FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 21, 2024
PROXY STATEMENT SUMMARY
This summary provides an overview of selected information in this year’s Annual Meeting proxy statement. We encourage you to read the entire proxy statement carefully before voting.
Participating in the Annual Meeting of Shareholders
| Time and Date: | 10:30 AM, Eastern Time, Tuesday, May 21, 2024 |
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| Place: | Trustco Bank Loan Center, 6 Metro Park Road, Albany, NY 12205 |
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| Record Date: | Shareholders as of the close of business on March 22, 2024 are entitled to vote |
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| How to Vote: | Shareholders as of the record date may vote until 11:59 PM, Eastern Time, on May 20, 2024 and during the Annual Meeting |
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You may vote by:
| • | voting your shares over the internet by going to www.proxyvote.com and following the instructions. You will need the control number included on your proxy card or Notice of Internet Availability of Proxy Materials to obtain your records and create an electronic voting instruction form. |
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| • | voting your shares by telephone at 1-800-690-6903 within the United States, U.S. territories or Canada using a touch-tone phone and following the recorded instructions. You will need the control number included on your proxy card or Notice of Internet Availability of Proxy Materials in order to vote by telephone. |
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| • | If you requested that printed copies of the proxy materials be sent to you by mail, by marking, signing, dating, and mailing your proxy card in the postage-paid envelope provided with the proxy statement and returning it before the meeting date. Mailed proxy cards must be received no later than May 20, 2024 in order to be counted for the Annual Meeting. |
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Attending and Voting: Shareholders will be able to attend the meeting in person, vote shares, and ask questions about matters on the meeting agenda during the meeting.
We are continuing to use the SEC’s Notice and Access rule for certain shareholders, which allows us to furnish proxy materials to shareholders over the Internet. This means that many of our shareholders will receive only a Notice containing instructions on how to access the proxy materials over the Internet and vote online. This offers a convenient way for shareholders to review the materials. The Notice is not a proxy card and cannot be used to vote. We are first furnishing proxy materials to shareholders on or about April 1, 2024.
Proposals to be Voted on by Shareholders
| · Proposal · · · BoardRecommendation · · · PageReference · |
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| | 1. | | | Election of Directors | | | FOR | | | 8 | |
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| | 2. | | | Advisory Resolution on the Compensation of TrustCo’s Named Executive Officers | | | FOR | | | 16 | |
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| | 3. | | | Ratification of the Appointment of the Independent Registered Public Accounting Firm | | | FOR | | | 17 | |
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This proxy statement is furnished in connection with the solicitation by the board of directors of TrustCo Bank Corp NY of proxies to be voted at TrustCo’s Annual Meeting of Shareholders and to transact any other business that may properly come before the meeting.
| TrustCo Bank Corp NY 2024 Proxy Statement | | | 1 |
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PROXY STATEMENT SUMMARY FOR ANNUAL MEETING OF SHAREHOLDERS
Board of Directors Snapshot
In Proposal 1, our shareholders are asked to vote on the election of the individuals nominated by our board of directors and named in this proxy statement.
The Nominating and Corporate Governance Committee Charter requires that the committee seek board candidates that embody a broad range of talents and expertise. The candidates listed in this proxy statement reflect these elements and the board’s commitment to achieving gender, racial, and ethnic diversity. The following chart sets forth the self-identified diversity statistics of our current board members.
| · Board Diversity Matrix (As of April 1, 2024) · |
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| · Total Number of Directors: 9 · · · · · · · · · |
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| | | | | Female | | | Male | | | Non-Binary | | | Did Not Disclose Gender | |
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| · Part I: Gender Identity · · · · · · · · · |
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| | Directors | | | 3 | | | 6 | | | — | | | — | |
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| | Part II: Demographic Background | | | | | | | | | | | | | |
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| | African American or Black | | | — | | | 1 | | | — | | | — | |
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| | Alaskan Native or Native American | | | — | | | — | | | — | | | — | |
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| | Asian | | | — | | | — | | | — | | | — | |
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| | Hispanic or Latinx | | | — | | | — | | | — | | | — | |
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| | Native Hawaiian or Pacific Islander | | | — | | | — | | | — | | | — | |
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| | White | | | 3 | | | 5 | | | — | | | — | |
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| | Two or More Races or Ethnicities | | | — | | | — | | | — | | | — | |
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| | LGBTQ+ | | | — | | | — | | | — | | | — | |
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| | Did Not Disclose Demographic Background | | | — | | | — | | | — | | | — | |
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| | Directors With Disabilities: 1 | | | | | | | | | | | | | |
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The table below sets forth basic information concerning each nominee.
