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Section 1: DEF 14A (DEF 14A)

banc-def14a_20190613.htm

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

Filed by the Registrant  

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))

  Definitive Proxy Statement

  Definitive Additional Materials

  Soliciting Material Pursuant to Rule 14a-12

BANC OF CALIFORNIA, INC.

(Name of Registrant as Specified In Its Charter)

N/A

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

Payment of Filing Fee (Check the appropriate box):

No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:

 

 


 

 

 


 

 

April 29, 2019

Dear Fellow Stockholder:

 

Robert D. Sznewajs

Chair of the Board

On behalf of the Board of Directors and management of Banc of California, Inc. (the Company), we invite you to attend the Company’s 2019 Annual Meeting of Stockholders (the Annual Meeting or the Meeting). The Meeting will be held at 8:00 A.M., Pacific Daylight Time, on June 13, 2019 at Balboa Bay Resort, located at 1221 West Coast Highway, Newport Beach, California 92663.

Over the last two years, we have made significant changes to our Board, executive management team and corporate governance practices.  With this strong foundation, we are transforming the Company into a relationship-oriented community bank that serves businesses, business owners and individuals within our footprint, which we believe will enhance stockholder value.

This year’s Annual Meeting provides us with an opportunity to review certain changes made to our executive compensation program as we ask our stockholders to approve, on an advisory basis, the compensation paid to certain of our executive officers in 2018

(also known as Say-on-Pay). In addition, we are asking our stockholders to refresh their recommendation for how frequently we present our stockholders with a Say-on-Pay Proposal. We feel strongly that a critical component of our long-term objectives is to maintain a close alignment between our Board and executive management, and to be in alignment with our stockholders. In an effort to meet this objective, the Board recommends stockholders be presented with a Say-on-Pay proposal on an annual basis.

 

Your vote is important, regardless of the number of shares you hold. We began mailing a Notice of Internet Availability of Proxy Materials to most stockholders on or about April 29, 2019, informing them of the availability online of our proxy statement and our Annual Report on Form 10-K for the year ended December 31, 2018, along with voting instructions. You may choose to access these materials online, or you may request paper or e-mail copies. By making these materials available online and by paper only upon request, we are able to reduce our printing and distribution costs.

 

Even if you do not plan to attend the Annual Meeting, please read the enclosed proxy statement and vote your shares as promptly as possible. You can vote by completing, signing and dating the enclosed proxy card and returning it in the accompanying pre-postage paid return envelope. Registered stockholders, that is, stockholders who hold stock in their own names, can also vote their shares by telephone or via the internet. If your shares are held through a bank, broker or other nominee, please check your proxy card to see if you can also vote by telephone or the internet. Voting promptly will save the Company additional expense in soliciting proxies and will ensure that your shares are represented at the Meeting.

Our Board is committed to the success of the Company and we continue to be focused on enhancing stockholder value. We greatly appreciate your continued confidence and support as we strive to become California’s premier relationship-oriented community bank.

Sincerely,

 

/s/ Robert D. Sznewajs

ROBERT D. SZNEWAJS

Chair of the Board

3 MacArthur Place

Santa Ana, California 92707

 

 

Annual Proxy Statement    |    2019

 

 


 

BANC OF CALIFORNIA, INC.

 

 

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

June 13, 2019

NOTICE IS HEREBY GIVEN that the 2019 Annual Meeting of Stockholders (the Annual Meeting or the Meeting) of Banc of California, Inc. (the Company) will be held:

DATE

June 13, 2019

 

 

TIME

8:00 A.M. Pacific Daylight Time

 

 

PLACE

Balboa Bay Resort—1221 West Coast Highway, Newport Beach, California 92663

 

 

 

ITEMS OF BUSINESS

No.

Proposal

 

 

 

 

I.

Election of the six Class I director nominees named in this proxy statement, each for a term of one year expiring at the Company’s 2020 annual meeting of stockholders.

 

 

 

 

II.

Ratification of the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2019.

 

 

 

 

III.

Approval, on an advisory and non-binding basis, of the compensation paid to our named executive officers as disclosed in this proxy statement (Say-on-Pay).

 

 

 

 

IV.

Approval, on an advisory and non-binding basis, of the frequency of future Say-on-Pay votes (Say-on-Frequency).

 

 

 

RECORD DATE

Holders of record of the Company’s voting common stock at the close of business on April 15, 2019, will be entitled to vote at the Meeting or any adjournment or postponement of the Meeting.

 

 

ANNUAL REPORT

The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as filed with the Securities and Exchange Commission on March 1, 2019 (the Annual Report) accompanies this proxy statement.

 

 

AVAILABILITY OF
MATERIALS

The Company’s proxy statement and the Annual Report are also available on the Internet at www.investorvote.com/BANC.

 

 

PROXY VOTING

It is important that your shares be represented and voted at the Meeting. You can vote your shares by completing and returning the enclosed proxy card. Registered stockholders, that is, stockholders who hold stock in their own names, can also vote their shares by telephone or via the internet. If your shares are held through a bank, broker or other nominee, check your proxy card to see if you can also vote by telephone or the internet. Regardless of the number of shares you own, your vote is very important. Please act today.

  

BY ORDER OF THE BOARD OF DIRECTORS,

 

/s/ Rachel L. Fisher

RACHEL L. FISHER

Corporate Secretary

Santa Ana, California

April 29, 2019

 

 

 

Annual Proxy Statement    |    2019

 


 

TABLE OF CONTENTS

 

 

 

BANC OF CALIFORNIA, INC.

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

June 13, 2019

 

 

 

 

 

 

 

 

PAGE

 

 

PROXY STATEMENT SUMMARY

1

 

 

Our Annual Meeting Logistics

1

 

 

Our Annual Meeting Agenda

1

 

 

Our Vision

2

 

 

2018 Performance

2

 

 

Strategic Priorities

2

 

 

Focus on Long-Term Strategic Objectives

2

 

 

STOCK OWNERSHIP

3

 

 

Stock Ownership of Greater than 5 Percent Stockholders

3

 

 

Stock Ownership of Directors and Executive Officers

5

 

 

Section 16(a) Beneficial Ownership Reporting Compliance

6

 

 

PROPOSAL I

7

 

 

General

7

 

 

Current Board of Directors

8

 

 

Director Nominations and Proposals by Stockholders

9

 

 

Six Nominees for Director at the Annual Meeting

9

 

 

Director Nominees with Terms Expiring at the Annual Meeting - Class I

10

 

 

Continuing Directors - Terms to Expire at the 2020 Annual Meeting of Stockholders – Class II

13

CORPORATE GOVERNANCE MATTERS

15

Corporate Governance Framework

15

 

 

 

 

 

 

 

PAGE

 

 

Evaluating the Board’s Effectiveness

16

 

 

Consideration of Board Diversity

16

 

 

Director Education

16

 

 

Corporate Governance Documents

16

 

 

Director Independence

17

 

 

Board Leadership Structure

17

 

 

Risk Oversight

17

 

 

Board Composition and Meetings

19

 

 

Committee Composition of the Board of Directors and Meeting Attendance

20

 

 

Role and Composition of the Audit Committee

21

 

 

Role and Composition of the Compensation and Human Capital Committee

23

 

 

Compensation Committee Interlocks and Insider Participation

24

 

 

Role and Composition of the Nominating and Corporate Governance Committee

25

 

 

Communications with the Board

26

 

 

DIRECTOR COMPENSATION

26

 

 

Overview

27

 

 

Current Director Compensation Program

27

 

 

Previous Director Compensation Program in Effect During 2018

28

 

 

Employee Directors

29

 

 

2018 Summary Table of Director Compensation

29

 

 

 

 

Page    |    TOCi

Annual Proxy Statement    |    2019

 


 

TABLE OF CONTENTS

 

 

 

 

 

 

 

PAGE

 

 

EXECUTIVE OFFICERS

31

 

 

Designation of Executive Officers

31

 

 

Executive Officer Biographies

32

 

 

COMPENSATION DISCUSSION AND ANALYSIS

35

 

 

Introduction

35

 

 

Our Vision and Strategic Priorities

35

 

 

Our Corporate Values and the Philosophy and Objectives of our Compensation Program

36

 

 

A Fresh Perspective for California’s Bank:
Focus on Corporate Governance and
Recent Changes

37

 

 

Stockholder Outreach

38

 

 

Overview of Executive Compensation Program

39

 

 

2018 Pay Decisions

41

 

 

Our Compensation Program Best Practices

42

 

 

Strong Alignment with Stockholders—What We
Do and What We Don’t Do

42

 

 

How We Make Compensation Decisions

43

 

 

Role of the Chief Executive Officer

43

 

 

Role of the Compensation Consultants

43

 

 

Base Salary

43

 

 

Annual Incentives

44

 

 

Long-Term Incentives

46

 

 

Compensation Committee’s Response to 2016
“Say-on-Pay” Vote

49

 

 

Stock Ownership Guidelines

49

 

 

Recoupment Policy

49

 

 

Anti-Hedging/Pledging Policy

50

 

 

Equity Grant Policy

50

 

 

401(k) Plan

50

 

 

Perquisites and Other Benefits

50

 

 

 

 

 

PAGE

 

 

Employment Agreements

51

 

 

Payments Due Upon Termination or a Change in
Control

51

 

 

Tax Impact

51

 

 

REPORT OF THE HUMAN CAPITAL AND
COMPENSATION COMMITTEE

52

 

 

SUMMARY COMPENSATION TABLE

53

 

 

CHIEF EXECUTIVE OFFICER PAY RATIO

55

 

 

2018 GRANTS OF PLAN-BASED AWARDS

56

 

 

OUTSTANDING EQUITY AWARDS AT
DECEMBER 31, 2018

57

 

 

STOCK OPTION EXERCISES AND STOCK VESTED

59

 

 

EMPLOYMENT AGREEMENTS

60

 

 

POTENTIAL PAYMENTS UPON TERMINATION OR
CHANGE IN CONTROL

63

 

 

Summary of Benefits and Payments Upon
Termination of Employment or a Change in
Control

63

 

 

Potential Payments Upon Termination of Change of
Change in Control as of December 31, 2018

64

 

 

REPORT OF THE AUDIT COMMITTEE

67

 

 

PROPOSAL II

68

 

 

Fees Paid to Independent Registered Public
Accounting Firm During the Years Ended
December 31, 2018 and 2017

69

 

 

OVERVIEW OF ADVISORY VOTES ON EXECUTIVE
COMPENSATION (PROPOSALS III AND IV)

70

 

 

PROPOSAL III

71

 

 

Advisory (Non-Binding) Vote to Approve
Executive Compensation

71

 

 

Response to 2016 Say on Pay Vote and Overall
Compensation Refresh that Began in 2017

71

 

 

Expected Analysis by ISS and Glass Lewis

72

 

 

2017 and 2018 Highlights of Executive
Compensation Changes

75

 

 

Annual Proxy Statement    |    2019

Page    |    TOCii

 


 

TABLE OF CONTENTS

 

 

 

 

 

 

PAGE

 

 

PROPOSAL III (Cont.)

