DEF 14A of Franklin Templeton Inc
Filed Dec 20, 2024 · FY20240001140361-24-050019
VOTING ITEMS
| Option Exercises and Stock Vested for Fiscal Year 2024 | | 52 | | Non-Qualified Deferred Compensation | | 52 | | Potential Payments Upon Termination or Change in Control | | 53 | | Pay Ratio | | 56 | | Pay Versus Performance | | 56 | | Compensation Risk Assessment | | 59 | | Compensation Committee Interlocks and Insider Participation | | 59 | | Equity Compensation Plan Information | | 60 | | REPORT OF THE AUDIT COMMITTEE | | 61 | | Membership and Role of the Audit Committee | | 61 | | Review of the Company’s Audited Financial Statements for the Fiscal Year Ended September 30, 2024 | | 61 | | FEES PAID TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | | 62 | | Pre-approval Process and Policy | | 63 | | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | | 64 | | Related Person Transaction Policy | | 65 | | SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE | | 67 | | Delinquent Section 16(a) Reports | | 67 | | | PROPOSAL NO. 2: RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 68 | | ADDITIONAL INFORMATION | | 69 | | Stockholder Proposals and Nominations of Directors at 2026 Annual Meeting | | 69 | | Contact the Board of Directors | | 70 | | Electronic Access to Proxy Materials and Annual Meeting | | 70 | | Householding of Proxy Materials | | 71 | | Other Matters | | 71 |
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| | Recommendation of the Board The Board recommends a vote “FOR” the election to the Board of each of the nominees listed below. The voting requirements for this proposal are described in the “Voting Information” section above. |
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Nominees The Corporate Governance Committee of the Board recommended and nominated, and the Board approved, the nominees named below for election as members of the Board. All nominees are current directors of the Company who were elected by stockholders. Listed below are the names, ages as of December 31, 2024, and principal occupations and membership on public boards for the past five years of each nominee. In addition, we have provided information concerning the particular experience, qualification, attributes and/or skills that the Corporate Governance Committee and the Board considered as relevant to each nominee that led to the conclusion that he or she should serve as a director. Board Nominee Diversity
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| OVERALL GENDER AND RACIAL/ETHNIC DIVERSITY* | DIRECTOR TENURE | | | | | SECTOR EXPERIENCE | | | | |
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| * Mses. Byerwalter, J. Johnson and King identify as female. Ms. King and Messrs. Kim and Yang identify as ethnically diverse. |
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| 2025 Proxy Statement | 5 |
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KEY ATTRIBUTES, EXPERIENCE AND SKILLS
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| 6 | Franklin Resources |
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| | | | | | MARIANN BYERWALTER | | | | Age: 64 | Board committees: | | | Director since: 2015 | Audit; Corporate Governance |
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Career Highlights:
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| • | Chairman of the Board of Directors of Pacific Mutual Holding Company |
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| • | Chairman Emeritus of the Board of Directors of SRI International, having served as Chairman from January 2014 through December 2019 |
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| • | Chairman of JDN Corporate Advisory, LLC, a privately held advisory services firm, since 2001 |
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| • | From 2006 to 2013, Chairman of the Board of Directors of Stanford Healthcare, and from January 2016 to July 2016, Interim President and Chief Executive Officer and President of Stanford Healthcare. Served on the Stanford Health Care Board of Directors from 1999 to 2013 and from 2015 until September 2024 |
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| • | From 1996 to 2001, she served as the Chief Financial Officer, Vice President for Business Affairs and Special Assistant to the President of Stanford University |
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| • | Partner and co-founder of America First Financial Corporation from 1987 to 1996 |
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| • | Director, Redwood Trust, Inc. from 1998 to June 2020 |
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| • | Trustee of various investment companies affiliated with Charles Schwab Corporation |
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Key Attributes, Experience and Skills: Ms. Byerwalter’s significant financial expertise provides the Board with valuable perspectives on finance, accounting and investment management matters. From her leadership roles at Stanford University and several financial institutions she has a deep understanding of accounting and strategic planning as well as wide-ranging management expertise. Ms. Byerwalter’s current and prior service on the boards of private and public companies as well as with non-profit organizations including SRI International, Pacific LifeCorp and Pacific Mutual Holding Company, Burlington Capital Group, Stanford Healthcare, Lucile Packard Children’s Hospital, and the Stanford University Board of Trustees also provides our Board with the benefit of her perspectives on business, corporate governance and citizenship.
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| | | | | | ALEXANDER S. FRIEDMAN | | | | Age: 54 | Board committees: | | | Director since: 2021 | Audit (Chair); Corporate Governance |
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Career Highlights:
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| • | Co-Founder and Chief Executive Officer of Novata Inc., a public benefit corporation committed to simplifying the process of collecting, analyzing and benchmarking sustainability data |
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| • | Co-Founded Jackson Hole Economics, a non-profit private economic research firm, in January 2019 |
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| • | Chief Executive Officer of GAM Holding AG, a publicly listed international investment management firm, from September 2014 to November 2018 |
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| • | Global Chief Investment Officer of UBS AG Wealth Management and Wealth Management Americas, Chairman of the UBS Global Investment Committee and Group Managing Director from February 2010 to September 2014 |
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| • | Chief Financial Officer of the Bill & Melinda Gates Foundation from March 2007 to February 2010 |
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| • | Director, Investment Banking at Lazard from June 2001 to March 2007 |
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Mr. Friedman’s experience as a senior business leader with two decades of experience growing and transforming businesses in the financial services industry, and as the senior financial executive of the world’s largest foundation, provides the Board with valuable insights on financial matters, investment and wealth management, strategic planning and operational integration and development. Mr. Friedman currently serves as Co-Chairman of Project Syndicate, an international non-profit focused on original editorial content in economics and politics. He is a board member of the American Alpine Club, a non-profit member organization representing more than 24,000 American climbers, member of the Council on Foreign Relations, and also serves on the advisory council of Social Finance, a non-profit organization dedicated to mobilizing capital to drive social progress, and the advisory board of America Needs You, a non-profit organization focused on college access for first generation college students.
