DEF 14A of Five Star Bancorp
Filed Apr 3, 2024 · FY20230001275168-24-000079
•“FOR” each of the nominees for director; and
•“FOR” each of the nominees for director; and •“FOR” the ratification of the appointment of Moss Adams LLP as the Company’s independent registered public accounting firm for fiscal year 2024. If any matter not described in this proxy statement is properly presented at the annual meeting, the persons named in the proxy card will use their judgment to determine how to vote your shares. This includes a motion to adjourn or postpone the meeting to solicit additional proxies. If the annual meeting is adjourned or postponed, your shares of Five Star Bancorp common stock may also be voted by the persons named in the proxy card on the new meeting date, unless you have revoked your proxy. The Company does not know of any other matters to be presented at the annual meeting. If your Five Star Bancorp common stock is held in street name, you will receive instructions from your broker, bank, or other nominee that you must follow to have your shares voted. Your broker, bank, or other nominee may allow you to deliver your voting instructions online. Please see the instruction form provided by your broker, bank, or other nominee that accompanies this proxy statement. If you wish to change your voting instructions after you have returned your voting instruction form to your broker, bank, or other nominee, you must contact your broker, bank, or other nominee.
ITEM 1. ELECTION OF DIRECTORS
ITEM 1. ELECTION OF DIRECTORS
Election and Classification of Directors
Election and Classification of Directors In accordance with the terms of our Bylaws, each of our directors will be elected for a one-year term until the following annual meeting of shareholders or until their successors are elected and qualified. Accordingly, at the annual meeting, shareholders will vote to elect 11 directors to serve for terms expiring at the Company’s 2025 annual meeting of shareholders. Each of the following persons listed and described below is nominated for election as a director at the meeting. The term of service indicated for each director below includes the term of service as a director of the Bank prior to the Company becoming the bank holding company for the Bank. Each member of the Company’s board of directors also serves as a member of the Bank’s board of directors. No director has any family relationship, as defined in Item 401(d) of Regulation S-K, with any other director or any of our executive officers. None of the persons nominated for election as director listed below were selected pursuant to any arrangement or understanding other than with the directors and executive officers of the Company acting within their capacities as such. The persons nominated for election as a director receiving the most votes will be elected directors. Abstentions, broker non-votes, and votes withheld are treated as present for quorum purposes only and will have no effect on the outcome of the election of directors. In the event that any of the persons nominated for election should be unable to serve as a director, it is intended that the proxy will be voted for the election of such substitute nominee, if any, as shall be designated by the board of directors. The board of directors has no reason to believe that any of the persons named below will be unable to serve if elected. Additional nominations for directors may only be made by complying with the nomination procedures which are set forth herein and in the Company’s Bylaws. The following is a brief discussion of the background and experience of our directors, each of whom have been nominated for election as a director at the meeting. Except as otherwise indicated, the occupation listed has been such person’s principal occupation for at least the last five years. Robert T. Perry-Smith Mr. Perry-Smith, age 76, has been a director since 2020. Mr. Perry-Smith serves as Board Chairperson, a position he has held since 2023. Mr. Perry-Smith previously served as Vice Chairperson of the board of directors from 2022 through 2023. Mr. Perry-Smith founded and served as Chief Executive Officer of Perry-Smith LLP, a regional accounting and consulting firm that provided professional services throughout California and to numerous industries, including the banking industry. Upon his retirement in 2013, Mr. Perry-Smith concluded his 40 year career as a Certified Public Accountant, having served as a partner and executive at both the national and regional levels. Throughout his career, he was responsible for the delivery of professional services to both public and private companies, including annual audits and management consulting services. With an industry specialization in banking, he also participated in regulatory compliance examinations, capital structure