FYI

PICO Holdings (NASDAQ: PICO) recently announced several governance improvements. We at Lawndale Capital Management believe that these governance changes, when taken as a whole, will allow the company to better execute its stated plan to monetize assets and return value to shareholders through stock buybacks, dividends, and any other appropriate means.

PICO plans to accelerate the de-staggering of its Board of Directors, whereby all directors will offer their voluntary resignation from their current staggered multi-year terms and will stand for election to one-year terms at the 2017 Annual Meeting. Lawndale previously called for accelerating the de-staggering process vs. the initially adopted multi-year enactment and commend Pico's Board for voluntarily taking this important action. Lawndale believes all companies converting from a classified board to the best governance practices of annual terms for all directors should take similar fast enactment actions.

PICO's Board also approved the reduction in its size to five members immediately following the 2017 Annual Meeting. As part of this decision, Directors Raymond Marino II and Howard Brownstein do not intend to stand for re-election at the 2017 Annual Meeting. We would like to thank Mr. Marino for his service to PICO and its shareholders as Independent Chairman during this transitional period for the company. As part of the changes, effective immediately, Mr. Marino has resigned as Chairman and CEO Maxim Webb and Independent Director Daniel Silvers have been elected Chairman and Lead Independent Director, respectively. Even in the re-combined Chairman and CEO role, Mr. Webb has agreed that his base salary will remain at the same level at which it was set prior to his promotion to CEO.

We understand the Board's reasoning for re-combining Chairman and CEO positions and appreciate that the Board is giving shareholders the right to voice their opinions on the combination in an advisory vote at the 2017 Annual Meeting. Lawndale does not support re-combining the two positions as a governance best practice. However, we will respect the outcome of this advisory vote.

December 2, 2016
PICO Holdings, Inc. Announces Governance Enhancements and Changes
http://globenewswire.com/news-release/2016/12/02/894623/0/en/PICO-Holdings-Inc-Announces-Governance-Enhancements-and-Changes.html

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