 

 

 

Vote Required

77

 

 

PROPOSAL IV

78

 

 

Advisory (non-binding) Vote to Approve the Frequency of Future Say-on-Pay Votes

78

 

 

TRANSACTIONS WITH RELATED PERSONS

79

 

 

General

79

 

 

Loans to Officers and Directors

80

 

 

Other Transactions with Related Persons

81

 

 

INFORMATION ABOUT THE 2019 ANNUAL MEETING OF STOCKHOLDERS

83

 

 

Notice and Access (Electronic Proxy)

83

 

 

Copies of Materials

83

 

 

Who Can Vote

83

 

 

Voting Shares Held in “Street Name” by a
Broker

84

 

 

Number of Shares Required to be Present to Hold the Meeting

84

 

 

How to Vote Your Shares

84

 

 

 

 

 

PAGE

 

 

 

 

Revoking Your Proxy

84

 

 

Board of Directors Voting Recommendations

85

 

 

How Shares are Treated when no Voting Instructions are Provided

85

 

 

Other Matters to be Presented

85

 

 

Vote Required for Each Proposal and Treatment and Effect of Abstentions and Broker Votes

86

 

 

Actions Required if any Director Nominee Does not Receive Required Majority Vote

86

 

 

Inspector of Election

87

 

 

Proxy Solicitor Costs

87

 

 

Attending the Meeting

87

 

 

Director Nominees Unable to Stand for Election

87

 

 

ADDITIONAL INFORMATION

88

 

 

Other Matters

88

 

 

Stockholder Proposals for the Annual Meeting of Stockholders to be Held in 2020

88

 

 

APPENDICES

89

 

 

Appendix A

89

 


 

 

Page    |    TOCiii

Annual Proxy Statement    |    2019

 


 

 

PROXY STATEMENT SUMMARY

 

 

 

 

Our Annual Meeting Logistics

 

 

 

 

BANC OF CALIFORNIA, INC.

3 MacArthur Place

Santa Ana, California 92707

(949) 236-5211

 

 

 

 

 

Date and Time

June 13, 2019

8:00 A.M. Pacific Daylight Time

 

Location

Balboa Bay Resort

1221 West Coast Highway

Newport Beach, California 92663

 

 

 

 

Record Date

April 15, 2019

 

 

 

 

Who Can Vote

Holders of the Company’s Voting
Common Stock as of the Record Date

 

 

 

Our Annual Meeting Agenda

 

The Board of Directors of Banc of California, Inc. (Banc of California, the Company, we, us and our) is using this proxy statement to solicit proxies from the holders of the Company’s voting common stock, par value $0.01 per share, for use at the upcoming 2019 Annual Meeting of Stockholders (the Annual Meeting or the Meeting) and any adjournments or postponements of the Meeting. Stockholders are being asked to vote on the following matters:

 

 

 

 

  No.

Proposal

Board Vote

Recommendation:

    Page    

 

 

 

 

  I.

Election of the six Class I director nominees named in this proxy statement, each for a term of one year expiring at the Company’s 2020 annual meeting of stockholders.

FOR each director

nominee 

7

 

 

 

 

  II.

Ratification of the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2019. 

FOR

68

 

 

 

 

  III.

Approval, on an advisory and non-binding basis, of the compensation paid to our named executive officers, as disclosed in this proxy statement (Say-on-Pay).

FOR

71

 

 

 

 

  IV.

Approval, on an advisory and non-binding basis, of the frequency of future Say-on-Pay votes (Say-on-Frequency).

EVERY YEAR

78

These proposals are described in more detail elsewhere in this proxy statement. In addition to these proposals, stockholders will also consider any other matters that may properly come before the Meeting or any adjournment or postponement of the Meeting, although the Company’s Board of Directors (the Board) knows of no other business to be presented.

By submitting your proxy, you authorize the Board to represent you and vote your shares at the Meeting in accordance with your instructions. The Board also may vote your shares to adjourn the Meeting from time to time and will be authorized to vote your shares at any adjournments or postponements of the Meeting.

For more information about voting mechanics and other general Meeting matters, see Information About the 2019 Annual Meeting of Stockholders beginning on page 83. The accompanying Notice of Annual Meeting of Stockholders and this proxy statement are first being made available to stockholders on or about April 29, 2019.

The Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission on March 1, 2019 (the Annual Report), which includes the Company’s audited financial statements, accompanies this proxy statement. The Annual Report does not constitute a part of the proxy solicitation materials and is not incorporated into this proxy statement by reference.

Additionally, some of the information in this proxy statement and the Annual Report relates to the Company’s wholly owned banking subsidiary, Banc of California, National Association (the Bank).

Your vote is important. Whether or not you plan to attend the Annual Meeting, please promptly submit your proxy.

 

Page    |    1

Annual Proxy Statement    |    2019

 


 

PROXY STATEMENT SUMMARY

 

 

 

 

Our Vision

Our vision is to be California’s premier relationship-oriented community bank, serving businesses, business owners and individuals within our footprint. We have a strong foundation that supports this vision, including:

    a strong and powerful brand;

    superior markets in which we operate;

    a strong balance sheet;

    solid credit and right-sized capital metrics; and

    an experienced leadership team and strong corporate governance.

2018 Performance

 

(1)  Total stockholder return is calculated using the measurement period of the last trading day of the year prior to each respective time horizon to December 31, 2018.

As recent benchmarking data show, the Company has underperformed in cumulative total stockholder return with a majority of the underperformance occurring since the strategic transformation of Banc of California into a community banking franchise, which began in 2017.  During that time, various initiatives have been executed, including targeted asset sales, business divestitures and expense reductions.  These actions were completed methodically, with a view toward building long-term value within the business.  As such, management believes the structural pieces are now in place to implement many parts of the Company’s long-term strategic plan.  

 

Strategic Priorities

Our executive leadership team prioritizes initiatives that are consistent with our vision.  In March 2019, we welcomed Jared M. Wolff as our new President and Chief Executive Officer, and as a member of our Board of Directors. Under Mr. Wolff’s leadership and with the support of the Board, our executive team is focused on executing the following priorities:

    right-sizing the balance sheet to eliminate assets and business lines that do not enhance the value of the Company;

    focusing on relationship-oriented lines of business consistent with our community banking footprint and model; and

    gathering noninterest bearing deposits and low-cost deposits from businesses and principals of those businesses who value our service, execution and high-touch banking model.

 

Focus on Long-Term Strategic Objectives

We believe our strategic priorities are consistent with creating significant shareholder value.  In concert with the above, we continue to strive towards the following long-term strategic objectives:

Normalize Expenses. We will continue striving to ensure ongoing expenses are appropriate to the business and, overall, are relative to our size.

Create Effective Customer Platforms. We have invested, and will continue to invest, in core business technology solutions in an effort to simplify the way our customers do business. Delivering effective, but user-friendly solutions to our customers is a fundamental component of our business strategy.

Creating Long-Term Value. We believe a combination of the actions above will enhance value for stockholders over time. We expect the foundation we have in place today, when coupled with the strategic objectives and initiatives outlined above, will result in expanded operating leverage as we improve the overall earnings profile of the Company.

 


 

Annual Proxy Statement    |    2019

Page    |    2

 


 

 

 

 

STOCK OWNERSHIP

 

 

 

 

Stock Ownership of Greater than 5 Percent Stockholders

 

The following table shows the beneficial ownership of our voting common stock by those persons or entities known by management to beneficially own more than five percent of the outstanding shares of our voting common stock as of April 15, 2019, the record date for the Annual Meeting. As of April 15, 2019, there were 50,365,106 shares of voting common stock issued and outstanding.

For purposes of this section and the one that follows, beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission (the SEC). In computing the number of shares beneficially owned by a person and the percentage of ownership by that person, shares of voting common stock subject to rights held by that person to acquire such shares currently or within 60 days are deemed outstanding. Such shares are not deemed outstanding for the purpose of computing the percentage of ownership by any other person.

Name and Address of Greater than 5% Stockholders

 

Amount and Nature of

Beneficial Ownership

 

Percent of Voting

Common Stock Outstanding (1)

BlackRock, Inc.

55 East 52nd Street

New York, New York 10055 (2)

 

 

 

6,444,776

 

 

 

 

12.80%

 

 

Wellington Management Group LLP et al.

280 Congress Street

Boston, Massachusetts 02210 (3)

 

 

 

5,846,892

 

 

 

 

11.61%

 

 

PL Capital Advisors, LLC et al.

47 East Chicago Avenue, Suite 328

Naperville, Illinois 60540 (4)

 

 

 

3,437,518

 

 

 

 

6.82%

 

 

Dimensional Fund Advisors LP

Building One

6300 Bee Cave Road

Austin, Texas 78746 (5)

 

 

 

3,249,267

 

 

 

 

6.45%

 

 

The Vanguard Group

100 Vanguard Boulevard

Malvern, Pennsylvania 19355 (6)

 

 

 

2,657,799

 

 

 

 

5.28%

 

 

(1)

The percent was calculated based on 50,365,106 shares of voting common stock issued and outstanding as of the record date of April 15, 2019.

 

(2)

As reported in Amendment No. 3 to Schedule 13G filed with the Securities and Exchange Commission on January 24, 2019 by BlackRock, Inc. (BlackRock). The amended Schedule 13G reports that BlackRock has (i) sole voting power over 6,330,581 shares and (ii) sole dispositive power over 6,444,776 shares.

 

(3)

As reported in Amendment No. 2 to Schedule 13G filed with the Securities and Exchange Commission on February 12, 2019 by Wellington Management Group LLP (Wellington); Wellington Group Holdings LLP (Wellington Group); Wellington Investment Advisors Holdings LLP (Wellington Advisors); and Wellington Management Company LLP (Wellington Company). The amended Schedule 13G reports as follows:

 

 

Wellington has shared voting power over 4,651,599 shares and shared dispositive power over 5,846,892 shares;

 

 

Wellington Group has shared voting power over 4,651,599 shares and shared dispositive power over 5,846,892 shares;

 

 

Wellington Advisors has shared voting power over 4,651,599 shares and shared dispositive power over 5,846,892 shares; and

 

 

Wellington Company has shared voting power over 4,619,026 shares and shared dispositive power over 5,793,884 shares.

