DEFA14A: Bank of Hawaii Responds to ISS Recommendation, Director Lucien Resigns from Key Committees

Bank of Hawaii addresses concerns raised by ISS regarding director independence, leading to Kent T. Lucien's resignation from the Nominating and Corporate Governance Committee and the Audit and Risk Committee.

Summary

• Bank of Hawaii Corporation has issued a supplement to its 2024 Notice of Annual Meeting of Shareholders and Proxy Statement.
• The supplement addresses feedback from Institutional Shareholder Services (ISS) regarding the independence of director Kent T. Lucien.
• ISS recommended a vote against Mr. Lucien's election due to his prior role as an officer of the Company within the last five years, classifying him as a non-independent director.
• This classification conflicted with his service on the Nominating and Corporate Governance Committee (NCGC) and Audit and Risk Committee (ARC).
• To address these concerns, Mr. Lucien resigned from membership on both the NCGC and the ARC, effective April 5, 2024.
• Mr. Lucien will continue to serve as a director of the Company and will stand for election at the Annual Meeting.

Sentiment

Score: 6

Explanation: The sentiment is neutral. While there were concerns raised by ISS, the company took action to address them. The situation is not ideal, but the company is managing it appropriately.

Positives

• The company is responsive to feedback from proxy advisory firms.
• The company took action to address concerns about director independence.

Negatives

• ISS raised concerns about the independence of a director.
• A director had to resign from key committees to address independence concerns.

Risks

• Negative recommendations from proxy advisory firms can influence shareholder votes.
• Director independence issues can raise concerns about corporate governance.

Future Outlook

The company is proceeding with its Annual Meeting of Shareholders on April 26, 2024, with Mr. Lucien standing for election as a director.

Industry Context

Director independence is a key focus for investors and proxy advisory firms, particularly in the financial services industry. Companies are expected to adhere to high standards of corporate governance.

Comparison to Industry Standards

• The company's definition of director independence aligns with NYSE standards, which use a three-year lookback period.
• ISS uses a more stringent five-year lookback period, which is stricter than the NYSE standard.
• Many companies face similar scrutiny from ISS and other proxy advisory firms regarding director independence.

Management Changes

Stakeholder Impact

• Shareholders may be influenced by the ISS recommendation regarding the election of Mr. Lucien.
• The company's reputation could be affected by concerns about director independence.

Next Steps

• Shareholders will vote on the election of directors at the Annual Meeting on April 26, 2024.

Key Dates

Keywords

director independence, proxy statement, ISS, Bank of Hawaii, Kent T. Lucien, corporate governance, annual meeting, NCGC, ARC