augmentation and numerous mergers and acquisitions. Mr. Perry-Smith has been a frequent speaker at various banking industry conferences, including the California Bankers Association. He is a member of the American Institute of Certified Public Accountants (retired) and the California Society of CPAs. His previous board experience includes Racor Industries, The Sutter Club (past President), Presidio Bank, Sierra Vista Bank (Chairman), and the Perry-Smith Foundation. Mr. Perry-Smith is the Chairperson of the Audit Committee and a member of the Governance and Nominating Committee. We believe Mr. Perry-Smith’s experience in accounting and management qualify him to serve on our board of directors. Randall E. Reynoso Mr. Reynoso, age 66, has been a director since 2021. Mr. Reynoso serves as Vice Chairperson of the board of directors, a position he has held since 2023. Mr. Reynoso has over 40 years of banking experience, including serving as Executive Vice President of Wells Fargo Bank from 2007 until his retirement in 2020, leading the bank’s Business Banking for the San Francisco Bay Area, investor real estate for the nation, as well as serving as Middle Market Banking Leader for Northern California. Prior to this, Mr. Reynoso served as President and Chief Operating Officer, and on the boards of directors of both Placer Sierra Bancshares and Placer Sierra Bank. Additionally, Mr. Reynoso was instrumental in taking Placer Sierra Bank public in 2004 as well as facilitating the sale of the bank to Wells Fargo Bank in June 2007. A native of Sacramento, Mr. Reynoso has held leadership roles with numerous Northern California philanthropic organizations, including the San Francisco Opera Association, the San Francisco Travel Association (where he is the immediate past chair), and the Zuckerberg San Francisco General Hospital Foundation. Past service includes leadership roles with the Sacramento Hispanic Chamber of Commerce, the Stanford Home for Children, the Mondavi Center for the Performing Arts, KVIE, the Nonprofit Resource Center, and Naturebridge. Mr. Reynoso is a member of the Audit Committee. We believe Mr. Reynoso’s banking experience, as well as his experience with public banks specifically, qualifies him to serve on our board of directors. Larry E. Allbaugh Mr. Allbaugh, age 60, has been a director since 1999. Mr. Allbaugh has served as an executive of Buzz Oates Commercial Real Estate since 1990, serving as Chief Executive Officer since 2009. He is a managing member of Pac West Equities, LP, the primary real estate investment entity of the organization, and co-trustee of the Marvin L. Oates Trust. Mr. Allbaugh serves on the board of directors of Teichert Inc. and serves as Chair of its Audit Committee. He also serves on the board of directors of the Greater Sacramento Economic Council and the Marvin Buzz Oates Charitable Foundation as a founding director. He is active in multiple charitable and faith-based activities locally and internationally. Mr. Allbaugh is the Chairperson of the Governance and Nominating Committee. We believe Mr. Allbaugh’s management experience qualifies him to serve on our board of directors. Mr. Beckwith, age 66, has been a director and served as our President and Chief Executive Officer since 2003. Mr. Beckwith joined the Company in 2003. He is deeply connected to the Sacramento community and has chaired several community-based organizations including the Sacramento Metro Chamber of Commerce, Valley Vision, and KVIE (the local PBS affiliate). He is the immediate past Chair of California Bankers Association, a Private Sector Director with Greater Sacramento Economic Council, and a member of the Sacramento State University College of Business Advisory Council. Mr. Beckwith previously served as Chief Financial Officer and Chief Operating Officer at National Bank of the Redwoods in Santa Rosa, California. He graduated from San Francisco State University with a Bachelor of Science in Business Administration with a concentration in Accounting. He is also a graduate of Pacific Coast Banking School at the University of Washington where he was class president. In 2020, Mr. Beckwith was recognized by the Sacramento Metro Chamber of Commerce as the Businessman of the Year. He was named among the Most Admired CEOs of 2020 by the Sacramento Business Journal and recognized with a Vistage Leadership Award in 2021. He was the 2022 UCP Humanitarian of the Year. We believe Mr. Beckwith’s experience in management, accounting, and as a director, as well as his understanding of the California industries and market, qualify him to serve on our board of directors. Shannon Deary-Bell
Election and Classification of Directors