 


 

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Annual Proxy Statement    |    2019

 


 

 

(4)

Includes shares reported in Amendment No. 3 to Schedule 13D filed with the Securities and Exchange Commission on February 10, 2017 by PL Capital Advisors, LLC (PL Capital Advisors); John W. Palmer; and Richard J. Lashley. The amended Schedule 13D reports as follows:

 

 

Messrs. Lashley and Palmer have shared voting and dispositive powers over 3,401,719 shares;

 

 

PL Capital Advisors has shared voting and dispositive powers over 3,401,719 shares;

 

 

Mr. Lashley has sole voting and dispositive powers over 20,000 shares; and

 

 

Mr. Palmer has sole voting and dispositive powers over 5,500 shares.

 

Also includes an additional 10,299 shares held by Mr. Lashley directly, 5,250 of which are issuable upon the vesting of restricted stock units on May 31, 2019.

(5)

As reported in the Schedule 13G filed with the Securities and Exchange Commission on February 8, 2019 by Dimensional Fund Advisors LP (Dimensional). The Schedule 13G reports that Dimensional has (i) sole voting power over 3,111,491 shares and (ii) sole dispositive power over 3,249,267 shares.

 

(6)

As reported in the Schedule 13G filed with the Securities and Exchange Commission on February 11, 2019 by The Vanguard Group (Vanguard). The Schedule 13G reports that Vanguard has (i) sole voting power over 41,060 shares, (ii) sole dispositive power over 2,604,539 shares, (iii) shared voting power over 15,500 shares and (iv) shared dispositive power over 53,260 shares.

 

 

 

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Annual Proxy Statement    |    2019

 


 

STOCK OWNERSHIP

 

 

 

Stock Ownership of Directors and Executive Officers

 

The following table shows the beneficial ownership of our voting common stock on the record date of April 15, 2019 by:

 

(i)

each continuing director and director nominee of the Company;

 

(ii)

each Named Executive Officer (as defined under Compensation Discussion and Analysis—Introduction); and

 

(iii)

all of the Named Executive Officers, current executive officers who are not Named Executive Officers and current directors of the Company as a group.

The address of each of these beneficial owners is the same main address as that of the Company. To the extent any of the beneficial owners hold fractional shares of voting common stock, such fractional shares have been rounded down to the nearest whole share. As used in the following table, RSAs refer to restricted stock awards and RSUs refer to restricted stock units.

Directors and Executive Officers

 

Voting

Common

Stock

 

 

Total

Number

of Shares

Subject

to RSUs

that will

Vest

Within 60

Days

 

 

Total

Number

of Shares

Subject to

Exercisable

Options

 

 

Total

Number of

Shares

Beneficially

Owned (1)

 

 

Percent of

Voting

Common

Stock

Outstanding

 

Jared M. Wolff

 

 

148,594

 

(2)

 

 

 

 

 

 

 

148,594

 

 

 

0.30

%

President, Chief Executive Officer and

Continuing Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

John A. Bogler

 

 

29,719

 

 

 

 

 

 

 

 

 

29,719

 

 

 

0.06

%

Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hugh F. Boyle

 

 

89,137

 

(3)

 

 

 

 

73,000

 

 

 

162,137

 

 

 

0.32

%

Chief Risk Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rita H. Dailey

 

 

3,557

 

 

 

 

 

 

 

 

 

 

3,557

 

 

 

0.01

%

Head of Deposits and Treasury

Management

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kris A. Gagnon

 

 

6,779

 

 

 

 

 

 

 

 

 

6,779

 

 

 

0.01

%

Chief Credit Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Angelee J. Harris

 

 

26,477

 

(4)

 

 

 

 

 

 

 

 

26,477

 

 

 

0.05

%

General Counsel

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Halle J. Benett, Continuing Director

 

 

26,510

 

(5)

 

5,188

 

 

 

4,832

 

 

 

36,530

 

 

 

0.07

%

Mary A. Curran, Director Nominee

 

 

6,900

 

 

 

4,938

 

 

 

 

 

 

11,838

 

 

 

0.02

%

B.A. Fallon-Walsh, Director Nominee

 

 

100

 

 

 

3,563

 

 

 

 

 

 

3,663

 

 

 

0.01

%

Bonnie G. Hill, Director Nominee

 

 

5,568

 

 

 

4,750

 

 

 

 

 

 

10,318

 

 

 

0.02

%

Richard J. Lashley, Director Nominee

 

 

3,426,768

 

(6)

 

5,250

 

 

 

 

 

 

3,432,018

 

 

 

6.81

%

Jonah F. Schnel, Director Nominee

 

 

44,453

 

(7)

 

5,125

 

 

 

4,832

 

 

 

54,410

 

 

 

0.11

%

Robert D. Sznewajs, Chair and Continuing Director

 

 

30,704

 

(8)

 

7,188

 

 

 

4,832

 

 

 

42,724

 

 

 

0.08

%

W. Kirk Wycoff, Director Nominee

 

 

1,527,003

 

(9)

 

4,985

 

 

 

 

 

 

1,531,988

 

 

 

3.04

%

Douglas H. Bowers

 

 

64,738

 

 

 

 

 

 

 

 

 

64,738

 

 

 

0.13

%

Former President, Former Chief Executive

Officer and Former Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current and Former Named Executive

Officers, Current Executive Officers

who are not Named Executive Officers,

and current Directors as a group

(16 persons)

 

 

5,441,607

 

 

 

40,987

 

 

 

87,496

 

 

 

5,570,090

 

 

 

11.06

%

 

 

Page    |    5

Annual Proxy Statement    |    2019

 


 

STOCK OWNERSHIP

 

 

 

(1)

Includes 40,987 shares issuable within 60 days after April 15, 2019 upon vesting of RSUs and 87,496 shares subject to options that are exercisable as of, or will be become exercisable within 60 days after, April 15, 2019.

(2)

Includes 135,594 shares underlying unvested RSAs over which Mr. Wolff has voting power. Also includes 13,000 shares owned by the Wolff Family Trust. As a trustee of the Wolff Family Trust, Mr. Wolff may be deemed to beneficially own the shares owned by the Wolff Family Trust.

(3)

Includes 10,021 shares underlying unvested RSAs over which Mr. Boyle has voting power.

(4)

Includes 3,410 shares underlying unvested RSAs over which Ms. Harris has voting power.

(5)

Includes 7,920 shares underlying unvested RSAs over which Mr. Benett has voting power.

 

(6)

Includes 3,401,719 shares owned by PL Capital Advisors (as defined in Note 4 to the Stock Ownership of Greater than 5 Percent Stockholders table above); Mr. Lashley is a managing member of PL Capital Advisors and therefore may be deemed to beneficially own these shares. Also includes 15,049 shares held directly by Mr. Lashley, and 10,000 shares held by the Richard Lashley Roth IRA.

(7)

Includes 10,532 shares underlying unvested RSAs over which Mr. Schnel has voting power.

(8)

Includes 8,724 shares underlying unvested RSAs over which Mr. Sznewajs has voting power.

(9)

Includes 1,461,945 shares owned by Patriot Financial Partners II, L.P., Patriot Financial Partners Parallel II, L.P., and Patriot Financial Manager, L.P. (Patriot Partners); as a managing member of Patriot Partners, Mr. Wycoff may be deemed to beneficially own these shares. Also includes 65,058 shares held directly by Mr. Wycoff.

Section 16(a) Beneficial Ownership Reporting Compliance

 

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors and executive officers, and persons who beneficially own more than 10 percent of the Company’s voting common stock, to report to the SEC their initial ownership of the Company’s equity securities and any subsequent changes in that ownership. Specific due dates for these reports have been established by the SEC and the Company is required to disclose in this report any late filings or failures to file.

To the Company’s knowledge, based solely on our review of the copies of these reports furnished to the Company and written representations that no other reports were required during the fiscal year ended December 31, 2018, all Section 16(a) filing requirements applicable to the Company’s officers and directors during 2018 were met, except for inadvertent failures by: (i) Mr. Gagnon to timely file a Form 3 following the effective date of his appointment as Chief Credit Officer on February 7, 2018; (ii) Mr. Smith to timely file a Form 3 following his appointment as Chief Accounting Officer on September 4, 2018; (iii) Mr. Lashley to timely file a Form 4 to report an acquisition of 5,250 restricted stock units for service on the Board of Directors granted September 6, 2018; and (iv) Mr. Wycoff to timely file a Form 4 to report the sale on November 30, 2018 of 83 shares of common stock by Patriot Financial Partners, L.P. and the sale of 41 shares of common stock by Patriot Financial Partners Parallel, L.P., both of which entities are controlled by Mr. Wycoff.

 

 

 

Annual Proxy Statement    |    2019

Page    |    6

 


 

PROPOSAL I

 

 

 

 

Proposal I

ELECTION OF DIRECTORS 

General

 

The Company’s Board of Directors currently consists of nine directors. Since the 2018 annual meeting of stockholders and as previously reported, the Board (i) appointed B. A. Fallon-Walsh as a Class I director of the Company, effective September 1, 2018; (ii) accepted the separation of Douglas H. Bowers as the Company’s President and Chief Executive Officer and as a Class II director of the Company, effective March 18, 2019; and (iii) appointed Jared M. Wolff as the Company’s President and Chief Executive Officer and as a Class II director of the Company, effective March 18, 2019.

Prior to our 2017 annual meeting of stockholders, our directors were split into three classes, with members of each class generally serving for three-year terms that expired in successive years. However, at our 2017 annual meeting of stockholders, stockholders approved an amendment to our corporate charter to progressively declassify the Board. Directors serving three-year terms at that time continue to serve until the end of their respective terms. As the term for each class of directors expires, directors are elected to one-year terms until each of the classes expires, resulting in the entire Board standing for re-election for one-year terms. As shown below, six of our nine directors are nominated for re-election at the Annual meeting, and all nine directors will stand for re-election at the 2020 annual meeting of stockholders and at each annual meeting of stockholders thereafter.

 

 

 

Page    |    7

Annual Proxy Statement    |    2019

 


 

PROPOSAL I

 

 

 

The existing terms of the Class I directors, which include Mary A. Curran, Richard J. Lashley, Jonah F. Schnel, B. A. Fallon-Walsh, Bonnie G. Hill and W. Kirk Wycoff, will expire at the Annual Meeting. Mses. Curran and Fallon-Walsh, Dr. Hill and Messrs. Lashley, Schnel and Wycoff have all been nominated for re-election, each for a one-year term that will expire at the 2020 annual meeting of stockholders. See Six Nominees for Director at the Annual Meeting.

