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Section 1: DEF 14A (DEF 14A)

banc-def14a_20200514.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:

 

 

 

 

 


 

 

 

 


 

 

 

 

March 30, 2020 

 

Dear Fellow Stockholder:

 

During this unprecedented period of the coronavirus (COVID-19) pandemic, we would like to first express our thoughts and prayers to those who have been impacted by COVID-19.  Banc of California, Inc. (the Company) is committed to promoting and maintaining the health and safety of our employees, clients, communities and investors. Through the unwavering dedication of our employees and the business continuity procedures we have in place, we have continued to provide services to our clients with as little disruption as possible, while adhering to the best practices recommended by government and health officials.  Please rest assured, we are committed to supporting our clients and communities through this difficult period of time.

With this commitment in mind, on behalf of the Board of Directors (Board) and management of the Company, we invite you to attend the Company’s 2020 Annual Meeting of Stockholders (the Annual Meeting or the Meeting). The Meeting will be held at 8:00 A.M., Pacific Daylight Time, on May 14, 2020 at Balboa Bay Resort, located at 1221 West Coast Highway, Newport Beach, California 92663. As part of our precautions regarding the COVID-19 pandemic, we are planning for the possibility that the Annual Meeting may be held either solely by means of remote communication (commonly referred to as a “virtual” meeting) or in-person but with stockholders having the option to attend by means of remote communication. If we determine to make the Meeting virtual or provide a remote option, we will announce the decision to do so in advance, and provide information on how to participate in a press release, which will be filed with the Securities and Exchange Commission as additional proxy soliciting material.

2019 was a transformational year for the Company. We successfully executed on three core strategic objectives to improve the foundation of our franchise: reduce our cost of deposits, de-risk and right- size our balance sheet and reduce expenses. We made substantial progress toward accomplishing these goals with a largely new executive management team, most of whom joined us in 2019. With our new team in place, we are well positioned to continue to improve our franchise and work to become California’s premier relationship-focused business bank. We also bolstered our Board by adding two new independent directors, both of whom have deep roots in the Southern California business community.

In addition, we have made many enhancements to our corporate governance practices in recent years, including declassifying our Board. Starting with this year’s Annual Meeting, all directors will stand for election every year. Moreover, based on the “say-on-pay” frequency most favored by stockholders at our last annual meeting, we will be more accountable with respect to our executive compensation program by holding an advisory “say-on-pay” stockholder vote every year.

Your vote is important, regardless of the number of shares you hold. We will begin mailing a Notice of Internet Availability of Proxy Materials and voting instructions to our stockholders on or about March 30, 2020, informing them of the availability online of our proxy statement and our Annual Report on Form 10-K for the year ended December 31, 2019. You may choose to access these materials online, or you may request paper or e-mail copies. By making these materials available online to all stockholders 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-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.

In these unprecedented times, our Board and management are committed to the success of the Company.  We endeavor to support our colleagues, clients and communities in a way that will enhance stockholder value. We greatly appreciate your confidence and support. Sincerely,

 

/s/ Robert D. Sznewajs

ROBERT D. SZNEWAJS

Chair of the Board

 

/s/ Jared M. Wolff

JARED M. WOLFF

President and CEO

 

 

 

Annual Proxy Statement    |    2020

 

 


 

BANC OF CALIFORNIA, INC.

 

 

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

May 14, 2020

NOTICE IS HEREBY GIVEN that the 2020 Annual Meeting of Stockholders (the Annual Meeting or the Meeting) of Banc of California, Inc. (the Company) will be held:

DATE

May 14, 2020

 

 

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 ten director nominees named in this proxy statement, each for a term of one year.

 

 

 

 

II.

Ratification of the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2020.

 

 

 

 

III.

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

 

 

 

 

 

 

RECORD DATE

Holders of record of the Company’s voting common stock at the close of business on March 16, 2020 (Record Date), 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, 2019, as filed with the Securities and Exchange Commission on March 2, 2020 (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 vote today.

You may obtain directions to the Balboa Bay Resort, 1221 West Coast Hwy, Newport Beach, CA 92663, by calling the Balboa Bay Resort directly at (949) 645-5000. Each stockholder who attends may be asked to present valid picture identification such as a driver's license or passport. Stockholders holding stock in brokerage accounts (so-called "street name" holders) will also need to bring a copy of a brokerage account statement reflecting stock ownership as of the Record Date. Cameras, recording devices and other electronic devices will not be permitted at the Annual Meeting.

**As part of our precautions regarding the coronavirus (COVID-19) pandemic, we are planning for the possibility that the Annual Meeting may be held either solely by means of remote communication (commonly referred to as a “virtual” meeting) or in-person but with stockholders having the option to attend by means of remote communication.  If we determine to make this Meeting virtual or provide a remote option, we will announce the decision to do so in advance, and provide information on how to participate, in a press release, which will be filed with the Securities and Exchange Commission as additional proxy soliciting material.

 

March 30, 2020

BY ORDER OF THE BOARD OF DIRECTORS,

/s/Ido Dotan

IDO DOTAN

General Counsel and Corporate Secretary

Santa Ana, California

 

 

 

Annual Proxy Statement    |    2020

 

 


 

TABLE OF CONTENTS

 

 

 

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

May 14, 2020

 

 

 

 

 

 

 

PAGE

 

 

PROXY STATEMENT SUMMARY

1

 

 

Our Annual Meeting Logistics

1

 

 

Our Annual Meeting Agenda

1

 

 

Our Vision

2

 

 

2019 Performance

2

 

 

STOCK OWNERSHIP

3

 

 

Stock Ownership of Greater than Five Percent Stockholders

3

 

 

Stock Ownership of Directors and Executive Officers

4

 

 

Delinquent Section 16(a) Reports

5

 

 

PROPOSAL I

6

 

 

General

6

 

 

Current Board of Directors

6

 

 

Director Nominations and Proposals by Stockholders

7

 

 

Nominees for Director at the Annual Meeting

7

 

 

Directors

8

 

 

CORPORATE GOVERNANCE MATTERS

13

 

 

Corporate Governance Framework

13

 

 

Our Commitment to Corporate and Social Responsibility

14

 

 

