DEF 14A of Silvercrest Asset Management Group Inc., Apr 29, 2024

DEF 14A of Silvercrest Asset Management Group Inc.

Filed Apr 29, 2024 · FY20230000950170-24-049809

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS At the Annual Meeting, you will vote to elect as director the nominees listed below to serve until our 2027 Annual Meeting of stockholders or until his successor is elected and qualified. The Board has nominated Richard R. Hough III and Darla M. Romfo for election as directors. The nominees are current members of the Board. The nominees have consented to being named in this Proxy Statement as nominees and have agreed to serve as directors if elected. There is no family relationship among any of our executive officers or directors. In the normal course of its deliberations, the Board may decide at a later time to add one or more directors who possess skills and experience that may be beneficial to the Board and our Company. The persons named as Proxies in the accompanying form of proxy have advised us that, consistent with the Board’s recommendation, at the Annual Meeting, unless otherwise directed, they intend to vote the shares covered by the Proxies FOR the election of the nominees named below. If one or more of the nominees are unable to serve, or for good cause will not serve, the persons named as Proxies may vote for the election of any substitute nominee that the Board may propose. The persons named as Proxies may not vote for a greater number of persons than the number of nominees named above.

  2. Nominees for Election to the Board

    Nominees for Election to the Board The following table provides information about our nominees for director as of the Record Date, April 22, 2024:

  3. Nominees for Election to the Board

    | Name | Age | Position | | Richard R. Hough III | 54 | Chairman, Chief Executive Officer, President and Director | | Darla M. Romfo | 63 | Director |

  4. Nominees for Election to the Board

    Richard R. Hough III, 54, is our Chairman, Chief Executive Officer and President and a current member of the Board. Mr. Hough has served as Chairman of the Board since November 2015, President of Silvercrest Asset Management Group LLC, our operating subsidiary (“SAMG LLC”), since January 2012, as its Chief Operating Officer from July 2010 to November 2013 and as its Chief Executive Officer since November 2013. He has been a member of the Company’s Executive Committee since 2007. Mr. Hough, who joined us in 2003, has responsibility for all aspects of our operations, including corporate strategy and development. Mr. Hough recently served as a member of the Executive Committee of and member of the Board of Governors of the Investment Advisor Association, a not-for-profit organization that represents the interests of SEC-registered investment advisor firms. He serves on the advisory board of the New Criterion, a monthly review of the arts and intellectual life. He also serves as chairman of the board of the Institute for Family Studies. He serves on the boards of The Tunison Foundation, National Civic Arts Society, and Christendom College. Mr. Hough graduated with a degree in politics from Princeton University. Mr. Hough has been involved in the strategy of our Company for twenty years. His various leadership roles enable him to provide valuable insight on the strategic direction of the Company. Based on his experience and qualifications, Mr. Hough was elected as a member of the Board, and we believe he should continue as a Board Member. Darla M. Romfo, 63, is a current member of the Board. Ms. Romfo is a lawyer and a CPA who has had experience working in all three sectors of our economy—private, government and not-for-profit. After working in private practice as an attorney in tax law, Ms. Romfo worked closely as Counsel to two former United States Senators (Senator Kent Conrad and Senator John Breaux) in their roles as members of the Senate Finance Committee, as Legislative Director to each Senator, and with Senator Breaux in his positions within the Senate Democratic Leadership. Since 1999, Ms. Romfo has served as President and Chief Operating Officer of the Children’s Scholarship Fund, a national not-for-profit dedicated to providing partial scholarships to low-income children to attend private school. Ms. Romfo is a frequent speaker on education and parental choice, and is currently on the boards of Drexel Fund, Brilla College Prep Charter Schools, The Cloisters on the Platte, and Invest in Ed. Ms. Romfo received a B.A. degree in Political Science and a B.S.B.A. degree in Accounting from the University of North Dakota. She subsequently received her J.D. from The George Washington University Law School. Based on her management, legal and financial experience and qualifications, Ms. Romfo was elected as a member of the Board, and we believe she should continue as a Board Member.

