Form 4: Trico Bancshares CEO Richard Smith Receives Stock Awards

Trico Bancshares CEO Richard Smith was granted performance-based restricted stock units (PSUs) and restricted stock units (RSUs) on March 1, 2024.

Summary

• Richard P. Smith, CEO & President of Trico Bancshares, received a grant of 12,805 Performance Stock Units (PSUs) and 12,805 Restricted Stock Units (RSUs) on March 1, 2024.
• The PSUs cliff vest after 3 years, with the number of shares vesting between 0% and 150% of the target based on Trico Bancshares' total stockholder return relative to the KBW Regional Banking Index.
• The RSUs vest 33.3% per year over 3 years, and cash dividends on the RSUs are reinvested in shares of Trico Bancshares' common stock at fair market value on the date of dividend payment.
• The per unit value on the date of grant was $35.67, based on the 30-day average closing price of Trico Bancshares' common stock ending March 1, 2024.
• Following the transaction, Smith directly owns 43,897 shares of common stock related to PSUs and 41,130 shares of common stock related to RSUs.

Sentiment

Score: 7

Explanation: The document is a routine disclosure of stock awards to the CEO. It is generally positive as it incentivizes management and aligns their interests with shareholders, but it also carries risks related to performance and stock price fluctuations.

Positives

• The PSU award aligns executive compensation with shareholder returns, incentivizing strong performance relative to peers.
• The RSU award provides a long-term incentive for the CEO, encouraging continued service and value creation.
• Dividend reinvestment in the RSUs further aligns the CEO's interests with those of shareholders.

Risks

• The actual number of shares vesting from the PSU award is contingent on Trico Bancshares' performance relative to the KBW Regional Banking Index, introducing uncertainty.
• The value of the RSU award is subject to fluctuations in the price of Trico Bancshares' common stock.

Future Outlook

The vesting of the PSUs is dependent on the company's future performance relative to the KBW Regional Banking Index over the next three years. The RSUs will vest annually over the next three years.

Industry Context

Stock awards are a common form of executive compensation in the banking industry, used to align management's interests with those of shareholders and incentivize long-term value creation. The specific terms of the PSU award, linking vesting to relative performance against the KBW Regional Banking Index, are designed to reward outperformance compared to peers.

Comparison to Industry Standards

• Many regional banks use a combination of time-based and performance-based equity awards to compensate their executives.
• The KBW Regional Banking Index is a common benchmark for measuring the performance of regional banks.
• The vesting schedule of the RSUs (33.3% per year over 3 years) is a typical vesting schedule for time-based equity awards.
• The potential vesting range of the PSUs (0% to 150% of target) is within the typical range for performance-based equity awards.

Stakeholder Impact

• Shareholders: The stock awards align management's interests with shareholder value creation.
• Employees: The awards may have a positive impact on employee morale by demonstrating that management is incentivized to improve company performance.
• Management: The awards provide a significant incentive for the CEO to drive long-term growth and profitability.

Key Dates