Evaluating the Board’s Effectiveness

14

 

 

Consideration of Board Diversity

15

 

 

Director Education

15

 

 

Corporate Governance Documents

15

 

 

Director Independence

16

 

 

Board Leadership Structure

16

 

 

Risk Oversight

16

 

 

Board Composition and Meetings

17

 

 

Committee Structure of the Board of Directors and Meeting Attendance

17

 

 

Role and Composition of the Audit Committee

18

 

 

Role and Composition of the Compensation, Nominating and Corporate Governance Committee

19

 

 

 

 

 

 

 

PAGE

 

 

CNG Committee Delegation Of Authorities

20

 

 

Compensation Committee Interlocks and Insider Participation

20

 

 

Communications with the Board

20

 

 

DIRECTOR COMPENSATION

21

 

 

Overview

21

 

 

Current Director Compensation Program

21

 

 

Employee Directors

22

 

 

2019 Summary Table of Director Compensation

22

 

 

EXECUTIVE OFFICERS

24

 

 

Designation of Executive Officers

24

 

 

Executive Officer Biographies

25

 

 

COMPENSATION DISCUSSION AND ANALYSIS

28

 

 

Introduction

28

 

 

Our Vision

28

 

 

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

29

 

 

Key Features and Principal Components of Our Executive Compensation Program

30

 

 

Role of Peer Group for 2019 Compensation Decisions

31

 

 

2019 Pay Decisions

32

 

 

Our Compensation Program Best Practices

33

 

 

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

33

 

 

How We Make Compensation Decisions

34

 

 

Role of Chief Executive Officer

34

 

 

Role of Compensation Consultants

34

 

 

Base Salary

34

 

 

Annual Incentives

36

 

 

Long-Term Incentives

38

 

 

Compensation, Nominating and Corporate Governance Committee’s Response to 2019
“Say-on-Pay” Vote

40

 

 

Stock Ownership Guidelines

40

 

 

Recoupment Policy

40

 

 

 

Page    |    TOCi

Annual Proxy Statement    |    2020

 


 

TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

PAGE

 

 

 

 

Anti-Hedging/Pledging Policy

41

 

 

Equity Grant Policy

41

 

 

401(k) Plan

41

 

 

Perquisites and Other Benefits

41

 

 

Employment Agreements

42

 

 

Payments Due Upon Termination or a Change in Control

42

 

 

Tax Impact

42

 

 

REPORT OF THE COMPENSATION, NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

43

 

 

SUMMARY COMPENSATION TABLE

44

 

 

CHIEF EXECUTIVE OFFICER PAY RATIO

47

 

 

2019 GRANTS OF PLAN-BASED AWARDS

48

 

 

OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2019

49

 

 

STOCK OPTION EXERCISES AND STOCK VESTED

50

 

 

EMPLOYMENT AGREEMENTS

51

 

 

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

55

 

 

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

55

 

 

Potential Payments Upon Termination of Employment or Change of Control as of December 31, 2019

56

 

 

REPORT OF THE AUDIT COMMITTEE

58

 

 

PROPOSAL II

59

 

 

General

59

 

 

Fees Paid to Independent Registered Public Accounting Firms During the Years Ended December 31, 2019 and 2018

60

 

 

PROPOSAL III

61

 

 

Advisory (Non-Binding) Vote to Approve Executive Compensation

61

 

 

 

 

 

 

 

 

PAGE

 

 

Vote Required

61

 

 

TRANSACTIONS WITH RELATED PERSONS

62

 

 

General

62

 

 

Other Transactions with Related Persons

63

 

 

INFORMATION ABOUT THE 2020 ANNUAL MEETING OF STOCKHOLDERS

64

 

 

Notice and Access (Electronic Proxy)

64

 

 

Copies of Materials

64

 

 

Who Can Vote

64

 

 

Voting Shares Held in “Street Name” by a
Broker

64

 

 

Number of Shares Required to be Present to Hold the Meeting

65

 

 

How to Vote Your Shares

65

 

 

Revoking Your Proxy

65

 

 

Board of Directors Voting Recommendations

66

 

 

How Shares are Treated when no Voting Instructions are Provided

66

 

 

Other Matters to be Presented

66

 

 

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

67

 

 

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

67

 

 

Inspector of Election

68

 

 

Proxy Solicitation Costs

68

 

 

Attending the Meeting

68

 

 

Director Nominees Unable to Stand for Election

68

 

 

ADDITIONAL INFORMATION

69

 

 

Other Matters

69

 

 

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

69

 

 

APPENDICES

70

 

 

Appendix A

70

 

 

 

 

 

Annual Proxy Statement    |    2020

Page    |    TOCii

 


 

PROXY STATEMENT SUMMARY

 

 

 

 

 

 

Our Annual Meeting Logistics

 

 

 

 

BANC OF CALIFORNIA, INC.

3 MacArthur Place

Santa Ana, California 92707

(949) 236-5211

 

 

 

 

 

Date and Time

May 14, 2020

8:00 A.M. Pacific Daylight Time

 

Location**

Balboa Bay Resort

1221 West Coast Highway

Newport Beach, California 92663

 

 

 

 

Record Date

March 16, 2020

 

 

 

 

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 2020 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 ten director nominees named in this proxy statement, each for a term of one year.

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, 2020. 

FOR

59

 

 

 

 

  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

61

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 2020 Annual Meeting of Stockholders beginning on page 64. The accompanying Notice of Annual Meeting of Stockholders and this proxy statement are first being made available to stockholders on or about March 30, 2020.

The Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission (the SEC) on March 2, 2020 (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).

As of the Record Date, there were 49,800,219 shares of voting common stock issued and outstanding.

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

** As part of our precautions regarding the coronavirus (COVID-19) pandemic, we are planning for the possibility that the Annual Meeting may be held either solely by means of remote communication (commonly referred to as a “virtual” meeting) or in-person but with stockholders having the option to attend by means of remote communication.  If we determine to make this Meeting virtual or provide a remote option, we will announce the decision to do so in advance, and provide information on how to participate, in a press release, which will be filed with the SEC as additional proxy soliciting material.