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| 2025 Proxy Statement | 7 |
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| | | | | GREGORY E. JOHNSON | | | Age: 63 | | | Director since: 2007 |
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Career Highlights:
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| • | Executive Chairman since February 2020, Chairman of the Board since June 2013 and director of the Company since January 2007 |
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| • | Chairman of the San Francisco Giants, a professional baseball team, since November 2019 |
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| • | Chief Executive Officer of the Company from July 2005 to February 2020 |
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| • | Co-Chief Executive Officer of the Company from January 2004 to July 2005 |
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| • | President of the Company from December 1999 to September 2015 |
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| • | Officer and/or director of certain subsidiaries of the Company |
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| • | Director or trustee of certain funds registered as investment companies managed or advised by subsidiaries of the Company |
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Key Attributes, Experience and Skills: Mr. G. Johnson brings leadership and extensive business and operating experience, as well as significant knowledge of our Company and the global fund management industry, to the Board. Mr. G. Johnson is a Certified Public Accountant and prior to joining the Company, was a senior accountant with Coopers & Lybrand. Over his 30-year tenure with the Company, Mr. G. Johnson has held officer and director positions with various subsidiaries of the Company; hands-on experience that provides him with in-depth knowledge of the Company’s operations. Mr. G. Johnson’s presence on the Board provides the Board with management’s current perspectives on the Company’s business and strategic vision for the Company. Mr. G. Johnson’s service on various boards of industry organizations, including the Investment Company Institute’s Board of Governors, also provides the Board with the benefit of additional perspectives on industry developments, including regulatory and policy issues. He is a past Chairman and Vice Chairman of the Investment Company Institute and currently serves on its Executive Committee.
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| | | | | JENNIFER M. JOHNSON | | | Age: 60 | | | Director since: 2020 |
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Career Highlights:
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| • | President of the Company since December 2016 and Chief Executive Officer and Director since February 2020 |
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| • | Chief Operating Officer of the Company from February 2017 to February 2020 |
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| • | Co-President of the Company from October 2015 to December 2016 |
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| • | Executive Vice President and Chief Operating Officer of the Company from March 2010 to September 2015 |
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| • | Executive Vice President – Operations and Technology of the Company from December 2005 to March 2010 |
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| • | Senior Vice President and Chief Information Officer of the Company from May 2003 to December 2005 |
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| • | Officer and/or director of certain subsidiaries of the Company, including certain of the specialist investment managers acquired through the Legg Mason transaction |
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| • | Director or trustee of certain funds registered as investment companies managed or advised by subsidiaries of the Company |
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| • | Director of Thermo Fisher Scientific Inc., a science service company since July 2023 |
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Ms. Johnson brings significant experience leading and working with all parts of our business, as well as extensive knowledge of the global investment management industry. Over her 35-year tenure with the Company, Ms. Johnson has held leadership roles in all major divisions of the business, including investment management, global distribution, customer service, fund administration, global technology, and the Company’s high-net-worth business. This extensive hands-on experience provides her with in-depth knowledge of the Company’s operations. She has been a key driver of many key acquisitions, including the acquisitions of Legg Mason in 2020 and Putnam Investments in 2024, as well as the expansion of the Company’s alternative investment capabilities through the acquisitions of Lexington Partners in April 2022 and Alcentra in November 2022. Under Ms. Johnson’s leadership, the Company continues to invest strategically in areas designed to deliver strong client results, including financial technology and investment data science.
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| 8 | Franklin Resources |
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| | | | | RUPERT H. JOHNSON, JR. | | | Age: 84 | | | Director since: 1971 |
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Career Highlights:
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| • | Vice Chairman of the Company since December 1999 and director of the Company since 1971 |
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| • | Officer and/or director of certain subsidiaries of the Company |
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| • | Officer and/or director or trustee of certain funds registered as investment companies managed or advised by subsidiaries of the Company |
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Key Attributes, Experience and Skills: Mr. R.H. Johnson, Jr.’s service as Vice Chairman of the Company and as an officer, director or trustee of various subsidiaries of the Company and Franklin Templeton mutual funds since its inception provides the Board with significant knowledge of and insights into the Company and the global fund management industry in which we operate. His fundamental knowledge of the Company gained over 55 years gives him an important perspective on the Company and provides significant leadership, business and operational expertise to the Board. Mr. R. H. Johnson, Jr. has served on various industry boards and committees addressing investment company issues including the Board of Governors of the Investment Company Institute. In his capacity with the Company, he has served as Director of Research and is a portfolio manager for one of its funds. He provides the Board with a unique perspective on critical components of the Company’s business.
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| | | | | | JOHN Y. KIM | | | | Age: 64 | Board committees: | | | Director since: 2021 | Compensation; Corporate Governance |
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Career Highlights:
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| • | Founder and Managing Partner of Brewer Lane Ventures LLC, an early stage fintech venture capital firm, since 2019 |
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| • | President of New York Life Insurance Company from 2015 to 2018 |
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| • | Chief Executive Officer and Chief Investment Officer of New York Life Investment Management from 2008 to 2015 |
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| • | President of Prudential Retirement from 2004 to 2007 |
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| • | President of Cigna Investments and Retirement from 2002 to 2004 |
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| • | Chief Executive Officer of Bondbook, a financial technology company, from 2001 to 2002 |
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| • | Chief Executive Officer and Chief Investment Officer of Aeltus Investment Management, an investment subsidiary of Aetna, from 1994 to 2000 |
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| • | Board of Trustees, Eversource Energy since 2018 |
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| • | Director of FiServ, a global provider of financial services technology, from 2016 to 2018 |
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Mr. Kim brings leadership and extensive business and technology experience to the Board, including direct management of asset management firms. In addition, Mr. Kim’s significant experience as chief executive officer of a variety of companies provides valuable insights into leadership, growth, and strategy. Mr. Kim currently serves on the boards of several privately held technology startup companies in fintech including—Kingfield, Socotra, Brella Insurance and Ladder Financial, Inc. His service on various public and private boards of industry organizations provides additional perspectives on asset management, insurance, and technology.
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| 2025 Proxy Statement | 9 |
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| | | | | | KAREN M. KING | | | | Age: 52 | Board committees: | | | Director since: 2021 | Audit; Compensation |
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Career Highlights:
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| • | Managing Director and the Chief Legal Officer of Silver Lake, a global investment firm focused on large-scale opportunities in the technology, technology-enabled, and related growth sectors |
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| • | Formerly held a variety of roles at Silver Lake since 2004 |
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Key Attributes, Experience and Skills: Ms. King’s experience with Silver Lake provides the Board with valuable perspective and experience in the alternative investments area, specifically in the private equity space, as well as strategic matters relating to M&A activity and fundraising transactions. Her management experience at Silver Lake also provides the Board with an additional perspective on regulatory matters, cybersecurity, equity, diversity and inclusion, and environmental, social and corporate governance (ESG) matters. Ms. King’s involvement with Silver Lake’s portfolio companies, including a current member of the board of directors of Relativity and Qualtrics International Inc., acting as an Advisor to Cicero and previous service on the boards of Aras and Serena Software, as well as her service on various non-profit boards, including the Duke University Board of Trustees, Chair of the Menlo School Board of Trustees, United States Olympic and Paralympic Foundation and as former Chair of the American Leadership Forum—Silicon Valley, provides the board with additional perspectives on governance.
