DEF 14A of Affiliated Managers Group, Inc.
Filed Apr 12, 2024 · FY20230001004434-24-000019
At this year’s Annual Meeting, the election of directors (Proposal 1) and the advisory vote on executive compensation
At this year’s Annual Meeting, the election of directors (Proposal 1) and the advisory vote on executive compensation
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS
Introduction
Introduction Nine directors, which will constitute our entire Board of Directors following the Annual Meeting, are expected to be elected at the Annual Meeting to serve until the 2025 Annual Meeting of Stockholders and until their respective successors are duly elected and qualified. The Board of Directors, upon the recommendation of the Nominating and Governance Committee, has nominated Karen L. Alvingham, Dwight D. Churchill, Annette Franqui, Jay C. Horgen, Reuben Jeffery III, Félix V. Matos Rodríguez, Tracy P. Palandjian, David C. Ryan, and Loren M. Starr to serve as directors. Each of these director nominees is currently serving as a director of the Company, with the exception of Ms. Franqui, who will first join the Board of Directors following her election at the Annual Meeting. Tracy A. Atkinson, a current member of the Board of Directors, is not standing for re-election and her term will expire after the Annual Meeting. Ms. Atkinson has dutifully served the Company during her tenure as a member of the Board of Directors and the Chair of its Audit Committee, and her service to the Company has been exemplary and is greatly appreciated. As more fully discussed below in the “Corporate Governance Matters and Meetings of the Board of Directors and Committees” section of this Proxy Statement, the Board of Directors has determined that eight of its nine director nominees, Lady Alvingham, Mr. Churchill, Ms. Franqui, Mr. Jeffery, Dr. Matos Rodríguez, Ms. Palandjian, Mr. Ryan, and Mr. Starr have no material relationship with the Company and, therefore, are independent for purposes of NYSE listing standards. The Board of Directors expects that each of the director nominees will, if elected, serve as a director for the new term. However, if any person nominated by the Board of Directors is unable to accept election, the proxies will be voted for the election of such other person or persons as the Board of Directors may recommend. The Company’s by-laws (as amended and restated, the “By-laws”) provide for majority voting in uncontested director elections. Under the majority voting standard, directors are elected by a majority of the votes cast, which means that the number of shares voted “for” a director must exceed the number of shares voted “against” that director. In a contested election (a situation in which the number of nominees exceeds the number of directors to be elected), the standard for the election of directors will be a plurality of the votes cast. Abstentions and broker non-votes will have no effect on the outcome of the vote on the election of directors. Under our Corporate Governance Guidelines, the Nominating and Governance Committee has established procedures for any incumbent director who is not re-elected to tender his or her offer to resign. Upon receiving the director’s offer to resign, the Nominating and Governance Committee will recommend to the Board of Directors whether to accept or reject the offer to resign, or whether other action should be taken. The Nominating and Governance Committee and the Board of Directors, in making their decisions, may consider any factor or information that they deem relevant. The Board of Directors, taking into account the Nominating and Governance Committee’s recommendation, will act on the tendered resignation within ninety days following certification of the election results. A director whose resignation is under consideration must abstain from participating in any recommendation or decision regarding his or her resignation.
Recommendation of the Board of Directors
Recommendation of the Board of Directors The Board of Directors believes that the election of each of the director nominees named above is in the best interests of the Company and its stockholders and, therefore, unanimously recommends that stockholders vote FOR the election of each of the director nominees. 14
Information Regarding the Nominees
Information Regarding the Nominees The following table sets forth the name, age (as of April 1, 2024), tenure, and other information of each director nominee, along with the committees of the Board of Directors on which each individual currently serves.
Information Regarding the Nominees
| Director Nominee Information: Committee Memberships | | | | | | | | | Name | Age | Compensation Committee | Nominating and Governance Committee | Audit Committee | Independence | Tenure (Years) | Other Public Company Boards | | Karen L. Alvingham | 61 | | ✓ | | ✓ | 6 | — | | Dwight D. Churchill | 70 | ✓ | ✓ (Chair) | | ✓ | 14 | — | | Annette Franqui | 62 | | | | ✓ | — | 2 | | Jay C. Horgen President and Chief Executive Officer | 53 | | | | | 5 | — | | Reuben Jeffery III Board Chair | 70 | ✓ | | ✓ | ✓ | 4 | — | | Félix V. Matos Rodríguez | 62 | ✓ | ✓ | | ✓ | 3 | — | | Tracy P. Palandjian | 53 | ✓ (Chair) | ✓ | | ✓ | 12 | — | | David C. Ryan | 54 | | | ✓ | ✓ | 2 | — | | Loren M. Starr | 62 | | | ✓ (Chair-Elect) | ✓ | <1 | — | | | Average Age of 61 | 100% Independent; All New Members since 2020 and New Chair in 2024 | 100% Independent; 3 New Members since 2020 and New Chair in 2024 | 100% Independent; 100% Financial Experts; All New Members since 2021, and New Chair-Elect in 2024 | 8 of 9 Nominees are Independent | 5 New Members since 2020, including New Nominee in 2024 | No Overboarding |
Information Regarding the Nominees
| | | | | | | | | Karen L. Alvingham Director since 2018 | | Dwight D. Churchill Director since 2010 | | Annette Franqui Director Nominee | | Jay C. Horgen President and Chief Executive Officer Director since 2019 | | | | | | | | | | Reuben Jeffery III Board Chair since 2024 Director since 2020 | Félix V. Matos Rodríguez Director since 2021 | | Tracy P. Palandjian Director since 2012 | | David C. Ryan Director since 2021 | Loren M. Starr Director since 2023 |
Information Regarding the Nominees
15 The director nominees bring a wide array of qualifications, skills, and attributes to our Board of Directors that support its oversight role on behalf of our stockholders. The most relevant of these qualifications and skills are summarized in the table below:
Information Regarding the Nominees
| Director Nominee Experience and Skills Overview | | | | Capital allocation | Our continued success depends in large part on a disciplined approach to capital allocation, as we seek to deploy resources in the areas of highest growth and return in our business to capitalize on growth opportunities, before efficiently returning excess capital to our stockholders; directors with experience managing capital contribute to the advancement of this strategy to enhance long-term value creation | 8 of 9 Nominees | | Investment management | Directors with investment management experience provide the Board with an enhanced understanding and assessment of our business strategy and bring valuable perspective on topics that are uniquely relevant to our industry | 8 of 9 Nominees | | Leadership | Directors who have held significant leadership positions provide a practical understanding of organizations, processes, strategy, risk management, and other factors that promote growth | All Nominees | | Corporate governance | We place a high standard on strong corporate governance, and adopt best practices through the active monitoring of evolving trends and developments, and through routine Board self- assessments and enhancements to our governance policies, committee charters, and board practices, as well as through active shareholder engagement and ongoing board refreshment, and we seek directors with demonstrated knowledge and practical experience in corporate governance, fiduciary roles, and stakeholder engagement | All Nominees | | Risk management and compliance | Risk management is critical to the stability, security, and success of our business, and we seek directors with regulatory and compliance expertise, as well as experience managing and overseeing risk in public and private companies and in other contexts | All Nominees | | Financial, accounting, or financial reporting | We use a broad set of financial metrics to measure our operating and strategic performance, and we seek directors with an understanding of finance and financial reporting processes | 8 of 9 Nominees | | Operational, including human capital management | Directors with experience in operations are able to assess and advise management on the formulation and execution of our business strategy, including the efficient allocation and utilization of our and our Affiliates’ human capital and other operating resources, and the re- allocation of those resources over time through all stages of market cycles | All Nominees | | Sustainability | Directors who have experience in managing sustainability issues are able to assist the Board in overseeing and advising management to ensure that strategic business imperatives and long- term value creation for stockholders are achieved within a responsible long-term business plan. Directors who have experience in sustainable investment are able to advise management in increasing AMG’s exposure to this secular growth area | 6 of 9 Nominees | | Public policy, regulatory, and government affairs | Directors with experience in governmental, regulatory, and related organizations provide valuable insight into governmental actions and socioeconomic trends, as well as the highly regulated industry in which we and our Affiliates operate | 4 of 9 Nominees | | Other public board experience | Directors with experience serving on other public company and publicly traded fund boards provide valuable operations and management perspectives, including insights on governance trends and practices and other issues affecting public companies generally | 6 of 9 Nominees | | Global experience | Directors with global business experience, including managing and growing organizations worldwide, and investing and operating experience in international and emerging markets, provide valuable insights on growth trends in these markets | 8 of 9 Nominees |
Information Regarding the Nominees
16 The following biographical summaries provide additional information on the business experience, principal occupation and past employment, and directorships of each director nominee during at least the last five years.
