE>
<CAPTION>
ESTIMATED ANNUAL PENSION BENEFITS
AVERAGE ANNUAL -------------------------------------------------------------------------------------------
COMPENSATION FOR 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
APPLICABLE PERIOD ($) SERVICE ($) SERVICE ($) SERVICE ($) SERVICE ($) SERVICE ($) SERVICE ($)
- --------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
$ 200,000 31,208 46,811 62,415 78,019 93,623 109,226
400,000 64,208 96,311 128,415 160,519 192,623 224,727
600,000 97,208 145,811 194,415 243,019 291,623 340,227
800,000 130,208 195,311 260,415 325,519 390,623 455,726
1,000,000 163,208 244,811 326,415 408,019 489,623 571,227
1,200,000 196,208 294,311 392,415 490,519 588,623 686,727
1,400,000 229,208 343,811 458,415 573,019 687,623 802,226
</TABLE>

Compensation covered by the Pension Plan is shown in the salary and bonus
columns in the Summary Compensation Table. Annual benefits in excess of certain
limits imposed by the Employee Retirement Income Security Act of 1974 ("ERISA")
or the Code on payments from the Pension Plan will be paid by the Company under
its Excess Benefit Plan and Supplemental Retirement Plan. Such amounts are
included in the above table.

14
<PAGE> 17

While normal retirement age is 65, employees with at least 15 years of
service may retire as early as age 55, but retirement prior to age 62 may result
in an actuarially reduced pension and retirement prior to age 65 may result in
an adjustment to benefits as required by applicable federal regulations. An
employee with at least 5 years of service credit, whose employment is terminated
prior to retirement for any reason, is entitled to a deferred vested pension or,
in the event of death prior to commencement of such benefit, a qualified
survivor benefit payable to the employee's spouse. If an employee with at least
15 years of service credit dies prior to retirement, the employee's spouse is
entitled to an immediate pension equal to 50% of the amount of the employee's
accrued benefit.

The executive officers named in the Cash Compensation Table have the
following credited years of service: Mr. Glasser, 34 years; Mr. Zech, 18 years;
Mr. Edwards, 14 years; Mr. Chambers, 2 years and Mr. Anderson, eight months.

EXCESS BENEFIT PLAN

The Company's Excess Benefit Plan covers salaried employees of the Company
and employees of most of its domestic subsidiaries whose benefits under the
Pension Plan and/or Savings Plan are subject to reduction because of the limits
imposed by ERISA or the Internal Revenue Code, and provides that the Company
will pay an employee the difference between the benefits the employee receives
from the Pension Plan and the Savings Plan and the benefits the employee would
have received in the absence of these limitations. Amounts payable under the
Excess Benefit Plan are included in the above table.

SUPPLEMENTAL RETIREMENT PLAN

The Supplemental Retirement Plan covers all participants in the EDIPs whose
benefits were subject to reduction because their deferred compensation was not
included in compensation for purposes of the Pension Plan, and provides that the
Company will pay a participant the difference between certain of the benefits
the participant receives under the Pension and Excess Benefit Plans and the
benefits the participant would have received under such plans absent
participation in the EDIPs. ERISA imposes limits on the level of compensation
(currently $150,000) that may be considered in computing benefits under the
Pension Plan. As a result of this limitation, certain executive officers will
not receive the level of benefits under the Pension Plan to which they otherwise
would have been entitled. In order to offset the reduction in benefits, the
Supplemental Retirement Plan provides benefits in amounts equal to the
difference between the benefits that the executive would have received absent
the imposed limitation and the benefits the executive will actually receive
under the Pension Plan. Amounts payable under the Supplemental Retirement Plan
are included in the above table.

15
<PAGE> 18

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

COMPENSATION POLICY AND OBJECTIVES

The Company's policy is to provide a competitive and balanced total
compensation program which is structured to attract, retain and motivate highly
qualified management personnel and to align management interests with those of
the Company's shareholders. This policy has been developed under the supervision
of the Compensation Committee of the Board of Directors which periodically
reviews the policy and oversees its implementation.