 

Page    |    1

Annual Proxy Statement    |    2020

 


 

PROXY STATEMENT SUMMARY

 

 

 

Our Vision

 

Our vision is to be California’s premier relationship-focused business bank. We deliver comprehensive products and solutions for businesses, entrepreneurs, and individuals within our footprint through our 31 full service branches, extending from San Diego to Santa Barbara, including Los Angeles and Orange County.  We have served California markets since 1941 through the Bank and its predecessors. The Bank offers a variety of financial products and services designed around our clients in order to serve all of their banking and financial needs.

We have a strong foundation that supports this vision, including:

    a strong balance sheet;

    a strong credit and underwriting culture;

    a client-centric and service-oriented focus;

    an experienced leadership team and strong corporate governance;

    a recognizable and powerful brand; and

    superior markets in which we operate.  

 

2019 Performance

 

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 executed on the following priorities in 2019:

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

    growing low cost and noninterest bearing deposits by focusing on relationships with clients, who value our service, execution and high touch-banking model. This relationship-based approach will result in a higher mix of noninterest bearing deposits, and reduced reliance on wholesale funding.

    reducing the expense burden by realizing operational efficiencies, including investments in technology that contribute to better client service.

Through these initiatives, we believe our management team strengthened the foundation of the Company in a way that will increase shareholder value for the long term. The Company’s common stock reacted favorably to the vision and execution. After underperforming in 2018 compared to the three indices shown in the chart below, the Company’s common stock achieved a 32% annual rate of return for stockholders, outperforming the NYSE Composite and KBW Regional Bank Indices.  

 

Annual Rate of Stockholders' Return Index 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 Banc of California, Inc. 33% 23% 22% -34% 32% NYSE Composite -6% 9% 16% -11% 22% KBW Regional Bank Index3% 36% 0% -19% 20%

 

For 2020, we intend to continue our focus and investment of resources on (i) improving the mix and cost of our deposits; (ii) remixing our loan portfolio, adding relationship-based loans as legacy brokered loans run off; and (iii) optimizing our use of capital.  We believe the execution of these priorities will continue to improve our franchise and increase stockholder value.

 

Annual Proxy Statement    |    2020

Page    |    2

 


 

STOCK OWNERSHIP

 

 

 

 

Stock Ownership of Greater than Five 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 the March 16, 2020 record date (Record Date) for the Annual Meeting.

 

 

Name and Address of Greater than 5% Stockholders

 

Amount and Nature of

Beneficial Ownership (1)

 

Percent of Voting

Common Stock Outstanding (1)

Wellington Management Group LLP et al.

280 Congress Street

Boston, Massachusetts 02210 (2)

 

 

 

7,087,175

 

 

 

 

14.23%

 

 

BlackRock, Inc.

55 East 52nd Street

New York, New York 10055 (3)

 

 

 

7,032,846

 

 

 

 

14.12%

 

 

Dimensional Fund Advisors LP

Building One

6300 Bee Cave Road

Austin, Texas 78746 (4)

 

 

 

3,911,999

 

 

 

 

7.86%

 

 

PL Capital Advisors, LLC et al.

750 Eleventh Street South, Suite 202

Naples, Florida 34102 (5)

 

 

 

3,437,518

 

 

 

 

6.90%

 

 

The Vanguard Group

100 Vanguard Boulevard

Malvern, Pennsylvania 19355 (6)

 

 

 

3,097,215

 

 

 

 

6.22%

 

 

 

(1)

Based on 49,800,219 shares of common stock of the Company issued and outstanding as of the Record Date.  For purposes of computing the percentage of outstanding shares of common stock held by each person or group of persons named above, any shares which such person or persons has the right to acquire within 60 days of the Record Date are deemed to be outstanding for such person or persons, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.

 

(2)

As reported in Amendment No. 3 to Schedule 13G filed with the SEC on January 8, 2020 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 6,363,463 shares and shared dispositive power over 7,087,175 shares;

 

 

Wellington Group has shared voting power over 6,363,463 shares and shared dispositive power over 7,087,175 shares;

 

 

Wellington Advisors has shared voting power over 6,363,463 shares and shared dispositive power over 7,087,175 shares; and

 

 

Wellington Company has shared voting power over 6,332,179 shares and shared dispositive power over 7,019,781 shares.

 

(3)

As reported in Amendment No. 4 to Schedule 13G filed with the SEC on February 4, 2020 by BlackRock, Inc. (BlackRock). The amended Schedule 13G reports that BlackRock has (i) sole voting power over 6,915,880 shares and (ii) sole dispositive power over 7,032,846 shares.

 

(4)

As reported in Amendment No. 1 to Schedule 13G filed with the SEC on February 12, 2020 by Dimensional Fund Advisors LP (Dimensional). The amended Schedule 13G reports that Dimensional has (i) sole voting power over 3,773,444 shares and (ii) sole dispositive power over 3,911,999 shares.

 

(5)

Includes shares reported in Amendment No. 3 to Schedule 13D filed with the SEC 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 issued to Mr. Lashley in connection with his service on the Board.

(6)

As reported in Amendment No. 1 to Schedule 13G filed with the SEC on February 12, 2020 by The Vanguard Group (Vanguard). The amended Schedule 13G reports that Vanguard has (i) sole voting power over 45,886 shares, (ii) sole dispositive power over 3,042,858 shares, (iii) shared voting power over 15,500 shares and (iv) shared dispositive power over 54,357 shares.

 

 

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Annual Proxy Statement    |    2020

 


 

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 for:

 

(i)

each director of the Company;

 

(ii)

each Named Executive Officer (as defined under Compensation Discussion and Analysis—Introduction), consisting of the applicable executive officers at December 31, 2019 and including certain individuals who ceased to be executive officers prior to that date; and

 

(iii)

all 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. As used in the following table, RSAs refer to restricted stock awards and RSUs refer to restricted stock units, each of which is defined in our 2018 Omnibus Stock Incentive Plan (the 2018 Omnibus Plan).