Information Regarding the Nominees
| Director Nominee Biographical Information | | | Karen L. Alvingham Nominating and Governance Committee | Karen L. Alvingham has been a director of the Company since January 2018. She served until June 2017 as Managing Partner of Genesis Investment Management, LLP, a boutique investment management firm and an AMG Affiliate since 2004. Lady Alvingham joined Genesis in 1990 and was appointed Managing Partner in 2003. Prior to joining Genesis, she was a senior investment manager at Touche Remnant Investment Management Ltd and Lloyds Investment Management Ltd. She began her career at Grieveson Grant & Co. She currently serves on the board of directors of International Market Management Ltd. We believe Lady Alvingham’s qualifications to serve on our Board of Directors include her substantial experience in the investment management industry, including as a senior executive in a leading investment management firm. | | Dwight D. Churchill Compensation Committee; Nominating and Governance Committee (Chair) | Dwight D. Churchill has been a director of the Company since February 2010, and served as independent Board Chair from August 2020 to January 2024. Mr. Churchill held a number of senior positions at Fidelity Investments before retiring from the firm in 2009. Having joined Fidelity in 1993, he served as the head of the Fixed Income Division, head of Equity Portfolio Management and President of Investment Services. While at Fidelity, Mr. Churchill also served as the elected chair of the Board of Governors for the CFA Institute, a 190,000-member association, and from June 2014 to January 2015, he served as interim President and Chief Executive Officer at the CFA Institute. Prior to joining Fidelity, Mr. Churchill served as a Managing Director of Prudential Financial, Inc., as President and Chief Executive Officer of CSI Asset Management, Inc., a subsidiary of Prudential Financial, Inc., and held senior roles at Loomis, Sayles & Company and the Ohio Public Employees Retirement System. Mr. Churchill currently serves on the Board of Trustees and as Chair of the Audit Committee of State Street Global Advisors SPDR ETF Mutual Funds. Mr. Churchill received a B.A from Denison University and an M.B.A. from The Ohio State University Fisher College of Business. We believe that Mr. Churchill’s qualifications to serve on our Board of Directors includes his extensive experience in the investment management industry. | | Annette Franqui | Annette Franqui is a nominee for election to our Board of Directors. Ms. Franqui is a Founding Partner of Forrestal Capital, LLC, a business and investment advisory firm that services the original founding families of Panamerican Beverages (“Panamco”). Previously, she served as the Chief Financial Officer of Panamco and as a Managing Director in the investment banking division of JPMorgan Chase & Co. She currently serves on the boards of directors of OFG Bancorp and Arcos Dorados Holdings Inc. and previously served as a member of the board of directors of AARP as well as its Chair. Ms. Franqui received a B.S. from the Wharton School at the University of Pennsylvania and an M.B.A. from the Stanford University Graduate School of Business. She is also a Chartered Financial Analyst. We believe that Ms. Franqui’s qualifications to serve on our Board of Directors include her significant leadership experience from her career in the financial services and investment management industries, including her extensive knowledge of the Latin America region, as well as a track record of service on public company boards. | | Jay C. Horgen President and Chief Executive Officer | Jay C. Horgen is the President and Chief Executive Officer of the Company and joined the Board of Directors in May 2019. Mr. Horgen was appointed President and CEO in 2019, having previously served as Chief Financial Officer from 2011 to 2019, and as Executive Vice President, New Investments prior to 2011. Before joining AMG in 2007, Mr. Horgen founded a private equity firm, Eastside Partners, where he served as a Managing Director. From 1993 to 2005, Mr. Horgen focused on asset management as an investment banker in the Financial Institutions Groups at Merrill Lynch & Co., where he was a Managing Director, and Goldman Sachs & Co. Mr. Horgen received a B.A. in Economics and Mathematics from Yale University. We believe that Mr. Horgen’s qualifications to serve on our Board of Directors include his direct knowledge of the Company’s strategy and operations through his 17 years of service at the Company, including as President & Chief Executive Officer, and Chief Financial Officer, and his more than 30 years of extensive experience in the financial services, private equity, and investment management industries. |
Information Regarding the Nominees
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Information Regarding the Nominees
| Director Nominee Biographical Information (cont.) | | | Reuben Jeffery III Board Chair Audit Committee; Compensation Committee | Reuben Jeffery III has been a director of the Company since April 2020, and has served as independent Board Chair since January 2024. Mr. Jeffery served as President and Chief Executive Officer and member of the board of Rockefeller & Co. from 2010 to 2018; previously he served seven years in the U.S. government in a variety of positions, including as Under Secretary of State for Economic, Energy and Agricultural Affairs and Chairman of the U.S. Commodity Futures Trading Commission. Prior to that, Mr. Jeffery spent two decades at Goldman Sachs & Co., becoming Managing Partner of the Goldman Sachs European Financial Institutions Group in 1992, and then Managing Partner of the Goldman Sachs Paris office in 1997. He began his career as a corporate attorney with Davis Polk & Wardwell LLP. Currently, Mr. Jeffery serves as an independent director and chairman of the board of SMBC Americas Holdings, Inc. and as a board member of PartnerRe Ltd. Mr. Jeffery served as a non-executive director at Barclays Plc from 2010 to 2019. He received a B.A from Yale University and an M.B.A. and J.D. from Stanford University. We believe that Mr. Jeffery’s qualifications to serve as Chair of our Board of Directors include his extensive financial services experience, particularly within investment banking and wealth management, and his leadership positions, knowledge, and experience with the U.S. and global political and regulatory environments. | | Félix V. Matos Rodríguez Compensation Committee; Nominating and Governance Committee | Félix V. Matos Rodríguez has been a director of the Company since January 2021. Dr. Matos Rodríguez is the Chancellor of the City University of New York (CUNY). Prior to his appointment as Chancellor in May 2019, Dr. Matos Rodríguez was president of CUNY’s Queens College and of CUNY’s Eugenio María de Hostos Community College in the Bronx. Dr. Matos Rodríguez has served as a professor, professor administrator, and former Cabinet secretary for the Commonwealth of Puerto Rico. He currently serves as board and executive committee chair of Research Foundation CUNY, co-chair of New York City Regional Economic Development Council, and as vice chair of the board of directors of the American Council on Education. Additionally, he serves on the boards of Phipps Houses, the United Way of New York City, and the Association for a Better New York (ABNY), as well as on the steering committee of Research Alliance for New York City Schools. Dr. Matos Rodríguez received a B.A. from Yale University and a doctorate in history from Columbia University. We believe that Dr. Matos Rodríguez’s qualifications to serve on our Board of Directors include his long track record as an innovator in both academia and the public sector and his leadership in a large, decentralized human-capital-based organization operating through a network of distinct institutions. | | Tracy P. Palandjian Compensation Committee (Chair); Nominating and Governance Committee | Tracy P. Palandjian has been a director of the Company since March 2012. Ms. Palandjian is the Chief Executive Officer, co-founder, and a member of the Board of Directors of Social Finance, Inc., a nonprofit and registered investment advisor focused on developing and managing investments that generate social impact and financial return. Prior to establishing Social Finance, Ms. Palandjian served as a Managing Director at The Parthenon Group, a global strategy consulting firm. At Parthenon, she established and led the Nonprofit Practice and consulted to foundations and nonprofit organizations in the U.S. and globally. Prior to Parthenon, Ms. Palandjian worked at McKinsey & Company and at Wellington Management Company, LLP. Ms. Palandjian is currently a member of the Harvard Corporation, vice-chair of the U.S. Impact Investing Alliance, and a trustee of the Global Steering Group on Impact Investing. She serves on the Boards of the Barr Foundation, The Boston Foundation, and the Surdna Foundation (and chairs its Investment Committee). Ms. Palandjian is also a member of the American Academy of Arts and Sciences. Ms. Palandjian received a B.A from Harvard University and an M.B.A. from Harvard Business School. We believe that Ms. Palandjian’s qualifications to serve on our Board of Directors include her extensive global financial management, consulting, and advisory experience. | | David C. Ryan Audit Committee | David C. Ryan has been a director of the Company since July 2021. Mr. Ryan is a corporate advisor to Singapore- based Temasek Holdings, and serves on the board of Mapletree Investments Pte Ltd., a Singapore-based real estate development, investment, capital, and property management company, and previously served on the boards of ADT Inc. and Tiga Acquisition Corp. Mr. Ryan’s 22-year career at Goldman Sachs & Co., where he was a partner, spanned a variety of roles in Asia and the U.S. From 2011 to 2013, he served as President of Goldman Sachs Asia (chairing its management committee) and was a member of the Management Committee of Goldman Sachs & Co. Mr. Ryan received a B.A. from Yale University. We believe that Mr. Ryan’s qualifications to serve on our Board of Directors include his substantial global financial services experience, particularly his extensive knowledge of the Asian region. | | Loren M. Starr Audit Committee (Chair-Elect) | Loren M. Starr has been a director of the Company since September 2023. Mr. Starr retired from Invesco Ltd. in March 2021, having served as Chief Financial Officer of the company for 15 years, from 2005 to 2020, after which he held an executive advisory role as Invesco’s Vice Chair until his retirement. Prior to joining Invesco in 2005, Mr. Starr served as the Chief Financial Officer of Janus Capital Group Inc. from 2001 to 2005, and held senior corporate finance roles with Putnam Investments, Lehman Brothers Inc., and Morgan Stanley & Co. LLC. Currently, he is an independent consultant, and is a member of the Nuveen/TIAA-CREF Fund Complex Boards of Trustees. Mr. Starr received a B.A. and B.S. from Columbia University, an M.B.A. from Columbia Business School, and an M.S. from Carnegie Mellon University. We believe that Mr. Starr’s qualifications to serve on our Board of Directors include his substantial experience as a senior executive and principal financial officer in the asset management industry, particularly his experience in corporate strategy, mergers and acquisitions, and capital management. |
Information Regarding the Nominees
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Information Regarding the Nominees
| Board of Directors Experience, Diversity, and Refreshment | | 5 Independent Director Nominees are New Since 2020, Including a New Director Nominee in 2024 50% of Independent Director Nominees are Women and/or Ethnically Diverse |
Information Regarding the Nominees
| Director Nominee Key Experience and Expertise | | Capital Allocation | | Investment Management | | Leadership | | Corporate Governance | | Risk Management and Compliance | | Financial, Accounting, or Financial Reporting | | Operational, Including Human Capital Management | | Sustainability | | Public Policy, Regulatory, and Government Affairs | | Other Public Board Experience | | Global Experience |
Information Regarding the Nominees
1.For 2024, reflects director nominees. 2.Reflects independent directors and, for 2024, independent director nominees. 3.Reflects independent director nominees. Displayed percentages reflect rounded values and may not add up to 100%. 19
Information Regarding the Nominees
| Independence1 | | | 2020 | 2024 |
Information Regarding the Nominees
89% 70%
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| Average Tenure1 | | | 2020 | 2024 |
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| Gender Diversity2 | | | 2020 | 2024 |
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| Ethnic Diversity2 | | | 2020 | 2024 |
Information Regarding the Nominees
5 yrs 8 yrs 25% 38% 25% 38%
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| Diversity3 | | | Gender | Ethnic Minority |
Information Regarding the Nominees
| Tenure3 |
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| Corporate Governance Practices |
Information Regarding the Nominees