  5. Other Current Members of the Board

    Other Current Members of the Board Richard J. Burns, 64, is a current member of the Board. Richard J. Burns founded Blackhall Ventures in 2021 and is currently its General Partner and Chairman of its operating companies. Prior to founding Blackhall Ventures, Mr. Burns co-founded Isis Ventures Partners in 2002 and is currently one of its general partners and Chairman of its operating companies. Prior to co-founding Isis, Mr. Burns was President and Chief Executive Officer of Thomson Financial Media, a company holding the banking, insurance and electronic commerce media assets of The Thomson Corporation. Mr. Burns also previously served as Chief Executive Officer and publisher of Institutional Investor, a leading media business for fund management and finance professionals. Mr. Burns is currently a director on the board of Interaudi Bank, an FDIC-regulated bank based in New York. He serves as Chairman of the bank’s audit committee and is a member of its compliance committee. He also serves as Chairman of the board of Intelligent Security Systems, a leading provider of algorithmic software solutions for the global video intelligence industry. Mr. Burns currently serves on the board of Carnegie Hall, representing Manhattan Borough President Mark Levine. Mr. Burns has previously served as a member of the Board of Trustees of the American Museum of Natural History and as a member of the Board of Trustees of the David Rockefeller-founded Americas Society. Mr. Burns was educated at St. John’s College, Oxford University, where he received B.A. and M.A. degrees. He subsequently received his Masters of Science from Columbia University’s Graduate School of Journalism. Based on his experience and qualifications, Mr. Burns was elected as a member of the Board. Brian D. Dunn., 69, is a current member of the Board. Mr. Dunn joined McLagan Partners (an Aon Hewitt Company), a provider of compensation consulting services, in 1998 and retired as Chairman of McLagan and CEO of Performance, Reward & Talent for Aon Hewitt Consulting Worldwide in December 2015. He is a board member of Spire Technologies and Solutions Private Limited, SullivanCotter which is a private consulting firm focused on the Healthcare sector, and the Live Like Lou Foundation. Mr. Dunn received a B.S. degree summa cum laude from the New York State School of Industrial and Labor Relations at Cornell University and an M.B.A. with highest honors from the Cornell University Graduate School of Management. Mr. Dunn has over 40 years of experience specializing in incentive and executive compensation and has had several compensation committee relationships with publicly traded companies. His client base was largely financial services firms including many asset managers. Based on his experience and qualifications, Mr. Dunn was elected as a member of the Board. Albert S. Messina, 76, is a current member of the Board. He was elected to the Board on March 19, 2014. Mr. Messina joined our Company in April 2002 as a Managing Director and Portfolio Manager of equity and fixed income portfolios. Prior to 2002, Mr. Messina was a Managing Director at Credit Suisse Asset Management (CSAM), where he served in a similar capacity. He arrived at CSAM as a result of that firm’s merger with DLJ, where he had worked since 1983. Previously, he spent 14 years with Bankers Trust Company, where he advised private clients and oversaw the fiduciary department’s Tax Services Division. Mr. Messina holds a B.A. in Economics from Brooklyn College. Mr. Messina has decades of experience in the asset management industry, including over a decade of leadership experience at Silvercrest. Based on his experience and qualifications, Mr. Messina was elected as a member of the Board.

  6. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION Under our director compensation program, each non-employee director receives annual compensation that is comprised of an annual cash retainer of $50,000, an annual equity retainer of $50,000, an additional $5,000 cash annually per Committee on which the director serves, and Committee chair cash retainers of $10,000, $5,000 and $5,000 for the chairperson of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, respectively. The annual cash retainer is paid quarterly in arrears, and the annual equity retainer is paid in the form of restricted stock units that relate to Class A shares of Silvercrest Asset Management Group Inc. and vest on the third anniversary of the grant date, conditioned upon the director’s continuous service. We offer each of our non-employee directors our investment management services, if they place their funds in a separately managed account with us, at a discounted advisory fee typically associated with these services. In addition, all directors are reimbursed for reasonable out-of-pocket expenses incurred by them in connection with attending Board, Committee and stockholder meetings, including those for travel, meals and lodging. Employee directors do not receive any additional compensation for services as a director. We reserve the right to change the manner and amount of compensation to our directors at any time.

