This article was first published on Insightia’s Voting module on May 17, 2022. For more information about the product, click here.
Several management proposals at California-based PacWest Bancorp’s May 10 annual meeting faced significant opposition from shareholders who cited concerns over compensation.
PacWest’s remuneration report received 79.6% opposition from shareholders.
In line with concerns raised by Glass Lewis, Calvert pointed out that CEO Matthew Wagner’s pay exceeded the 75th percentile of peers despite company’s performance falling short of the 75th percentile of the peer group. Wagner’s pay also exceeded four times the average pay for the company’s named executive officers (NEOs).
Calvert also cited concerns over PacWest’s annual and long-term incentive programs, which it said underscored a pay-for-performance misalignment.
More than a third of the bank’s shareholders opposed the reelection of compensation committee members Tanya Acker (who faced 32% opposition), Paul Burke (33.2%), Roger Molvar (33.2%), Robert Stine (50.2%), and lead independent director William Hosler (33.2%).
While proxy voting advisor Glass Lewis supported the reelection of each director, Calvert Research and Management cited concerns over “limited responsiveness demonstrated following last year’s failed ‘say on pay’ proposal,” as well as a lack of board diversity.
Stine took the brunt of the opposition, having served as chair of PacWest Bancorp’s compensation and nominating committee. As such, he announced his resignation from the board on May 11.
In November 2020, PacWest was highlighted by Insightia’s Vulnerability module as a potential target for shareholder activism after its growth-through-acquisition strategy stalled, its core commercial construction business slowed, and it suffered a “massive goodwill writedown that cratered an already flagging share price.”