Highly independent, diverse Board; world-class, experienced directors with a range of skills and backgrounds Non-Executive, Independent Board Chair New Board Chair Appointed in January 2024 Women in Leadership Roles on the Board No Overboarding Policies to Promote Long-Term Director and Executive Equity Ownership 99% Average Director Attendance at Board and Committee Meetings in 2023 Significant Board Refreshment since 2020; complete Committee Chair Refreshment expected in 2024 Publicly-Disclosed Corporate Governance Guidelines Majority Vote Standard in Uncontested Director Elections No Staggered Board No “Poison Pill” “Double-Trigger” Equity Award Vesting Upon Change in Control Annual Say-on-Pay Vote Active Engagement with Shareholders
Information Regarding the Nominees
| 2023 Director Engagement | | Board and Committee Meetings | | 10 Board Meetings | | 16 Committee Meetings | | 99% Average attendance rate at meetings of the full Board of Directors and its committees |
Information Regarding the Nominees
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COMPENSATION DISCUSSION AND ANALYSIS
| Compensation Governance Practices | | | Our Board of Directors is committed to maintaining responsible compensation practices, and believes that rewards for our senior leaders should be commensurate with the results they achieve for our stockholders. Our strong governance procedures and practices with respect to employment and compensation include the following: | | | What we do | What we don’t do | | •Annual Say-on-Pay vote •Caps on Annual Incentive Compensation for each NEO, including the CEO •Annual cap on independent director equity awards •Equity ownership guidelines for NEOs and directors, as well as an equity holding policy for NEOs •One-year minimum vesting on equity awards •Double-trigger vesting upon change in control •Clawback policy •Mitigation of dilutive impact of equity awards through share repurchases •Formulaic Performance Assessment scorecard; pre-set objective quantitative metrics drive 100% of the assessment score, with achievement caps on each individual metric •Significant portion of variable compensation is performance-based equity awards tied to key business metrics •Majority of equity awards are performance-based, with delivery tied to the achievement of pre-established performance targets •A thorough risk assessment process, as described under “Risk Considerations in our Compensation Program” below •Retain an independent compensation consultant | •No employment agreements with any NEOs, including the CEO •No golden parachute change in control agreements with executives •No tax reimbursements or gross-ups for perquisites •No hedging or pledging of AMG securities by directors or officers •No option re-pricing or buy-outs of underwater stock options •No option grants with exercise price below grant date stock price •No payment of dividends on equity awards prior to vesting •No liberal share counting or recycling of shares tendered or surrendered to pay the exercise cost or tax obligation of grants •No “evergreen” equity plan feature •No excessive perquisites |
Named Executive Officer Annual Compensation Determination Process and Results
The Compensation Committee continued to engage with shareholders and integrate feedback to enhance the scorecard assessment and further align incentive pay with objective quantitative metrics with the highest impact, related to AMG management’s ability to create shareholder value across capital allocation decisions. For performance year 2023, the Compensation Committee implemented revisions to three metrics to increase the overall weighting of returns measured over longer time periods. The TSR: Absolute and TSR: Relative metrics were revised to include a 5-year TSR component, along with the 1- and 3-year returns. The 3-Year Rolling Adjusted Return on Capital metric was revised to remove the impact of annualization on capital deployed to share repurchases in the current performance year, replacing it with a simple percentage change in the current performance year. In addition to these refinements, the Compensation Committee also replaced the metric measuring AUM Dedicated to Sustainable Investment with a broader metric, AUM Contribution from Selected Strategic Target Areas, which measures AUM contribution from strategies management believes are closely aligned with long-term secular growth trends (including alternative and sustainable strategies). The net effect of these changes implemented to refine the scorecard metrics impacted the overall score by (6%). Metric targets were set using a consistent approach with the prior year and the rigor of absolute earnings-related targets was maintained despite lower asset levels at the start of performance year 2023. In addition, for performance year 2023, the Compensation Committee implemented a 50% threshold level for both absolute earnings-related metrics, resulting in Committee-set or natural threshold values applying to 70% of the Performance Assessment scorecard. 36
Named Executive Officer Annual Compensation Determination Process and Results
| | During first half of year, determine Peer Group to set NEO Target Payouts along with maximum payout levels CEO Target Total Payout was set at the Peer Median ($11.1mm, 10% lower than prior-year Target Payout); cap on total compensation set at $17.5mm (unchanged relative to prior years) Non-CEO NEO payout targets are informed by peer medians and incorporate individuals’ AMG roles and responsibilities; individual caps established by the Compensation Committee | $11.1 Target $17.5 Maximum |
Named Executive Officer Annual Compensation Determination Process and Results
The Compensation Committee regularly reviews our Peer Group to ensure its ongoing relevance throughout the various stages of the Company’s growth and development, and to reflect on the current developments in the businesses of our peers. In determining the Company’s Peer Group on an annual basis, the Compensation Committee applies a principles-based approach in considering both industry- and company-specific dynamics to identify the peers with which we compete for client assets, stockholders, and talent. As a result, the Committee focuses on peers within the asset management industry, as well as financial services companies with significant investment management components to their businesses and does not, for example, include retail or investment banks, brokerage or custodian firms, or insurance companies. The Committee believes that success in the asset management industry, in particular, relies heavily on human talent, given the service-oriented and fee-based business model. In addition, the Compensation Committee recognizes that the companies within our Peer Group vary by business strategy, product concentration, and overall profitability. The nature of the roles of executives also varies by firm. For example, our senior management team has developed a differentiated skill set and reputation to match our unique business model of pursuing long- term partnerships with outstanding independent, partner-owned investment management firms. The Committee takes Peer Group comparisons into account and also forms its own perspective on appropriate compensation levels, considering additional factors with respect to unique elements of AMG officer roles and responsibilities.
Named Executive Officer Annual Compensation Determination Process and Results
| Our Peer Group was revised in 2023 with the addition of two additional alternative investment companies, Blue Owl and TPG, increasing the total to 13 peers, to reflect the growing contribution of alternative strategies to our earnings –The CEO Target Total Payout was set at $11.1 million, the median of the revised Peer Group. The addition of Blue Owl and TPG to the Peer Group did not have any impact on the median CEO compensation of the revised Peer Group. The CEO Total Target Payout decreased 10% relative to the prior-year CEO Total Target Payout of $12.3 million, driven by lower compensation for CEOs in the Peer Group. |
Named Executive Officer Annual Compensation Determination Process and Results
| Current Peer Group ($B) | | | 13 Peers | Market Capitalization as of 12/31/2023 | | AllianceBernstein Holding L.P. | $9.0 | | Ares Management Corporation | 38.2 | | Artisan Partners Asset Management Inc. | 3.5 | | Blue Owl Capital Inc. | 21.5 | | The Carlyle Group Inc. | 14.7 | | Federated Hermes, Inc. | 2.9 | | Franklin Resources, Inc. | 15.7 | | Invesco Ltd. | 8.0 | | Janus Henderson Group plc | 4.9 | | Lazard Ltd. | 3.9 | | TPG Inc. | 16.8 | | Victory Capital Holdings, Inc. | 2.2 | | Virtus Investment Partners, Inc. | 1.7 | | Peer Median | $8.0 | | AMG | $5.3 |
Named Executive Officer Annual Compensation Determination Process and Results
The following table displays the 2023 targets and 2023 actual results for each individual metric considered in the Compensation Committee’s scorecard assessment. The scorecard was designed based on five groups of metrics across strategic and financial categories that are expected to drive the performance of the business and share price over time. The Committee implemented a cap of 200% on the achievement level of each individual metric in addition to an aggregate cap on compensation. A score above 100% implies a payout above the target level (in case of Chief Executive Officer, median of Peer Group). The final score of 106% incorporated the individual metric caps, and reflected solid financial and operating performance for performance year 2023, which was partially offset by the underperformance of AMG stock over the 1-year period, measured against objective pre-determined targets in areas where management drives shareholder value:
Named Executive Officer Annual Compensation Determination Process and Results
| | Calculate Annual Incentive Compensation amount Apply weighted score of 106% to the Target Total Payout, to yield Total Compensation of $11.8mm or $11.0mm of Annual Incentive Compensation excluding salary | $11.0 |
Named Executive Officer Annual Compensation Determination Process and Results
| | Formulaically derive Annual Incentive Compensation payouts (cash and equity) (i)Determine the mix of cash bonus and total long-term equity incentive awards, using a pre- established tiered formula (ii)Allocate the equity awards across performance-based and time-based equity awards | $4.8 Cash $3.7 Perf.-Based Equity $2.5 Time-Based Equity |
Named Executive Officer Annual Compensation Determination Process and Results
The final amount of Annual Incentive Compensation for our President and Chief Executive Officer was then allocated between cash bonus and long-term equity awards using a pre-established tiered formula which caps ultimate cash awards at 50% of Annual Incentive Compensation (with the process viewable in the schematic on page 11), resulting in a formulaic cash bonus of $4.8 million (44%) and a formulaic equity incentive award amount of $6.2 million (56%) for our President and Chief Executive Officer. This formulaic equity incentive award amount was granted 40% in the form of Long-Term Deferred Equity Awards and 60% in the form of Long-Term Performance Achievement Awards, consistent with the Committee’s targeted allocations. For the balance of the named executive officers, formulaic cash bonuses were $2.5 million for the Head of Affiliate Investments, $2.5 million for the Chief Financial Officer, and $1.3 million for the Head of Affiliate Engagement. Formulaic equity incentive awards for such named executive officers were $2.5 million, $2.5 million, and $1.3 million, respectively, granted 40% in the form of Long-Term Deferred Equity Awards and 60% in the form of Long-Term Performance Achievement Awards, consistent with the Committee’s targeted allocations. Long-Term Performance Achievement Awards were granted with three-year cliff vesting and are tied to rigorous, transparent Average ROE targets measured over the three-year measurement period. These Awards are only deliverable if minimum Average ROE levels are met (measured over the applicable performance measurement period). The Average ROE target range for the 2023 Long-Term Performance Achievement Awards (achievement levels at which 100% of the shares would be delivered) was set at 16–17%, consistent with levels set for 2022. If Average ROE over the measurement periods for such awards is (i) below 10%, no shares underlying the initial award will be issued and distributed; and (ii) between 10% and 22%, a ratable portion between 40% and up to a maximum of 150% of the shares underlying the award will be issued and distributed. The Compensation Committee reviews the Average ROE target at least annually, and recently increased the rigor of the target for awards issued in respect of performance year 2022 as detailed in the Company’s definitive proxy statement for its 2023 Annual Meeting of Stockholders (the “2023 Proxy Statement”); this approach was again utilized for the awards issued in respect of performance year 2023. 39
Summary of Performance Assessment Target Descriptions and Rationale, and 2023 Target Setting Process
Summary of Performance Assessment Target Descriptions and Rationale, and 2023 Target Setting Process The following is a summary of the metrics utilized in the Performance Assessment scorecard, including the rationale for including each metric and the methodology used in setting the individual metric targets. In setting the targets for the revised quantitative scorecard, the Compensation Committee employed a disciplined methodology, relying on informed views of performance expectations applied to a framework in order to pre-set targets during the first half of the year, to appropriately incentivize executives.