  7. 2023 Director Summary Compensation Table

    | | | | All | | | | Fees Earned or | Fees Earned or | Other | | | | Paid in Cash | Paid in Stock | Compensation | Total | | Name | ($) | ($)(1) | ($)(2) | ($) | | Richard J. Burns | 75,000 | 50,000 | — | 125,000 | | Brian D. Dunn | 70,000(3) | 50,000 | 137,793 | 257,793 | | Darla M. Romfo | 70,000 | 50,000 | — | 120,000 |

  8. Summary Compensation Table

    Summary Compensation Table The following table shows the annual compensation of our principal executive officer, principal financial officer and the three next most highly compensated executive officers who were serving as executive officers on December 31, 2023. These officers are referred to in this Proxy Statement as the “named executive officers.”

  9. Summary Compensation Table

    | | | | | Stock | Option | All Other | | | | | Salary | Bonus | Awards | Awards | Compensation | | | Name and Principal Position | Year | ($) (1) | ($) (2) | ($) (3) | ($) | ($) (4) | Total ($) | | Richard R. Hough, | 2023 | $875,000 | $1,500,000 | $1,500,000 | $— | $1,766,698 | $5,641,698 | | Chief Executive Officer and President | 2022 | $741,667 | $1,650,000 | $1,500,000 | $— | $134,582 | $4,026,249 | | | 2021 | $700,000 | $1,000,000 | $1,500,000 | $— | $125,014 | $3,325,014 | | Scott A. Gerard, | 2023 | $375,000 | $903,000 | $200,000 | $— | $35,802 | $1,513,802 | | Chief Financial Officer | 2022 | $375,000 | $903,000 | $— | $— | $37,971 | $1,315,971 | | | 2021 | $375,000 | $1,050,000 | $150,000 | $— | $32,242 | $1,607,242 | | David J. Campbell, | 2023 | $375,000 | $793,265 | $39,663 | $— | $11,894 | $1,219,822 | | General Counsel and Secretary | 2022 | $375,000 | $793,265 | $— | $— | $13,216 | $1,181,481 | | | 2021 | $375,000 | $793,265 | $25,000 | $— | $1,375 | $1,194,640 | | Albert S. Messina, | 2023 | $320,833 | $574,750 | $— | $— | $44,272 | $939,855 | | Managing Director and Portfolio Manager | 2022 | $300,000 | $765,808 | $— | $— | $46,075 | $1,111,883 | | | 2021 | $300,000 | $910,000 | $— | $— | $49,840 | $1,259,840 | | J. Allen Gray, | 2023 | $500,000 | $1,850,900 | $100,000 | $— | $33,237 | $2,484,137 | | Managing Director – Institutional Business | 2022 | $466,667 | $1,961,522 | $100,000 | $— | $31,038 | $2,559,227 | | | 2021 | $300,000 | $2,121,385 | $250,000 | $— | $21,167 | $2,692,552 |