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| | | | | | ANTHONY J. NOTO | | | | Age: 56 | Board committees: | | | Director since: 2020 | Audit; Corporate Governance |
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Career Highlights:
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| • | Chief Executive Officer and a director of SoFi Technologies, Inc. (SoFi), a mobile-first personal finance platform, since March 1, 2018 |
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| • | Chief Operations Officer from 2017 until 2018, Chief Operations Officer and Chief Financial Officer from 2016 to 2017, and Chief Financial Officer from 2014 to 2016, of Twitter, Inc., a global social media company |
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| • | Partner, Co-Head, Global Technology, Media and Telecom Investment Banking from 2011 to 2014, and Partner, Investment Banking Division from 2010 to 2011, at Goldman Sachs & Co |
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| • | Chief Financial Officer from 2008 to 2010 of the National Football League |
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As Chief Executive Officer of SoFi, Mr. Noto brings valuable fintech industry experience. He has overseen SoFi’s expansion from a desktop lending business to a broad-based, mobile-first personal financial platform, offering users investment products including stocks, ETFs, cryptocurrency trading, as well as loans and cash management accounts. He also brings valuable leadership, strategic, financial and operations experience, having previously served as Chief Operating Officer and Chief Financial Officer of Twitter, Inc., and as Chief Financial Officer of the National Football League. During his nearly 13 years at Goldman Sachs & Co., Mr. Noto developed a deep understanding of the technology, media and telecommunications industries, including serving as Co-Head of Global Technology, Media and Telecommunications Investment Banking, and Co-Head of Communications, Media and Entertainment Investment Research. His current and prior experience provides the Board with the benefit of his perspective on trends in the financial industry, including developments in the fintech and social media spaces, and finance matters.
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| 10 | Franklin Resources |
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| | | | | | JOHN W. THIEL | | | | Age: 64 | Board committees: | | | Director since: 2021 | Audit; Compensation |
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Career Highlights:
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| • | Partner and Senior Advisor with MyNextSeason, an executive coaching firm, since 2018 |
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| • | Formerly with Bank of America Merrill Lynch Wealth Management from 1989 to 2018, serving as Vice Chairman of Global Wealth and Investment Management of Bank of America Merrill Lynch from 2017 to 2018 |
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| • | Head of Merrill Lynch Wealth Management from 2011 to 2016 |
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| • | Head of Private Banking and Investment Group at Merrill Lynch Wealth Management from 2005 to 2011 |
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| • | Pacific West Regional Managing Director of Private Banking and Investment Group at Merrill Lynch Wealth Management from 2001 to 2005 |
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| • | Market Executive at Merrill Lynch Wealth Management from 1997 to 2001 |
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| • | District Sales Manager at Merrill Lynch Wealth Management from 1995 to 1997 |
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| • | Financial Advisor at Merrill Lynch Wealth Management from 1989 to 1995 |
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Key Attributes, Experience and Skills: Mr. Thiel brings deep global leadership and extensive asset, investment and distribution management expertise to the Board as well as operating experience, including navigating complex relationships. Client-focused, Mr. Thiel is recognized as a transformative leader who, during his tenure at Merrill Lynch, accelerated growth and drove dramatic cultural and strategic transformation while forming effective internal and external partnerships. He is a member of the board of Decker Communications, a business communications training, coaching, and consulting firm, a Director on the Board of LifeYield Inc., a director of Cohen & Steers Income Opportunities REIT, Inc. and Executive Chairman of Forabaya, LLC. Mr. Thiel’s long-term commitment to philanthropy and his community includes service on the board of V Foundation for Cancer Research, as the chair of Don’t Ever Give Up, Inc. and as a trustee of Florida State University.
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| | | | | | SETH H. WAUGH | | | | Age: 66 | Board committees: | | | Director since: 2015 | Compensation (Chair) |
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Career Highlights:
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| • | Former Chief Executive Officer and current Senior Adviser of The PGA of America, an American organization of golf professionals, since 2018 |
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| • | Former Managing Director, Partner and current Senior Advisor at Silver Lake |
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| • | Non-executive chairman of Alex. Brown, a division of Raymond James, from 2016 to 2019 |
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| • | Vice Chairman of Florida East Coast Industries, LLC, the parent company of several commercial real estate, transportation and infrastructure companies based in Florida, from 2013 to 2017 |
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| • | From 2000 to 2013, Mr. Waugh served in various roles at Deutsche Bank Americas, including Chief Executive Officer and Chairman of the Board of Directors of Deutsche Bank Securities Inc. |
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| • | Chief Executive Officer of Quantitative Financial Strategies, a hedge fund |
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| • | Served in various capacities at Merrill Lynch over 11 years, including Co-head of Global Debt Markets |
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| • | Director of Yext, Inc. since 2020 |
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Mr. Waugh’s significant experience in the financial sector provides the Board with valuable perspectives on capital markets and investment management. Having held various leadership roles at Deutsche Bank and other financial institutions, Mr. Waugh brings strong leadership skills as well as deep knowledge of operational and strategic matters to the Board. His prior service on the boards of the Deutsche Bank Americas Advisory Board, the Deutsche Bank Americas Foundation, The Clearing House, the Financial Services Forum and the Board of Governors of FINRA provides our Board with the benefit of his substantial expertise in financial industry developments and corporate citizenship.