Summary of Performance Assessment Target Descriptions and Rationale, and 2023 Target Setting Process
| Incentive Compensation Performance Assessment: Metric Descriptions / Rationale and Target-Setting Methodology | | | | Metric | Description / Rationale | Target-Setting Methodology | | Financials | | | | Annual Management Fee EBITDA | •Key top-line growth metric at AMG tied to the long-term value creation of the business, measuring AMG profit net of performance fee earnings, interest expense, taxes, and non-cash depreciation amortization — indicates the condition of AMG’s Affiliate management fee earnings on an ownership-weighted basis, the efficacy of capital reinvested for growth, and management of corporate expenses •Performance fee earnings removed, to dampen volatility year-over-year | •Annual growth in Management Fee EBITDA is influenced by the following primary factors: 1.Change in market asset levels for the year (time weighted), estimated based on publicly available market composite data (“Beta”); 2.Relative investment performance by AMG’s Affiliates; 3.Asset-based fee rates; 4.Annual expenses incurred by AMG and certain of our Affiliates; 5.AMG’s ownership levels across our Affiliate group; and 6.Management Fee EBITDA contributed by new Affiliate investments •For performance year 2023, the Committee adopted a target of +3% growth relative to the prior-year actual achievement, consistent with the approach for performance year 2022 •We believe that the resulting target is a rigorous metric given that the year-over-year change in Management Fee EBITDA is reflective of management’s execution against its strategy (described above) and regardless of the impact of Beta on AMG’s business across a range of reasonable market outcome scenarios •In 2023, a minimum threshold was included in measuring this metric, set at 50% of the target, and below which the metric would result in 0% achievement | | Annual Economic Earnings per Share (EEPS) | •Most comprehensive measure of overall earnings contribution on a per-unit basis; please refer to AMG’s most recent Annual Report on Form 10-K for a full definition •Incorporates aggregate condition of Affiliates, corporate expenses, capital structure, tax exposure, and the full weight of capital allocation decisions (deployment of capital into new Affiliate investments and share repurchases) | •EEPS is a key non-GAAP performance metric •Annual growth in EEPS is influenced by similar principal factors that affect Management Fee EBITDA (see #s 1-6 above) and also includes the impact of performance fees, taxes and interest expense, and share repurchases •For performance year 2023, the Committee adopted a target of +5% growth relative to the prior-year actual achievement, consistent with the approach for performance year 2022 •We believe that the resulting EEPS target is a rigorous metric given that the year-over-year change in EEPS is reflective of management’s execution against its strategy, regardless of the impact of Beta on AMG’s business across a range of reasonable market outcome scenarios •In 2023, a minimum threshold was included in measuring this metric, set at 50% of the target, and below which the metric would result in 0% achievement |
Summary of Performance Assessment Target Descriptions and Rationale, and 2023 Target Setting Process
| Metric | Description / Rationale | Target-Setting Methodology | | Relative Earnings Growth - Percentile Rank | •Relative growth ranking vs. Peer Group across GAAP EPS and EEPS (equally-weighted); relative metric reduces impact of macro factors •EEPS is one of AMG’s key performance metrics, but must be calculated by us for certain peers that do not disclose a comparable metric. Given that all public companies must report under GAAP, diluted GAAP EPS is included in the composite metric, enhancing conformity across the Peer Group. Idiosyncratic issues across each metric are offset by equally weighting EEPS vs. GAAP EPS; short-term anomalies are offset by comparing across a 3-year period | •Target for AMG’s relative growth ranking vs. Peer Group across GAAP EPS and EEPS (equally-weighted) is the peer median (50th percentile); a score of 100% indicates median performance •Given this is a relative metric, minimum threshold for this metric of 0% based on relative ranking with Peer Group and maximum score capped at 200% | | Shareholder Value Creation Metrics: TSR, Annualized (1-, 3-, and 5-Year Composites) | | | | Absolute TSR | •TSR metrics directly link Performance Assessment with shareholder investment experience •Absolute metric accounts for AMG’s unique exposures that are not captured in the Peer Group •Beginning with performance year 2023, 5-year TSR was added to the composite calculation to reflect management’s focus on long-term value creation. The resulting 1- / 3- / 5-year composites (with 30% / 50% / 20% weights, respectively) recognize annual performance while also aligning incentives with longer-term stockholder return | •Target for the Absolute TSR, Annualized, metric (1-, 3-, and 5-Year Composite) was set at 10%, given cost of capital estimated utilizing the Capital Asset Pricing Model (“CAPM”), including assumptions for the risk-free rate, equity risk premium, and long- term beta •Minimum threshold set if composite performance falls below 0% for measurement period | | Relative TSR | •TSR metrics directly link Performance Assessment with shareholder investment experience •Relative metric provides comparability with Peer Group and mitigates macro impact(s) on individual stocks’ return •Beginning with performance year 2023, 5-year TSR was added to the composite calculation to reflect management’s focus on long-term value creation. The resulting 1- / 3- / 5-year composites (with 30% / 50% / 20% weights, respectively) recognize annual performance while also aligning incentives with longer-term stockholder return | •Target for the Relative TSR, Annualized, metric (1-, 3-, and 5-Year Composite) was set at the peer median (50th percentile); a score of 100% indicates median performance •Given this is a relative metric, minimum threshold for this metric of 0% based on relative ranking with Peer Group and maximum score capped at 200% | | Capital Deployment and Return on Capital Metrics | | | | Average Annualized New Investments Yield: 3-Year | •Measures average pre-tax cash returns on new investments on a 3-year time- weighted basis, therefore indicating efficacy of new investment effort over the period; 3-year period offsets short-term anomalies •Incents a focus on pricing, structure, and long-term growth potential | •Target pre-tax cost of equity of 12% is estimated utilizing the CAPM, including assumptions for the risk-free rate, equity risk premium, and long- term beta •Minimum threshold set if 3-year annualized yield falls below 0% for measurement period | | Average Adjusted Return on Capital: 3-Year | •Time-weighted annual after-tax return on investment from capital deployed over 3-year period across the combination of new investments and share repurchases (together accounting for the significant majority of AMG’s discretionary capital decisions) •Beginning with performance year 2023, the impact of annualization on capital deployed into share repurchases in the current performance year was removed •Incents a disciplined approach to capital allocation across growth investments and share repurchases as management creates shareholder value over time; 3-year period offsets short-term anomalies | •Target after-tax cost of capital of 10% is estimated utilizing the CAPM, including assumptions for the risk-free rate, equity risk premium, long-term beta, and tax rate •Minimum threshold set if 3-year average adjusted return on capital falls below 0% for measurement period |
Summary of Performance Assessment Target Descriptions and Rationale, and 2023 Target Setting Process
| Metric | Description / Rationale | Target-Setting Methodology | | Strategic Focus | | | | AUM Contribution from Selected Strategic Target Areas | •Measures the notional level of AUM dedicated to select strategic target areas that management has identified as benefiting from structural, long-term secular tailwinds and are therefore focus areas for AMG. The selected strategic target areas include strategies dedicated to private markets, liquid alternatives, and sustainable investment. AMG increasingly participates in these secular growth areas via investments in new Affiliates or collaborating with existing Affiliates in product development or enhancing capabilities; targets are reconsidered annually to ensure appropriate progress is incented over time | •Target set relative to the prior-year contribution level of AMG notional AUM in these strategies | | Human Capital Management | | | | Organizational Diversity and Leadership | •Percentage of women at AMG in management positions, reflecting importance of diverse management and leadership perspectives; targets are re-considered annually to ensure appropriate progress is incented over time | •Target set relative to the prior-year AMG level, and over time may include goals and objectives and incorporate other forms of diversity | | Employee Engagement Survey Score | •Percentage of AMG employees indicating overall job satisfaction in formal annual employee engagement survey, relative to industry benchmark satisfaction rate | •Target set relative to an industry benchmark satisfaction rate |
Risk Considerations in our Compensation Program
Risk Considerations in our Compensation Program The Compensation Committee has discussed the concept of risk as it relates to our compensation program with our management team and with our Compensation Consultant. The Compensation Committee does not believe the goals or the underlying philosophy of our compensation program encourage excessive or inappropriate risk-taking, or create risks that are reasonably likely to have a material adverse effect on the Company. Throughout our compensation program, compensation is aligned with increases in shareholder value and long-term stockholder interests and, therefore, we believe our compensation arrangements do not encourage inappropriate risk-taking. The named executive officers’ salaries are fixed in amount and typically account for approximately 10% of their Total Compensation. For 2023, all other Total Compensation (other than base salaries and perquisites) for named executive officers was determined using the Performance Assessment, which links incentive award payouts to pre-established performance targets (with caps on the scoring of individual metrics) and to a peer benchmarked pay target, and the total Annual Incentive Compensation of each named executive officer was subject to a maximum payout. The Compensation Committee also reviews the output of the scorecard and the resulting incentive compensation to ensure that the output is consistent with the design of the plan. The Committee could apply incremental discretion for a variety of factors, including, but not limited to, a result inconsistent with the plan design, factors that arise after establishing the Peer Group, payout targets, and scorecard metrics earlier in the year (no discretion was applied in 2023). Annual Incentive Compensation is then allocated between cash bonus and long-term equity awards using the pre- established tiered formula, resulting in formulaic cash bonus and equity incentive award amounts. Additionally, a substantial portion of executive compensation is in the form of equity incentive awards, a majority of which are subject to specific pre-established performance targets, which further aligns executives’ interests with those of our stockholders. We believe that these awards do not encourage excessive or inappropriate risk-taking given that the value of the awards is tied to our performance, and the awards are subject to long-term vesting schedules to help ensure that executives have significant value tied to long-term performance.