Name

 

Voting

Common

Stock

 

 

Total Number

of Shares

Subject to

RSUs that will

Vest Within 60 Days

 

 

Total Number

of Shares

Subject to

Exercisable

Options that will

Vest Within 60 Days

 

 

Total

Number of

Shares

Beneficially

Owned (2)

 

 

Percent of

Voting

Common

Stock

Outstanding (1)

 

Directors Who Are Not Executive Officers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

James A. “Conan” Barker

 

 

10,890

 

 

 

 

 

 

 

 

 

10,890

 

 

*

 

Mary A. Curran

 

 

12,049

 

 

 

 

 

 

 

 

 

12,049

 

 

*

 

B.A. Fallon-Walsh

 

 

3,697

 

 

 

 

 

 

 

 

 

3,697

 

 

*

 

Bonnie G. Hill

 

 

10,318

 

 

 

 

 

 

 

 

 

10,318

 

 

*

 

Richard J. Lashley

 

 

3,432,018

 

(3)

 

 

 

 

 

 

 

3,432,018

 

 

 

6.89

%

Jonah F. Schnel

 

 

49,578

 

(4)

 

 

 

 

6,328

 

 

 

55,906

 

 

*

 

Robert D. Sznewajs, Chair

 

 

37,892

 

(5)

 

 

 

 

6,328

 

 

 

44,220

 

 

*

 

Andrew Thau

 

 

70

 

 

 

 

 

 

 

 

 

70

 

 

*

 

W. Kirk Wycoff

 

 

1,531,914

 

(6)

 

 

 

 

 

 

 

1,531,914

 

 

 

3.08

%

Named Executive Officers Who Are Current Executive Officers at March 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

Jared M. Wolff

 

 

165,094

 

(7)

 

5,759

 

 

 

 

 

 

170,853

 

 

*

 

President, Chief Executive Officer and Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lynn M. Hopkins

 

 

 

 

 

 

 

 

 

 

 

 

 

*

 

Executive Vice President and

   Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ido Dotan

 

 

 

 

 

 

 

 

 

 

 

 

 

*

 

Executive Vice President, General Counsel

   and Corporate Secretary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael A. Smith

 

 

3,128

 

 

 

2,879

 

 

 

 

 

 

6,007

 

 

*

 

Chief Accounting Officer and Former Interim

   Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lynn A. Sullivan

 

 

 

 

 

 

 

 

 

 

 

 

 

*

 

Executive Vice President and Chief Risk Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Named Executive Officers Who Are Former Executive Officers as of March 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

Douglas H. Bowers

 

 

64,738

 

 

 

 

 

 

 

 

 

64,738

 

 

*

 

Former President and Chief Executive

   Officer and Former Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

John A. Bogler

 

 

29,719

 

 

 

 

 

 

 

 

 

29,719

 

 

*

 

Former Executive Vice President and

   Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kris A. Gagnon

 

 

6,863

 

 

 

10,363

 

 

 

 

 

 

17,226

 

 

*

 

Former Executive Vice President and

   Chief Credit Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Angelee J. Harris

 

 

26,477

 

 

 

 

 

 

 

 

 

26,477

 

 

*

 

Former Executive Vice President and General Counsel

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All Named Executive

   Officers and Current Directors, as a group

   (18 persons)

 

 

5,384,445

 

 

 

19,001

 

 

 

12,656

 

 

 

5,416,102

 

 

 

10.87

%

 

 

Annual Proxy Statement    |    2020

Page    |    4

 


 

STOCK OWNERSHIP

 

 

 

*

Represents less than 1% of the outstanding shares of the Company's common stock calculated in accordance with 13d-3 of the Exchange Act.

(1)

For purposes of this table, "beneficial ownership" is determined in accordance with Rule 13d-3 under the Exchange Act, pursuant to which a person or group of persons is deemed to have "beneficial ownership" of any shares of common stock that such person has the right to acquire within 60 days of the Record Date. This would include any restricted stock units which vest within 60 days of the Record Date. For purposes of this table, "percent of voting common stock outstanding" is based on 49,800,219 shares of common stock of the Company issued and outstanding as of the Record Date.  In addition, the percentage of outstanding shares of common stock held by each person or group of persons named above, any shares which such person or persons has the right to acquire within 60 days of the Record Date are deemed to be outstanding for such person or persons, but are not deemed to be outstanding for the purposes of computing the percentage ownership of any other person.

(2)

Unless otherwise indicated, the nature of the beneficial ownership is sole voting and investment powers over the shares indicated.

(3)

Includes 3,401,719 shares owned by PL Capital Advisors (as defined in footnote 5 to the Stock Ownership of Greater than Five 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 20,299 shares held directly by Mr. Lashley, and 10,000 shares held by the Richard Lashley Roth IRA.

(4)

Includes 4,475 shares underlying unvested RSAs over which Mr. Schnel has voting power.

(5)

Includes 4,107 shares underlying unvested RSAs over which Mr. Sznewajs has voting power.

(6)

Includes 1,461,871 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 70,043 shares held directly by Mr. Wycoff.

(7)

Includes 135,594 shares underlying unvested RSAs over which Mr. Wolff has voting power. Also includes 29,500 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.

 

Delinquent Section 16(a) Reports

 

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors, certain of its 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 known failures to file.

To the Company’s knowledge, based solely on our review of such reports filed with the SEC and written representations that no other reports were required during the fiscal year ended December 31, 2019, all Section 16(a) filing requirements applicable to the Company’s officers and directors during 2019 were met, except for the inadvertent failures by each of Mr. Bowers, Ms. Fallon-Walsh and Ms. Hill to report one transaction on a Form 4.

 

 

 

Page    |    5

Annual Proxy Statement    |    2020

 


 

PROPOSAL I

 

 

 

 

Proposal I

ELECTION OF DIRECTORS 

General

 

The Company’s Board of Directors currently consists of ten directors. All the Company’s current directors have been nominated for re-election, each for a one-year term that will expire at the 2021 annual meeting of stockholders. See Nominees for Director at the Annual Meeting.

Current Board of Directors

 

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

 

Name

Age(1)

Director

Since

 

Committee Memberships

Principal Occupation

CNG 

ALC 

ER 

Barker, James A. “Conan” 

 

54

2019

Co-President, Velocity Vehicle Group

M

 

M

 

Curran, Mary A.

 

63

2017

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

M

 

 

C

Fallon-Walsh, B.A.

