Stockholders encouraged to vote ‘no’
Advisory firm says company’s executive pay is too high
One of the largest shareholder advisory firms in the United States says stockholders of Trustco Bank Corp NY should vote “no” on the company’s executive pay program at the bank’s annual meeting this week.
Trustco Bank Corp NY is the holding company for Trustco Bank, one of the largest independent banks in the Capital Region.
The advisory firm, Glass Lewis of San Francisco, is also recommending that Trustco shareholders vote against the
reelection of one of its board members, real estate developer Frank Silverman.
Trustco disagrees with
Glass Lewis and is urging its shareholders to vote “yes” instead.
Trustco says shareholders should approve both measures at Thursday’s annual meeting, which is being held at its Metro Park Road branch in Colonie off of Wolf Road.
Glass Lewis provides institutional shareholders like pension funds and mutual funds with advice on how they should vote at the annual meetings of the public companies that they own shares in.
Shareholders of Capital Region public companies rarely vote “no” on the elections of directors and executive compensation. For instance, Trustco’s entire slate of directors up for election last year all received more than 90 percent of the votes cast. The same went for the bank’s executive pay packages.
Glass Lewis recommended voting against Trustco’s compensation plan for the bank’s top executives, including CEO Robert J. Mccormick, who was awarded $3,184,330 in total compensation in 2021. Glass Lewis says the amount is too high and is higher than those awarded to CEOS at comparable banks.
Michael Hall, general counsel and corporate secretary for Trustco, said in a May 5 letter to Glass Lewis that the bank disagrees with the firm’s assertions that Mccormick and other top executives are paid too much. Hall pointed out that the bank changed its
compensation methodology in response to a “shareholder engagement program” in which it spoke to stockholders.
“Accordingly, we disagree that the Trustco compensation program does not appropriately link pay and performance and urge shareholders to support the advisory resolution on executive compensation,” Hall wrote. “We believe that the changes to our executive compensation program for 2022 will enhance the link between pay and performance.”
Shareholder votes on executive compensation are nonbinding.
Glass Lewis also says that Trustco shareholders should vote against the reelection of Frank B. Silverman, a Florida real estate investor who had owned some of Trustco Bank’s branch offices.
Glass Lewis said this created conflicts of interest and should disqualify him as an “independent” director. Trustco disagrees and notes that Silverman has sold his interest in the properties and leases that had connections with the bank.