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| 2025 Proxy Statement | 11 |
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| | | | | | GEOFFREY Y. YANG | | | | Age: 65 | Board committees: | | | Director since: 2011 | Compensation; Corporate Governance (Chair) |
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Career Highlights:
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| • | Managing Director and Founding Partner of Redpoint Ventures, a private equity and venture capital firm, since 1999 |
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| • | General Partner with Institutional Venture Partners from 1987 to 1999 |
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| • | Director of Warner Bros. Discovery, Inc. since April 2022 |
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| • | Director of AT&T, Inc. from July 2016 to April 2022 |
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| • | Director of Liberty Media Acquisition Corp. from January 2021 to December 2022 |
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| • | Director of BigBand Networks from 1999 to 2011 |
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| • | Director of TiVo from 1997 to 2009 |
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| • | A member of the President’s Information Technology Advisory Committee for the United States from 2003-2007 |
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Key Attributes, Experience and Skills: Mr. Yang’s experience as a Managing Director of Redpoint Ventures provides the Board with valuable perspectives on financial and strategic matters as well as expertise in the capital markets. Mr. Yang co-founded Redpoint Ventures in 1999, after having previously been a General Partner with IVP since 1987. With approximately $6.5 billion of capital under management, Redpoint invests in venture capital and early growth stage technology companies. Some of the companies in which Redpoint has invested include DraftKings, Hashicorp, Netflix, Snowflake, Stripe and Twilio. In addition, Mr. Yang is the CEO/founder of Performance Health Sciences (d/b/a Apeiron Life), the CEO/founder of The Odds, the Chairman/founder of Rock the Bells, the Chairman/Founder of Sake Ono, and serves on the board of these companies as well as Esquel, Tastemade and Scribd. These experiences bring strategic direction, growth and technology expertise to the Board. Mr. Yang’s current and prior service on the boards of several private and public companies as well as with non-profit organizations including as current Chairman of the U.S. Olympic and Paralympic Foundation, the Naval Postgraduate Advisory Board, the Workday CEO Advisory Board, the President’s Advisory Committee at Princeton University, McLaren Advisory Team, and formerly serving on the Advisory Council for the Stanford Graduate School of Business and Chairman of the Nanea Admissions Committee, provides our Board with the benefit of his perspectives on business, corporate governance and citizenship, and finance. Family Relationships Jennifer M. Johnson and Gregory E. Johnson are siblings, and their uncle is Rupert H. Johnson, Jr. Each serves as both a director and an executive officer of the Company.
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| 12 | Franklin Resources |
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General The Corporate Governance Committee and the Board believe that the nominees have the requisite experience, qualifications, attributes and skills to provide the Company with effective oversight of a global investment management organization. The Corporate Governance Committee and the Board believe that there are general requirements and skills that are required of each director and other skills and experience that should be represented on the Board as a whole but not necessarily by each director. The Board believes that, consistent with these requirements, each nominee displays a high degree of personal and professional integrity, an ability to exercise sound business judgment on a broad range of issues, sufficient experience and background to have an appreciation of the issues facing our Company, a willingness to devote the necessary time to board duties, a commitment to representing the best interests of the Company and its stockholders and dedication to enhancing stockholder value. The Board seeks to assemble a group of directors that, as a whole, represents a mix of experiences and skills that allows appropriate deliberation on all issues that the Board might be likely to consider. The Corporate Governance Committee’s Policy Regarding Nominations and Qualifications of Directors described below outlines the qualities that the Corporate Governance Committee and the Board seek in director nominees. If elected, each nominee will serve until the next annual meeting of stockholders or until his or her successor is elected and qualified or until his or her earlier death, resignation, retirement, disqualification or removal. In accordance with the Company’s Director Independence Standards, described more fully below, and the rules of the NYSE, the Board has affirmatively determined that it is currently composed of a majority of independent directors, and that the following director nominees are independent and do not have a material relationship with the Company: Mariann Byerwalter; Alexander S. Friedman; John Y. Kim; Karen M. King; Anthony J. Noto; John W. Thiel; Seth H. Waugh; and Geoffrey Y. Yang. As part of its determination, the Board considered the transactions and relationships described below under “Compensation Committee Interlocks and Insider Participation” and “Certain Relationships and Related Transactions” and applied our Director Independence Standards as adopted by the Board, which includes categorical standards to assist the Board of Directors in making independence determinations and specifies the types of relationships that are deemed not material and, therefore, not considered each year. With respect to Mr. Noto, the Board considered that in the ordinary course of the Company’s asset management business, certain Company-sponsored funds and other funds and client accounts managed by Company subsidiaries have purchased, and may in the future purchase, notes or securities issued by securitization trusts formed, sponsored, administered, and/ or serviced by one or more subsidiaries of SoFi Technologies, Inc. (collectively, “SoFi”), a U.S. public company for which Mr. Noto serves as chief executive officer and director. The investments were made on terms generally available to other investors and were determined not to impair Mr. Noto’s independence. In the ordinary course of their asset management businesses, the Company’s specialist investment managers (“SIMs”) or other subsidiaries may from time to time invest client assets in companies in which certain of our directors may be a director or in which certain affiliates of our directors may be significant stockholders or invest client assets in funds and other investment vehicles managed by entities affiliated with certain of our directors.
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| 2025 Proxy Statement | 13 |
Corporate Governance
Corporate Governance The Company regularly monitors regulatory developments and reviews its policies and procedures in the area of corporate governance to respond to such developments. As part of those efforts, we review federal laws affecting corporate governance, as well as corporate governance-related rules adopted by the SEC and the NYSE, as appropriate. Corporate Governance Guidelines. The Board has adopted Corporate Governance Guidelines, which are posted in the corporate governance section of the Company’s website at www.franklinresources.com (the “Company’s website”). The inclusion of our website address or reference to our website here and elsewhere in this Proxy Statement does not include or incorporate by reference the information on our website into this Proxy Statement. The Corporate Governance Guidelines set forth the practices the Board follows with respect to, among other things, the composition of the Board, director responsibilities, Board committees, director access to officers, employees and independent advisers, director compensation, director orientation and continuing education, management succession and performance evaluation of the Board. Code of Ethics and Business Conduct. The Board has adopted a Code of Ethics and Business Conduct, which is applicable to all employees, temporary employees, directors and officers of the Company and its subsidiaries and affiliates. The Code of Ethics and Business Conduct is posted in the corporate governance section of the Company’s website. The Company also has a Compliance and Ethics Hotline, where employees and applicable third parties can anonymously report a violation of the Code of Ethics and Business Conduct or submit another question or concern. We intend to satisfy the disclosure requirement regarding any amendment to, or a waiver of, a provision of the Code of Ethics and Business Conduct for the Company’s principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions, by posting such information on the Company’s website. Insider Trading Blackout Policy. The Board has adopted an