  10. Summary Compensation Table

    (1) Amounts represent guaranteed payments made to our named executive officers. (2) Amounts represent cash bonuses earned for the fiscal year and paid out in the following year. (3) Reflects the grant date fair value computed in accordance with FASB ASC Topic 718, or ASC 718, associated with restricted stock units in Silvercrest L.P calculated pursuant to ASC 718. Pursuant to ASC 718, Silvercrest L.P. recognizes compensation expense associated with the granting of equity-based compensation based on the grant-date fair value of the award if it is classified as an equity instrument, and on the changes in settlement amount for awards that are classified as liabilities. Silvercrest L.P.’s restricted stock units are all classified as equity instruments. For additional information regarding the assumptions made in calculating these amounts, see Note 16 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Amounts in this column represent the aggregate dollar amount of all other compensation received by the named executive officers. For 2023, amounts for Mr. Hough, consist of cash distributed on account of vested and unvested restricted stock units equal to $96,133, insurance premiums for life and disability insurance benefiting Mr. Hough equal to $1,565, the savings of $1,650 to Mr. Hough for the discounted advisory fee for investment management services on his funds placed in separately managed accounts with the Company and a non-recurring variable compensation payment of $1,667,350 related to the difference between the number of non-qualified stock options granted to Mr. Hough as determined in prior years using the Black-Scholes method inclusive and exclusive of the expected annual dividend yield input. For 2023, amounts for Mr. Gerard consist of cash distributed on account of vested and unvested restricted stock units equal to $8,746, employer-paid car allowances equal to $3,000, insurance premiums for life and disability insurance benefiting Mr. Gerard equal to $1,565, and the savings of $22,491 to Mr. Gerard for the discounted advisory fee for investment management services on his funds placed in separately managed accounts with the Company. For 2023, amounts for Mr. Campbell, consist of cash distributed on account of vested and unvested restricted stock units equal to $1,461, employer-paid car allowances equal to $6,000, insurance premiums for life and disability insurance benefiting Mr. Campbell equal to $1,565, and the savings of $2,868 to Mr. Campbell for the discounted advisory fee for investment management services on his funds placed in separately managed accounts with the Company. For 2023, amounts for Mr. Messina consist of employer-paid car allowances equal to $6,000, insurance premiums for life and disability insurance benefiting Mr. Messina equal to $1,138, and the savings of $37,134 to Mr. Messina for the discounted advisory fee for investment management services on his funds placed in separately managed accounts with the Company. For 2023, amounts for Mr. Gray consist of cash distributed on account of vested and unvested restricted stock units equal to $14,248, employer-paid car allowances equal to $6,000, insurance premiums for life and disability insurance benefiting Mr. Gray equal to $1,565, and the savings of $11,424 to Mr. Gray for the discounted advisory fee for investment management services on his funds placed in separately managed accounts with the Company.

  11. Grants of Plan-Based Awards in Fiscal Year 2023

    Grants of Plan-Based Awards in Fiscal Year 2023 The following table sets forth information relating to restricted stock units and non-qualified stock options in Silvercrest L.P. granted to our named executive officers in 2023.

  12. Grants of Plan-Based Awards in Fiscal Year 2023

    | | | | All | | | | | All | Other | | | | | Other | Option Awards: | | | | | Stock | Number of | | | | | Awards: | Securities | Grant Date | | | | Shares Of | Underlying | Fair Value | | | Grant | Stock Or | Options | Of Stock | | Name | Date | Units (#) (1) | (#) | Awards ($) (2) | | Richard R. Hough | 4/3/2023 | 82,508 | — | $1,499,995 | | Scott A. Gerard | 4/3/2023 | 11,001 | — | $199,998 | | David J. Campbell | 4/3/2023 | 2,182 | — | $39,669 | | Albert S. Messina | — | — | — | $— | | J. Allen Gray | 4/3/2023 | 5,501 | — | $100,008 |

  13. Grants of Plan-Based Awards in Fiscal Year 2023

    (1) These RSUs vest in four equal installments on each of the first, second, third and fourth anniversaries of the grant date. Reflects the grant date fair value computed in accordance with FASB ASC Topic 718, or ASC 718, associated with restricted stock units in Silvercrest L.P calculated pursuant to ASC 718. Pursuant to ASC 718, Silvercrest L.P. recognizes compensation expense associated with the granting of equity-based compensation based on the grant-date fair value of the award if it is classified as an equity instrument, and on the changes in settlement amount for awards that are classified as liabilities. Silvercrest L.P.’s restricted stock units are all classified as equity instruments. For additional information regarding the assumptions made in calculating these amounts, see Note 16 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

  14. Outstanding Equity Awards at Fiscal Year End 2023

    Outstanding Equity Awards at Fiscal Year End 2023 The following table sets forth information relating to unexercised stock options and unvested equity interests in Silvercrest L.P. issued to our named executive officers that remained outstanding on December 31, 2023.

