DEFA14A: TriCo Bancshares Defends Board Diversity Efforts Against Glass Lewis Recommendation

TriCo Bancshares responds to Glass Lewis' recommendation to withhold votes for director John S.A. Hasbrook due to board gender diversity concerns, highlighting recent efforts to increase diversity and refresh the board.

Summary

• TriCo Bancshares is addressing Glass Lewis' recommendation to withhold votes for John S.A. Hasbrook's re-election to the Board of Directors.
• Glass Lewis' recommendation is based on TriCo's board not meeting their 30% gender diversity benchmark.
• TriCo's board currently has 27.27% female representation, with three out of eleven directors being women.
• TriCo highlights that each of the three women directors chairs one of the seven standing Board committees.
• Since 2020, TriCo has added five new directors, 60% of whom are women, and one director from an underrepresented community.
• TriCo argues that Glass Lewis' bright line application of its guidelines doesn't account for the actions taken by the Board since 2020.
• The company also notes that 45.45% of the Board has turned over in the last four years, reflecting efforts to refresh and diversify the Board.
• The average tenure of TriCo's independent directors is approximately 8.7 years.
• TriCo emphasizes the importance of balancing board refreshment with the historical perspective of more tenured directors, especially in the highly regulated banking industry.
• TriCo urges shareholders to re-elect Mr. Hasbrook to the Board.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While there's a negative recommendation from Glass Lewis, TriCo is actively defending its position and highlighting its efforts to improve board diversity.

Positives

• TriCo has added five new directors since 2020, with 60% being women, demonstrating a commitment to increasing gender diversity.
• Each of the three women directors chairs one of the seven standing Board committees.
• The Board has undergone significant refreshment, with 45.45% turnover in the last four years.
• The average tenure of independent directors is 8.7 years, indicating a balance between experience and refreshment.

Negatives

• Glass Lewis recommends withholding votes for John S.A. Hasbrook due to the board not meeting their 30% gender diversity benchmark.
• TriCo's board currently has 27.27% female representation, which falls short of Glass Lewis' guideline.

Risks

• Negative shareholder sentiment due to Glass Lewis' recommendation could impact the re-election of Mr. Hasbrook.
• Failure to meet diversity benchmarks set by proxy advisory firms could lead to continued scrutiny and potential negative voting recommendations in the future.
• Too much turnover can impact the effectiveness of the Boards oversight and the culture of TriCo.

Future Outlook

TriCo is open to dialogue on the topic of board diversity and committed to considering shareholder feedback.

Management Comments

• We feel the bright line application by Glass Lewis of its guidelines does not take into account these actions taken by our Board since 2020.
• The banking industry is highly regulated and it is very helpful to have directors on the board that have experienced the various economic cycles TriCo has endured.
• Too much turnover can impact the effectiveness of the Boards oversight and the culture of TriCo (including the Board).

Industry Context

Board diversity is an increasingly important topic for investors and proxy advisory firms, particularly in the financial services industry. Companies are facing pressure to increase representation of women and underrepresented groups on their boards.

Comparison to Industry Standards

• Many companies in the Russell 3000 are facing similar scrutiny from proxy advisory firms regarding board diversity.
• The 30% gender diversity benchmark used by Glass Lewis is becoming a common standard for evaluating board composition.
• Companies like State Street and BlackRock are also pushing for greater board diversity in their investment stewardship activities.

Stakeholder Impact

• Shareholders are being asked to consider TriCo's position on board diversity when voting on the re-election of Mr. Hasbrook.
• The outcome of the vote could impact the composition and effectiveness of the Board of Directors.

Next Steps

• Shareholders will vote on the re-election of Mr. Hasbrook at the Annual Meeting on May 23, 2024.
• TriCo will continue to engage in dialogue with Glass Lewis and shareholders regarding board diversity.

Key Dates

Keywords

TriCo Bancshares, Board Diversity, Glass Lewis, Proxy Statement, John S.A. Hasbrook, Corporate Governance, Shareholders, Directors