Current Board of Directors

 

Details about the current Board of Directors, including their class, qualifications, and committee memberships are reflected in the table below.

 

Name

Age  (1)

Director

Since

Class  (2)

Related
Qualifications

 

Committee Memberships

Principal Occupation

CHC 

NCG 

ALC 

CR 

ER 

 

 

 

 

 

 

 

 

 

 

 

 

  Benett, Halle J.

 

52

2013

II

   

Managing Director and Head of Diversified Financial Services Investing, Melody Capital Partners

 

 

C

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Curran, Mary A.

 

62

2017

I

  

Former Executive Vice President and Corporate Banking Chief Risk Officer, MUFG Union Bank 

 

 

 

 

   C  

 

 

 

 

 

 

 

 

 

 

 

 

 

*Fallon-Walsh, B.A.

 

67

2018

I

  

Former Division Head of Institutional Retirement Plan Services, The Vanguard Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Hill, Bonnie G.

 

77

2017

I

 

President, B. Hill Enterprises, LLC 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Lashley, Richard J.

 

60

2017

I

   

Principal and Managing Member, PL Capital Advisors, LLC 

C

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Schnel, Jonah F.

 

46

2013

I

  

Chair and President, Fast A/R Funding

 

 

 

 

 

C

 

 

 

 

 

 

 

 

 

 

 

 

  Sznewajs, Robert D.

 

72

2013

II

Former President and Chief Executive Officer, West Coast Bancorp 

 

IC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Wolff, Jared M.

 

50

2019

II

   

President and Chief Executive Officer, Banc of California, Inc. and Banc of California, N. A.

 

 

 

C

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Wycoff, W. Kirk

 

61

2017

I

  

Managing Partner, Patriot Financial Partners 

 

 

 

 

 

 

 

 

 

 

 

Accounting and Financial Expertise

* – Director Nominee

 

Banking Industry Experience

A – Audit

 

Banking Regulatory Experience

ALCO – ALCO

 

Compensation and Employee Benefits

CHC – Compensation and Human Capital

 

Corporate Governance

CR – Credit

 

Executive Leadership

ER – Enterprise Risk

 

Risk Management Expertise

NCG – Nominating and Corporate Governance

 

Financial Expert

C – Chair

IC – Interim Chair

 

(1)

As of April 15, 2019.

 

(2)

Effective at the conclusion of the Annual Meeting, Class I will be eliminated with all re-elected members reclassified as Class II directors with terms expiring at the 2020 annual meeting of stockholders.

 

Annual Proxy Statement    |    2019

Page    |    8

 


 

PROPOSAL I

 

 

 

Director Nominations and Proposals by Stockholders

 

Director nominations by stockholders and stockholder proposals must be made pursuant to timely notice in writing to the Corporate Secretary, as set forth in Section 1.09 of the Company’s bylaws. A stockholder’s notice must be received by the Company not less than 90 days, nor more than 120 days, prior to the first anniversary of the preceding year’s annual meeting to be considered timely. If, however, the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from the prior year’s date, notice by the stockholder must be delivered not earlier than 120 days prior to the date of the meeting and not later than the close of business on the later of the 90th day prior to the date of the meeting or the 10th day following the day on which notice of the date of the meeting was mailed or public announcement of the date of the meeting was first made. The stockholder’s notice must also include the information set forth in Section 1.09 of the Company’s bylaws. The Company’s bylaws contain additional notification requirements for stockholder proposals, regardless of whether they are submitted for inclusion in the Company’s proxy materials.

Six Nominees for Director at the Annual Meeting

 

At the recommendation of the Nominating and Corporate Governance Committee (the Nominating Committee), the Board has nominated Mary A. Curran, B. A. Fallon-Walsh, Richard J. Lashley, Jonah F. Schnel, Bonnie G. Hill and W. Kirk Wycoff, for re-election, each for a one-year term.

Mses. Curran and Fallon-Walsh, Dr. Hill and Messrs. Lashley, Schnel and Wycoff have each consented to being named as a director nominee in this proxy statement and agreed to serve if re-elected. Further, each qualifies as an independent director under the Corporate Governance Listing standards of the New York Stock Exchange (NYSE), as applied in accordance with the Company’s Corporate Governance Guidelines.

Set forth below is information about the six director nominees, including their principal occupation, business experience and qualifications to serve on the Board of Directors.

 

 

 

 The Board of Directors unanimously recommends that you vote FOR Mses. Curran and Fallon-Walsh, Dr. Hill and Messrs. Lashley, Schnel and Wycoff.

 

Page    |    9

Annual Proxy Statement    |    2019

 


 

PROPOSAL I

 

 

 

 

Director Nominees with Terms Expiring at the Annual Meeting - Class I

 

 

Mary A. Curran

 

 

 

 

 

 

Independent Director

 

Class I

 

Age: 62

 

Ms. Curran spent 25 years at MUFG Union Bank, N.A., during which time she held several executive level positions, including Executive Vice President, Corporate Banking Chief Risk Officer from 2011 to 2014, and Executive Vice President, Head of The Private Bank at Union Bank from 2006 to 2011. During her time with Union Bank, Ms. Curran worked closely with its board and management to build an infrastructure focused on a strong, proactive, integrated and effective risk management. Ms. Curran was also tasked with improving the performance of Union Bank’s Wealth Management practice, a business unit with offices throughout California, Washington and Oregon. Prior to 2006, she spent 17 years in leadership roles in commercial banking.

Ms. Curran recently served as Chair of San Diego State University’s Campanile Foundation Board and Executive Committee, and currently chairs the university’s Nominating and Governance Committee and serves on the university’s Athletics Committee. She also serves on the Board of Directors, Nominating/Governance Committee and Compensation Committee for Hunter Industries, a privately held global irrigation, landscape lighting and custom manufacturing company. Previous board service includes: Chair of the California Bankers Association where she remains involved on the Banker Benefits Board, and Chair of the San Diego Sports Commission. Ms. Curran is a current member of the Corporate Directors Forum, San Diego, The Corporate Director’s Roundtable of Orange County, Women Corporate Directors and the National Association of Corporate Directors (NACD). Ms. Curran is a NACD Governance Fellow, and holds a Bachelor of Science degree in Journalism from the University of Colorado, Boulder and a Master’s degree in Business from San Diego State University.

Ms. Curran’s broad range of experience in the financial services industry and community involvement, especially in California, as well as her prior business and leadership positions, have enhanced the Board’s perspective. Her leadership and knowledge, specifically in credit and risk management as Chair of the Credit Committee, have been vital to the Company’s risk framework and objectives.

 

 

 

 

 

B. A. Fallon-Walsh

 

 

 

 

 

Independent Director

 

Class I

 

Age: 67

 Ms. B.A. Fallon-Walsh has more than 35 years of experience in the banking and financial services industry. From 1995 until her retirement in 2012, Ms. Fallon-Walsh was with The Vanguard Group, where she led High Net Worth Services, Core Investor Services, Institutional Marketing and Institutional Retirement Plan Services, among other leadership positions. During her time at Vanguard, Ms. Fallon-Walsh also held Series 7, 63 and 24 securities licenses. Prior to joining Vanguard, she was an Executive Vice President with Bank of America and a predecessor company, Security Pacific Bank, in California. Her banking leadership roles included retail banking, strategic planning, marketing, product management and electronic delivery, residential mortgage, product development and secondary marketing.

Ms. Fallon-Walsh currently serves on the board of directors of Alliance Bernstein (NYSE: AB), where she chairs the Compensation and Workplace Practices Committee and the Corporate Governance Committee.  She also serves on the board of directors of MONY Life Insurance Company of America, an indirect subsidiary of AXA Equitable Holdings, Inc. (NYSE: EQH), and chairs the Investment Committee.  In addition, Ms. Fallon-Walsh is a member of the Betterment for Business Advisory Board. Previous board service on other AXA companies includes Paris-based AXA Investment Managers and its subsidiaries.  Ms. Fallon-Walsh received the Chairman’s Award for Outstanding Board Service from the Main Line Chamber of Commerce and is currently a director of the Lewes Yacht Club and chairs their Leadership Development Committee.  She is a member of Women Corporate Directors and the NACD. Ms. Fallon-Walsh received a Bachelor’s degree, summa cum laude, in Liberal Arts and Management from Northeastern University and a Master’s degree in Business Administration from Harvard Business School.

Ms. Fallon-Walsh’s comprehensive background in the financial services industry, particularly within California, as well as her board experience and leadership expertise in banking have enriched the Board’s perspective.

 

Annual Proxy Statement    |    2019

Page    |    10

 


 

PROPOSAL I

 

 

 

Bonnie G. Hill

 

 

 

 

 

 

Independent Director

 

Class I

 

Age: 77

 

Dr. Hill has served as the President of B. Hill Enterprises, LLC, a consulting firm focusing on corporate governance, board organizational and public policy issues since 2001. She is also co-founder of Icon Blue, a brand marketing company founded in 1998 and based in Los Angeles. Dr. Hill has over 25 years of experience serving on numerous corporate boards with a wide-ranging career in business, government, education, and philanthropy. Currently, Dr. Hill is a faculty member of the NACD Board Advisory Services Program, a founding member of the Lead Directors Network, and sits on the Ira M. Millstein Center for Global Markets and Corporate Ownership Advisory Committee for Columbia Law School and the National Board of 2020 Women on Corporate Boards. Dr. Hill has also served on numerous public company boards, including the California Water Service Group (NYSE: CWT), The Home Depot, Inc. (NYSE: HD), Yum! Brands, Inc. (NYSE: YUM) and AK Steel Holding Corp. (NYSE: AKS). Dr. Hill also co-chaired the 2016 NACD Blue Ribbon Commission Report on Building the Strategic-Asset Board, served on the board of Financial Industry Regulatory Authority Investor Education Foundation and is a former member of Public Company Accounting Oversight Board Investor Advisory Group.