 

67

2018

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

 

C

M

 

Hill, Bonnie G.

 

78

2017

President, B. Hill Enterprises, LLC 

 

M

 

M

Lashley, Richard J.

 

61

2017

Principal and Managing Member, PL Capital Advisors, LLC 

C

 

M

 

Schnel, Jonah F.

 

47

2013

Former Chair and President, Fast A/R Funding

 

M

 

M

Sznewajs, Robert D.

 

73

2013

Former President and Chief Executive Officer, West Coast Bancorp 

M

M

 

 

Thau, Andrew

 

54

2019

Chief Operating Officer and General Counsel, United Talent Agency

 

M

 

M

Wolff, Jared M.

 

51

2019

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

 

 

C

M

Wycoff, W. Kirk

 

62

2017

Managing Partner, Patriot Financial Partners 

 

M

M

 

(1)As of March 30, 2020

A – Audit Committee

C – Chair

ALC – Asset Liability Committee (ALCO)

M – Member

CNG – Compensation, Nominating and Corporate Governance

            Committee

ER – Enterprise Risk Committee (Risk)

 

 

Annual Proxy Statement    |    2020

Page    |    6

 


 

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.

Nominees for Director at the Annual Meeting

 

At the recommendation of the Compensation, Nominating and Corporate Governance Committee (CNG Committee), the Board has nominated James A. “Conan” Barker, Mary A. Curran, B. A. Fallon-Walsh, Bonnie G. Hill, Richard J. Lashley, Jonah F. Schnel, Robert D. Sznewajs, Andrew Thau, Jared M. Wolff and W. Kirk Wycoff for re-election, each for a one-year term.

Each nominee has consented to being named as a director nominee in this proxy statement and agreed to serve if re-elected. Further, except for Mr. Wolff, 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 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 all of the director nominees.

 

 

 

Page    |    7

Annual Proxy Statement    |    2020

 


 

PROPOSAL I

 

 

 

Directors

 

 

JAMES A. “CONAN” BARKER

 

 

 

 

 

 

Independent Director

 

 

 

 Age: 54

 

Mr. Barker has over 30 years of experience in corporate strategy, private equity, and management of large corporate enterprises. Since 1998, Mr. Barker has served as Co-President and 25% owner of Velocity Vehicle Group, a privately owned group of companies that serve the truck, bus and capital equipment finance markets throughout the Southwest with revenues and assets in excess of $1 billion. Mr. Barker is also a board member and 50% owner of Velocity SBA, one of 14 non-bank small business lending companies in the United States licensed to originate loans under the Small Business Administration’s 7(a) program. From 1994 through 1997, Mr. Barker worked in Palo Alto, California for HAL Investments Inc., a private equity investment firm with holdings in real estate, maritime and industrial interests. From 1991 to 1994, Mr. Barker worked in the corporate strategy department of Sea Containers, Inc. in London, England setting business strategies for the multi-national transportation and hotel conglomerate. In addition, from 1988 to 1991 Mr. Barker worked for the Boston Consulting Group in the San Francisco and Chicago offices, assisting Fortune 500 firms on corporate strategy initiatives.

Mr. Barker received his Bachelor’s in Economics and Master’s in East Asian Studies from Stanford University and has lived in Southern California for 21 years.

Mr. Barker’s extensive experience in managing large corporate enterprises and his proficiency in corporate strategy and finance make him a valuable contributor to the Board. Mr. Barker is one of the Company’s Board-designated “audit committee financial experts.”

 

 

 

 

 

Mary A. Curran

 

 

 

 

Independent Director

 

 

 

Age: 63

 

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 currently serves on the Board of Directors, Audit and Nominating and Corporate Governance Committees of Innovative Industrial Properties, Inc. (NYSE: IIPR). 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. Ms. Curran recently served as Chair of San Diego State University’s Campanile Foundation Board and Executive Committee, and currently chairs its Nominating and Governance Committee and serves on its Athletics Committee. Previous board service also includes: Chair of the California Bankers Association where she remains involved on the Banker Benefits Board. 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 Enterprise Risk Committee, have been vital to the Company’s risk framework and objectives.

 

Annual Proxy Statement    |    2020

Page    |    8

 


 

PROPOSAL I

 

 

 

 

B. A. Fallon-Walsh

 

 

 

 

 

Independent Director

 

 

 

Age: 67

 

Ms. 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.

Until June 2019, Ms. Fallon-Walsh served on the board of directors of Alliance Bernstein (NYSE: AB), where she chaired the Compensation and Workplace Practices Committee and the Corporate Governance Committee.  She also served on the board of directors of MONY Life Insurance Company of America, an indirect subsidiary of AXA Equitable Holdings, Inc. (NYSE: EQH), and chaired 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.  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.  Ms. Fallon-Walsh is the Chair of the CNG Committee.

 

Bonnie G. Hill

 

 

 

 

 

 

Independent Director

 

 

 

Age: 78

 

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.  

 

Page    |    9

Annual Proxy Statement    |    2020

 


 

PROPOSAL I

 

 

 

 

Richard J. Lashley

 

 

 

 

 

Independent Director

 

 

 

Age: 61

 

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 enables him to be a significant contributor to the Board as well as provides the perspective of a significant investor in the Company. Mr. Lashley is one of the Company’s Board-designated “audit committee financial expert” and serves as Chair of the Audit Committee.

 

 

 

Jonah F. Schnel

 

 

 

 

 

Independent Director

 

 

 

Age: 47

 

Mr. Schnel is a consultant, and manager of private equity sponsored companies and new business ventures. Until their acquisitions during 2019, Mr. Schnel led Fast A/R Funding, a private company focused on lending to small businesses throughout the United States and Timco CNG, a private 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 and 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’s Office of the Vice Provost for Advances in Learning in association with HarvardX.

 

Annual Proxy Statement    |    2020

Page    |    10

 


 

PROPOSAL I

 

 

 

 

 

 

 

Robert D. Sznewajs

 

 

 

 

 

Chair, Independent Director

 

 

 

Age: 73 

 

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.” 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.