Ms. Deary-Bell, age 57, has been a director since 2020. Ms. Deary-Bell most recently served as President and Chief Executive Officer of Nor-Cal Beverage, a position she held since 2010 before its acquisition in 2023 by Manna Beverages & Ventures. At Nor-Cal Beverage, Ms. Deary-Bell had oversight of the transition of the company into one of the largest co-packers in the western United States. During her 30 years of service at Nor-Cal Beverage, she held numerous positions before serving as President and Chief Executive Officer. Recently, Ms. Deary-Bell led the company through a major acquisition, and after 17 months of negotiations, was successful in finding the right company to acquire her family business of 87 years. Ms. Deary-Bell has been an active member of the Women Business Leaders of Sacramento since 2015. She is a member of the Sacramento Host Committee and has been a member of Vistage (Leadership Chief Executive Organization) since 2013. Ms. Deary-Bell served on the Jesuit High School board of directors for six years. Ms. Deary-Bell is a member of the Governance and Nominating Committee. We believe Ms. Deary-Bell’s operations and management experience qualifies her to serve on our board of directors. Warren P. Kashiwagi Mr. Kashiwagi, age 70, has been a director since 2021. Mr. Kashiwagi has over 40 years of professional public accounting experience. A retired Certified Public Accountant, he has advised, counseled, and represented various businesses in tax planning and compliance, business succession planning, strategic planning, and merger and acquisition consulting. From 2011 to 2017, Mr. Kashiwagi was a Tax Partner with Crowe Horwath, LLP. Prior to that, he was a Tax Partner with Perry-Smith LLP from 1988 to 2011. Mr. Kashiwagi has served on the boards of directors of the Sacramento Metropolitan Chamber of Commerce, the California Asian Pacific Chamber of Commerce, the Los Rios Colleges Foundation, and the Crocker Art Museum. He also served as Board Chair of Sutter Community Hospitals and as Board President of the Sacramento Japanese American Citizens League. Mr. Kashiwagi is a member of the Audit Committee. We believe Mr. Kashiwagi’s management and accounting experience qualifies him to serve on our board of directors. Donna L. Lucas Ms. Lucas, age 64, has been a director since 2021. Ms. Lucas is a successful strategic communications consultant and has been the Founder and Chief Executive Officer of Lucas Public Affairs since its opening in 2006. Ms. Lucas served as Deputy Chief of Staff for strategic planning and initiatives for Governor Arnold Schwarzenegger and Chief of Staff for First Lady Maria Shriver. Ms. Lucas was also the Deputy Press Secretary for Governor George Deukmejian, Deputy Treasurer for State Treasurer Tom Hayes, and California Press Secretary for the 1988 presidential campaign of then-Vice President George H.W. Bush. Ms. Lucas is a past chair of the California Chamber of Commerce board of directors and the Maria Shriver’s Women’s Alzheimer’s Movement. She serves as the chair of the College Futures Foundation and is on the boards of the Scripps Institution of Oceanography and John Burton Advocates for Youth. Ms. Lucas is also a member of the Statewide Leadership Council of the Public Policy Institute of California (“PPIC”) and was on the PPIC’s board of directors from 2007 to 2019, chairing the board from 2013 to 2016. Ms. Lucas is a founding member of She Shares, a unique conversation series featuring trailblazing women leaders who have created a lasting impact on women in California and beyond. She was named by the Sacramento Metro Chamber of Commerce as the Sacramento Businesswoman of the Year in 2018. Ms. Lucas is routinely named one of Sacramento’s most powerful and influential people in Capitol Weekly’s annual “Top 100.” Ms. Lucas is a member of the Compensation Committee. We believe Ms. Lucas’s ties to our community and business experience qualify her to serve on our board of directors. David F. Nickum Mr. Nickum, age 59, has been a director since 2010. Since 2010, Mr. Nickum has served as Owner and President of Waveco, Inc., d.b.a. Valley Farm Transport, Inc., one of the largest agricultural trucking companies in the United States, after being employed there in various capacities since 1988. Mr. Nickum is a past chair of Make-A-Wish Foundation of Northeastern and Central California and Northern Nevada, a former board member of St. Michael’s Episcopal Day School, and a past board member of Tesco Controls, Inc. Mr. Nickum is also a former member of Cal Poly College of Agriculture, Food and Environmental Sciences’ Dean’s Advisory Council. We believe Mr. Nickum’s vast experience in operations, finance, and management as well as his strong understanding of the California agricultural industry and its business leaders qualify him to serve on our board of directors. Kevin F. Ramos Mr. Ramos, age 59, has been a director since 2019. Mr. Ramos is the Chief Investment Officer of Buzz Oates Commercial