From 1997 to 2001, Dr. Hill served as President and Chief Executive Officer of The Times Mirror Foundation and as Senior Vice President, Communications and Public Affairs, for the Los Angeles Times. From 1992 to 1997 she served as Dean of the McIntire School of Commerce at the University of Virginia, and prior to that, Secretary of the State and Consumer Services Agency for the State of California. Dr. Hill has held a variety of presidential appointments, including Vice Chair of the Postal Rate Commission and Assistant Secretary in the U.S. Department of Education under President Reagan, and as Special Adviser to President George H. W. Bush for Consumer Affairs. She has chaired the SEC’s Consumer Affairs Advisory Committee and served on the board of directors of NASD Regulation, Inc. Dr. Hill also served as Vice President with Kaiser Aluminum and Chemical Corporation, and recently was honored with the Lifetime Achievement Award by the Forum for Corporate Directors. Dr. Hill has a Bachelor of Arts degree from Mills College, a Master of Science degree from California State University, Hayward, and a Doctorate of Education from the University of California at Berkeley.

Dr. Hill’s extensive background in board leadership and corporate governance has significantly supported the Company’s efforts to improve its corporate governance practices and broaden the Board’s perspective.  

 

Richard J. Lashley

 

 

 

 

 

Independent Director

 

Class I

 

Age: 60

 

Mr. Lashley is Managing Member of PL Capital Advisors, LLC, a SEC-registered investment advisory firm, and co-founder of PL Capital, LLC, a firm founded in 1996. PL Capital Advisors specializes in the banking industry and was named by the American Banker as one of the top community bank investors in the country. PL Capital is also one of the Company’s largest stockholders. Mr. Lashley’s primary responsibilities at PL Capital Advisors include portfolio management and research. Mr. Lashley has extensive experience serving on the boards of directors of numerous publicly-held and privately-held banks throughout the United States, including current service on the boards of directors of MutualFirst Financial, Inc. (NASDAQ: MFSF) and its subsidiary bank, MutualBank, and prior service on the boards of directors of Metro Bancorp, Inc. State Bancorp, Inc. and BCSB Bancorp, Inc. Mr. Lashley also has diverse experience as Chairman and/or member of numerous board committees. From 1994 to 1996, he was a Director in KPMG LLP’s corporate finance group, where he led a team providing merger and acquisition advisory services to banks throughout the country. From 1984 to 1993 he worked for KPMG LLP as a CPA, providing professional accounting services to banks and other financial services companies in New York and New Jersey. From 1992 to 1993 he served as the Assistant to the Chairman of the AICPA Savings Institution Committee in Washington D.C. Mr. Lashley received his Master’s degree from Rutgers University and a Bachelor of Science degree from Oswego State University. He is licensed as a CPA in New Jersey (status inactive).

Mr. Lashley’s extensive experience at KPMG LLP providing professional accounting and advisory services, as well as his service on numerous bank boards and his experience at PL Capital managing investments in the banking industry enable him to be a significant contributor to the Board. Mr. Lashley was appointed as a director pursuant to a Cooperation Agreement between the Company and PL Capital Advisors and its affiliates dated as of February 8, 2017. For additional information, regarding the Cooperation Agreement, see Other Transactions with Related Persons. Mr. Lashley is a Board designated “audit committee financial expert” and serves as Chair of the Audit Committee.

 

Page    |    11

Annual Proxy Statement    |    2019

 


 

PROPOSAL I

 

 

 

 

 

 

Jonah F. Schnel

 

 

 

 

 

Independent Director

 

Class I

 

Age: 46

 

Mr. Schnel is the Chairman and President of Fast A/R Funding, a private company focused on lending to small businesses throughout the United States. Presently, Mr. Schnel also manages Timco CNG, a company operating public-access, compressed, natural gas stations in Southern California. Previously, Mr. Schnel led the recapitalization of National Capital Management, an acquirer and servicer of distressed consumer debt, and assisted management during that company’s significant growth through its acquisition by Portfolio Recovery Group, Inc. in 2012. Prior to that, Mr. Schnel was a Partner at ITU Ventures for seven years, a venture capital firm making early-stage investments in technology companies associated with innovation emerging from leading research universities in the United States. Earlier in his career, Mr. Schnel worked as a manager at SunAmerica Investments, Inc. in the real estate investment division with a primary focus on first lien lending in a diversified range of commercial real estate assets. Mr. Schnel currently serves as the Chair and President of the Southern California Chapter of the Tourette Association of America. Mr. Schnel completed the director training and certification program at the UCLA Anderson School of Management and received his Bachelor’s degree, summa cum laude, from Tulane University.

Mr. Schnel’s diverse experience in founding and managing numerous privately-held companies and investments in various industries such as specialty finance and lending, alternative energy, gaming and technology, as well as his proficiency in commercial real estate and managerial oversight of a diverse set of finance-related businesses, has considerably strengthened the Board. More recently, Mr. Schnel received training and completed the cybersecurity certification program with respect to managing risk in the Information Age through Harvard University.

As Chair of the Enterprise Risk Committee, his leadership, knowledge and experience are key assets to the oversight and risk-management of the Company’s strategic plan and regulatory obligations.

 

W. Kirk Wycoff

 

 

 

 

 

 

Independent Director

 

Class I

 

Age: 61

 

Mr. Wycoff is Managing Partner of Patriot Financial Partners, a private equity fund headquartered in Philadelphia holding committed capital of $650 million, maintaining a long only, value-oriented buy and hold strategy designed to provide growth capital to financial services companies that require additional equity to grow. Prior to joining Patriot Financial Partners, Mr. Wycoff served as Chairman and Chief Executive Officer of Continental Bank Holdings, a de novo community bank serving the Philadelphia metro market, from 2005 to 2007, and from 1991 to 2004 he served as Chairman, Chief Executive Officer and President of Progress Financial Corp. and Progress Bank. He currently serves on the board of directors of Porter Bancorp (NASDAQ: PBIB), Radius Bank and U.S. Century Bank, and recently served as a director of Guaranty Bancorp (NASDAQ: GBNK) and its subsidiary, Guaranty Bank and Trust Company, and Heritage Commerce Corp. (NASDAQ: HTBK) and its subsidiary, Heritage Bank of Commerce. Previous board positions held by Mr. Wycoff include Square 1 Financial, Inc., NewSpring Ventures-Fund I, NewSpring Mezzanine Fund as well as service on the board of The Lincoln Center during which he served as Chair of its Finance Committee. He received a Bachelor of Arts degree in Business Administration and Finance from Franklin & Marshall College.

Mr. Wycoff’s 40 years in the banking industry, which includes over 18 years of experience as an executive officer and more than 10 years in various director positions, brings extensive leadership and community banking experience to our Board, including executive management, risk, credit and resolution experience, risk assessment skills and public company expertise. As the Managing Partner of Patriot Financial Partners, he also provides the perspective of a significant investor in the Company.

 

 

Annual Proxy Statement    |    2019

Page    |    12

 


 

PROPOSAL I

 

 

 

 

Continuing Directors with Terms Expiring at the 2020 Annual Meeting of Stockholders – Class II

 

Set forth below is information about the directors whose terms of office continue beyond the Meeting, including each individual’s principal occupation, business experience and qualifications to serve on the Board of Directors.

 

 

 

 

 

Halle J. Benett

 

 

 

 

 

Independent Director

 

Class II

 

Age: 51

 

 

Mr. Benett has been the Managing Director and Head of Financial Services Investing at Melody Capital Partners since September 2016, for which his work frequently brings him to California. Prior to that, Mr. Benett was the Managing Director and Head of Diversified Financials Investment Banking at Keefe, Bruyette & Woods, a Stifel Company. Mr. Benett has completed over 100 equity and debt capital raises in addition to having participated in more than 40 merger and acquisition transactions. Before joining Keefe, Bruyette & Woods in 2014, Mr. Benett was a Senior Advisor for Ares Management, working with the firm’s capital markets, private debt, private equity and real estate groups. Prior to that, Mr. Benett spent 16 years at UBS Financial Institutions, Investment Banking in the Americas serving as the head from 2011 through 2013 and as co-head from 2008 through 2010. Prior to that, Mr. Benett served as Global Head of Specialty Finance at UBS Investment Bank after having advanced from his role with the company as Managing Director. Mr. Benett began his career at Ryan, Beck & Co. and received his Master’s degree in International Affairs from Columbia University and a Bachelor’s degree in Political Science and History from Rutgers University.

Mr. Benett’s wide range of experience in the financial services industry, including having worked with banks, thrifts, mortgage companies, insurance companies, alternative asset management companies and specialty finance companies, has considerably broadened the Board’s perspective. Mr. Benett also serves as a board-designated “audit committee financial expert” as a member of the Audit Committee.

 

 

 

Robert D. Sznewajs

 

 

 

 

 Chair, Independent Director

 

Class II

 

Age: 72

 

Mr. Sznewajs was the President and Chief Executive Officer of West Coast Bancorp from 2000 to 2013, an Oregon-based bank holding company which was sold in 2013 with $2.5 billion in assets. Mr. Sznewajs has held a variety of executive level roles in large financial services institutions, including Vice Chair of U.S. Bancorp; President and Chief Operating Officer of BankAmericard; Executive Vice President and Manager of Valley National Bancorp; and President and Chief Executive Officer of Michigan National Bank. In addition to nearly 40 years of experience in the areas of regulatory matters, operations and technology, consumer and commercial banking, sales and marketing, management of investment portfolios and mergers and acquisitions, Mr. Sznewajs has also served on several boards and executive committees, namely Outerwall, Inc. (formerly Coinstar); the Portland Branch Board of the Federal Reserve Bank of San Francisco; the Oregon’s Bankers Association; the United Way; the Association for Corporate Growth; and the Bates Group, LLC. Mr. Sznewajs received both his Master’s and Bachelor’s degrees from the University of Detroit and is a licensed CPA (status inactive).

In addition to Mr. Sznewajs’ responsibilities as the Board Chair, he is one of the Company’s Board-designated “audit committee financial experts” and serves as Interim Chair of the Compensation and Human Capital Committee (the Compensation Committee). His broad and deep experience in the banking industry, including having been the Chief Executive Officer of a publicly-held bank holding company, makes him a particularly valued member of the Board.