 

 

 

 

 

 

 

 

ANDREW THAU

 

 

 

 

Independent Director

 

 

 

Age: 54

 

Mr. Thau is Chief Operating Officer and General Counsel of global talent and entertainment company United Talent Agency (UTA). Since 2007, Mr. Thau has been central to UTA’s operations, M&A and business expansion strategies amid a sea change across the entertainment, media and technology landscape. Mr. Thau was the first non-agent to be named to the UTA partnership in 2016 and its Board of Directors in 2018. Mr. Thau also serves on UTA’s audit committee and as one of four managing directors responsible for overseeing UTA’s day-to-day business. Mr. Thau began his career at the Zalkin, Rodin and Goodman law firm in New York City, specializing in bankruptcy and corporate restructuring. Mr. Thau then moved to 20th Century Fox where he served as an attorney in the licensing/merchandising and filmed entertainment groups before taking on executive roles overseeing domestic and international cable television networks and businesses. Mr. Thau later led the content and technology venture Be Here as its CEO and subsequently helped launch and served as COO of Network LIVE, a joint venture of AOL, XM Satellite Radio and AEG that broadcasted live music and entertainment events across all platforms.

Mr. Thau is a graduate of George Washington University and the Benjamin N. Cardozo School of Law, and has served on the boards of multiple charitable organizations. He has lived in Southern California for 25 years.

Mr. Thau’s extensive operational, legal and strategic experience from his senior leadership roles at UTA and various entertainment and technology ventures has considerably strengthened the Board.

 

 

Page    |    11

Annual Proxy Statement    |    2020

 


 

PROPOSAL I

 

 

 

 

 

 

 

 

Jared M. Wolff

 

 

 

 

Non-Independent Director

 

 

 

Age: 51

 

 

Mr. Wolff was appointed as President and Chief Executive Officer of the Company and the Bank and as a director 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 to 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 and Credit Committee. As General Counsel of PacWest, 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 member of the Board.

 

W. Kirk Wycoff

 

 

 

 

 

 

Independent Director

 

 

 

Age: 62

 

Mr. Wycoff is the 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    |    2020

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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 reviewed and approved by the Board on a regular basis and 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.

 

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 requires 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 and expectations:

As required by the Company’s Corporate Governance Guidelines, non-employee 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, 2019, 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 complied with the Stock Ownership Guidelines.

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.

 

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 financial related 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

 

 

 

 

Our Commitment to Corporate and Social Responsibility

 

Our Board of Directors and management are committed to fulfilling our corporate and social responsibility to bring value to our various stakeholders, including our employees, our clients and communities, and the environment in addition to our stockholders.  For example, for our employees, we aim to attract talent that not only is motivated to achieve our strategies but also reflects the diversity of the communities in which we do business. We believe that the diversity of backgrounds will not only make us better at serving the needs of the communities in which we operate, but will also provide a diversity of viewpoints to help inform our decision making. We provide competitive compensation and benefits to our employees and we offer opportunities through training and development. We are committed to maintaining a workplace where all employees feel valued for their contributions and fully engaged with our business. 

As to our clients and communities, we proudly invest, volunteer and lend in the communities we serve.  For example:

     we invest in affordable housing projects to uplift and support our local communities; 

     we empower communities through donating to organizations and supporting programs that teach financial literacy; 

     we build stronger communities through our employees who volunteer their time and skill to assist the underserved and those less fortunate in our communities; and 

     we build impactful relationships with local small businesses, entrepreneurs and individuals to empower their financial success through our banking and lending products. 

Most recently, in response to the COVID-19 pandemic, we partnered with FoodFinders, a local non-profit organization, that provides over 300,000 meals to our most vulnerable neighbors across Southern California.

We are also committed to pursuing initiatives that are both smart for our business and good for the environment. We invest in alternative energy partnerships formed to provide sustainable energy projects that also help us to generate a return primarily through the realization of federal tax credits (energy tax credits) and other tax credits. As an employer, we provide free electric vehicle charging at our headquarters for employees and we provide credits to employees for using group and public transportation.

From a governance perspective, we are committed to following corporate best practices, including, among other things, a Board consisting of ten directors, nine of whom are independent members, and a separation of the Chairman and Chief Executive Officer roles.  The diversity of our Board and executive management team is further evidence of our commitment to best corporate governance practices.

 

Evaluating the Board’s Effectiveness

 

The Board and each of its principal standing committees (Audit, ALCO, CNG, and Risk) 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 each of the principal standing committees and the Board for 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.

The CNG 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.

 

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CORPORATE GOVERNANCE MATTERS

 

 

 

 

Consideration of Board Diversity

 

Throughout the director nomination process, the CNG Committee seeks to achieve diversity among the members of Board by selecting director nominees with diverse opinions and perspectives that are representative of our industry. The CNG 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 calls for the consideration of a range of types of diversity, including but not limited to race, gender, ethnicity and geography.

The CNG Committee is committed to actively seeking 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 CNG 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 Compliance Department.

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.

Attn: Corporate Secretary

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 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. With respect to Mr. Wycoff, the Board made this determination after evaluating a third party vendor transaction whereby Mr. Wycoff’s son is a Regional Director employed by the vendor and both Mr. Wycoff and his son confirmed to the Company that neither had received any compensation nor expects to receive compensation, under the transaction.  The Board also determined that Halle J. Benett, who retired as a director effective November 6, 2019, met this independence standard.  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 CNG 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 CNG 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 Chief Executive Officer and Chair of the Board, 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.

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 Risk Committee and ALCO Committee of the Boards of the Company and the Bank. The 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 Risk Committee is also focused on assisting the Boards in their monitoring and oversight of credit processes and asset quality, and compliance with applicable regulatory requirements; prior to June 13, 2019, these were the main functions of a separately constituted Credit Committee. 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 and appropriate balance sheet and earnings risk management. In accordance with its charter, the 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 interest rate and liquidity risks primarily being overseen by the ALCO Committee.

During 2019, the Risk Committee, Credit Committee (prior to June 13, 2019), 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 Board, Risk Committee, Credit Committee (prior to June 13, 2019) and ALCO Committee also received reports from the Company’s Chief Risk Officer, Chief Compliance Officer, Chief Financial Officer, General Counsel, Chief Information Security 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 the 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 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 Risk Committee as well.

