PICO Holdings, Inc. Announces Revised Compensation Arrangements
16 December 2016 - 8:37AM
- Shareholder-Focused Revisions to
Executive Bonus Plan and Director Compensation
Arrangements
PICO Holdings, Inc. (NASDAQ:PICO) announced today that it has
implemented a number of actions with respect to compensation
arrangements.
On December 14, 2016, following extensive
outreach to many of PICO’s shareholders following its 2016 Annual
Meeting of Shareholders, PICO’s Compensation Committee recommended,
and its Board of Directors approved, a series of arrangements that
are designed to more closely align the Company’s compensation
programs with the interests of its shareholders as the Company
executes its business plan of monetizing assets and returning
capital to shareholders.
The approved arrangements include:
- A revised Executive Bonus Plan, with effect from January 1,
2016, which provides various changes from PICO’s previous bonus
plan, including:
- Calculations of any gains on asset dispositions will be based
upon gross invested capital rather than December 31, 2015 book
value;
- Reduction in participation level from 20% to 8.75%;
- 30% of amounts earned under the Executive Bonus Plan will be
paid pursuant to PICO’s issuance of restricted stock units (“RSU”),
for which the recipient bears the market risk for three years;
- Allocation to a discretionary pool, to allow for retention of
key employees other than Messrs. Webb and Perri; and
- PICO’s ownership interest in UCP, Inc. has been “carved-out” of
the Executive Bonus Plan to allow the Board of Directors of PICO to
separately incentivize management to pursue PICO’s objectives with
respect to its stake in UCP.
- Employment agreements, which become effective on January 1,
2017, for Mr. Webb, the Company’s Chief Executive Officer, and Mr.
Perri, the Company’s Chief Financial Officer. Pursuant to the terms
of the employment agreements, the base salaries and employee
benefits provided to Messrs. Webb and Perri will remain at the same
levels that existed prior to their promotions to Chief Executive
Officer and Chief Financial Officer, respectively, in October
2016.
- A revised NonEmployee Director Compensation Policy for PICO’s
nonemployee directors, which will become effective on January 1,
2017, and which provides various changes from PICO’s previous
compensation policy for nonemployee directors, including:
- A reduction and reallocation of total compensation, with a
greater weighting on equity awards with longer required holding
periods for such awards resulting in:
- A decrease in the annual cash retainer from $80,000 to
$50,000.
- An increase in the annual RSU grant from $50,000 to
$75,000.
- Incentives for directors to elect to take all stock-based
compensation in lieu of cash:
- Directors may elect to receive any amount of their annual
retainer in the form of an RSU with a notional value equal to 125%
of the stated cash retainer, a feature designed to motivate
directors to take all compensation in RSU.
- Shares of common stock underlying any RSU issued to a director
pursuant to the NonEmployee Director Compensation Policy will not
be delivered to such director until such director ceases serving on
PICO’s Board of Directors.
- Elimination of fees paid to directors for attendance at
seminars.
Mr. Cates, Chairman of PICO’s Compensation
Committee commented, “The board believes that these changes to
PICO’s executive compensation will serve to further incentivize
management to execute on PICO’s stated business plan in the most
efficient and effective manner, and more closely align management’s
compensation with shareholder interests. Likewise, the
revised NonEmployee Director Compensation Policy is designed to
incentivize PICO’s nonemployee directors to take more, or all, of
their compensation in the form of stock-based awards in an effort
to better align their interests with shareholder interests.
Furthermore, in conjunction with requiring directors to hold all
stock-based awards through their service on the board, we believe
directors will be even more focused on maximizing shareholder
value.” Mr. Cates continued, “As part of these changes, the
board also approved changes to the Company’s self-defined peer
group, which will be further described in PICO’s proxy statement
for its 2017 Annual Meeting of Shareholders.”
Mr. Silvers, PICO’s Lead Independent Director,
commented, “The board believes these new arrangements are fair to
all parties, and are designed to provide long-term alignment with
the interests of our shareholders. As with the revised Executive
Bonus Plan, the NonEmployee Director Compensation Policy is
designed to more closely align the board’s compensation with actual
shareholder returns.”
Mr. Webb, PICO’s Chairman and Chief Executive
Officer, commented, “I appreciate the board’s efforts in working to
put in place a program that rewards management for realizing value
while protecting the interests of shareholders. I look
forward to working to create value for our shareholders as we seek
to monetize assets and efficiently return capital to the owners of
the business.”
Mr. Silvers concluded, “I want to thank both Mr.
Webb and Mr. Perri for their commitment to our shareholders and
their flexibility in allowing the board to revise the Company’s
compensation programs with a focus on shareholder interests.
Their hard work, dedication and attention to the interests of
shareholders is greatly appreciated by the board.”
About PICO Holdings, Inc.
PICO Holdings is a diversified holding
company. Currently, we believe the highest potential return
to shareholders is from a return of capital to shareholders.
As we monetize assets, rather than reinvest the proceeds, we intend
to return the capital derived therefrom, less any working capital
requirements, back to shareholders through a stock repurchase
program or by other means such as special dividends taking into
effect liquidity requirements, debt covenants and any other
contractual and legal restrictions that may exist at the time.
As of September 30, 2016, our two major
investments were:
- Vidler Water Company, Inc., a water resource development
business; and
- a 56.9% interest in UCP, Inc. (NYSE: UCP), a publicly-traded
homebuilder and land developer in markets located in California,
Washington State, North Carolina, South Carolina and
Tennessee.
OTHER INFORMATION
At September 30, 2016, PICO Holdings, Inc.
had a market capitalization of $272 million, and 23,069,381 shares
outstanding.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
Statements in this press release that are not
historical, including statements regarding the ability of our
compensation arrangements to achieve their stated objectives, our
ability to execute our business objectives, and our ability to
monetize assets and return capital to shareholders through stock
repurchases or through other means, are forward-looking statements
based on current expectations and assumptions that are subject to
risks and uncertainties.
In addition, a number of other factors may cause
results to differ materially from our expectations, such as: any
slow down or downturn in the housing recovery or in the real estate
markets in which UCP and Vidler operate; fluctuations in the prices
of water and water rights; physical, governmental and legal
restrictions on water and water rights; a downturn in some sectors
of the stock market; general economic conditions; prolonged
weakness in the overall U.S. and global economies; the performance
of the businesses; the continued service and availability of key
management personnel; and potential capital requirements and
financing alternatives.
For further information regarding risks and
uncertainties associated with our business, please refer to the
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and “Risk Factors” sections of our SEC
filings, including our Annual Report on Form 10-K and our Quarterly
Reports on Form 10-Q, copies of which may be obtained by contacting
us at (858) 456-6022 or at http://investors.picoholdings.com.
We undertake no obligation to (and we expressly
disclaim any obligation to) update our forward-looking statements,
whether as a result of new information, subsequent events, or
otherwise, in order to reflect any event or circumstance which may
arise after the date of this press release, except as may otherwise
be required by law. Readers are urged not to place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release.
This news release was distributed by
GlobeNewswire, www.globenewswire.com.
CONTACT:
Max Webb
Chairman and Chief Executive Officer
(858) 652-4114
UCP, Inc. (NYSE:UCP)
Historical Stock Chart
From Jun 2024 to Jul 2024
UCP, Inc. (NYSE:UCP)
Historical Stock Chart
From Jul 2023 to Jul 2024