  15. Outstanding Equity Awards at Fiscal Year End 2023

    | | Option Awards | | | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units That Have Not Vested (#) (1) | Market Value of Shares or Units of Stock That Have Not Vested ($) (2) | | Richard R. Hough | 60,742 | — | $14.54 | 5/1/2024 | 82,508 | $1,402,636 | | | — | — | $— | — | 59,242 | $1,007,110 | | | 86,764 | — | $10.18 | 5/1/2030 | 43,135 | $733,287 | | | — | — | $— | — | 12,279 | $208,743 | | Scott A. Gerard | — | — | $— | — | 11,001 | $187,017 | | | — | — | $— | — | 5,392 | $91,664 | | David J. Campbell | — | — | $— | — | 2,182 | $37,094 | | | — | — | $— | — | 899 | $15,275 | | Albert S. Messina | — | — | $— | — | — | $— | | J. Allen Gray | | | | | 9,874 | $167,854 | | | — | — | $— | — | 8,987 | $152,771 |

  16. Outstanding Equity Awards at Fiscal Year End 2023

    (1) For Mr. Hough, the 82,508 restricted stock units vest in four equal installments on each of April 3, 2024, 2025, 2026 and 2027, the 59,242 restricted stock units vest on each of November 1, 2024, 2025 and 2026, the 43,135 restricted stock units vest on each of May 3,2024 and 2025, and the remaining 12,279 restricted stock units vest on May 1, 2024. For Mr. Gerard, the 11,001 restricted stock units vest in four equal installments on each of April 3, 2024, 2025, 2026 and 2027, and the remaining 5,392 restricted stock units vest on each of May 3, 2024 and 2025. For Mr. Campbell, the 2,182 restricted stock units vest in four equal installments on each of April 3, 2024, 2025, 2026 and 2027, and the remaining 899 restricted stock units vest on each of May 3, 2024 and 2025. For Mr. Gray, the 9,874 restricted stock units vest on each of November 1, 2024, 2025 and 2026, the 8,987 restricted stock units vest on each of May 3, 2024 and 2025 and the remaining 5,501 restricted stock units vest in four equal installments on each of April 3, 2024, 2025, 2026 and 2027. (2) Represents (i) $17.00 per unit, which is the effective per unit value as of December 31, 2023, multiplied by (ii) the number of unvested units.

  17. Option Exercises and Stock Vested During the Year Ended December 31, 2023

    Option Exercises and Stock Vested During the Year Ended December 31, 2023 The following table sets forth information concerning interests in Silvercrest L.P. acquired upon the vesting of restricted stock units and the exercise of options held by the named executive officers during the year ended December 31, 2023.

  18. Option Exercises and Stock Vested During the Year Ended December 31, 2023

    | | Option Awards | | Equity Awards | | | | Number of | Value | Number of | Value | | | L.P. Interests | Realized | L.P. Interests | Realized | | | Acquired | on | Acquired | on | | Name | on Exercise (#) | Exercise ($) | on Vesting (#) | Vesting ($) | | Richard R. Hough | 105,398 | $389,974 | 62,191 | $1,115,960 | | Scott A. Gerard | — | $— | 2,696 | $48,312 | | David J. Campbell | — | $— | 449 | $8,051 | | J. Allen Gray | — | $— | 7,785 | $136,931 |

  19. Pension Benefits

    Pension Benefits We do not sponsor or maintain any benefit pension or retirement benefits for the benefit of our employees.

  20. Nonqualified Defined Contribution and Other Nonqualified Deferred Compensation Plans

    Nonqualified Defined Contribution and Other Nonqualified Deferred Compensation Plans We do not sponsor or maintain any nonqualified defined contribution or other nonqualified deferred compensation plans for the benefit of our employees.

  21. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control The following summarizes the potential payments and benefits that we would provide to our named executive officers in connection with a termination of employment and/or a change in control. In determining amounts payable, we have assumed in all cases that the termination of employment occurred on December 31, 2023.