Equity Grant Policy
Equity Grant Policy We grant all equity awards, including stock options, under the terms of an equity grant policy. Pursuant to the policy, we generally grant equity awards to our named executive officers at regularly scheduled meetings of the Compensation Committee in the first quarter, and to directors at regularly scheduled meetings of the Compensation Committee in the first quarter and in the third quarter, although the Committee retains discretion to grant awards at other times during the year. If the date of a Committee approval of an equity grant falls within a regularly scheduled quarterly blackout period under our insider trading policy, the awards will not become effective and are not priced until the closing of the last day of the blackout period following the public release of our earnings results for the prior quarter and/or year, as applicable. In all other cases, the effective grant date of any equity awards will be the date of the relevant Committee meeting or written consent. We do not have any program, plan, or practice to time equity awards to employees or directors in coordination with the release of material non-public information. If the Compensation Committee is in possession of material non-public information, either favorable or unfavorable, when equity awards are made, the Compensation Committee will not take this information into consideration when determining award amounts. 43
EXECUTIVE COMPENSATION TABLES
EXECUTIVE COMPENSATION TABLES The following tables provide information regarding the compensation arrangements for the years indicated with respect to the Company’s Chief Executive Officer, Chief Operating Officer (who served as Chief Financial Officer during 2023), and other executive officers during the fiscal year ended December 31, 2023 (collectively, the “named executive officers”). Equity awards granted in March 2024 in recognition of performance during fiscal year 2023 do not appear in the following Summary Compensation Table or the Grants of Plan-Based Awards table because SEC rules require equity awards to be reported in these tables in the fiscal year of grant, even where the awards are intended to compensate executives for performance in a prior year. As a result, Mr. Horgen’s compensation for performance year 2023 was approximately $(2.8) million lower than the amount reported in the Summary Compensation Table, and the difference is wholly attributable to the timing of stock awards. We have included a supplemental table that reports equity awards in the year in which they were earned, to better demonstrate how we evaluated and compensated our named executive officers with respect to performance year 2023. For information on the equity awards granted in March 2024 in recognition of 2023 performance, please refer to the Supplemental Table—Annual Compensation Earned in Performance Year 2023 below, and the related discussion in the “Compensation Discussion and Analysis” section of this Proxy Statement.
Summary Compensation Table
Summary Compensation Table
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Non-Equity Incentive Plan Compensation ($)(1) | Stock Awards ($) | All Other Compensation ($)(2) | Total ($) | | Jay C. Horgen ............................................ | 2023 | 750,000 | 4,811,000 | 8,990,000(3) | 66,823 | 14,617,823* | | President and Chief Executive Officer | 2022 | 750,000 | 5,995,000 | 6,925,000(4) | 73,212 | 13,743,212 | | | 2021 | 750,000 | 4,755,000 | 3,500,000(5) | 58,156 | 9,063,156 | | Rizwan M. Jamal ....................................... | 2023 | 500,000 | 2,526,000 | 3,539,000(3) | 32,670 | 6,597,670* | | Head of Affiliate Investments | 2022 | 500,000 | 3,193,000 | 4,250,000(4) | 41,170 | 7,984,170 | | | 2021 | 500,000 | 2,100,000 | 2,050,000(5) | 27,270 | 4,677,270 | | Thomas M. Wojcik(6) .................................. | 2023 | 500,000 | 2,526,000 | 3,501,000(3) | 23,640 | 6,550,640* | | Chief Operating Officer | 2022 | 500,000 | 3,167,000 | 2,950,000(4) | 32,140 | 6,649,140 | | | 2021 | 500,000 | 2,400,000 | 2,075,000(5) | 21,240 | 4,996,240 | | John R. Erickson ....................................... | 2023 | 500,000 | 1,340,000 | 1,990,000(3) | 24,294 | 3,854,294* | | Head of Affiliate Engagement | 2022 | 500,000 | 1,990,000 | 2,250,000(4) | 32,794 | 4,772,794 | | | 2021 | 500,000 | 1,250,000 | 1,350,000(5) | 21,894 | 3,121,894 |
Summary Compensation Table
*See the Supplemental Table below for the actual compensation earned by our named executive officers in respect of 2023 performance. The delivery of 60% of the grant date fair value of Stock Awards below is tied to the achievement of rigorous pre-established performance targets.