 

 

 

 

 

Page    |    13

Annual Proxy Statement    |    2019

 


 

PROPOSAL I

 

 

 

Jared M. Wolff

 

 

 

 

Non-Independent Director

 

Class II

 

Age: 50

 

 

Mr. Wolff was appointed as President and Chief Executive Officer of the Company and the Bank and as a Class II director on the Board of the Company and Chair of the Board of the Bank effective March 18, 2019. Prior to joining the Company, Mr. Wolff served as Executive Vice President, General Counsel and Corporate Secretary of City National Bank from May 2018 to March 2019, and as Deputy General Counsel from January 2018 to April 2018. At City National, he was a member of the Executive Committee and oversaw the Legal and Corporate Administrative Group, among other areas. Prior to City National, from 2015 to 2017, Mr. Wolff served as Co-Managing Partner of Quarter Group, LLC, a real estate investment company focused on acquiring urban property. From 2002 until 2014, Mr. Wolff was a senior executive at PacWest Bancorp (NASDAQ: PACW) where he served in numerous roles, including as General Counsel of PacWest, and as a member of the Board of Directors and President of its wholly owned subsidiary, Pacific Western Bank. As President of the commercial bank subsidiary, Mr. Wolff was responsible for overseeing the regional commercial banking teams for the bank throughout California and establishing initiatives for the bank as a whole. He was also a member of the bank’s Executive Asset and Liability Management Committee as well as the bank’s Credit Committee. As General Counsel of the public holding company, Mr. Wolff had primary responsibility for corporate governance, corporate regulatory compliance and execution of M&A activity, including PacWest’s $2.3 billion acquisition of CapitalSource (NYSE: CSE). During his tenure at PacWest, he also oversaw internal audit, deposit gathering, regional lending, risk management, and marketing, among other areas.

Mr. Wolff received his Bachelor’s degree from Duke University, his Master’s degree in French Language and Literature from Middlebury College and his Juris Doctorate from the University of Michigan Law School.

As a veteran California banking executive with deep expertise in finance, law and risk management, Mr. Wolff is a valuable addition to the Board.

 

 

 

 

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CORPORATE GOVERNANCE MATTERS

 

 

 

 

 

Corporate Governance Framework

 

Our Board of Directors and management are committed to sound and effective corporate governance practices. We established and utilize a comprehensive corporate governance framework that consists of policies and programs that not only satisfy applicable regulatory requirements but also are intended to build value for the Company’s stockholders.

The key components of our corporate governance framework are set forth below:

Corporate Governance Guidelines

The Company’s Corporate Governance Guidelines provide a framework for effective governance of the Company and its subsidiaries. These guidelines are reviewed periodically by the Nominating Committee, and, based upon their review, any revisions believed to be in the best interests of the Company are then recommended to the Board for review and approval.

 

Related Party Transaction Policy

The Company’s Related Party Transaction Policy restricts transactions with related parties by imposing rigorous standards, with the expectation that such transactions will be rare. The policy establishes protocols for prior review of proposed related party transactions and requires that they be in, or not inconsistent with, the best interests of the Company and its stockholders. For more information about this policy, see Transactions with Related Persons

 

Code of Business Conduct and Ethics

The Company’s Code of Business Conduct and Ethics (the Ethics Code) applies to all directors, officers and employees of the Company and its subsidiaries. The Ethics Code is intended to require that all employees and directors adhere to high ethical standards and is reviewed by the Board on a regular basis.

 

 

Outside Business Activities Policy

The Company’s Outside Business Activities Policy, which supplements the Ethics Code, tightens controls on outside business activities of officers and employees and requires non-employee directors to refrain from engaging in outside business activities that create an actual or apparent conflict of interest. For more information about this policy, see Transactions with Related Persons.

 

Stock Ownership Guidelines

The Board has determined that long-term, significant equity ownership by all directors and senior officers is in the best interest of the Company and serves to align the interests of the directors and senior officers with the interests of the Company’s stockholders. To that end, the Board has adopted the following stock ownership guidelines:

As required by the Company’s Corporate Governance Guidelines, directors are expected to own stock or stock equivalents with a value equal to five times the then-current annual base cash retainer by the end of the fifth fiscal year following their appointment to the Board. We evaluate stock ownership of our directors annually, on the last day of our fiscal year. As of December 31, 2018, based on the NYSE closing stock price per share of our voting common stock on that day,     each of the directors then serving on the Board were in compliance with the Stock Ownership Guidelines then in effect.

Stock ownership guidelines are also applicable to senior officers as described in more detail below. See Compensation Discussion and Analysis—Stock Ownership Guidelines.

Directors are expected to be long-term stockholders and to refrain from selling stock other than for legitimate tax, estate planning, or portfolio diversification purposes. Other than sales through Rule 10b5-1 plans or similar automated selling programs or sales to pay taxes on compensation paid by the Company, directors are required to provide six-months’ notice of any planned sale by such director (or any of his or her affiliates or immediate family members) unless prior approval is received from the Board of Directors.

 

Public Communications Policy

The Public Communications Policy, overseen by the Audit Committee, allows for more oversight and involvement by the Board and enhances the shared accountability for and the review of all public communications by the Company.

 

Insider Trading Policy

Directors, officers and employees are obligated to comply in all respects with the Ethics Code and the Company’s Insider Trading Policy, as well as all Company black-outs or similar trading restrictions as communicated by the General Counsel.

 

 


 

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CORPORATE GOVERNANCE MATTERS

 

 

 

Evaluating the Board’s Effectiveness

 

The Board and each of its principal standing committees (Audit, Compensation and Nominating) conduct an annual self-assessment aimed at enhancing their effectiveness. As part of the self-assessment process, each Board and committee member provides feedback on a range of topics relevant to the performance and effectiveness of the Board and the applicable committee. In addition, members of the Board participate in a peer evaluation of their fellow directors and provide comments on their own skills and qualifications. The Chair of the Board then meets separately with each director to discuss the results of the peer evaluations and individual self-assessments.

The results of the self-assessment process are aggregated and summarized for the Board and for each of the principal standing committees. Comments in the summaries are not attributed to individual Board or committee members to promote candor. The aggregated results and summary of the Board’s self-assessment are presented to the Board for its review and discussion at a full Board meeting, at which time the Board considers what, if any, actions might be implemented to enhance future performance of the Board. In addition, each of the principal standing committees discusses the results of its self-assessment and any actions that might be taken to improve the committee’s future performance.

The Nominating Committee considers the results of the self-assessment process when it periodically evaluates the size, structure and composition of the Board, as well as the role, composition and allocation of responsibilities among Board committees.

 

Consideration of Board Diversity

 

Throughout the director nomination process, the Nominating Committee seeks to achieve diversity amongst the members of Board by selecting director nominees with diverse opinions and perspectives that are representative of our industry. The Nominating Committee seeks to include members with diverse backgrounds, skills and experience, including appropriate financial and other expertise relevant to the business of the Company. While not a formal policy, the Company’s director nomination processes call for the consideration of a range of types of diversity, including but not limited to race, gender, ethnicity, nationality and geography.

The Nominating Committee is committed to actively seek highly qualified women and minority candidates, as well as candidates with diverse backgrounds, skills and experience, to include in the pool from which Board nominees are chosen.

Director Education

 

In accordance with the Company’s Corporate Governance Guidelines, all directors are expected to comply with the necessary continuing educational requirements which include, but are not limited to: (i) a component covering professional development in corporate governance; and (ii) a component which covers educational development in subject matter areas that are deemed relevant to the Company’s business. In support of continuing education, the Company incurs reasonable expenses to facilitate any mandatory educational and professional development programs or any voluntary programs which the Nominating Committee may deem appropriate.

Additionally, each director is required to participate in the Company’s compliance training program, wherein the Board is expected to complete annual compliance training overseen by the Company’s Chief Compliance Officer.

Corporate Governance Documents

 

The full texts of the Corporate Governance Guidelines, the Code of Business Conduct and Ethics, and the charters of the Board’s standing committees are publicly available under the “About Us” section on the Company’s website at www.bancofcal.com by selecting Investor Relations/Governance Documents or you may obtain free copies by contacting the Company at:

Banc of California, Inc.

c/o John A. Bogler

Chief Financial Officer and Investor Relations

3 MacArthur Place

Santa Ana, California 92707

(855) 361-2262

[email protected]

 

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CORPORATE GOVERNANCE MATTERS

 

 

 

Director Independence

 

In accordance with the NYSE Corporate Governance Listing Standards and the Company’s Corporate Governance Guidelines, the Board conducted its review of all relationships between the Company and each director and director nominee and has affirmatively determined that, with the exception of Mr. Wolff, none of them has a material relationship with the Company or any other relationship that would preclude his or her independence under the NYSE Corporate Governance Listing Standards. Accordingly, the Board has determined that each of our current directors, other than Mr. Wolff, is an independent director under the NYSE Corporate Governance Listing Standards, as applied in accordance with the Company’s Corporate Governance Guidelines. Additionally, the Board has affirmatively determined that each member of the Audit Committee meets the independence and financial literacy requirements for audit committee membership under the NYSE Corporate Governance Listing Standards and SEC Rule 10A-3(b)(1), and each member of the Compensation Committee meets the independence and other requirements for compensation committee membership as set forth in the NYSE Corporate Governance Listing Standards. See Corporate Governance Matters—Role and Composition of the Audit Committee and—Role and Composition of the Compensation and Human Capital Committee for specific independence requirements.

Board Leadership Structure

 

The Board of Directors determined it to be in the best interests of the Board and the Company to separate the roles of the Chief Executive Officer and Chair of the Board. The Board believes this structure increases the Board’s independence from management and, in turn, leads to better monitoring and oversight of management. Although the Board trusts that the Company is currently best served by separating the role of the Board Chair and the Chief Executive Officer, the Board periodically reviews and discusses the continued appropriateness of this structure.

The Chair of the Board presides at meetings of the Board of Directors and at executive sessions of independent (non-employee) directors, and exercises leadership of Board operations. In the event the Chair of the Board is unable to act or is otherwise available, the Chair of the Nominating Committee will discharge the duties of the Chair of the Board.

Risk Oversight

 

The Boards of Directors of the Company and the Bank oversee the risk profile of the Company and its subsidiaries and management’s process for assessing and managing risks, both as a whole as well as through the Company and Bank Boards’ committees. The Boards have two primary methods for overseeing risk. The first method is oversight by each Board as a whole and the second method is through the Enterprise Risk Committee, Credit Committee and ALCO Committee of the Boards of the Company and the Bank. The Enterprise Risk Committee is primarily focused on assisting the Boards in discharging their oversight duties with respect to risk management activities, including the establishment of the Company’s enterprise risk management framework and associated policies and practices. The Credit Committee is mainly focused on assisting the Boards in their monitoring and oversight of credit processes and asset quality, and compliance with applicable regulatory requirements. The ALCO Committee assists the Boards in their monitoring and oversight of asset and liability strategies, liquidity and capital management to maintain compliance with applicable regulatory requirements. In accordance with its charter, the Enterprise Risk Committee is responsible for ensuring that the Company has in place an appropriate enterprise-wide framework and processes to identify, prioritize, measure and monitor significant risks, including, without limitation, operational, technology, information security, compliance, legal, reputational, strategic, credit, interest rate and liquidity risks, with the management of credit risk and interest rate risk primarily being overseen by the Credit Committee and ALCO Committee, respectively.