| | Name | | | Age | | | Director Since | | | Independent? | |
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| | Steffani Cotugno, DO(1) | | | 56 | | | 2023 | | | Yes | |
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| | Brian C. Flynn | | | 73 | | | 2016 | | | Yes | |
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| | Lisa M. Lucarelli(2) | | | 60 | | | 2017 | | | Yes | |
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| | Thomas O. Maggs | | | 79 | | | 2005 | | | Yes | |
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| | Anthony J. Marinello, MD, PhD | | | 68 | | | 1995 | | | Yes | |
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| | Robert J. McCormick(3) | | | 60 | | | 2005 | | | No | |
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| | Curtis N. Powell | | | 70 | | | 2021 | | | Yes | |
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| | Kimberly A. Russell | | | 55 | | | 2020 | | | Yes | |
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| | Frank B. Silverman | | | 52 | | | 2020 | | | Yes | |
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| (1) | Dr. Cotugno was elected to the board in October 2023. |
| (2) | Ms. Lucarelli serves as Lead Independent Director. |
| (3) | Mr. McCormick serves as President, CEO, and Chairman of the Board. |
| 2 | | | TrustCo Bank Corp NY 2024 Proxy Statement |
PROXY STATEMENT SUMMARY FOR ANNUAL MEETING OF SHAREHOLDERS
Corporate Governance Highlights
Our board of directors is not classified, with each of the directors subject to re-election annually. Directors are elected by the affirmative vote of a majority of the votes validly cast in such election. Our board also maintains a director resignation policy for board members or nominees who receive more votes against their nomination than for their nomination. Our commitment to good corporate governance is further illustrated by the following practices:
| ✔ | Board independence (with the exception of Mr. McCormick, all currently serving directors are independent) |
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| ✔ | Diversity of board skills and experience, as well as gender, ethnicity, and race |
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| ✔ | Lead independent director with robust duties |
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| ✔ | Board oversight of environmental, social, and governance matters, including related risk, formalized by committee charter |
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| ✔ | Robust stock ownership guidelines for directors and executive officers |
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| ✔ | Clawback policy for executive officer cash and equity incentive compensation covering financial restatement and misconduct |
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| ✔ | All directors attended greater than 75% of all 2023 board and committee meetings that they were eligible to attend |
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| ✔ | Majority voting with director resignation policy for uncontested elections |
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| ✔ | Annual election of all directors |
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| ✔ | Year-round shareholder outreach and engagement program |
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| ✔ | Ongoing director training and education |
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| ✔ | Annual board and committee evaluations |
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| ✔ | Enterprise-wide risk oversight and assessment in the Risk Committee, with the Risk Committee and Audit Committee sharing oversight of cyber risk. |
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| ✔ | Compensation Committee focusing on compensation risk |
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| ✔ | No overboarded directors |
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Governance and Sustainability
We continue to focus on key governance risks and on providing transparency around our sustainability efforts. We are committed to implementing or continuing our initiatives and investment in the following key areas:
| • | Human Capital Management: Trustco Bank maintains a Human Capital Strategic Plan that guides us on our journey toward fostering a multicultural, collaborative, and inclusive work environment that promotes the exchange of different ideas, philosophies, and perspectives, which continues to be a top priority at TrustCo and Trustco Bank. The plan focuses on identifying areas of opportunity to further diversify our workforce. TrustCo is committed to creating an inclusive environment that promotes diversity, equity, and inclusion through recruiting, training, and retention practices that recognize and reward our employees. We actively encourage and support the growth of our employees throughout their educational and career development, ensuring employees are given opportunities to develop and refine their skills to be successful in the competitive environment in which we operate. |
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| • | Climate Change: TrustCo continues to take proactive steps to combat climate change risk throughout our various geographic regions. We believe that we have strong controls in place and consistent compliance oversight to ensure all loans in designated flood zones are covered under the appropriate level of flood insurance. Being mindful of our carbon footprint, we continue the ongoing process of installing energy efficient branch signage and LED bulbs at select internal and branch locations. We continue to update our robust Disaster Recovery Plan, enhance virtual capabilities, and cross-train staff in order to mitigate the increasing threats associated with climate change. |