insider Trading Blackout Policy, which is applicable to all designated employees, temporary employees, directors and officers of the Company and its subsidiaries and affiliates. The Trading Blackout Policy is posted in the corporate governance section of the Company’s website. The Trading Blackout Policy is designed to promote compliance with insider trading laws, rules and regulations with respect to the purchase, sale and/or other dispositions of the Company’s securities, as well as the applicable rules and regulations of the New York Stock Exchange. The Trading Blackout Policy addresses the implementation of certain trading blackout periods in the Company’s securities (including common stock, debt, options and other related derivative securities) for covered persons. Director Independence Standards. The Board has made determinations as to the independence of each of our current non-employee directors and concluded that all of our current non-employee directors qualify as independent directors under the NYSE listing standards. The Board has adopted guidelines for determining whether a director is independent, which are posted in the corporate governance section of the Company’s website. The Board will monitor and review as necessary, but at least once annually, commercial, charitable, family and other relationships that directors have with the Company to determine whether the Company’s directors are independent. For purposes of the Company’s Director Independence Standards, the “Company” refers to Franklin Resources, Inc. and its consolidated subsidiaries. For a director to be considered independent, the Board must determine affirmatively that the director does not have material relationships with the Company either directly, or as a partner, stockholder or officer of an organization that has a relationship with the Company. Such determination will be made and disclosed pursuant to applicable NYSE or other applicable rules. A material relationship can include, but is not limited to, commercial, industrial, banking, consulting, legal, accounting, charitable and family relationships. Policy Regarding Multiple Board Memberships. The Board has adopted a policy regarding memberships on boards of directors or equivalent governance bodies of unaffiliated publicly traded companies or other entities. If a director of the Company also serves as the principal executive officer, such as the chief executive officer or president, of a publicly traded company, it is the policy of the Board that such director shall not accept membership on a board of directors or equivalent governance body of another publicly traded company, without first informing and obtaining the consent of the Company’s Corporate Governance Committee, if such new membership would result in the director serving contemporaneously on three or more boards of directors or equivalent governance bodies of unaffiliated publicly traded companies, excluding the Company’s Board. If a director does not serve as a principal executive officer, such as a chief executive officer or president, of a publicly traded company, it is the policy of the Board that such director shall not accept membership on a board of directors or equivalent governance body of another publicly traded company, without first informing and obtaining the consent of the Company’s Corporate Governance Committee, if such new membership would result in the member serving contemporaneously on four or more boards of directors or equivalent governance bodies of publicly traded companies, excluding the Company’s Board.
Corporate Governance
| 14 | Franklin Resources |
Corporate Governance
| Corporate Governance |
Corporate Governance
Prohibition Against Hedging Transactions. Pursuant to the Company’s Code of Ethics and Business Conduct, which is applicable to all employees, temporary employees, directors and officers of the Company and its subsidiaries and affiliates, short sales of securities, including “short sales against the box” (i.e., a short sale by the holder of a long position in the same stock) of securities issued by the Company, and securities issued by any closed-end fund sponsored or advised by the Company, are prohibited. This prohibition also applies to effecting economically equivalent transactions, including, but not limited to, purchasing and selling call or put options and swap transactions or other derivatives that would result in a net short exposure to the Company or any closed-end fund sponsored or advised by the Company. Prohibition Against Pledging. Pursuant to the Company’s Code of Ethics and Business Conduct, unless otherwise previously approved by the Compensation Committee, directors and executive officers are prohibited from directly or indirectly pledging, hypothecating or otherwise encumbering securities issued by the Company as collateral for indebtedness. This prohibition includes, but is not limited to, holding such securities in a margin account that could cause securities issued by the Company to be subject to a margin call or serve as collateral for a margin loan. Securities issued by the Company that were not received as compensation are not subject to the prohibition as long as the holder of such securities remains in compliance with applicable Stock Ownership Guidelines. If any person has subject securities issued by the Company pledged as collateral or held in a margin account when such person becomes a director or executive officer of the Company, the pledge must be released within one year from the date the person became a director or executive officer. Stock Ownership Guidelines. Our Board of Directors has adopted stock ownership guidelines for directors and executive officers. Directors and executive officers are permitted a five-year grace period to reach the applicable ownership level established under the guidelines. Our Directors are expected to own shares of common stock of the Company with a value of at least 5x the value of their annual cash retainer within five years of their appointment to the Board. Similarly, executive officers of the Company are expected to own shares of common stock of the Company with a value equal to a specific multiple of such executive officer’s base salary, as indicated in the table below, by five years from when he or she first assumed the position for which stock ownership is expected:
Corporate Governance
| Title | Market Value of Shares Owned as a Multiple of Base Salary | | Director | 5X | | Executive Chairman | 5X | | Vice Chairman | 5X | | Chief Executive Officer | 5X | | President | 4X | | Executive Vice President | 4X | | Other Executive Officers | 3X |
Corporate Governance
Both direct and certain indirect forms of ownership are recognized in achieving these guidelines, including shares owned outright, unvested time-based restricted stock and restricted stock units, 401(k) plan funds invested in shares of the Company’s common stock, and funds deemed invested in shares of the Company’s common stock under the 2006 Directors Deferred Compensation Plan. Shares of the Company’s common stock held by immediate family members (which includes a director’s or executive officer’s spouse, children and parents) or entities controlled by a director or executive officer may be considered holdings of the director or executive officer for purposes of the guidelines only and not as an admission of beneficial ownership for any other purpose. As of December 20, 2024, all directors and executive officers were in compliance with these guidelines. Executive Compensation Clawback Policy The Company’s general employee compensation clawback practices provide for recovery of compensation amounts (i) in connection with fraud or a breach of securities law by an individual or (ii) when (A) the Company issues a restatement of financial results to correct a material error; (B) the Compensation Committee determines, in good faith, the individual’s fraud or willful misconduct was a significant contributing factor to the need to issue such restatement; and (C) some or all of an award awarded to that individual prior to such restatement and/or shares of the Company’s common stock or mutual fund shares that were awarded and/ or other property earned by the individual prior to such restatement would not have been awarded and/or earned, as applicable, based upon the restated financial results. In addition, effective for compensation awarded for periods beginning on or after October 1, 2023, the Board adopted an Executive Compensation Clawback Policy (“Clawback Policy”). The Clawback Policy provides for the mandatory recovery of erroneously awarded incentive-based compensation following accounting restatements from persons who served as an executive officer of the Company at any time during the performance period for such incentive-based compensation and who received such compensation during the three fiscal years preceding the date on which the Company is required to prepare an accounting restatement. The compensation to be recovered is the amount in excess of what would have been paid based on the restated results. Recovery will be required on a “no fault” basis, without regard to whether any misconduct occurred and without regard to whether an executive officer was responsible for the erroneous financial statements.
