Bloggers Note Chairman Marino’s 6-Month Milestone

As originally appeared in the Troubled Company Reporter.

PICO Holdings, Inc. (Nasdaq:PICO), based in La Jolla, Calif., is a diversified holding company reporting recurring losses since 2008. PICO owns 57% of UCP, Inc. (NYSE:UCP), 100% of Vidler Water Company, Inc., a securities portfolio and various interests in small businesses. PICO has $662 million in assets and $426 million in shareholder equity. Central Square Management LLC and River Road Asset Management LLC collectively own more than 14% of PICO. Other activists at have taken to the Internet to advance the shareholder cause.

The bloggers note that PICO Chairman, Raymond Marino, asked shareholders for 6 months to get up to speed. The bloggers say: “Six months have passed. The only significant improvements at PICO Holdings have come from the efforts of shareholders. Large decisions are not made. Small decisions are not made. Assets are not sold. Capital is not returned to shareowners.

The only significant decision made by this Board so far relates to Synthonics. We view retention of the Synthonics stake as a capital allocation failure and a violation of shareholder will — given that former Director Kenneth J. Slepicka was just thrown off the Board by PICO shareowners.

Last post, we reminded readers that Delaymond “took the liberty” of lunching with UCP executives before the PICO Annual Meeting. He also mentioned having visited the UCP East Garrison master plan community in Monterey, California. While this may sound like dedication, Delaymond’s golf course residence is only a 26-minute drive from the East Garrison spread. That’s not exactly putting yourself out, Ray.

Delaymond is a rare bird in the world of corporate governance: he is a non-elected Chairman of the Board. Delaymond was nominated by Robotti & Company, which owns about 1% of PICO shares. He was brought on when the Board was in chaos, as one Legacy Director had just departed and two more were departing. Delaymond did not face shareowner election in 2016, due to the Board’s abusive decision to declassify incrementally.

Delaymond is on the record as stating that the Board will be declassified before the 2017 Annual Meeting. Thereafter, Delaymond will be an elected Chairman — or not.

There once was a Chairman named Ray.
He was paid roughly $550 per day.
Ray said, ‘Give me half a year.
I’ll make shareholders cheer.’
But all he produced was delay.”