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| • | Information Security and Data Privacy: TrustCo takes very seriously its obligations with respect to privacy and data security. Our Information Security Program includes a number of components designed to identify, analyze, and respond to cybersecurity risks, including reliance on a layered system of preventative and detective technologies, controls, and policies designed to detect, mitigate, and contain cybersecurity threats. As part of our Information Security Program, we maintain an Information Security Policy that outlines internal controls and procedures designed to protect information systems. We |
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| TrustCo Bank Corp NY 2024 Proxy Statement | | | 3 |
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PROXY STATEMENT SUMMARY FOR ANNUAL MEETING OF SHAREHOLDERS
conduct annual cybersecurity awareness training for employees to enhance awareness of how to detect and respond to cybersecurity threats, as well as periodic phishing training campaigns. We also provide quarterly cybersecurity updates for our employees, and table-top exercises are conducted annually to simulate a response to a cybersecurity incident. Additionally, we proactively aim to issue timely fraud prevention alerts to our customers.
| • | Financial Access: TrustCo also maintains a comprehensive Financial Literacy Portal containing educational information on a wide array of topics intended to address issues for new business owners, estate planning, personal finance, investment, retirement, and tax matters, among others. The Financial Literacy Portal can be found on our website at www.trustcobank.com under the “About Trustco” tab. The information found on our website is not incorporated by reference in this proxy statement or any other report that we file or furnish to the SEC. |
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| • | Community Outreach Efforts: At Trustco Bank, every day we live our commitment to being your home town bank. As an institution, we support charitable causes and community groups throughout our area of operation and beyond. We are enthusiastic supporters of Ronald McDonald House, local hospitals, and veterans’ groups, to name a few. Additionally, our team members volunteer thousands of hours dedicating their time, talent, and passion to groups touching virtually every aspect of life in the communities that we serve from housing and community development, education and literacy, sports and fitness, and many more. |
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The Nominating and Corporate Governance Committee’s charter includes oversight of the Company’s ESG program, activities, and related policies, operational controls, and disclosures. The committee’s charter also requires that the committee receive updates about such matters as needed, but at least quarterly. For more information about our focus on and enhancement of our ESG efforts, please visit the Corporate Sustainability section of our company website at www.trustcobank.com under the “About Trustco” tab. The information found on our website is not incorporated by reference in this proxy statement or any other report that we file or furnish to the SEC.
Shareholder Engagement and Responsiveness
We view shareholder engagement as a year-round opportunity to strengthen existing relationships with our shareholders, and to foster new connections within the investment community. This program has led to many meaningful conversations which have provided invaluable feedback to the Company and its stakeholders. We engage our shareholders for feedback on our practices and disclosures with respect to corporate governance, human capital management, board refreshment, corporate sustainability, banking operations, and the compensation of our executive officers, among others. In addition to providing an opportunity for shareholders to meet with management throughout the year, we maintain our governance documents, business highlights, and corporate sustainability on our investor relations website. The information found on our website is not incorporated by reference in this proxy statement or any other report that we file or furnish to the SEC.
In 2023 and early 2024, TrustCo reached out to its institutional and retail investors and extended engagement invitations to holders representing approximately 58% of its outstanding shares. Through that outreach, TrustCo had conversations with investors representing approximately 28% of its outstanding shares (calculated as of December 31, 2023). Conversations were had with all holders that expressed a willingness to engage. We also reached out to two proxy advisory firms, Institutional Shareholder Services (“ISS”) and Glass Lewis. One of those firms responded indicating that they did not see a need for a conversation at that time and we had a productive conversation with the other. As to shareholders, we had substantive dialog on topics that included:
| ✔ | Board responsiveness to proxy advisor recommendations about our executive compensation program |
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| ✔ | The state of our proxy disclosure generally |
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| ✔ | Board composition, skills, diversity, and refreshment |
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| ✔ | The Company’s human capital management, including diversity, equity, and inclusion |
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| ✔ | Substantive corporate sustainability matters |
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| ✔ | Business and financial matters |
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| ✔ | Broad-ranging aspects of risk management |
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On the subject of executive compensation, since our 2023 Annual Meeting of Shareholders, the majority of shareholders with which we engaged, both in number and percentage of ownership, indicated that they support or have no concern with the program.