Real Estate, a position he has held since 1995, and Investment Committee Chair of Pac West Industrial Equities, LP, a position he has held since 2017. He has 35 years of experience in the commercial real estate industry with specific experience in finance, entitlement, development, leasing, property management, investment, and asset management. He currently serves on the board of directors of Saint John’s Program for Real Change, and the Sacramento chapter of NAIOP, a national commercial real estate association. Mr. Ramos is a member of the Compensation Committee. We believe Mr. Ramos’s commercial real estate and investment management experience qualifies him to serve on our board of directors. Judson T. Riggs Mr. Riggs, age 69, has been a director since 2019. Mr. Riggs is the Chief Executive Officer and Chair of Teichert Inc., positions he has held since 2003 and 2010, respectively. Mr. Riggs serves on the boards of directors of Teichert Inc., the Greater Sacramento Economic Council, the Host Committee, the Dean’s Advisory Council of the Graduate School of Management at University of California, Davis, and the Juvenile Justice Chaplaincy, and is the Vice Chair of the board of directors and Chair of the Finance Committee of PRIDE Industries. Mr. Riggs is the Chairperson of the Compensation Committee. We believe Mr. Riggs’s management experience qualifies him to serve on our board of directors. Leigh A. White Ms. White, age 60, has been a director since 2021. Ms. White has over 30 years of experience in key positions in television broadcast management throughout the United States. From 2015 to 2020, Ms. White served as Vice President and General Manager of KTXL-TV in Sacramento, California (FOX, Tribune Broadcasting). She is a graduate of the University of Minnesota with a Bachelor of Science degree in Applied Studies/Communications. She most recently graduated from the Saïd School of Business Digital Disruption Program at the University of Oxford in Oxford, England. She is currently pursuing her MBA in Finance at Louisiana State University. Ms. White serves on the boards of Paratransit and United Cerebral Palsy, both based in Sacramento. We believe Ms. White’s leadership and business experience qualify her to serve on our board of directors. The board of directors unanimously recommends a vote “FOR” the election of each of the 11 nominees for director.
Summary Compensation Table
Summary Compensation Table The following table sets forth certain information with respect to the compensation paid to our NEOs for the fiscal years ended December 31, 2023 and December 31, 2022.
Summary Compensation Table
| Name and Principal Position | Year | Salary | Stock Awards(1) | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings(2) | All Other Compensation(3) | Total Compensation | | James E. Beckwith | 2023 | $608,678 | $— | $582,796 | $(305,817) | $61,739 | $947,396 | | President & CEO | 2022 | 580,845 | 101,517 | 276,785 | (42,392) | 57,545 | 974,300 | | Michael A. Rizzo | 2023 | 311,969 | 14,716 | 127,427 | — | 21,715 | 475,827 | | SVP & CBO | 2022 | 300,000 | 14,706 | 90,411 | — | 23,396 | 428,513 | | John W. Dalton | 2023 | 311,584 | 14,716 | 120,207 | — | 21,832 | 468,339 | | SVP & CCO | 2022 | 280,000 | 14,706 | 87,542 | — | 21,284 | 403,532 |
Summary Compensation Table
(1)The amounts reported here do not reflect the actual economic value realized by each NEO. In accordance with SEC rules, stock awards represent the grant date fair value of the awards, calculated in accordance with Accounting Standards Update 2018-07, Compensation—Stock Compensation (Topic 718). For additional information, see Note 1 to our consolidated financial statements in our Annual Report on Form 10-K. The vesting schedules applicable to stock awards granted to our NEOs in 2023 and 2022 are described in the section entitled “—Outstanding Equity Awards at December 31, 2023” below. (2)Represents the change in value, net of cash benefits paid, during each respective year of Mr. Beckwith’s vested accrued benefit under his salary continuation agreement. (3)All other compensation consisted of the following items:
Summary Compensation Table
| Name | Year | Auto Expense | Life Insurance Premium | 401(k) Matching Contributions | Cell Phone Reimbursement | Club Dues | | James E. Beckwith | 2023 | $2,705 | $4,164 | $12,200 | $1,019 | $41,651 | | | 2022 | 3,311 | 4,164 | 12,200 | 706 | 37,164 | | Michael A. Rizzo | 2023 | 6,000 | — | 11,439 | 460 | 3,816 | | | 2022 | 6,000 | — | 12,000 | 448 | 4,948 | | John W. Dalton | 2023 | 6,000 | — | 11,423 | 718 | 3,691 | | | 2022 | 6,000 | — | 11,014 | 706 | 3,564 |
Outstanding Equity Awards at December 31, 2023
Outstanding Equity Awards at December 31, 2023 The following table provides information regarding outstanding stock awards held by our NEOs as of December 31, 2023.