Corporate Governance
| 2025 Proxy Statement | 15 |
Information About the Board
Information About the Board
The Compensation Committee
| • | that directors’ independence may be compromised or impaired for Board or committee purposes if director compensation exceeds customary levels. |
The Corporate Governance Committee
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3) | Total ($)(4) | | Mariann Byerwalter | 179,500 | 195,011 | 374,511 | | Alexander S. Friedman | 170,750 | 195,000 | 365,750 | | John Y. Kim | — | 334,000 | 334,000 | | Karen King | — | 337,000 | 337,000 | | Anthony J. Noto | 137,000 | 195,011 | 332,011 | | John W. Thiel | 147,000 | 195,011 | 342,011 | | Seth H. Waugh | 144,500 | 195,000 | 339,500 | | Geoffrey Y. Yang | 121,750 | 229,761 | 351,511 |
Compensation Discussion and Analysis
1. Our Compensation Philosophy Our Compensation Committee believes that executive compensation should be strongly linked to our performance – both for our investors and for our clients who entrust us to manage their investments and in turn drive our success. We recognize the importance of our compensation decisions to these constituencies and believe the design and implementation of our executive compensation program reflects this stewardship. Accordingly, we seek to maintain an executive compensation program that is designed to attract and retain skilled executives, incentivize executives to deliver returns for our clients and thus maximize our financial performance and the creation of stockholder value, and align executives’ interests with those of our stockholders. We aim to achieve these objectives by granting a significant majority of executive compensation in the form of “at-risk” compensation, where the value of compensation is dependent on our performance. Our at-risk compensation is typically granted in the form of (i) annual incentive cash bonus awards and restricted stock unit (“RSU”) awards granted under our Amended and Restated Annual Incentive Compensation Plan (the “AIP”) that are earned based on certain annual performance objectives and (ii) performance-based RSU awards that are earned and vest based on achievement of annual and three-year financial performance objectives. We currently do not grant stock options. The significant equity portion of our at-risk compensation serves to align the interests of our NEOs with those of our stockholders. In addition, the Compensation Committee recognizes that NEOs implement and effect long-term initiatives for the Company that often take more than one fiscal year to accomplish and, accordingly, should receive a significant percentage of their compensation in the form of equity that does not immediately vest.
Compensation Discussion and Analysis
2. Compensation Overview Our executive compensation program consists primarily of three elements: (1) base salary, (2) short-term incentive compensation based on company-wide investment and financial performance objectives and NEO-specific strategic initiatives, and which is paid in a combination of cash and time-based incentive RSU awards, and (3) RSU awards subject to long-term performance-based vesting conditions.
Compensation Discussion and Analysis
| Compensation Element | Designed To Reward | Relationship To The Objectives | | Base Salary | • Experience, knowledge of the industry, duties and scope of responsibility | • Provides a minimum, fixed level of cash compensation to attract and retain talented executives to the Company who can continue to improve the Company’s overall performance | | Annual Incentive Compensation • Incentive cash awards • Incentive RSU awards • Incentive investment fund unit awards | • Success in achieving objectives | • Motivates executives to achieve specific financial and non-financial Company-wide, business unit and individual performance objectives • Provides competitive compensation to attract and retain talented executives • Links annual incentive to value creation for stockholders with a mix of cash and equity • Induces retention of key executives with the Company with incentive RSU awards awarded based on annual performance and vesting subject to continued service in order to encourage retention | | Long-term Incentive Compensation • Performance RSU awards | • Continued excellence and achievement of objectives over time • Success in long-term growth and development | • Motivates executives to achieve specific Company-wide financial objectives over a three-year performance period • Aligns the executives’ interests with long-term stockholder interests with performance RSU awards earned based on achievement of financial performance objectives • Provides competitive compensation to attract and retain talented executives • Encourages retention of key executives with the Company with performance RSU awards subject to performance-based vesting conditions over a three-year period |
Compensation Discussion and Analysis
Base Salary The Compensation Committee believes that base salaries for our NEOs should be limited to a reasonable base compensation for the day-to-day performance of the NEOs’ job responsibilities and that the majority of their pay should be in at-risk compensation tied to performance. Base salaries are evaluated by the Compensation Committee annually for all NEOs and in general do not change significantly year-to-year unless the NEO is promoted or the Compensation Committee determines that an adjustment is necessary due to compensation or economic trends in the industry. Annual Incentive Compensation Annual incentive compensation in the form of incentive cash awards and incentive RSU awards granted to our NEOs and incentive investment fund unit awards (“Fund Unit Awards” and, together with RSU awards, the “Annual Deferred Incentive Awards”) granted to Mr. Murphy, are funded from an award pool (the “Award Pool”) that is established annually under the AIP. The incentive RSU awards are granted under the 2002 Universal Stock Incentive Plan, as amended (the “USIP”), based on prior year performance and, for all NEOs other than Mr. Murphy, vest in equal installments over three years subject to continued service with the Company. As Mr. Murphy continues to transition to his role as Head of Public Markets, the Company has agreed that (1) Mr. Murphy has satisfied the vesting requirements for the RSU awards granted to him in fiscal year 2024 other than the notice period, and assuming proper notification, such awards are subject to immediate vesting upon retirement; and (2) to align Mr. Murphy's compensation with his role as Head of Public Markets, Fund Unit Awards are granted to Mr. Murphy pursuant to the terms of a deferred incentive plan (the “Deferred Incentive Plan”) created for certain eligible employees in connection with the Company's acquisition of Legg Mason in 2020 pursuant to the terms of a deferred incentive plan (the “Deferred Incentive Plan”) created for certain eligible employees in connection with the Company's acquisition of Legg Mason in 2020. The Annual Deferred Incentive Awards are granted shortly following the end of the fiscal year to which the award relates, with the number of RSU awards determined by dividing the dollar value of the equity portion of the award by the closing price of our common stock on the date of grant and the number of Fund Unit Awards determined based on the dollar value of the units of the applicable funds amongst which the award is allocated. NEOs receive dividends on unvested incentive RSU awards as and when dividends are paid to stockholders. Targets under the AIP are based on a combination of Company-wide, business unit and individualized performance objectives. The Compensation Committee recognizes that the Company-wide measures may not fully reflect the individual performance and contributions made by our separate business units and their respective leaders, and therefore has incorporated objectives relating to achievement of strategic initiatives into the AIP. These objectives are specifically tailored to each business unit and include, but are not limited to, a mix of investment performance, sales, financial, customer service, technology and human resources objectives. The size of the Award Pool is approved by the Compensation Committee and is fixed at a percentage of our pre-bonus net operating income, exclusive of passive income and calculated before non-operating interest, taxes, extraordinary items, and any special items such as special compensation payouts on account of an acquisition (“PBOI”). The specific size of the Award Pool is determined at the start of the fiscal year but may be revised by the Compensation Committee at any point during or after the fiscal year. The annual incentive compensation paid and granted in November 2024, the specific strategic objectives considered by the Compensation Committee for each NEO in fiscal year 2024, and the Compensation Committee’s determination of the Award Pool for fiscal year 2024 are summarized in “4. Fiscal Year 2024 Executive Compensation Decisions” below. Long-Term Incentive Compensation Our long-term incentive compensation consists of annual grants of performance RSU awards (“Performance Awards”) under the USIP that vest over a three-year period based on the achievement of specified financial performance goals as described below. Half of the Performance Awards granted in fiscal year 2024 will be earned and vested based on our Adjusted Operating Margin (as defined below) and half of the Performance Awards will be based on our relative total stockholder return over a three-year period (as described below). The Performance Award component that is based on Adjusted Operating Margin is earned based on our fiscal year performance, with performance vesting occurring in equal increments in each year over a three-year period, while the Performance Award component that is based on relative total stockholder return is earned and “cliff”-vests based on a three-year performance period. NEOs receive dividends on Performance Awards upon vesting of the applicable Performance Award.