During 2018, the Enterprise Risk Committee, Credit Committee, ALCO Committee and the full Board received reports from executive management and employees who oversee day-to-day risk management duties on the most critical strategic issues and risks facing the Company. The Boards, Enterprise Risk Committee, Credit Committee and ALCO Committee also received reports from the Company’s Chief Risk Officer, Chief Compliance Officer, Chief Financial Officer, Chief Internal Audit Officer, the Company’s independent auditors, third-party advisors, and other executive management regarding compliance with applicable laws and regulations, risk-related policies, procedures and limits in order to ensure compliance by properly evaluating the effectiveness of the Company’s risk controls.

 

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CORPORATE GOVERNANCE MATTERS

 

 

 

Cybersecurity risk is a key consideration in the operational risk management capabilities at the Company. Under the direction of its Chief Information Security Officer, the Company maintains a formal information security management program, which is subject to oversight by, and reporting to, the Enterprise Risk Committee. Given the nature of the Company’s operations and business, including the Company’s reliance on relationships with various third-party providers in the delivery of financial services, cybersecurity risk may manifest itself through various business activities and channels, and it is thus considered an enterprise-wide risk which is subject to control and monitoring at various levels of management throughout the business. The Enterprise Risk Committee oversees and reviews reports on significant matters of corporate security, including cybersecurity. The Company also maintains specific cyber insurance through its corporate insurance program, the adequacy of which is subject to review and oversight by the Enterprise Risk Committee as well.

The Enterprise Risk Committee, Credit Committee and ALCO Committee may address risks directly with management, or, where appropriate, may elevate a risk for consideration by the full Boards, respectively. In addition to these committees, the other Board committees monitor risk aspects relevant to their respective areas of responsibility through direct interactions with management.


 

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CORPORATE GOVERNANCE MATTERS

 

 

 

Board Composition and Meetings

 

During 2018, each director attended at least 75 percent of the aggregate of (i) the total number of meetings of the Company’s Board of Directors held during the portion of the year he or she was a director and (ii) the total number of meetings held by all Board committees on which he or she served during the periods in which he or she served.

Although not required, the Board of Directors generally requests that directors attend the Company’s annual meeting of stockholders and that the Board Chair attends the Meeting and, if the Chair is not an independent director, the Board generally requests that an independent (non-employee) director attend the Meeting to represent such directors. The 2018 annual meeting of stockholders was attended by all directors serving at that time, including the one director whose term expired at the conclusion of that meeting and who declined to stand for re-election.

The current composition of the Company Board is reflected below. All members of the Company Board also currently serve as directors of the Bank, each for a one-year term, with Mr. Wolff serving as Chair of the Board of Directors of the Bank.  

Robert D. Sznewajs, Chair

 

 

 

Halle J. Benett

Richard J. Lashley

 

 

Mary A. Curran

Jonah F. Schnel

 

 

B. A. Fallon-Walsh

Jared M. Wolff

 

 

Bonnie G. Hill

W. Kirk Wycoff

 

Regular meetings of the Company’s Board of Directors were held on a quarterly basis during 2018, with additional, special meetings held as needed. Which also provided for executive sessions of independent directors without the presence of management. Likewise, separate sessions of only independent directors were held regularly or when determined by the independent directors to be necessary. Meetings held during the fiscal year ended December 31, 2018, as well as actions taken in the form of a unanimous written consent by the Board in lieu of holding a special meeting is set forth below.

 

Company Board Meetings and Actions

      Total

 

Regular Meetings

 

 

5

 

Special Meetings

 

 

14

 

Actions by Unanimous Written Consent

 

 

4

 

Annual Total

 

 

23

 

 

 

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CORPORATE GOVERNANCE MATTERS

 

 

 

Committee Composition of the Board of Directors and Meeting Attendance

 

The Board of Directors of the Company currently has six standing committees. Since all current members of the Company Board also serve as directors of the Bank, each of these committees is a joint committee of the Boards of Directors of the Company and the Bank. The Nominating Committee is responsible for evaluating the structure, composition and duties of each Board committee and recommending any changes to the Board. The table below reflects the current composition of, and the number of meetings held (and actions taken by unanimous written consent) during the fiscal year ended December 31, 2018 by, the Board committees:

 

Board Member

Audit

Compensation

Nominating

ALCO

Credit

Enterprise Risk

Benett

M

 

C

M

 

 

Curran

 

 

 

 

C

M

Fallon-Walsh

 

M

 

 

 

M

Hill

 

M

M

 

 

 

Lashley

C

 

M

M

 

 

Schnel

 

 

M

 

M

C

Sznewajs

M

C*

 

 

 

 

Wolff

 

 

 

C**

M

M

Wycoff

 

M

M

M

 

 

Meetings Held in 2018

10

11

12

4

8

4

Actions by Unanimous Written Consent in 2018

1

 

*

Interim Chair

 

**

Effective March 18, 2019. During 2018, the Chair was the Company’s former President, Chief Executive Officer and Director, Douglas H. Bowers.

 

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CORPORATE GOVERNANCE MATTERS

 

 

 

Role and Composition of the Audit Committee

 

The following table reflects further information regarding the principal roles and responsibilities of the Audit Committee. For a more comprehensive description, please refer to the Audit Committee charter, which is publicly available under the “About Us” section on the Company’s website at www.bancofcal.com by selecting Investor Relations/Governance Documents. The Audit Committee’s Report is included on page 69 of this proxy statement.

 

Name, Composition and

Board Determinations

 

Responsibilities

Required Meeting

Frequency

Audit Committee

Richard J. Lashley, Chair

Halle J. Benett

Robert D. Sznewajs

After review of each individual’s employment experience and other relevant factors, the Board has determined that each member has met the independence and financial literacy requirements set forth in the NYSE Listed Company Manual as well as the regulations of the Federal Deposit Insurance Corporation, and any additional requirements specific to audit committee membership. Further, the Board has affirmatively determined that each member of the Audit Committee is financially literate and at least one member is designated as an “audit committee financial expert” as defined by the SEC.

 

Hiring, terminating and/or reappointing the Company’s independent registered public accounting firm.

Not less than four times annually.

May convene additional meetings from time to time as necessary or appropriate.

 

 

 

Monitoring and oversight of the qualifications, independence and performance of the Company’s internal auditors and independent registered public accounting firm.

 

Approving non-audit and audit services to be performed by the independent registered public accounting firm.

 

Reviewing the annual audit report prepared by the Company’s independent registered public accounting firm.

 

Monitoring and oversight of the integrity of the Company’s financial statements and financial accounting practices.

 

Monitoring and oversight of the accounting and financial reporting processes of the Company and the audits of the Company’s financial statements.

 

Monitoring and oversight of the effectiveness of the Company’s internal control over financial reporting and compliance with legal and regulatory requirements.

 

Reviewing and assessing the adequacy of the Audit Committee charter on an annual basis.

 

 

 

 

 

 

Based on the recommendations of the Nominating Committee, the Board has determined that Messrs. Lashley, Benett and Sznewajs each qualify as an “audit committee financial expert,” as defined in Item 407(d)(5) of SEC Regulation S-K, and that each member of the committee meets the independence and financial literacy requirements for audit committee membership under the NYSE Listed Company Manual.

 

 

 

The Board made qualitative assessments of the levels of knowledge and experience of Messrs. Lashley, Benett and Sznewajs based on a variety of factors.

 

 

 

 

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CORPORATE GOVERNANCE MATTERS

 

 

 

 

Name, Composition and

Board Determinations

Responsibilities

Required Meeting

Frequency

 

In the case of Mr. Lashley, the Board considered his extensive experience in providing professional accounting and advisory services, as well as his service on numerous bank boards and audit committees and his experience at PL Capital managing investments in the banking industry for more than 20 years. Mr. Lashley is a certified public accountant (status inactive).

In the case of Mr. Benett, the Board considered his approximately 23 years of experience working as an investment banker with financial services companies, through which he has acquired a broad and deep knowledge of financial, accounting and audit-related matters and extensive experience analyzing and evaluating financial statements.

In the case of Mr. Sznewajs, the Board considered his formal education, extensive finance background, expertise in the areas of management, operations and technology, consumer and commercial banking, sales and marketing, investment portfolios and regulatory matters in addition to mergers and acquisitions. With more than 39 years in banking, Mr. Sznewajs has held a variety of executive level positions in financial services organizations across the United States in community and large banks, and was the Chief Executive Officer of a publicly held bank holding company. Mr. Sznewajs is a certified public accountant (status inactive).

 

 

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CORPORATE GOVERNANCE MATTERS

 

 

 

Role and Composition of the Compensation and Human Capital Committee

 

The following table reflects further information regarding the principal roles and responsibilities of the Compensation Committee. For a more comprehensive description, please refer to the Compensation Committee’s charter, which is publicly available under the “About Us” section on the Company’s website at www.bancofcal.com by selecting Investor Relations/Governance Documents. The report of the Compensation Committee is included on page 57 of this proxy statement.

 

 

 

 

Name, Composition and

Board Determinations

Responsibilities

Required Meeting

Frequency

Compensation and Human Capital Committee

 

Robert D. Sznewajs, Interim Chair

B. A. Fallon-Walsh

Bonnie G. Hill

W. Kirk Wycoff

Reviewing and approving director and officer compensation plans, policies and programs.

Not less than two times annually. May convene additional meetings from time to time as necessary or appropriate.

Determining, or recommending to the Board for its determination, the compensation of the Company’s Chief Executive Officer and other executive officers of the Company, as well as all other officers with total compensation of $1,000,000 or more.

After review of each member’s experience and other relevant factors, the Board has determined that:

Making recommendations to the Board as to the appropriate level of compensation and the suitable mix of cash and equity compensation for directors.

 

each member is independent, as defined in the NYSE Listed Company Manual, including the additional independence requirements specific to the Compensation Committee membership set forth in the NYSE Listed Company Manual;

Reviewing and recommending to the Board for approval, subject as necessary or appropriate to stockholder approval, stock option plans and other equity based compensation plans that permit payment in or based upon the Company’s stock.

at least two members are “non-employee directors” as defined in Rule 16b-3(b)(3)(i) promulgated under the Securities Exchange Act of 1934, as amended;

Overseeing the talent planning and executive recruiting processes.

all members are “outside directors” as defined for purposes of Section 162(m) and the regulations thereunder; and

Produce a report on executive compensation for inclusion in the Company’s annual proxy statement and/or annual report on Form 10-K.