Supplemental Table – Annual Compensation Earned in Performance Year 2023
| Name | Salary ($) | Non-Equity Incentive Plan Compensation ($)(1) | Stock Awards ($)(7) | All Other Compensation ($)(2) | Total Compensation Earned ($) | | Jay C. Horgen ................................................................ | 750,000 | 4,811,000 | 6,226,000 | 66,823 | 11,853,823 | | Rizwan M. Jamal ........................................................... | 500,000 | 2,526,000 | 2,539,000 | 32,670 | 5,597,670 | | Thomas M. Wojcik ......................................................... | 500,000 | 2,526,000 | 2,539,000 | 23,640 | 5,588,640 | | John R. Erickson ........................................................... | 500,000 | 1,340,000 | 1,340,000 | 24,294 | 3,204,294 |
Grants of Plan-Based Awards in Fiscal Year 2023
Grants of Plan-Based Awards in Fiscal Year 2023
Grants of Plan-Based Awards in Fiscal Year 2023
| | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards ($) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Jay C. Horgen ............. | — | — | 4,611,050 | 6,525,000 | — | — | — | — | — | | | 3/5/2023(2) | — | — | — | — | — | — | 19,576 | 3,147,000 | | | 3/5/2023(3) | — | — | — | — | 18,173 | 27,260 | — | 2,921,500 | | | 3/5/2023(4) | — | — | — | — | 18,173 | 27,260 | — | 2,921,500 | | Rizwan M. Jamal ........ | — | — | 2,375,000 | 4,300,000 | — | — | — | — | — | | | 3/5/2023(2) | — | — | — | — | — | — | 7,707 | 1,239,000 | | | 3/5/2023(3) | — | — | — | — | 7,154 | 10,731 | — | 1,150,000 | | | 3/5/2023(4) | — | — | — | — | 7,154 | 10,731 | — | 1,150,000 | | Thomas M. Wojcik ...... | — | — | 2,375,000 | 4,300,000 | — | — | — | — | — | | | 3/5/2023(2) | — | — | — | — | — | — | 7,620 | 1,225,000 | | | 3/5/2023(3) | — | — | — | — | 7,079 | 10,619 | — | 1,138,000 | | | 3/5/2023(4) | — | — | — | — | 7,079 | 10,619 | — | 1,138,000 | | John R. Erickson ........ | — | — | 1,250,000 | 4,300,000 | — | — | — | — | — | | | 3/5/2023(2) | — | — | — | — | — | — | 4,336 | 697,000 | | | 3/5/2023(3) | — | — | — | — | 4,022 | 6,033 | — | 646,500 | | | 3/5/2023(4) | — | — | — | — | 4,022 | 6,033 | — | 646,500 |
Grants of Plan-Based Awards in Fiscal Year 2023
(1)Represents the range of performance-based cash bonus opportunities for performance year 2023. The amounts presented above are calculated using the Performance Assessment scorecard and framework, applying a pre-established tiered formula allocating between cash bonus and long-term equity awards, subject to payout caps, to the overall Target Total Payout, which is set based on peer benchmarking, and the maximum possible Annual Incentive Compensation amount; both amounts are inclusive of all cash and equity compensation. The amounts reported in the (i) “Target” sub-column reflect the application of an assumed Performance Assessment score of 100% and (ii) “Maximum” sub-column reflect the application of individual payout caps. Actual amounts earned for performance in 2023 are included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table above. AMG’s Annual Incentive Compensation determination process is more fully described in the “Compensation Discussion and Analysis” section of this Proxy Statement. (2)Represents 2022 Long-Term Deferred Equity Awards granted in March 2023 under the 2020 Stock Plan in recognition of performance in 2022, vesting in four equal installments on March 5, 2024, 2025, 2026, and 2027, subject to continued employment through each vesting date (with certain limited exceptions in the case of death, disability, Retirement, or certain terminations of employment in connection with a change in control). The grant date fair value has been computed in accordance with FASB ASC Topic 718. (3)Represents 2022 Long-Term Performance Achievement Awards (three-year cliff vesting) granted in March 2023 under the 2020 Stock Plan in recognition of performance in 2022, vesting in full on March 5, 2026, subject to continued employment through the vesting date (with certain limited exceptions in the case of death, disability, Retirement, certain terminations of employment in connection with a change in control, or terminations of employment other than for cause or by the employee for good reason). As further described in the Summary Compensation Table above, the number of shares of common stock of the Company underlying each 2022 Long-Term Performance Achievement Award (three-year cliff vesting) that may be issued and distributed for each restricted stock unit is based on the Company’s level of achievement measured against pre-established performance targets measuring the Company’s Average ROE over a three-year measurement period ending on December 31, 2025. The grant date fair value has been computed in accordance with FASB ASC Topic 718, and assumes that the midpoint level of Average ROE will be achieved. (4)Represents 2022 Long-Term Performance Achievement Awards (five-year cliff vesting) granted in March 2023 under the 2020 Stock Plan in recognition of performance in 2022, vesting in full on March 5, 2028, subject to continued employment through the vesting date (with certain limited exceptions in the case of death, disability, Retirement, certain terminations of employment in connection with a change in control, or terminations of employment other than for cause or by the employee for good reason). As further described in the Summary Compensation Table above, the number of shares of common stock of the Company underlying each 2022 Long-Term Performance Achievement Award (five-year cliff vesting) that may be issued and distributed for each restricted stock unit is based on the Company’s level of achievement measured against pre-established performance targets measuring the Company’s Average ROE over a five-year measurement period ending on December 31, 2027. The grant date fair value has been computed in accordance with FASB ASC Topic 718, and assumes that the midpoint level of Average ROE will be achieved. 47
Outstanding Equity Awards at 2023 Fiscal Year-End
Outstanding Equity Awards at 2023 Fiscal Year-End
Outstanding Equity Awards at 2023 Fiscal Year-End
| | Option Awards | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexerciseable (#)(1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares of Stock That Have Not Vested (#)(2) | Market or Payout Value of Shares of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares of Stock That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market Value of Unearned Shares of Stock That Have Not Vested ($) | | Jay C. Horgen ............ | — | 600,000 | 74.49 | 8/15/2026 | 69,088 | 10,461,305 | 68,513 | 10,374,238 | | Rizwan M. Jamal ....... | — | 428,807 | 74.49 | 8/15/2026 | 36,035 | 5,456,420 | 34,049 | 5,155,700 | | Thomas M. Wojcik ..... | — | 373,145 | 74.49 | 8/15/2026 | 33,499 | 5,072,419 | 27,861 | 4,218,713 | | John R. Erickson ....... | — | 375,206 | 74.49 | 8/15/2026 | 22,118 | 3,349,108 | 18,495 | 2,800,513 |
Outstanding Equity Awards at 2023 Fiscal Year-End
(1)Represents Alignment Options pursuant to the Long-Term Equity Alignment Awards granted under the 2011 Option Plan on August 15, 2019, vesting on August 15, 2024 (“Alignment Options”), the exercise of which is subject to the Company’s level of achievement measured against pre-established performance targets measuring Average ROE over a five-year measurement period ending on December 31, 2023. If Average ROE is between 12% and 20% or above for such measurement period, a ratable portion between 50% and up to a maximum of 150% of the shares underlying the award will be eligible for exercise, with 100% of the shares underlying the award becoming eligible for exercise if a midpoint of 16% Average ROE is achieved for the measurement period. If Average ROE is equal to or less than 12% for the measurement period, 50% of the shares underlying the award will be eligible for exercise. Any portion of the award that will not be delivered following the five-year performance period will be forfeited. The number of shares underlying Alignment Options presented above reflects the Company’s actual level of performance achieved relative to the pre-established targets. (2)Represents the following awards of restricted stock units: (i) 2022 Long-Term Deferred Equity Awards granted under the 2020 Stock Plan in March 2023, vesting in four equal installments on March 5, 2024, 2025, 2026, and 2027, (ii) 2021 Long-Term Deferred Equity Awards granted under the 2020 Stock Plan in March 2022, vesting in four equal installments on March 5, 2023, 2024, 2025, and 2026, (iii) 2020 Long-Term Deferred Equity Awards granted under the 2020 Stock Plan in March 2021, vesting in four equal installments on March 5, 2022, 2023, 2024, and 2025, (iv) 2020 Long-Term Performance Achievement Awards granted under the 2020 Stock Plan in March 2021, vesting in full on March 5, 2024, with the portion of such awards eligible to vest determined based on the Company’s Average ROE during the three- year measurement period ending on December 31, 2023, measured against pre-established performance targets, and (v) 2019 Long-Term Deferred Equity Awards granted under the 2013 Stock Incentive Award Plan (as amended, the “2013 Stock Plan”) in March 2020, vesting in four equal installments on January 1, 2021, 2022, 2023, and 2024. See the Summary Compensation Table for additional details, including relevant performance conditions for the 2020 Long-Term Performance Achievement Awards. The number and market value of shares of stock that have not yet vested underlying the 2020 Long-Term Performance Achievement Awards presented above reflects the Company’s actual level of performance achieved relative to the pre-established targets. For each award set forth above, vesting is subject to continued employment through each vesting date (with certain limited exceptions in the case of death, disability, certain terminations of employment in connection with a change in control, and in the case of the 2022 Long-Term Deferred Equity Awards, the 2021 Long-Term Deferred Equity Awards, the 2020 Long-Term Performance Achievement Awards, and the 2020 Long-Term Deferred Equity Awards, Retirement). These awards participate in cash dividends declared by the Company, the payment of which is deferred until delivery of the shares and is forfeited if the requisite service period or any performance conditions are not satisfied. (3)Represents the following awards of restricted stock units: (i) 2022 Long-Term Performance Achievement Awards (three-year cliff vesting) granted under the 2020 Stock Plan in March 2023, vesting in full on March 5, 2026, with the portion of such awards eligible to vest determined based on the Company’s Average ROE during the three-year measurement period ending on December 31, 2025, measured against pre-established performance targets, (ii) 2022 Long-Term Performance Achievement Awards (five-year cliff vesting) granted under the 2020 Stock Plan in March 2023, vesting in full on March 5, 2028, with the portion of such awards eligible to vest determined based on the Company’s Average ROE during the five-year measurement period ending on December 31, 2027, measured against pre-established performance targets, and (iii) 2021 Long-Term Performance Achievement Awards granted under the 2020 Stock Plan in March 2022, vesting in full on March 5, 2025, with the portion of such awards eligible to vest determined based on the Company’s Average ROE during the