  22. Pay Versus Performance

    Pay Versus Performance The Dodd-Frank Wall Street Reform Act and Consumer Protection Act and the compensation disclosure rules of the SEC require us to disclose the following information regarding “compensation actually paid” to our named executive officers and certain financial performance measures. The dollar amounts for “compensation actually paid” (or “CAP”) are calculated in accordance with Item 402(v) of Regulation S-K. For information on our compensation policies and decisions regarding compensation paid to our named executive officers, including how we align executive compensation with Company performance, see the Compensation Discussion and Analysis section above.

  23. Pay Versus Performance

    | | | | Average | | | | | | | | | | Summary | | | | | | | | | | Compensation | Average | | | | | | | | | Table | Compensation | Value of Fixed $100 | | | | | | Summary | Compensation | Total | Actually Paid | Investment Based on: | | | | | | Compensation | Actually | for Non-PEO | to Non-PEO | | Peer Group | | Diluted | | | Table Total | Paid to | Named Executive | Named Executive | Total | Total | | Adjusted | | | For PEO | PEO | Officers | Officers | Shareholder | Shareholder | Net | Earnings | | | ($) | ($) | ($) | ($) | Return | Return | Income | Per Share | | Year | (b)(1) | (c)(1) | (d)(2)(6) | (e) (2) | (f) (3) | (g)(3) | (h)(4) | (i)(5) | | 2023 | $5,641,698 | $3,173,747 | $1,539,404 | $1,478,809 | $159.91 | $211.89 | $15,183 | $1.12 | | 2022 | $4,026,249 | $3,789,874 | $1,542,140 | $1,634,404 | $144.93 | $120.66 | $30,793 | $1.35 | | 2021 | $3,325,014 | $3,669,106 | $1,688,568 | $1,796,357 | $127.60 | $161.06 | $24,946 | $1.89 |

  24. Pay Versus Performance

    Mr. Hough was the PEO for all three years in the table. As shown in the table below, Compensation Actually Paid (“CAP”) to the PEO for each year in the table was calculated by starting with the Summary Compensation Table ("SCT") total compensation for the PEO, deducting the date of grant fair value of stock awards and stock options shown in the SCT, and adding (or subtracting) (i) the fair value of stock awards and stock options that were granted in the year and remained outstanding and unvested at the end of the year; (ii) the change in fair value of stock awards that were granted in prior years and still outstanding and unvested at the end of each respective year; (iii) the change in fair value of stock awards that were granted in prior years and vested during each respective year; and (iv) the dollar value of distributions payable on stock awards during each respective year. During the years shown in the table, no awards were granted and vested in the same year, or were forfeited.

  25. Pay Versus Performance

    | | | | | | | Value | | | | | | | Change in | | of | | | | | | Fair Value | Fair Value | Change in | Distributions | | | | | Date of Grant | of Stock Awards | of Stock Awards | Fair Value | Paid | | | | | Fair Value | Granted to PEO | Granted to PEO | of Stock Awards | to PEO | | | | Summary | of All | in Current Year | in Prior Years | Granted to PEO | on Unvested | Compensation | | | Compensation | Stock Awards | and Outstanding | and Outstanding | in Prior Years | Stock Awards | Actually | | | Table Total | to | as of | as of | and Vested | in | Paid to | | | For PEO | PEO | December 31 | December 31 | in Current | Current | PEO | | | ($) | ($) | ($) | ($) | Year | Year | $ | | Year | (b)(1) | (c)(1) | (d)(1)(6) | (e) (1) | (f) (1) | (g)(1) | (h)(1) | | 2023 | $5,641,698 | $(1,500,000) | $1,402,636 | $(890,515) | $(1,576,205) | $96,133 | $3,173,747 | | 2022 | $4,026,249 | $(1,500,000) | $1,482,624 | $194,458 | $(546,473) | $133,017 | $3,789,875 | | 2021 | $3,325,014 | $(1,500,000) | $1,481,239 | $490,780 | $(251,376) | $123,449 | $3,669,106 |

  26. Pay Versus Performance

    For 2023, 2022 and 2021, Messrs. Gerard, Campbell, Messina and Gray were the Non-PEO Named Executive Officers ("NEOs"). As shown in the table below, CAP for the Non-PEO NEOs for each year in the table was calculated by starting with the average SCT total compensation for the Non-PEO NEOs, deducting the average date of grant fair value of stock awards and stock options shown in the SCT, and adding (or subtracting) (i) the average fair value of stock awards and stock options that were granted in the year and remained outstanding and unvested at the end of the year; (ii) the average change in fair value of stock awards that were granted in prior years and still outstanding and unvested at the end of each respective year; (iii) the average change in fair value of stock awards that were granted in prior years and vested during each respective year; and (iv) the average dollar value of distributions payable on stock awards during each respective year. During the years shown in the table, no awards were granted and vested in the same year, or were forfeited.

