Form 4: Trico Bancshares Executive Daniel K. Bailey Reports Stock Awards

EVP and Chief Banking Officer Daniel K. Bailey reports the acquisition of performance-based restricted stock units and restricted stock units in Trico Bancshares.

Summary

• Daniel K. Bailey, EVP and Chief Banking Officer of Trico Bancshares, reported the acquisition of 4,219 Performance Stock Units (PSUs) and 4,219 Restricted Stock Units (RSUs) on March 1, 2024.
• The PSU award cliff vests 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 RSU award vests 33.3% per year over 3 years, and cash dividends on 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 grant date was $35.67, based on the 30-day average closing price of Trico Bancshares' common stock ending March 1, 2024.
• Following the reported transactions, Bailey directly owns 14,485 PSUs and 13,443 RSUs.

Sentiment

Score: 7

Explanation: The document is a routine disclosure of stock awards to an executive, which is generally viewed as a neutral to slightly positive event as it aligns management interests with shareholders. The performance-based component adds a positive element.

Positives

• The grant of PSUs aligns executive compensation with the company's performance relative to its peers in the KBW Regional Banking Index.
• The vesting schedule of the RSUs encourages long-term retention of the executive.
• Reinvestment of cash dividends on RSUs into company stock further aligns the executive's interests with those of shareholders.

Risks

• The value of the PSUs is contingent on the company's performance relative to the KBW Regional Banking Index, which is subject to market fluctuations and industry-specific risks.
• The vesting of the RSUs is subject to the executive's continued employment with the company.

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 continue to vest over the next three years, subject to continued employment.

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 performance. The use of performance-based units tied to a regional banking index is a typical approach to benchmarking performance against peers.

Comparison to Industry Standards

• Comparing Trico Bancshares' executive compensation practices to peers like First Republic Bank (before its acquisition) or PacWest Bancorp, the use of PSUs and RSUs is a standard approach.
• The vesting schedules and performance metrics are generally in line with industry norms, although specific details would require a deeper analysis of peer compensation packages.
• The grant value of $35.67 per unit is reflective of Trico Bancshares' stock price at the time of the grant, and would need to be compared to similar grants at peer institutions to assess its relative value.

Stakeholder Impact

• Shareholders: The stock awards align executive compensation with company performance, potentially benefiting shareholders through increased value.
• Employees: The awards may motivate the executive to drive company success, which could benefit employees.
• Executive: The executive benefits from the potential appreciation of the stock awards.

Key Dates