three- year measurement period ending on December 31, 2024, measured against pre-established performance targets. As of December 31, 2023, the achievement of the relative performance targets for the 2022 Long-Term Performance Achievement Awards (three-year cliff vesting), the 2022 Long-Term Performance Achievement Awards (five-year cliff vesting), and the 2021 Long-Term Performance Achievement Awards had not yet been determined. For each award set forth above, vesting is subject to continued employment through each vesting date (with certain limited exceptions in the case of death, disability, certain terminations of employment in connection with a change in control, or terminations of employment other than for cause or by the employee for good reason, and in the case of the 2022 Long-Term Performance Achievement Awards (three-year cliff vesting), the 2022 Long-Term Performance Achievement Awards (five-year cliff vesting), and the 2021 Long-Term Performance Achievement Awards, Retirement). Each of these awards participates in cash dividends declared by the Company, the payment of which is deferred until delivery of the shares and is forfeited if the requisite service period or any performance conditions are not satisfied. See the Summary Compensation Table for additional details regarding the 2022 Long-Term Performance Achievement Awards (three-year cliff vesting), the 2022 Long-Term Performance Achievement Awards (five-year cliff vesting), and the 2021 Long-Term Performance Achievement Awards and relevant performance conditions. For purposes of calculating the number and market value of unearned shares of stock that have not yet vested in the above table, consistent with the grant date fair value determinations, the calculations assume that the midpoint performance level is achieved for the 2022 Long-Term Performance Achievement Awards (three-year cliff vesting), the 2022 Long-Term Performance Achievement Awards (five-year cliff vesting), and the 2021 Long-Term Performance Achievement Awards. 48
Option Exercises and Stock Vested in Fiscal Year 2023
Option Exercises and Stock Vested in Fiscal Year 2023
Option Exercises and Stock Vested in Fiscal Year 2023
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($)(2) | | Jay C. Horgen ................................................................................... | — | — | 125,652 | 18,848,623 | | Rizwan M. Jamal ............................................................................... | — | — | 45,775 | 7,000,611 | | Thomas M. Wojcik ............................................................................ | — | — | 39,079 | 6,139,719 | | John R. Erickson ............................................................................... | — | — | 37,770 | 5,758,798 |
Option Exercises and Stock Vested in Fiscal Year 2023
(1)Reflects the portions vested in 2023 of the following awards of restricted stock units: (i) 2021 Long-Term Deferred Equity Awards granted in March 2022 under the 2020 Stock Plan, (ii) 2020 Long-Term Deferred Equity Awards granted in March 2021 under the 2020 Stock Plan, (iii) 2019 Long-Term Deferred Equity Awards granted in March 2020 under the 2013 Stock Plan, (iv) 2019 Long-Term Performance Achievement Awards granted under the 2013 Stock Plan in March 2020 (175% of such awards, reflecting the maximum level of performance achieved relative to the targets), (v) the full value of the third and final tranche of the Alignment RSUs pursuant to the Long-Term Equity Alignment Awards granted in August 2019 under the 2013 Stock Plan (“Alignment RSUs”), reflecting the achievement of the maximum level of performance, and (vi) 2018 Long-Term Deferred Equity Awards granted in February 2019 under the 2013 Stock Plan. (2)Represents the value of the portions vested in 2023 of each of the awards listed in footnote (1) above, determined as of the date of vesting. 49
Pay Versus Performance Table
Pay Versus Performance Table
Pay Versus Performance Table
| Year | Summary Compensation Table Total for Principal Executive Officer (“PEO”) ($)(1) | Compensation Actually Paid to PEO ($)(2) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers (“Other NEOs”) ($)(3) | Average Compensation Actually Paid to Other NEOs ($)(2) | Value of Initial Fixed $100 Investment Based On: | | Net Income ($mm) | Company- Selected Measure: EEPS ($)(5) | | | | | | | TSR (Calculated per Item 201(e) of Reg S-K) ($) | Peer Group TSR (Calculated per Item 201(e) of Reg S-K) ($)(4) | | | | 2023 | 14,617,823 | 4,737,760 | 5,667,535 | 11,365 | 180 | 144 | 906.1 | 19.48 | | 2022 | 13,743,212 | 12,828,824 | 5,648,688 | 5,767,013 | 188 | 123 | 1,388.1 | 20.02 | | 2021 | 9,063,156 | 50,596,284(6) | 3,960,965 | 20,158,091(6) | 195 | 142 | 890.1 | 18.05 | | 2020 | 7,632,026 | 19,261,190 | 2,346,688 | 4,431,940 | 121 | 114 | 427.0 | 13.30 |
Pay Versus Performance Table
(1)For each of 2023, 2022, and 2021, represents the total compensation as reported in the Summary Compensation Table included in this Proxy Statement for Mr. Horgen, the Company’s President and Chief Executive Officer. For 2020, represents the total compensation as reported in the Summary Compensation Table for Mr. Horgen in the 2023 Proxy Statement. (2)“Compensation Actually Paid” represents a calculation of compensation under SEC rules that differs significantly from the Summary Compensation Table presentation of compensation, as well as from the way in which the Compensation Committee views annual compensation decisions, as discussed in the “Compensation Discussion and Analysis” section of this Proxy Statement. The figures reported in this column do not reflect the actual amount of compensation earned by or paid to Mr. Horgen and the Other NEOs during the applicable calendar year or for the applicable performance year. To calculate the compensation actually paid to the PEO and the average compensation actually paid to the Other NEOs, the below adjustments were made to total compensation as reported in the Summary Compensation Table. The adjustments were calculated according to the prescribed method determined by the SEC for the calculation of compensation actually paid for the periods presented. For equity awards with performance-based vesting conditions, fair value as of the applicable year-end is based on the probable outcome of such conditions as of year-end. There were no other assumptions made in the valuation of equity awards that differ materially from those disclosed at the time of grant.
Pay Versus Performance Table
| Year | Summary Compensation Table Total ($) | Less Reported Value of Equity Awards for the Covered Year ($) | Plus Year-End Fair Value of Outstanding Unvested Equity Awards Granted in the Covered Year ($) | Change in Fair Value as of Year-End of Outstanding Unvested Equity Awards Granted in Prior Years ($) | Change in Fair Value as of Year-End of Equity Awards Granted in Prior Years that Vested in the Covered Year ($) | Plus Vesting Date Fair Value of Equity Awards Granted in the Covered Year and that Vested in the Same Year ($)(7) | Deduct Fair Value as of Prior Year- End of Equity Awards that Failed to Meet Applicable Vesting Conditions During the Covered Year ($) | Add Fair Value of Dividends or Other Earnings Paid on Stock or Option Awards that are not Otherwise Included ($) | Compensation Actually Paid ($) | | PEO | | | | | | | | | | | 2023 | 14,617,823 | (8,990,000) | 8,467,709 | (8,306,040) | (1,058,423) | — | — | 6,691 | 4,737,760 | | 2022 | 13,743,212 | (6,925,000) | 10,277,354 | (1,822,612) | (2,453,065) | — | — | 8,934 | 12,828,824 | | 2021(6) | 9,063,156 | (3,500,000) | 4,753,187 | 34,957,185 | 5,421,436 | — | (108,850) | 10,168 | 50,596,284 | | 2020 | 7,632,026 | (4,275,000) | 6,773,932 | 9,242,980 | (99,356) | — | (93,468) | 80,075 | 19,261,190 | | Other NEOs | | | | | | | | | | | 2023 | 5,667,535 | (3,010,000) | 2,835,239 | (5,308,086) | (176,064) | — | — | 2,741 | 11,365 | | 2022 | 5,648,688 | (2,712,500) | 4,025,548 | (717,625) | (479,865) | — | — | 2,767 | 5,767,013 | | 2021(6) | 3,960,965 | (1,718,750) | 2,334,109 | 13,800,674 | 1,793,895 | — | (15,387) | 2,586 | 20,158,091 | | 2020 | 2,346,688 | (1,350,000) | 1,863,602 | 1,607,295 | (186,941) | 189,655 | (54,942) | 16,584 | 4,431,940 |
Pay Versus Performance Table
(3)For 2023, represents the average total compensation as reported in the Summary Compensation Table for Mr. Wojcik, Mr. Jamal, and Mr. Erickson. For each of 2022 and 2021, represents the average total compensation as reported in the Summary Compensation Table for Mr. Wojcik, Mr. Jamal, Mr. Erickson, and David M. Billings. Mr. Billings retired in December 2022 from his position of General Counsel and Secretary. For 2020, represents the average total compensation as reported in the Summary Compensation Table for Mr. Wojcik, Mr. Billings, Sean M. Healey, and Hugh P. B. Cutler. Mr. Healey served as Executive Chairman until his passing in May 2020, and Mr. Cutler retired in May 2020 from his position of Head of Global Distribution. (4)Reflects the TSR of the S&P MidCap 400 index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our 2023 Annual Report on Form 10-K. 50 (5)Economic earnings per share, or EEPS, is a non-GAAP financial measure. Additional information on non-GAAP financial performance measures, including reconciliations to the most directly comparable GAAP measure, can be found in AMG’s 2023 Annual Report on Form 10-K (or, with respect to amounts above for 2020, AMG's Quarterly Report on Form 10-Q for the quarter ended March 31, 2023) under “Supplemental Financial Performance Measures.” (6)For 2021, Compensation Actually Paid to the PEO and the average Compensation Actually Paid to the Other NEOs reflect the strong appreciation of AMG’s stock price during 2021, and the consequent increase in value of unvested awards, driven by the unvested value of the one-time special Long-Term Equity Alignment Awards granted in 2019. (7)Represents the vesting of equity awards held by Mr. Healey in accordance with such award terms upon his passing in May 2020. 51
Relationship Between Compensation Actually Paid and Performance Measures
Relationship Between Compensation Actually Paid and Performance Measures The following exhibits reflect the relationship between the Compensation Actually Paid (“CAP”) to the PEO and the average CAP to the Other NEOs and the performance measures shown in the above pay versus performance table during the four most recently-completed fiscal years:
Relationship Between Compensation Actually Paid and Performance Measures
| CAP vs. Company and Peer Group TSR |
Relationship Between Compensation Actually Paid and Performance Measures
| CAP vs. Net Income |
Relationship Between Compensation Actually Paid and Performance Measures
| CAP vs. EEPS |
Relationship Between Compensation Actually Paid and Performance Measures
CAP vs. Company and Peer Group and Index TSR CAP ($ million) $100 $80 $60 $40 $20 $0 2020 2021 202 52
Relationship Between Compensation Actually Paid and Performance Measures
| Tabular List of Financial Performance Measures(1) | | EEPS | | Annual Management Fee EBITDA | | Absolute TSR | | Relative TSR |
Relationship Between Compensation Actually Paid and Performance Measures
(1)See the “Compensation Discussion and Analysis – Summary of Performance Assessment Target Descriptions and Rationale, and 2023 Target Setting Process” section of this Proxy Statement for more information about the above measures.