  27. Pay Versus Performance

    | | | | | Change in | | Average | | | | | | | Average | | Value | | | | | | Average | Fair Value | Change in | of | | | | | | Fair Value | of Stock Awards | Average | Distributions | | | | | Date of Grant | of Stock Awards | Granted to | Fair Value | Paid | | | | Average | Average Fair Value | Granted to Non-PEO | Non-PEO | of Stock Awards | to Non-PEO | Average | | | Summary | of All | Named Executive | Named Executive | Granted to Non-PEO | Named Executive | Compensation | | | Compensation | Stock Awards | Officers | Officers | Named Executive | Officers | Actually | | | Table Total | to | in Current Year | in Prior Years | Officers | on Unvested | Paid to | | | For Non-PEO | Non-PEO | and Outstanding | and Outstanding | in Prior Years | Stock Awards | Non-PEO | | | Named Executive | Named Executive | as of | as of | and Vested | in | Named Executive | | | Officers | Officers | December 31 | December 31 | in Current | Current | Officers | | | ($) | ($) | ($) | ($) | Year | Year | $ | | Year | (b)(2) | (c)(2) | (d)(2)(6) | (e) (2) | (f) (2) | (g)(2) | (h)(2) | | 2023 | $1,539,404 | $(84,916) | $79,407 | $16,990 | $(78,190) | $6,114 | $1,478,809 | | 2022 | $1,542,140 | $(25,000) | $61,777 | $38,155 | $9,625 | $7,708 | $1,634,405 | | 2021 | $1,688,568 | $(106,250) | $131,153 | $77,149 | $- | $5,736 | $1,796,356 |

  28. Pay Versus Performance

    (3) See “Performance Graph” as disclosed in the Compensation Discussion and Analysis section above. (4) Net income for 2023 included a non-recurring variable compensation payment of $1,667,350 paid to Mr. Hough related to the difference between the number of non-qualified stock options granted to Mr. Hough as determined in prior years using the Black-Scholes method inclusive and exclusive of the expected annual dividend yield input. Net income for 2023, 2022 and 2021 included GAAP fair value adjustments to various contingent purchase price consideration arrangements of $22,000, $11,983,000 and ($5,305,000), respectively. (5) See “Appendix A - Non-GAAP Financial Information and Reconciliations" to this 2024 Proxy Statement. (6) Fair value of stock awards and stock options included in Compensation Actually paid to the PEO and Average Compensation paid to the NEOs are calculated at the required measurement dates, consistent with the approach used to value the awards at the grant date as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the Securities and Exchange Commission on March 7, 2024 and this proxy statement. Any changes to stock award and stock option fair values from the grant date (for current year grants) and from prior year-end (for prior year grants) are based on the Company’s updated stock price at the respective measurement dates.

  29. Relationship between Compensation Actually Paid disclosed in the Pay Versus Performance table, and other table elements