Compensation Discussion and Analysis
The Performance Awards granted to each NEO for fiscal year 2024 was determined by the Compensation Committee with the goal of targeting a material percentage of the NEO’s total incentive compensation in the form of Performance Awards. Mr. Murphy did not receive Performance Awards in fiscal year 2024. In the event a performance measure is not achieved at or above a specified threshold level, the portion of an award tied to such performance measure is forfeited. The Compensation Committee selects performance-based vesting targets that it believes are sufficient to motivate NEOs by being challenging, but achievable. The specific performance-based vesting conditions applicable to awards granted in November 2024 and those completing their vesting in November 2024 are summarized in “4. Fiscal Year 2024 Executive Compensation Decisions — Types of Compensation — Long-term Incentive Compensation” below. Compensation Mix for Our NEOs The following chart shows the breakdown of the types of compensation paid or granted to our NEOs for fiscal year 2024, which illustrates the Compensation Committee’s emphasis on at-risk, equity-based and performance-based components of our executive compensation program. COMPENSATION MIX
Compensation Discussion and Analysis
| Key Financial Performance Measures (as of and for fiscal years ended September 30) | 2024 | 2023 | Percentage Change 2024 vs. 2023 | | Ending Assets Under Management ($ billions) | $1,678.6 | $1,374.2 | 22% | | Average Assets Under Management ($ billions) | $1,565.8 | $1,400.4 | 12% | | Adjusted Operating Revenue ($ millions)(1) | $6,564.8 | $6,104.1 | 8% | | Adjusted Operating Income ($ millions)(1) | $1,713.1 | $1,823.8 | (6%) | | Adjusted Net Income ($ millions)(1) | $1,276.7 | $1,332.2 | (4%) | | Adjusted Earnings Per Share(1) | $2.39 | $2.60 | (8%) | | Adjusted Operating Margin(1) | 26.1% | 29.9% | — | | Three-Year Stockholder Return | 7.9% | 11.2% | |
Compensation Discussion and Analysis
Fiscal Year 2024 Investment Management Performance We are committed to delivering strong investment performance for our clients, offering a broad range of strategies and drawing on our diverse experiences and perspectives gained through our long history in the investment management business. We know that success demands smart and effective business innovation, solutions and technologies, and we remain focused on investment excellence, innovating to meet evolving client goals, and building strong partnerships by delivering superior client service. We continue to focus on the long-term investment performance of our investment products and on providing high quality service to our clients. A key driver of our overall success is the long-term investment performance of our investment products. A measure of the performance of these products is the percentage of AUM exceeding peer group medians and benchmarks. We compare the relative performance of our mutual funds against peers, and of our strategy composites against benchmarks. The performance of our mutual fund products against peer group medians and of our strategy composites against benchmarks is presented in the table below. Past performance is no guarantee of future results.
Compensation Discussion and Analysis
| | Peer Group Comparison(1) % of Mutual Fund AUM in Top Two Peer Group Quartiles | | | | Benchmark Comparison(2) % of Strategy Composite AUM Exceeding Benchmark | | | | | As of September 30, 2024 | 1-Year | 3-Year | 5-Year | 10-Year | 1-Year | 3-Year | 5-Year | 10-Year | | Fixed Income | 77% | 61% | 58% | 64% | 80% | 48% | 72% | 90% | | Equity | 57% | 56% | 43% | 59% | 51% | 40% | 41% | 45% | | Total AUM(3) | 55% | 64% | 43% | 53% | 56% | 47% | 55% | 64% |
Compensation Discussion and Analysis
| (1) Mutual fund performance is sourced from Morningstar and measures the percentage of ranked fund AUM in the top two quartiles of their peer groups. Mutual Fund AUM measured for the 1-, 3-, 5- and 10-year periods represents 38%, 38%, 37%, and 35%, respectively of our total AUM as of September 30, 2024. |
Compensation Discussion and Analysis
| (2) Strategy composite performance measures the percent of composite AUM beating its benchmark. The benchmark comparisons are based on each account’s/composite’s (strategy composites may include retail separately managed accounts and mutual fund assets managed as part of the same strategy) return as compared to a market index that has been selected to be generally consistent with the asset class of the account/ composite. Total strategy composite AUM measured for the 1-, 3-, 5- and 10-year periods represents 54%, 54%, 53%, and 48% of our total AUM as of September 30, 2024. |
Compensation Discussion and Analysis
4. Fiscal Year 2024 Executive Compensation Decisions Fiscal Year 2024 Base Salary and Annual Incentive Awards In November 2024, based on the Compensation Committee’s evaluation of the strategic initiative achievements summarized below and the performance objectives discussed above, the Compensation Committee approved the base salary and annual incentive awards in the aggregate amounts below.