The principal components of the total compensation program for executive
officers of the Company are base salary, annual incentive awards provided under
the MIP, and long-term incentive awards provided under the LTICP. As described
herein, annual and long-term incentive awards are contingent upon the
achievement by the Company of specific financial goals. The Compensation
Committee annually reviews and approves the Company's salary levels and the
design of the MIP and LTICP, and regularly evaluates the Company's total
compensation program to assure that it adequately reflects the manner and level
of compensation deemed appropriate for the executive officers of the Company.

Competitive compensation levels are determined based on analyses of annual
and long-term pay data reported in: (i) nationally recognized compensation
surveys of companies of comparable revenue size in a diversified group of
industries and (ii) the proxy statements of the companies in the Peer Group
performance graph, adjusted through regression analysis for the Company's
revenue and asset size. The Peer Group and the groups of companies in the
compensation surveys are hereinafter collectively referred to as the
"Comparative Groups." It is believed that the Comparative Groups represent a
good cross-section of executive talent, and that a review of the compensation
practices of these companies is more relevant than a review of such practices in
either sample alone. Moreover, comparison to companies that might be considered
more direct competitors in the businesses in which the Company engages is not
feasible since most of these companies are privately-held or subsidiaries of
larger organizations and therefore do not furnish information on compensation
levels. The level of compensation of each component of the compensation program
described in the preceding paragraph is targeted at the middle range of
compensation paid by companies in the Comparative Groups. In any given year, the
compensation level for any executive officer of the Company may be more or less
than the corresponding compensation level paid by companies in the Comparative
Groups, based upon Company and/or individual performance.

BASE SALARIES

The base salaries of the Company's executive officers are targeted at the
average base salary levels of executives of the Comparative Groups, giving
consideration to the comparability of responsibilities and experience. Salary
adjustments for executive officers of

16
<PAGE> 19

the Company earning base salaries of $150,000 or more are considered by the
Compensation Committee every 18 months, and salary adjustments for other
executive officers are considered every 12 months. In each case, salary
adjustments are based on an assessment of the individual performance and
contribution of each executive officer over the review period and an analysis of
the salary practices of the Comparative Groups for positions of similar
responsibilities. No specific weights are assigned to these factors. Mr.
Glasser's base salary was increased effective July 1, 1995 from $610,008 to
$700,008, reflecting his contributions to the Company's strong operating results
over the last three years and his leadership in strategically positioning the
Company for the future. His salary was last adjusted in 1992. The salaries paid
in 1995 to Mr. Glasser and to the executive officers as a group were generally
consistent with the average salaries paid to executives by companies in the
Comparative Groups.

ANNUAL INCENTIVE COMPENSATION

Executive officers and key managers of the Company are eligible to
participate in the MIP. The MIP reinforces the Company's pay for performance
policy by providing annual cash payments to executives based upon the
achievement of Company, subsidiary and individual performance goals. Target
incentive awards are paid only when financial or a combination of financial and
individual performance objectives are achieved. Awards for the Chief Executive
Officer and each other named executive officer are based solely on financial
performance objectives.

Each year, the Compensation Committee establishes both target financial
objectives for the Company and each of its subsidiaries, and a schedule
specifying the percentage, if any, of target incentive awards payable for actual
performance. In 1995, financial objectives were expressed exclusively in terms
of budgeted net income. Target incentive awards for the Company's executive
officers ranged from 45% to 65% of their base salaries, depending on the level
of the executive officer's position. For all participants, the maximum incentive
award is 150% of the target incentive award. The maximum incentive award is
payable for achieving 120% or more of the target financial objective for the
Company and four of its five subsidiaries, and 115% of the target financial
objective in the remaining subsidiary. No incentive awards are payable to the
Company's executive officers unless threshold financial levels are achieved. The
threshold level is 80% of the target financial objective for the Company and
four of its five subsidiaries, and 85% of the target financial objective in the
remaining subsidiary. The MIP awards for Messrs. Glasser and Zech are based 100%
on the consolidated results of the Company. The awards for Messrs. Anderson,
Edwards and Chambers are based 30% on the consolidated results of the Company
and 70% on the results of the Company's subsidiaries, weighted in proportion to
the budgeted contribution of each subsidiary to consolidated net income.