    Relationship between Compensation Actually Paid disclosed in the Pay Versus Performance table, and other table elements CAP to Mr. Hough was higher in 2023 relative to 2022 largely resulting from a non-recurring variable compensation payment of $1,667,350 paid to Mr. Hough related to the difference between the number of non-qualified stock options granted to Mr. Hough as determined in prior years using the Black-Scholes method inclusive and exclusive of the expected annual dividend yield input. Otherwise, CAP to Mr. Hough and cumulative total shareholder return were both lower in 2023 relative to 2022. The incremental decrease in PEO CAP from 2022 to 2023 was largely the result of the decrease in the Company’s stock price in relation to a consistent level of stock awards granted in both years. CAP to Mr. Hough and cumulative total shareholder return were both higher in 2022 relative to 2021. The increase in PEO CAP from 2021 to 2022 was largely the result of the increase in the Company’s stock price in relation to a consistent level of stock awards granted in both years. Diluted Adjusted Earnings Per Share decreased from 2022 to 2023 and from 2021 to 2022 primarily as a result of the negative impact of markets on revenue. In 2023 and 2022, total cash compensation was higher as a percentage of revenue due to lower year over year revenue and investments in new portfolio managers as they develop client relationships. Lastly, maintenance of a strong Adjusted EBITDA Margin1 over the same time periods contributed to the changes in PEO CAP. Changes in the average NEO CAP over the reported period were primarily because of fluctuations in the fair value of stock awards granted and the number of awards granted changed from year to year. The decrease in the Company’s stock price that contributed to the decreased PEO CAP in 2023 also drove the decrease in the Company’s Total Shareholder Return (“TSR”) in 2023. The increase in the Company’s stock price that contributed to the increased PEO CAP also drove the increase in the Company’s Total Shareholder Return (“TSR”) in 2022 and 2021. At the end of the five-year period, the Company’s cumulative TSR ended lower than the cumulative TSR of the Company’s 2023 Peer Group. the TSR decreased over the five-year period, Changes in the average NEO CAP over the five-year period reflect changes in the TSR. Net Income decreased from 2022 to 2023, directionally in line with the PEO CAP. Net income for 2023 included a non-recurring variable compensation payment of $1,667,350 paid to Mr. Hough related to the difference between the number of non-qualified stock options granted to Mr. Hough as determined in prior years using the Black-Scholes method inclusive and exclusive of the expected annual dividend yield input. Net income for 2023 also included a GAAP fair value adjustment to various contingent purchase price consideration arrangements of $22,000. Net Income increased from 2021 to 2022, directionally in line with the PEO CAP. Net income for 2022 and 2021 included GAAP fair value adjustments to various contingent purchase price consideration arrangements of $11,983,000 and ($5,305,000), respectively. Changes in the average NEO CAP over the reported period were primarily because of fluctuations in the fair value of stock awards granted and the number of awards granted changed from year to year. 1 See "Appendix A - Non-GAAP Financial Information and Reconciliations" to this 2024 Proxy Statement.

  30. CEO Pay Ratio

    CEO Pay Ratio In 2023, the compensation of Mr. Hough, our Chief Executive Officer and President, was approximately 23 times the median pay of our employees, resulting in a 23:1 CEO Pay Ratio. We identified our median employee by examining 2023 total compensation for all individuals, excluding Mr. Hough, who were employed by our firm as of December 31, 2023, the last day of our payroll year. We included all of our employees in this process, whether employed on a full-time or part-time basis. We did not make any assumptions or estimates with respect to total compensation. We define “total compensation” as the aggregate of base salary, cash bonus, other cash compensation and the grant date fair value of equity incentive compensation awards. After identifying the median employee based on total compensation, we calculated total compensation in 2023 for such employee using the same methodology we use for our named executive officers as set forth in the Summary Compensation Table for 2023. As illustrated in the table below, our 2023 CEO Pay Ratio is 23:1:

  31. CEO Pay Ratio

    | | Mr. Hough | Median Employee | | Base Salary ($) | $875,000 | $165,000 | | Cash Bonus ($) | $1,500,000 | $75,000 | | Other Cash Compensation ($) (1) | $1,667,350 | $— | | Stock Awards ($) | $1,596,133 | $— | | Total ($) | $5,638,483 | $240,000 | | CEO Pay Ratio | | 23:1 |

  32. CEO Pay Ratio

    (1) Represents a non-recurring variable compensation payment of $1,667,350 paid to Mr. Hough in 2023 related to the difference between the number of non-qualified stock options granted to Mr. Hough in prior years as determined in prior years using the Black-Scholes method inclusive and exclusive of the expected annual dividend yield input. Excluding the aforementioned payment, the CEO pay ratio would be 17:1.