The Risk 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.

Board Composition and Meetings

 

During 2019, 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 Chair and the other members of the Board of Directors are encouraged to attend the Company’s Meeting.  If the Board Chair is not an independent director, the Board generally requests that an independent director attend the Meeting to represent the independent directors. The 2019 annual meeting of stockholders was attended by all directors serving at that time.

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

 

 

 

James A. “Conan” Barker

Jonah F. Schnel

 

 

Mary A. Curran

Andrew Thau

 

 

B. A. Fallon-Walsh

Jared M. Wolff

 

 

Bonnie G. Hill

W. Kirk Wycoff

 

 

Richard J. Lashley

 

 

Regular meetings of the Company’s Board of Directors were held on a quarterly basis during 2019, with additional, special meetings held as needed. During 2019, the Company’s Board of Directors held a total of 13 meetings.   Separate sessions of only independent directors were held regularly or when determined by the independent directors to be necessary.

Committee Structure of the Board of Directors and Meeting Attendance

 

The Board of Directors of the Company currently has four standing committees: Audit; ALCO; CNG; and Risk.  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. Prior to June 13, 2019, the responsibilities of the CNG Committee were fulfilled by two committees (the Compensation and Human Capital Committee and the Nominating and Corporate Governance Committee) and the credit-related oversight responsibilities of the Risk Committee were fulfilled by a separate committee (the Credit Committee).  The change to the current committee structure was made by the Board, based on the recommendations of the then-Nominating and Corporate Governance Committee, in order to streamline the structure of the Board’s committees.

During 2019, the Audit Committee held 12 meetings, the CNG Committee (including its predecessor committees) held 16 meetings, the ALCO Committee held five meetings and the Risk Committee (including its predecessor committees) held 12 meetings.

 

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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 58 of this proxy statement.

 

Name, Composition and

Board Determinations

 

Responsibilities

Audit Committee

Richard J. Lashley, Chair

James A. “Conan” Barker

Mary A. Curran

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.

 

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, together with the Risk Committee, 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 CNG Committee, the Board has determined that each member of the Audit Committee meets the independence and financial literacy requirements for audit committee membership under the NYSE Listed Company Manual and that each Messrs. Lashley, Barker and Sznewajs qualifies as an “audit committee financial expert,” as defined in Item 407(d)(5) of SEC Regulation S - K.

 

 

The Board made qualitative assessments of the levels of knowledge and experience of the members of the Audit Committee based on a variety of factors.

 

 

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. Barker, the Board considered his proficiency in corporate finance stemming from over 30 years of managing large corporate enterprises, as well as his extensive investment experience at a private equity investment firm.

In the case of Ms. Curran, the Board considered her 32-year tenure in the banking industry, where she served in several executive positions with commercial banks. As a result, Ms. Curran provides the Audit Committee with banking industry knowledge and management experience.

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, Nominating and Corporate Governance Committee

 

The following table reflects further information regarding the principal roles and responsibilities of the CNG Committee. For a more comprehensive description, please refer to the CNG 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 CNG Committee is included on page 43 of this proxy statement.

 

Name, Composition and

Board Determinations

Responsibilities

Compensation, Nominating and Corporate Governance Committee

 

B. A. Fallon-Walsh, Chair

Bonnie G. Hill

Jonah F. Schnel

Robert D. Sznewajs

Andrew Thau

W. Kirk Wycoff

 

Compensation

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

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 other officers (if any) 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:

 

Recommending to the Board the appropriate level of compensation and the suitable mix of cash and equity compensation for directors.

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.

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

Overseeing the talent planning and executive recruiting processes.

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

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.

 

Nominating

Annually assessing 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.

 

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CORPORATE GOVERNANCE MATTERS

 

 

 

 

 

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 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 CNG 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 and chair of each Board committee.

 

 

Overseeing the areas of director orientation, continuing education and professional development.

 

 

Assisting the Board with senior management succession planning.

 

CNG Committee Delegation of Authorities

 

The charter of the CNG 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 “non-employee directors” as defined in Rule 16b-3(b)(3)(i) under the Securities Exchange Act of 1934, as amended. For information about the role of the Chief Executive Officer with respect to the CNG 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 CNG Committee.

Additionally, the charter of the CNG 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 CNG 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 CNG Committee or the Company’s Board of Directors.

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 or e-mail 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

[email protected]

 

 

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DIRECTOR COMPENSATION

 

 

 

 

Overview

 

The CNG 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 CNG 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 CNG 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.

The current components of our director compensation program are summarized in the tables below. We do not provide non-equity incentive plan awards, deferred compensation, retirement or health 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 (2)

 

 

Equity (3)

 

Annual Retainer (1)

 

$

75,000

 

 

$

75,000

 

 

 

Additional Compensation

 

Chair of the Board

 

$

37,500

 

 

$

37,500

 

Committee Chair

 

 

 

 

 

 

 

 

Audit

 

$

8,500

 

 

$

8,500

 

ALCO (4)

 

$

6,000

 

 

$

6,000

 

Compensation, Nominating and Corporate Governance (5)

 

$

6,000

 

 

$

6,000

 

Enterprise Risk (5)

 

$

6,000

 

 

$

6,000

 

Non-Chair Committee Member

 

 

 

 

 

 

 

 

Audit

 

$

4,250

 

 

$

4,250

 

ALCO

 

$

3,000

 

 

$

3,000

 

Compensation, Nominating and Corporate Governance (5)

 

$

3,000

 

 

$

3,000

 

Enterprise Risk (5)

 

$

3,000

 

 

$

3,000

 

 

(1)Effective as of May 14, 2020, both the annual cash retainer and the annual equity retainer will decrease to $70,000.  

(2)

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 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.

(3)

Equity awards are payable in the form of RSU’s 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.

(4)     As of April 2019, Mr. Wolff served as ALCO Chair, accordingly no Committee Chair compensation fee was paid after such date.