17
<PAGE> 20

In 1995, the Company exceeded its consolidated net income objective
entitling Mr. Glasser to a cash payment of $439,039 under the MIP based on the
factors described above. This payment represents 67% of Mr. Glasser's salary and
103% of his target award. As noted in the Compensation Table, a portion of this
payment was deferred to bring Mr. Glasser's compensation within the limits
prescribed by the Omnibus Budget Reconciliation Act of 1993.

The limitation on the tax deductibility of executive compensation in excess
of one million dollars under the Omnibus Budget Reconciliation Act of 1993 may
impact the Company. Accordingly, if the taxable compensation of any named
individual in any year is reasonably anticipated to exceed one million dollars,
the MIP payment (or the incremental portion thereof anticipated to exceed the
one million dollar threshold) otherwise payable to that individual will be
deferred until the earlier to occur of (a) the first year in which the payment
of the deferred amount (or any portion thereof) would be deductible by the
company (i.e., the year in which the million dollar threshold applicable to the
individual would not be exceeded) or (b) the year following the individual's
retirement.

LONG-TERM INCENTIVE COMPENSATION

Long-term incentive compensation opportunities are provided pursuant to the
LTICP to attract and retain qualified executive personnel, to encourage
ownership of the Company's stock by key executives, and to promote a close
identity of interests between the Company's management and its shareholders.
Since 1988, LTICP awards have been provided to the Chief Executive Officer and
his direct reports in the form of stock options and IPUs, and to other key
employees (currently 180 in number) in the form of stock options. The size of
IPU awards expressed as a percentage of salary is based on the scope of the
participant's responsibilities. The size of stock option awards is based on
qualitative factors considered appropriate by the Compensation Committee, taking
into account the scope of the participant's responsibilities, the size of
previous grants and competitive practices. In 1995, LTICP awards to the
Company's executive officers were on par with the average competitive long-term
incentive opportunities provided by the companies in the Comparative Groups.

The Chief Executive Officer, the Chief Operating Officer and their direct
reports (eight in number) received IPU grants in 1995. The purpose of IPUs is to
focus attention on superior, sustained long-term Company performance. The number
of IPUs granted is calculated by dividing a specified percentage of a
participant's salary (20% in the case of the Chief Executive Officer, 17.5% in
the case of the Chief Operating Officer and 15% for other participants) by the
fair market value of the Company's Common Stock on the date of grant. IPUs are
subject to redemption (in cash and Common Stock) only if the Company's return on
common equity over a three year period (the "Performance Period") reaches a
target level established by the Compensation Committee. The target level is
based on the multi-year return on equity achieved by a broad range of major U.S.
companies included in indices compiled by Forbes, Standard and Poor's and Value
Line. The number of IPUs redeemed is based on the extent to

18
<PAGE> 21

which the Company's return on equity has met or exceeded the target. The maximum
number of IPUs which may be redeemed is equal to three times the number granted
plus an amount representing reinvested dividends. On each dividend payment date
during the Performance Period, participants are credited with additional IPUs
equal in amount to the dividend paid divided by the market value of the
Company's Common Stock on such date. For the 1995-1997 Performance Period, such
maximum number is redeemable (60% in stock and 40% in cash) only if the
Company's return on common equity over the Performance Period exceeds the
preestablished target by more than 20%. The amount of payment for redeemed IPUs
is equal to the market value of the Company's Common Stock on the date of
redemption.

In 1995, Mr. Glasser received a grant of 2,718 IPUs covering the 1995-1997
Performance Period based on the considerations described above. Mr. Glasser
received a payment of $502,209 for the Performance Period ending in 1995 based
on the Company's actual return on equity relative to the target established for
the period.

Stock options are granted as an incentive to encourage and enhance positive
performance and to align the interest of the Company's employees with its
shareholders. Options are granted at the prevailing market rate and will have
value only if the Company's stock price increases. Each of the executive
officers named in the Compensation Table received an option grant in 1995 based
on the factors described above. Mr. Glasser was granted an option to purchase
30,000 shares of the Company's Common Stock at a price equal to the market price
on the date of grant, and the other executive officers listed in the
Compensation Table were granted options to purchase an aggregate of 58,000
shares of the Company's Common Stock at the same price.