| 4 | | | TrustCo Bank Corp NY 2024 Proxy Statement |
PROXY STATEMENT SUMMARY FOR ANNUAL MEETING OF SHAREHOLDERS
Information Security
As a company that deals with large volumes of sensitive customer information and financial transactions, we increasingly rely on the secure processing, transmission, and storage of information in our computer systems and networks. For that reason, we treat cyber security risk as a key operational risk within our enterprise-wide risk management framework. To manage information security risk, we have designed an expansive information security program, an integral component of which is our Information Security Policy. The Audit Committee and Risk Committee jointly oversee TrustCo’s cybersecurity risk exposures and the steps taken by management to monitor and mitigate cybersecurity risks. Our management reports directly to the Risk Committee on our cybersecurity program and efforts to prevent, detect, mitigate, and remediate issues. For additional information regarding our cybersecurity program, please see Item 1C. Cybersecurity in Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Compensation Philosophy and Practices
Philosophically, we seek to provide an executive compensation program that is consistent with promoting sound risk management and long-term value creation for our shareholders. Our executive compensation program is designed to promote the following compensation objectives:
| • | Encourage and reward the achievement of our short-term and long-term financial and strategic objectives, |
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| • | Align executive interests with the interests of our shareholders to encourage their focus on long-term return to shareholders and consideration of risk management, and |
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| • | Provide a comprehensive compensation program that fosters the retention of current executive officers and serves to attract new highly talented, results-driven executives as the need may arise. |
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At our 2023 Annual Meeting, shareholders representing 75.30% of the votes cast supported the “say-on-pay” vote. The support represents a significant majority of our shareholders; however, the Company nevertheless conducted outreach to our shareholders on compensation matters and the outcomes are discussed above.
| | What We Do | | |
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| | ✔ | | | Tie a substantial portion of executive pay to corporate performance | |
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| | ✔ | | | Provide for more than one metric for vesting under our performance-based restricted stock unit awards (“PSUs”) | |
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| | ✔ | | | Establish separate metrics for our short-term and long-term incentive plan designs to evaluate performance | |
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| | ✔ | | | Use balanced performance metrics that consider both the Company’s absolute performance and its relative performance versus peers | |
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| | ✔ | | | Maintain a robust clawback policy that meets the requirements of Nasdaq Listing Rule 5608, the clawback policy covers all executive officer incentive-based awards granted based upon material financial statement restatement or material fraud or misconduct | |
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| | ✔ | | | Require stock ownership guidelines for executive officers and directors, stock options and unearned PSUs do not count toward satisfaction of the guidelines | |
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| | ✔ | | | Engage with shareholders to promote transparency, improve accountability, and provide investors with a meaningful voice relating to our corporate governance and executive compensation practices | |
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| | What We Don’t Do | | |
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| | ✘ | | | We do not grant multi-year guaranteed incentive awards for executive officers | |
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| | ✘ | | | We no longer provide for “single-trigger” accelerated vesting of equity-based awards upon a change in control | |
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| | ✘ | | | We do not allow for excise tax “gross-ups” upon a change in control in employment agreements entered into since 2013 (five of seven executive officers of the Company do not have tax gross-ups in their employments agreements and the announced retirement of Mr. Salvador will reduce to one the number of legacy employment agreements with this feature) | |
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| | ✘ | | | We do not permit our executive officers and directors to hedge or pledge Company securities | |
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| | ✘ | | | We do not allow for discounting, reloading, or re-pricing of stock options without shareholder approval | |
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| TrustCo Bank Corp NY 2024 Proxy Statement | | | 5 |
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PROXY STATEMENT SUMMARY FOR ANNUAL MEETING OF SHAREHOLDERS