(5)

Prior to June 13, 2019, the responsibilities of the CNG Committee were fulfilled by two committees (the Compensation and Human Capital Committee and Nominating and Corporate Governance Committee) and the credit-related oversight responsibilities of the Risk Committee were fulfilled by a separate committee (the Credit Committee).  The fee amounts for the chairs and non-chair members of the Compensation and Human Capital Committee, Nominating and Corporate Governance Committee and Credit Committee were the same as the current fees amounts for the chairs and non-chair members of the CNG Committee and the Risk Committee except there is currently one less committee in total.  

 

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DIRECTOR COMPENSATION

 

 

 

 

Employee Directors

 

Directors who were also employees of the Company and/or the Bank during 2019 received no compensation for their service as directors. As such, Mr. Bowers, who served as President, Chief Executive Officer and a director of both the Company and the Bank until his departure from the Company and the Bank in March 2019, and Mr. Wolff, who became President and Chief Executive Officer of the Company and the Bank, a director of the Company and Chairman of the Board of Directors of the Bank in March 2019, did not receive compensation for their Board service in 2019.

As of the date of this proxy statement, nine of the ten directors of the Company are independent and are not employees of the Company or the Bank.

2019 Summary Table of Director Compensation

 

The following table provides information regarding compensation paid to the non-employee directors of the Company and the Bank during the year ended December 31, 2019. See Summary Compensation Table on page 44 of this proxy statement for information regarding compensation paid to Messrs. Bowers and Wolff in 2019.

 

Name(1)

 

Fees Earned

or Paid in

Cash ($)

 

Stock

Awards ($)(2)(3)

 

All Other

Compensation ($)(5)

Total ($)

 

Barker

 

 

$

12,708

 

 

 

 

$

48,998

 

 

 

 

$

 

 

 

$

61,706

 

Benett

 

 

$

85,250

 

 

 

 

$

82,260

 

(4)

 

 

$

4,782

 

 

 

$

172,292

 

Curran

 

 

$

84,625

 

 

 

 

$

85,263

 

 

 

 

$

1,926

 

 

 

$

171,814

 

Fallon-Walsh

 

 

$

82,500

 

 

 

 

$

84,012

 

 

 

 

$

1,390

 

 

 

$

167,902

 

Hill

 

 

$

81,000

 

 

 

 

$

81,009

 

 

 

 

$

1,853

 

 

 

$

163,862

 

Lashley

 

 

$

88,000

 

 

 

 

$

86,514

 

 

 

 

$

2,048

 

 

 

$

176,562

 

Schnel

 

 

$

84,000

 

 

 

 

$

81,009

 

 

 

 

$

5,637

 

 

 

$

170,646

 

Sznewajs

 

 

$

121,250

 

 

 

 

$

119,762

 

 

 

 

$

5,841

 

 

 

$

246,853

 

Thau

 

 

$

12,500

 

 

 

 

$

48,264

 

 

 

 

$

 

 

 

$

60,764

 

Wycoff

 

 

$

82,500

 

 

 

 

$

81,009

 

 

 

 

$

1,944

 

 

 

$

165,453

 

(1)

The amounts reported in this table represent amounts paid to each non-employee director for their service on the Company Board, Bank Board and all applicable committee assignments during the fiscal year ended December 31, 2019. For those directors who either departed from or were appointed to the Board in 2019, the amounts reported are for service during the following periods:

 

for Mr. Benett, from January 1, 2019 to November 6, 2019; and

 

for Messrs. Barker and Thau, from November 5, 2019 to December 31, 2019.

(2)

Represents the grant date fair value of the stock awards issued during fiscal 2019, determined in accordance with ASC Topic 718. Awards issued during 2019 include: (a) RSUs granted for service on Board committees, as applicable; and (b) RSUs for the equity portion of the annual retainer for each non-employee director.  See footnote 4 below for a description of amounts reported for Mr. Benett.

The assumptions used in the fair value calculations are included in Note 17 to the notes to the consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 2, 2020. The grant date fair value is calculated using the closing market price of the Company’s voting common stock on the business day preceding the grant date, which is then recognized as an expense, subject to market value changes, over the scheduled vesting period of the award.

(3)

See the table that immediately follows for a breakdown of the number of vested and unvested RSUs, RSAs, and Options outstanding.

(4)

For Mr. Benett, the amount reported represents grant date fair value, as the incremental fair value resulting from the acceleration of previously unvested RSAs and RSUs in connection with his retirement as a director effective November 6, 2019 was immaterial. In addition to the accelerated RSAs and RSUs, 1,124 unvested stock options held by Mr. Benett accelerated and became fully vested upon his retirement from the Board, per the terms of the applicable stock option agreement, all of which were outstanding as of December 31, 2019

(5)

Amounts reflect cash dividends and dividend equivalents paid during 2019 on unvested RSAs and RSUs, respectively.  

 

 

Annual Proxy Statement    |    2020

Page    |    22

 


 

DIRECTOR COMPENSATION

 

 

 

The following table presents: (a) the aggregate number of RSUs granted to each non-employee director, other than Mr. Benett, during 2019, the grant date fair values of which are reflected in the table above; (b) the number of RSUs and RSAs that were accelerated in vesting for Mr. Benett in connection with his departure from the Board on November 6, 2019; (c) the aggregate number of outstanding unvested RSAs and RSUs held by each non-employee director, including Mr. Benett, as of December 31, 2019; and (d) the aggregate number of outstanding options (both vested and unvested) held by each non-employee director, other than Mr. Benett, at December 31, 2019.  The RSUs granted to the non-employee directors during 2019 are scheduled to vest in full on June 12, 2020. Other than the awards that were accelerated for Mr. Benett, all other awards listed below generally vest in substantially equal annual installments over a period of five years beginning on the first anniversary of the grant date.

 

Stock Awards in the 2019 Summary

Table of Director Compensation Above

 

Aggregate Awards Outstanding as of

December 31, 2019

Name

 

Number of

Unvested

RSUs

 

Number of Vested RSUs

 

Number

of Vested

RSAs

 

Aggregate

Number of

Unvested

RSAs and RSUs

Outstanding

 

Aggregate

Number of

Options

Outstanding

Barker

 

 

 

3,335

 

 

 

 

70

 

 

 

 

 

 

 

 

 

 

3,335

 

 

 

 

 

 

 

Benett

 

 

 

 

 

 

 

 

5,918

 

 

 

 

 

3,742