Outstanding Equity Awards at December 31, 2023
| Name | Grant Date | Equity incentive plan awards: number of shares of common stock that have not vested(1) | Equity incentive plan awards: market value of shares of common stock that have not vested(2) | | James E. Beckwith | 5/7/2021 | 32,142(3) | $841,478 | | | 1/20/2022 | 1,188 | 31,102 | | Michael A. Rizzo | 5/7/2021 | 4,200(4) | 109,956 | | | 1/20/2022 | 172 | 4,503 | | | 2/2/2023 | 344 | 9,006 | | John W. Dalton | 5/7/2021 | 4,200(4) | 109,956 | | | 1/20/2022 | 172 | 4,503 | | | 2/2/2023 | 344 | 9,006 |
Outstanding Equity Awards at December 31, 2023
(1)Except where otherwise indicated, one-third of the total shares granted vested immediately upon grant, with the remainder vesting annually over two years in equal installments, provided the NEO remains employed with us as of the applicable vesting date. These shares were granted pursuant to the Equity Incentive Plan (as defined below). (2)The market value for our common stock is based on the closing price of our common stock on December 29, 2023 as reported by Nasdaq, which was $26.18 per share. These shares were granted pursuant to the Equity Incentive Plan. (3)Shares vest in equal installments over a seven-year period, beginning one year from the grant date, provided the NEO remains employed with us as of the applicable vesting date. (4)Shares vest in equal installments over a five-year period, beginning one year from the grant date, provided the NEO remains employed with us as of the applicable vesting date.
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION The following table sets forth information regarding compensation paid, earned, or awarded to each of our non-employee directors of the Company during the year ended December 31, 2023 for service as members of our board of directors and committees. The table also includes compensation attributable to the director’s service with the Bank. Mr. Beckwith is not shown in this table because he is compensated as an officer and did not receive any additional director compensation during the year ended December 31, 2023.
DIRECTOR COMPENSATION
| | Fees Earned | | | | Name | Cash | Stock Awards(1) | Total | | Larry E. Allbaugh | $49,000 | $35,992 | $84,992 | | Shannon Deary-Bell | 41,500 | 35,992 | 77,492 | | Warren P. Kashiwagi | 41,500 | 35,992 | 77,492 | | Donna L. Lucas | 41,500 | 35,992 | 77,492 | | David J. Lucchetti(2) | 68,292 | — | 68,292 | | David F. Nickum | 41,500 | 35,992 | 77,492 | | Robert T. Perry-Smith | 77,500 | 35,992 | 113,492 | | Kevin F. Ramos | 53,500 | 35,992 | 89,492 | | Randall E. Reynoso | 49,000 | 35,992 | 84,992 | | Judson T. Riggs | 49,000 | 35,992 | 84,992 | | Leigh A. White | 49,000 | 35,992 | 84,992 |
DIRECTOR COMPENSATION
(1)The amounts reported here do not reflect actual economic value realized by each director. In accordance with SEC rules, stock awards represent the grant date fair value of the awards, calculated in accordance with Accounting Standards Update 2018-07, Compensation – Stock Compensation (Topic 718). For additional information, see Note 1 to our consolidated financial statements included in our Annual Report on Form 10-K. (2)Upon retirement in May 2023, Mr. Lucchetti forfeited 1,262 restricted shares with a grant date fair value of $28.52 per share. Each of our directors is generally entitled to a $3,000 monthly cash retainer, an additional monthly payment of $458 for participation on one or more of the committees of the board of directors, as well as additional monthly cash payments based on the director’s chairperson responsibilities in accordance with the following schedule. •Board Chairperson: $3,000 •Audit Committee Chairperson: $1,250 •Loan Committee Chairperson: $1,000 •Compensation Committee Chairperson: $625 •Governance and Nominating Committee Chairperson: $625 •Asset Liability Committee Chairperson: $625 Stock awards are issued under the terms of the Equity Incentive Plan. In 2023, we granted shares of our common stock to each director, cliff vesting at the end of the year, as compensation for his or her service in the current year. We also offer reimbursements to our directors for their reasonable out-of-pocket expenses, including travel and lodging, incurred in attending meetings of our board of directors and committees.