STOCK OWNERSHIP TARGETS

To underscore the importance of stock ownership by management, the Company
has established stock ownership targets. Beginning in 1996, approximately 100 of
the key employees eligible for awards under the LTICP will have five years to
reach GATX Common Stock ownership targets based on their salary and position in
the Company. The targets specify that the Chief Executive Officer and the Chief
Operating Officer own GATX Common Stock with a minimum value equivalent to four
times base salary, and that all other named executive officers own GATX Common
Stock with a minimum value equivalent to two and one-half times base salary. The
five-year time frame will be extended for newly hired and promoted executives.

This report is submitted by the Compensation Committee of the Board of
Directors of GATX Corporation.

James W. Cozad (Chairman)
James M. Denny
Richard A. Giesen
Charles Marshall
Michael E. Murphy

19
<PAGE> 22

PERFORMANCE GRAPH

The following performance graph compares the yearly percentage change in
the Company's cumulative total shareholder return on its Common Stock (on a
dividend reinvested basis utilizing the closing price on December 31, 1990 as
the base) with Standard & Poor's Corporation S&P 500 Composite Stock Price Index
("S&P 500") and a group of comparable companies ("Peer Group") selected by the
Company and an external investment banking advisor.

Companies included in the Peer Group were selected on the basis of a number
of criteria. The selection is intended to provide a cross-section of companies
which are subject to the same economic and investment variables that are likely
to impact the Company's total return and which have investment characteristics
that closely correspond to those of the Company. The Peer Group consists of
Alexander and Baldwin, Inc., Allied-Signal Inc., American Express Company, Amoco
Corporation, Ashland Oil, Inc., Atlantic Richfield Company, A. Schulman, Inc.,
Beneficial Corporation, Burlington Northern Santa Fe Corporation, Caliber System
Inc., Curtiss-Wright Corporation, Englehard Corporation, Ferro Corporation,
Goulds Pumps, Incorporated, Household International, Inc., The Lubrizol
Corporation, Nordson Corporation, Overseas Shipping Group, Inc., Rohm and Haas
Company, Total Petroleum (North America) Ltd., and Union Pacific Corporation.

The performance graph reflects a weighted average comparison based upon the
market capitalization of each company and assumes $100.00 was invested on
December 31, 1990.

TOTAL RETURN
GATX VS. S&P 500 VS. PEER GROUP

[CHART]

5 YEAR CUMULATIVE TOTAL RETURN SUMMARY
- ---------------------------------------------------------------------------------------------
STARTING
BASIS
DESCRIPTION 1990 1991 1992 1993 1994 1995
- ----------- ---------- -------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
GATX CORP ($) $100.00 $115.21 $139.02 $177.28 $198.55 $226.83

S & P 500 ($) $100.00 $130.47 $140.41 $154.56 $156.60 $214.86

PEER GROUP ($) $100.00 $112.86 $128.09 $146.53 $145.69 $188.23

</TABLE>

<PAGE> 23

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth certain information regarding the security
ownership of each class of equity securities of the Company owned by each of the
named executive officers:

<TABLE>
<CAPTION>
Shares of Common Stock
Beneficially Owned
Name of Beneficial Owner as of March 8, 1996(1)
- ------------------------------------------------------------------ ----------------------
<S> <C>
James J. Glasser.................................................. 318,231
Ronald H. Zech.................................................... 107,037
David B. Anderson................................................. 1,008
David M. Edwards.................................................. 31,857
William L. Chambers............................................... 21,122
Directors and Executive Officers as a group....................... 507,240
</TABLE>