 

each member meets the considerations specifically relevant to independence from management in connection with performing their duties relating to compensation as defined under the charter.

 

 

 

The charter of the Compensation Committee does not specifically provide for delegation of any of the authorities or responsibilities of the committee as it relates to compensation, other than the ability of the committee to form and delegate authority to subcommittees when appropriate. This includes the delegation of approval of award grants and other transactions and other responsibilities regarding the administration of compensatory programs to a subcommittee consisting solely of members of the Committee who are (i) “non-employee directors” as defined in Rule 16b-3(b)(3)(i) under the Securities Exchange Act of 1934, as amended; and/or (ii) “outside directors” as defined for purposes of Section 162(m). For information about the role of the Chief Executive Officer with respect to the Compensation Committee see Compensation Discussion and Analysis—Role of the Chief Executive Officer. None of the Company’s executive officers, including the Chief Executive Officer, has any role in determining the amount of director compensation. Director compensation is determined by the full Board after considering the recommendations of the Compensation Committee.

 

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CORPORATE GOVERNANCE MATTERS

 

 

 

Additionally, the charter of the Compensation Committee authorizes the committee to select and retain compensation consultants, legal counsel or other advisors to advise the committee in carrying out its duties. See Compensation Discussion and Analysis—Role of Compensation Consultants.

Compensation Committee Interlocks and Insider Participation

 

None of the members of the Compensation Committee is a current or former officer or employee of the Company or any of its subsidiaries. No executive officer has served as a member of the Compensation Committee (or other board committee performing equivalent functions) or as a director of any other entity that has an executive officer serving as a member of the Compensation Committee or the Company’s Board of Directors.

For information regarding certain transactions to which the Company is a party in which Mr. Sznewajs, who currently serves as the interim Chair of the Compensation Committee, has or may have a direct or indirect material interest, see Other Transactions with Related Persons.

 

 

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CORPORATE GOVERNANCE MATTERS

 

 

 

Role and Composition of the Nominating and Corporate Governance Committee

 

The following table reflects further information regarding the principal roles and responsibilities of the Nominating Committee. For a more comprehensive description, please refer to the Nominating Committee’s charter, which is publicly available under the “About Us” section on the Company’s website at www.bancofcal.com by selecting Investor Relations/Governance Documents.

 

Name, Composition and

Board Determinations

Responsibilities

Required Meeting

Frequency

Nominating and Corporate Governance Committee

Halle J. Benett, Chair

Bonnie G. Hill

Richard J. Lashley

Jonah F. Schnel

W. Kirk Wycoff

After review of each member’s experience and other relevant factors, the Board has determined that each member is independent, as defined under the NYSE Listed Company Manual.

Nominating

Not less than two times annually.

May convene additional meetings from time to time as necessary or appropriate.

 

Annually assess the independence of the Board members.

 

Identifying, screening and recommending to the Board candidates for membership on the Board, including director nominees proposed by stockholders, in accordance with the Company’s bylaws and applicable law. Nominations from stockholders will be considered and evaluated using the same criteria as all other nominations. Final approval of any candidate shall be determined by the full Board.

 

Actively seek individuals qualified to become Board members for recommendation to the Board for appointment or nomination for election as directors.

 

As set forth in the Company’s Corporate Governance Guidelines, the following are the minimum requirements for Board membership: (a) the director must possess a breadth and depth of management, business, governmental, nonprofit or professional experience, preferably in a leadership or policymaking role, that indicates the ability to make a meaningful contribution to the Board’s discussion of and decision making on the array of complex issues which the Company faces and expects to face in the future; (b) the director must possess sufficient financial literacy or other professional business experience relevant to an understanding of the Company and its business that will enable such individual to provide effective oversight as a director; (c) the director must possess the ability to think and act independently, as well as the ability to work constructively in a collegial environment; (d) the director must demonstrate behavior that indicates that he or she is committed to the highest ethical standards; (e) the director must possess the ability to devote sufficient time and energy to the performance of his or her duties as a director; and (f) the director may not simultaneously serve on the board of directors or equivalent body of an organization that the Board reasonably determines (i) is a

 

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CORPORATE GOVERNANCE MATTERS

 

 

 

 

Name, Composition and

Board Determinations

Responsibilities

Required Meeting

Frequency

 

 

significant competitor or potential significant competitor of the Company or of a key vendor of the Company; or (ii) would otherwise benefit from access to the Company’s intellectual property, strategic or other confidential or proprietary information. It is also desired that individual directors possess special skills, expertise and background that would complement the attributes of the other directors and promote diversity and the collective ability of the Board to function effectively. While the Board does not have a specific diversity policy, as stated above, our Corporate Governance Guidelines provide that the Nominating Committee should seek to promote diversity on the Board and the committee considers age, gender, race, ethnicity and cultural background when considering and recommending candidates to the Board.

 

 

Corporate Governance

 

 

Developing and recommending to the Board a set of corporate governance guidelines and other policies and guidelines which the committee determines necessary and appropriate for adoption by the Company.

 

Reviewing and approving any insider or related party transactions (as defined in Item 404 of Regulation S-K), in accordance with the Company’s Related Party Transaction Policy.

 

Leading the Board in its annual review of the Board’s performance, and the performance of various Committees of the Board.

 

Recommending to the Board the membership of each Board committee.

 

Communications with the Board

 

Stockholders and other interested parties who wish to communicate with the Board or any specific director, including any committee of the Board, or with the chair of any committee, may do so by writing to the address below to the attention of the Corporate Secretary who will then sort the correspondence to ensure receipt by the appropriate director(s).

Banc of California, Inc.

Attn: Corporate Secretary

3 MacArthur Place

Santa Ana, California 92707

 

 

 

 

 

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DIRECTOR COMPENSATION

 

 

 

Overview

 

The Compensation Committee is responsible for the periodic review of compensation paid to non-employee directors of the Company and the Bank and recommending changes to the Boards, when the Compensation Committee deems appropriate. As indicated below under Employee Directors, directors who are also employees of the Company and/or the Bank receive no compensation for their service as a director.

The existing elements of the Company’s director compensation program are a combination of cash and stock-based incentives to attract and retain qualified candidates to serve on the Boards of the Company or the Bank. In determining the components of non-employee director compensation, the Compensation Committee considers the significant amount of time directors expend to fulfill their duties, the skill level required of Board members and the nature of the Company’s business objectives.

Effective August 8, 2018, upon the recommendation of the Compensation Committee, the Boards made minor changes to the cash component of the director compensation program to improve the administrative processes and provide further clarity. See Director Compensation - Previous Director Compensation Program in Effect in 2018. On November 28, 2018, upon the recommendation of the Compensation Committee, the Boards approved further changes to the director compensation program, effective January 1, 2019, which are expected to result in a net reduction in compensation of approximately 15 percent per non-employee director.

The current components of our director compensation program, as well as components in effect during 2018, are summarized in the tables below. We do not provide non-equity incentive plan awards, deferred compensation or retirement plans for non-employee directors.

Current Director Compensation Program

 

The current compensation program for non-employee directors of the Company and the Bank is reflected in the following table:

 

Schedule of Current Director Fees, Effective January 1, 2019

 

Compensation Element

 

Cash (1)

 

 

Equity (2)

 

Annual Retainer

 

$

75,000

 

 

$

75,000

 

 

 

Additional Compensation

 

Chair of the Board

 

$

37,500

 

 

$

37,500

 

Committee Chair

 

 

 

 

 

 

 

 

Audit

 

$

8,500

 

 

$

8,500

 

ALCO

 

$

6,000

 

 

$

6,000

 

Compensation and Human Capital

 

$

6,000

 

 

$

6,000

 

Credit

 

$

6,000

 

 

$

6,000

 

Enterprise Risk

 

$

6,000

 

 

$

6,000

 

Nominating and Corporate Governance

 

$

6,000

 

 

$

6,000

 

Non-Chair Committee Member

 

 

 

 

 

 

 

 

Audit

 

$

4,250

 

 

$

4,250

 

ALCO

 

$

3,000

 

 

$

3,000

 

Compensation and Human Capital

 

$

3,000

 

 

$

3,000

 

Credit

 

$

3,000

 

 

$

3,000

 

Enterprise Risk

 

$

3,000

 

 

$

3,000

 

Nominating and Corporate Governance

 

$

3,000

 

 

$

3,000

 

 

(1)

Cash compensation is payable in equal quarterly installments, in advance of each quarter, up to the maximum amount of the specified annual retainer; provided, however, that management is authorized to adjust the amount and timing of cash compensation payments on a case-by-case basis and in management’s sole discretion if the circumstances so warrant (for example, in the event a director’s anticipated term of service remaining is less than a quarter or to ensure each director is receives appropriate cash compensation to reflect his or her term of service). No cash retainer will be paid after any termination of service. Additionally, cash compensation is payable with respect to the entire month of service if one day is served by a director during that month, except that a director shall receive pro-rata fees during the first month of service based on the actual date he or she is first appointed or elected as a director. Lastly, if committee composition re-assignments occur after the first day of any quarter, then adjustments to cash payments as a result of committee composition reassignments will go into effect the first day of the following quarter.

 

Page    |    27

Annual Proxy Statement    |    2019

 


 

DIRECTOR COMPENSATION

 

 

 

 

 

(2)

Equity awards are payable in the form of restricted stock units that will fully vest on the one-year anniversary of the grant date, subject to acceleration upon a change of control, termination of service due to death or disability or other qualifying termination of service. Equity awards are granted annually, following the Company’s annual meeting of stockholders.

Previous Director Compensation Program in Effect During 2018

 

The compensation program for non-employee directors of the Company and the Bank in effect during 2018 is reflected in the following table:

 

Schedule of Director Fees in Effect During 2018

 

Compensation Element

 

Cash (1, 2)

 

 

 

Equity (3)

 

Annual Retainer

 

$

87,500

 

 

 

$

87,500

 

 

 

Additional Compensation

 

Chair of the Board

 

$

43,750

 

 

 

$

43,750

 

Committee Chair

 

 

 

 

 

 

 

 

 

Audit

 

$

10,000

 

 

 

$

10,000

 

ALCO

 

$

7,500

 

 

 

$

7,500

 

Compensation and Human Capital

 

$

7,500

 

 

 

$

7,500

 

Credit

 

$

7,500

 

 

 

$

7,500

 

Enterprise Risk

 

$

7,500

 

 

 

$

7,500

 

Nominating and Corporate Governance

 

$

7,500

 

 

 

$

7,500

 

Non-Chair Committee Member

 

 

 

 

 

 

 

 

 

Audit

 

$

5,000