Pay Ratio
Pay Ratio SEC rules permit identification of our median employee once every three years, provided there has been no material change in our employee population or employee compensation arrangements that we believe would significantly impact our pay ratio disclosure. Accordingly, we have calculated our pay ratio disclosure based on our median employee identified as of December 31, 2021. We selected such median employee by analyzing the compensation of each of our employees who were employed by the Company as of December 31, 2021, excluding our President and Chief Executive Officer, with each employee’s compensation calculated by reference to their fixed cash compensation for the year ended December 31, 2021, derived from payroll and other company records. We did not make any cost of living or other adjustments to these amounts, and did not exclude non-U.S. employees. We annualized total compensation for full-time employees that joined the Company during 2021 or had an unpaid leave of absence during the year. For purposes of this analysis, we included all full- and part-time employees at the Company and at our subsidiaries where we control the compensation determinations for the subsidiary’s employees. The total annual compensation of our President and Chief Executive Officer for 2023, as reported in the “Total” column of the Summary Compensation Table, was $14,617,823. The total annual compensation of our median employee for 2023, calculated on the same basis as the Summary Compensation Table, was $216,435. The ratio of our Chief Executive Officer’s total annual compensation for 2023 to our median employee’s total annual compensation for 2023 was 68 to 1. Supplemental Pay Ratio As discussed above, our President and Chief Executive Officer’s compensation earned for performance year 2023 was approximately $(2.8) million lower than the amount reported in the Summary Compensation Table, and the difference is wholly attributable to the timing of stock awards. The total annual compensation of our Chief Executive Officer for 2023, as reported in the “Total Compensation Earned” column of the Supplemental Table, was $11,853,823. The total annual compensation earned in performance year 2023 of our median employee, calculated on the same basis as the Supplemental Table, was $217,935. The ratio of our Chief Executive Officer’s total annual compensation earned in performance year 2023 to our median employee’s total annual compensation earned in performance year 2023 was 54 to 1. We believe executive pay should be internally consistent and equitable to motivate our employees to create shareholder value. We are committed to internal pay equity, and the Compensation Committee monitors the relationship between the pay our executive officers receive and the pay our other employees receive. 53
Director Compensation
Director Compensation Equity grant determinations for independent directors are made consistent with the Compensation Committee’s philosophy that compensation should be directly linked to shareholder value creation. Multiple directors have elected to defer cash service fees, with such deferred amounts credited to an AMG stock tracking fund and delivered in shares of AMG common stock. In 2022, the Compensation Committee revised the director compensation program to reinstate cash service fees, eliminate stock option grants, and increase the amount of restricted stock units to maintain the overall proportion of directors’ annual equity awards, and also to increase the Nominating and Governance Committee annual fee, in order to reflect peer and market practice and ensure that we attract a broad talent base of new directors. Further, a majority of our current independent directors, including our Board Chair, have also demonstrated their commitment to further alignment with stockholders by actively purchasing shares of our common stock in the open market; since 2019, independent directors have collectively purchased more than 54,000 shares, with an aggregate notional value of more than $5.5 million at the time of purchase. As part of our director compensation program design, our Compensation Consultant regularly provides a review of director compensation in the broad peer universe and in our Peer Group. This analysis includes data on total compensation for directors at such peer companies, as well as on the individual components of that compensation, such as annual retainers, meeting fees, and equity awards. Our Compensation Consultant also provides comparative data from time to time on compensation by board position (such as committee chairs, board chairs, and lead directors) at such companies, and on trends in director compensation. In determining compensation levels for the Company’s independent directors for 2023, the Compensation Committee deemed it appropriate that compensation be at or near the median in comparison to directors at public companies within our Peer Group, while equity compensation linked to shareholder value be higher on a relative basis, which is reflected in the compensation paid in 2023. Further, consistent with current best practices, our 2020 Stock Plan sets a cap on equity awards granted to any independent director in any calendar year of a maximum total grant date fair value of $500,000. The table below sets forth the current annual compensation levels for our independent directors. The Chair of each committee receives the annual Chair fee in lieu of the committee fee. Directors do not receive additional fees for attending meetings. All equity awards are granted in accordance with the terms of the Company’s equity grant policy. Vesting of the awards is deferred. Beginning in January 2024, the Compensation Committee revised the director compensation program to provide for vesting of director equity awards over a one-year period, consistent with industry practice.
Director Compensation
| Annual Compensation for Independent Directors | | | Board of Directors | | | Annual Equity Awards – Restricted Stock Units | $200,000 | | Board Chair Annual Fee – Restricted Stock Units | 100,000 | | Base Annual Fee – Cash | 80,000 | | Committee Fees — Cash | | | Audit Committee Membership Annual Fee | $20,000 | | Audit Committee Chair Annual Fee | 35,000 | | Compensation Committee Membership Annual Fee | 17,000 | | Compensation Committee Chair Annual Fee | 20,000 | | Nominating and Governance Committee Membership Annual Fee | 17,000 | | Nominating and Governance Committee Chair Annual Fee | 20,000 |
Director Compensation
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Director Compensation in Fiscal Year 2023
Director Compensation in Fiscal Year 2023 The following table sets forth information regarding the compensation earned by the Company’s independent directors in 2023. For compensation information with respect to Mr. Horgen and his services as the Company’s President and Chief Executive Officer, please see the Summary Compensation Table and other accompanying compensation tables. Mr. Horgen receives no additional compensation for his services as a director.
Director Compensation in Fiscal Year 2023
| Directors | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | All Other Compensation ($)(4) | Total ($) | | Karen L. Alvingham ............................................................................ | 97,000 | 200,250 | — | 10,000 | 307,250 | | Tracy A. Atkinson(5) ............................................................................. | 115,000 | 200,250 | — | 10,000 | 325,250 | | Dwight D. Churchill ............................................................................. | 134,000 | 300,531 | — | 10,000 | 444,531 | | Reuben Jeffery III ............................................................................... | 120,000 | 200,250 | — | 10,000 | 330,250 | | Félix V. Matos Rodríguez .................................................................. | 114,000 | 200,250 | — | 6,540 | 320,790 | | Tracy P. Palandjian ............................................................................. | 117,000 | 200,250 | — | 10,000 | 327,250 | | David C. Ryan ..................................................................................... | 100,000 | 200,250 | — | 10,000 | 310,250 | | Loren M. Starr ..................................................................................... | 21,305 | 54,031 | — | — | 75,336 |
Director Compensation in Fiscal Year 2023
(1)Represents annual Board and Committee fees earned by independent directors in fiscal year 2023. Amounts shown in the table are not reduced to reflect each of Lady Alvingham’s and Mr. Ryan’s election to defer receipt of such director’s cash service fees under the Company’s Deferred Compensation Plan. Under the Deferred Compensation Plan, an independent director may elect to defer all or part of the cash we would otherwise pay such director, with such deferred amounts credited to an AMG stock tracking fund and delivered in shares of the Company’s common stock. All amounts deferred under the Deferred Compensation Plan are only distributable upon termination of the director’s Board service. Mr. Starr was appointed to the Board of Directors in September 2023, and his annual Board fees were prorated accordingly. (2)Represents the aggregate grant date fair value (computed in accordance with FASB ASC Topic 718) of restricted stock unit awards granted to independent directors in 2023. On February 6, 2023 and July 27, 2023, the Company granted restricted stock unit awards with grant date fair values of $100,160 and $100,090, respectively, to each independent director then serving on our Board of Directors. On such dates, the Company also granted Mr. Churchill, who served as Board Chair in 2023, additional restricted stock unit awards with grant date fair values of $50,165 and $50,116, respectively, representing the annual Board Chair fee. On November 6, 2023, the Company granted Mr. Starr a restricted stock award with a grant date fair value of $54,031. Restricted stock unit awards granted in 2023 vest in equal installments over a period of four years, subject to continued service through each vesting date (with certain limited exceptions in the case of death, disability, or certain terminations, including retirement). The number of restricted stock units subject to each award is determined based on the fair market value of the Company’s common stock on the grant date, with each stock unit representing the right to receive one share of the Company’s common stock. Restricted stock unit awards participate in cash dividends declared by the Company, the payment of which is deferred until delivery of the shares and is forfeited if the requisite service period is not satisfied. As of December 31, 2023, the aggregate unvested portion of restricted stock units (measured in shares of common stock) held by our independent directors then serving on our Board of Directors was as follows: Lady Alvingham: 3,689; Ms. Atkinson: 3,775; Mr. Churchill: 5,889; Mr. Jeffery: 3,807; Dr. Matos Rodríguez: 3,180; Ms. Palandjian: 3,903; Mr. Ryan: 2,742; Mr. Starr: 414. (3)No stock option awards were granted to independent directors in 2023. As of December 31, 2023, the number of shares of common stock subject to stock options held by each of our independent directors then serving on our Board of Directors was as follows: Lady Alvingham: 13,309; Ms. Atkinson: 3,224; Mr. Churchill: 14,516; Mr. Jeffery: 4,554; Dr. Matos Rodríguez: 1,195; Ms. Palandjian: 15,808; Mr. Ryan: 559; Mr. Starr: 0. (4)Represents matching contributions to eligible non-profit organizations under the AMG gift-matching program that covers non-employee directors, as well as Company employees. (5)Consistent with the revisions made by the Compensation Committee to the director compensation program in January 2024, effective as of the cessation of Ms. Atkinson’s service on our Board of Directors following the Annual Meeting, the Compensation Committee has approved the acceleration of all of Ms. Atkinson’s outstanding and unvested restricted stock unit awards and stock options to the extent outstanding for at least one year at the time of such cessation of service. 55