- ---------------
(1) Includes shares which may be obtained by exercise of previously granted
options within 60 days of March 8, 1996 by Mr. Glasser (165,000), Mr. Zech
(84,000), Mr. Edwards (29,500), Mr. Chambers (20,000) and directors and
officers as a group (313,500), and 2,304 shares held by Mr. Glasser as
Trustee under revocable trusts with respect to which Mr. Glasser disclaims
any beneficial ownership. See pages 2 and 3 for the beneficial ownership of
Common Stock of each of the nominees for election as a director. Each
person has sole investment and voting power (or shares such powers with his
spouse). Mr. Glasser beneficially owned 1.58% of the Company's outstanding
shares of Common Stock. Each of the other named directors and executive
officers owned less than 1% of the Company's outstanding shares of Common
Stock. Directors and executive officers as a group (including Mr. Cozad,
who beneficially owned 400 shares) beneficially owned approximately 2.52%
of the Company's outstanding shares of Common Stock. No directors or named
executive officer owns any Preferred Stock. Section 16(a) of the Securities
Exchange Act of 1934 requires the Company's directors, executive officers
and certain shareholders to file with the Securities and Exchange
Commission an initial statement of beneficial ownership and certain
statements of changes in beneficial ownership of equity securities of the
Company. During 1995, a statement of a change in beneficial ownership was
inadvertently filed sixteen days late on behalf of Mr. William L. Chambers.

21
<PAGE> 24

BENEFICIAL OWNERSHIP OF COMMON STOCK

The following is the only person known to the Company or its management who
beneficially owned as of March 8, 1996 more than 5% of the Company's Common
Stock:

<TABLE>
<CAPTION>
Percent
Shares of
Beneficially Common
Name and Address of Beneficial Owner Owned Stock
- ------------------------------------------------------------ --------- ------
<S> <C> <C>
State Farm Mutual Automobile Insurance Company(1)........... 3,172,800 15.75
One State Farm Plaza
Bloomington, IL
</TABLE>

- ---------------
(1) According to the Schedule 13G dated January 22, 1996 furnished to the
Company, State Farm Mutual Automobile Insurance Company ("State Farm") and
certain affiliated entities, each of which owns shares of Common Stock with
sole voting and investment power, may be deemed to constitute a "group"
under the regulations of the Securities and Exchange Commission with regard
to the beneficial ownership of 3,172,800 shares of Common Stock. State Farm
and each of the entities disclaim that they are part of a group.

APPROVAL OF APPOINTMENT OF AUDITORS

The Board of Directors has appointed the firm of Ernst & Young LLP to audit
the Company's financial statements, subject to approval by the shareholders.
Ernst & Young LLP, or a predecessor thereof, has served in this capacity since
1916. The Board proposes that the shareholders approve such appointment.
However, if not approved, the Board will reconsider the selection of independent
auditors.

The Board of Directors recommends that the shareholders vote for this
proposal.

Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting, will have the opportunity to make a statement if they so desire,
and will be available to respond to appropriate questions by shareholders.

SHAREHOLDER PROPOSALS

Shareholder proposals intended to be presented at the Company's 1997 Annual
Meeting must be received by the Company no later than November 13, 1996 and must
otherwise comply with the requirements of the Securities and Exchange Commission
to be considered for inclusion in the Company's proxy statement and form of
proxy relating to that meeting.

22
<PAGE> 25

OTHER INFORMATION

On August 14, 1995 the Company continued the liability policies initially
procured in 1986 from Corporate Officers and Directors Assurance Ltd. ("CODA")
and A.C.E. Insurance Company Ltd. ("ACE") and purchased a policy from Federal
Insurance Co. ("Federal") that insures the Company in the event the Company is
required to indemnify a director or officer. The Federal policy also insures
directors and officers for those instances in which they may not be indemnified
by the Company. Both the CODA and ACE policies insure only directors and
officers and only for those instances in which they may not be indemnified by
the Company. The ACE and Federal policies expire on August 14, 1996. The CODA
policy expires on August 14, 1998. At the inception of the CODA policy, the
Company prepaid the premium for a three year period. On each anniversary date
thereafter, a renewal premium is paid and upon payment of such premium, the CODA
policy is automatically continued to a date one year beyond its previously
stated expiration date. During 1995, the Company paid premiums of $154,000 to
CODA, $92,000 to ACE and $341,000 to Federal.

The Board of Directors does not know of any matters to be presented at the
meeting other than those mentioned above. If any other matters do come before
the meeting, the holders of the proxy will exercise their discretion in voting
thereon.

By order of the Board of Directors

David B. Anderson
Secretary

23
<PAGE> 26

[LOGO]
<PAGE> 27

GATX CORPORATION

P PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
APRIL 26, 1996
R
THIS PROXY IS SOLICITED ON BEHALF OF GATX CORPORATION'S BOARD OF DIRECTORS
O
The undersigned hereby constitutes and appoints James J. Glasser,
X Ronald H. Zech and David B. Anderson, and each of them, his true and
lawful agents and proxies with full power of substitution in each, to
Y represent the undersigned at the Annual Meeting of Shareholders of GATX
CORPORATION to be held at the office of the Company, 500 West Monroe
Street, Chicago, Illinois, on Friday, April 26, 1996, at 9:00 A.M., and at
any adjournment thereof, on all matters coming before said meeting.

PLEASE MARK THIS PROXY AS INDICATED ON THE REVERSE SIDE TO VOTE ON ANY
ITEM. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDERS. IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS, PLEASE SIGN THE
REVERSE SIDE; NO BOXES NEED TO BE CHECKED. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.

- ----------------------------------------------------
COMMENTS/ADDRESS CHANGE:PLEASE MARK COMMENT/ADDRESS
BOX ON REVERSE SIDE

(Continued and to be signed on other side)

FOLD AND DETACH HERE
<PAGE> 28
<TABLE>
<S><C>
Please mark
your vote as
indicated in
this example /X/

FOR WITHHELD
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2. ALL FOR ALL FOR AGAINST ABSTAIN
ITEM 2 - APPROVAL OF AUDITORS
/ / / / / / / / / /
Item 1 - ELECTION OF DIRECTORS

Nominees: Franklin A. Cole, James M. Denny,
William C. Foote, Deborah M. Fretz, In their discretion, the Proxies are authorized
Richard A. Giesen, Miles L. Marsh, to vote upon other matters as may properly come
Charles Marshall, Michael E. Murphy and before the meeting.
Ronald H. Zech

WITHHELD FOR: (Write that nominee's name in the space provided below). COMMENTS/ADDRESS CHANGE
Please mark this box if you have written / /
comments/address change on the reverse side.

_____________________________________________________________ RECEIPT IS HEREBY ACKNOWLEDGED OF THE GATX
CORPORATION NOTICE OF MEETING AND PROXY STATEMENT.

______
|
|

Signature___________________________________________Signature_________________________________________________Date_________________

NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
- -----------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>

<PAGE> 29

GATX CORPORATION

SALARIED EMPLOYEES RETIREMENT SAVINGS PLAN
P
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
R
APRIL 26, 1996
O
THIS PROXY IS SOLICITED ON BEHALF OF GATX CORPORATION'S BOARD OF DIRECTORS
X
The undersigned hereby constitutes and appoints James J. Glasser,
Y Ronald H. Zech and David B. Anderson, and each of them, his true and
lawful agents and proxies with full power of substitution in each, to
represent the undersigned at the Annual Meeting of Shareholders of GATX
CORPORATION to be held at the office of the Company, 500 West Monroe
Street, Chicago, Illinois, on Friday, April 26, 1996, at 9:00 A.M., and at
any adjournment thereof, on all matters coming before said meeting.

- ----------------------------------------------------
COMMENTS/ADDRESS CHANGE:PLEASE MARK COMMENT/ADDRESS
BOX ON REVERSE SIDE

(Continued and to be signed on other side)

FOLD AND DETACH HERE
<PAGE> 30
<TABLE>
<S><C>
Please mark
your vote as
indicated in
this example /X/

FOR WITHHELD
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2. ALL FOR ALL FOR AGAINST ABSTAIN
ITEM 2 - APPROVAL OF AUDITORS
/ / / / / / / / / /
Item 1 - ELECTION OF DIRECTORS

WITHHELD FOR: (Write that nominee's name in the space provided below). COMMENTS/ADDRESS CHANGE
Please mark this box if you have written / /
comments/address change on the reverse side.

_____________________________________________________________ RECEIPT IS HEREBY ACKNOWLEDGED OF THE GATX
CORPORATION NOTICE OF MEETING AND PROXY STATEMENT.

______
|
|

Signature___________________________________________Signature_________________________________________________Date_________________