Compensation Discussion and Analysis
| | | Annual Incentive Award | | | | | | | Name | Base Salary | Total Incentive Award | Incentive Cash Component | Incentive Deferred Component | Long-Term Incentive Award | Total Annual Compensation | % change in Total Compensation vs. 2023 | | Jennifer M. Johnson | $750,000 | $11,050,000 | $5,525,000 | $5,525,000 | $3,250,000 | $15,050,000 | 0.0% | | Matthew Nicholls(1) | $600,000 | $6,800,000 | $4,520,000 | $2,280,000 | $1,900,000 | $9,300,000 | 0.0% | | Gregory E. Johnson | $600,000 | $1,900,000 | $1,335,000 | $565,000 | $500,000 | $3,000,000 | 0.0% | | Terrence Murphy(2) | $500,000 | $14,521,445 | $9,538,939 | $4,982,506 | — | $15,021,445 | (19.5%) | | Adam B. Spector(3) | $525,000 | $3,575,000 | $2,423,750 | $1,151,250 | $1,200,000 | $5,300,000 | 0.0% |
Compensation Discussion and Analysis
| (1) Amounts do not include a $750,000 cash transaction bonus awarded to Mr. Nicholls in connection with the completion of the Company’s acquisition of Putnam Investments. |
Compensation Discussion and Analysis
| | | | 2024 Performance Awards | | | | % of Award Eligible to Vest | Performance Period | Performance Level(1) | % Vesting(2) | | 2024 Adjusted Operating Margin Performance Award (50% of 2024 Performance Awards) | 34% | Fiscal Year 2025 | Adj. Operating Margin ≥ 90% of Plan | 100% | | | | | Adj. Operating Margin ≥ 80% and < 90% of Plan | 50% | | | | | Adj. Operating Margin < 80% of Plan | 0% | | | 33% | Fiscal Year 2026 | Adj. Operating Margin ≥ 90% of Plan | 100% | | | | | Adj. Operating Margin ≥ 80% and < 90% of Plan | 50% | | | | | Adj. Operating Margin < 80% of Plan | 0% | | | 33% | Fiscal Year 2027 | Adj. Operating Margin ≥ 90% of Plan | 100% | | | | | Adj. Operating Margin ≥ 80% and < 90% of Plan | 50% | | | | | Adj. Operating Margin < 80% of Plan | 0% | | 2024 Relative TSR Performance Award (50% of 2024 Performance Awards) | 100% | Fiscal Years 2025 - 2027 | ≥ 75th percentile | 150% | | | | | ≥ 50th to 75th percentile | 100 to 149% | | | | | ≥ 25th to 50th percentile | 50 to 99% | | | | | 0 to 25th percentile | 0 to 49% |
Compensation Discussion and Analysis
| | 2024 Performance Awards | | | | Name | Total Target Award Amount | Adjusted Operating Margin Target | Relative TSR Target | | Jennifer M. Johnson | $3,250,000 | 1,625,000 | 1,625,000 | | Matthew Nicholls | $1,900,000 | 950,000 | 950,000 | | Gregory E. Johnson | $500,000 | 250,000 | 250,000 | | Terrence Murphy(1) | — | — | — | | Adam B. Spector | $1,200,000 | 600,000 | 600,000 |
Compensation Discussion and Analysis
Vesting of the Performance Awards granted in fiscal years 2021-2023 is based upon the achievement of: (i) the Company’s adjusted operating margin as a percentage of the average operating margin for certain peer companies (“Relative Adjusted Margin”), and (ii) our total stockholder return ranking, defined as our total return to stockholders, as reported by Bloomberg or FactSet Research Systems (or their respective successors), relative to the respective total return to stockholders of certain peer companies over a three-year period (“Relative TSR”). For purposes of the Relative Adjusted Margin awards, “adjusted operating margin” means (a) operating income divided by (b) total revenues for the performance period, in each case as reported in the consolidated financial statements filed with the SEC (or if such financial statements are not available at the time of determination as otherwise disclosed in a press release), which amount is adjusted to exclude material onetime, non-recurring expenses including, but not limited to, M&A, severance, or other restructuring charges as reported in the relevant financial statements. Performance Awards that are based on Adjusted Operating Margin are earned based on our annual performance and performance vest in equal installments in each year over a three-year period, while Performance Awards that are based on Relative TSR are earned based on our performance over a three-year period and vest in one installment shortly following the Compensation Committee’s determination that the performance condition has been achieved. We define “Realized Pay” as the difference between the value of compensation awarded (salary, incentive cash awards, time-based and performance equity) at the time of grant (Fiscal Year 2021) compared to the value of such compensation at vest, including forfeitures and dividends paid at the end of the three-year vesting period (Fiscal Year 2024). After accounting for forfeitures because the performance objectives related to those units were not achieved and a reduction in the market price of the Company’s common stock from time of grant to the time of vest, all NEOs who received Performance Awards in Fiscal Year 2021 saw a decline in Realized Pay: ACTUAL VS REALIZED PAY: Fiscal Year 2021 Compensation Review
Compensation Discussion and Analysis
| STRATEGIC INITIATIVES • Successfully closed the acquisition of Putnam Investments on January 1, 2024 from Great-West Lifeco (“Great-West”) enhancing our relevance in the insurance and retirement sectors. The addition of Putnam has increased our defined contribution AUM to over $125 billion. The transaction enables the Company to further invest in these important segments to better serve all clients. ○ Putnam has added complementary capabilities with strong long-term track records. Since acquisition, Putnam’s AUM has grown 21% to $180 billion in AUM. We generated $11 billion of net inflows and had a 45% increase in average quarterly gross sales from Putnam strategies. ○ Succesfully completed integration efforts with over $150 million Putnam-related annual run-rate cost savings achieved by fiscal year-end ahead of schedule. ○ The Company was awarded “Deal of the Year” by With Intelligence for the acquisition of Putnam. • Led and established strategic relationship with Power Corporation and its group of companies, leaders in the global insurance, retirement, asset management and wealth management sectors. Great-West funded $21 billion across the Company’s specialist investment managers this year and became a long-term shareholder in Franklin Resources. • Alternatives continue to be a strategic priority and private markets fundraising totaled $14.8 billion. Highlights include: ○ Franklin Trempleton is a leading manager of alternative assets with approximately $250 billion in AUM. ○ Lexington closed Fund X with $22.7 billion in total capital commitments, raised primarily between 2022 and 2023, ranking among the largest funds raised to date in the global secondary private equity market, with approximately 20% raised in wealth channel. ○ Benefit Street Partners closed Debt Fund V and Special Situations Fund II with $4.7 billion and $850 million in total capital commitments raised, respectively, with each fund exceeding targets. ○ Established the Alternatives by Franklin Templeton brand in the wealth management channel in the U.S. and looked to broaden it in EMEA and Asia. • Diversification of vehicles continues with retail Separately Management Accounts (SMAs), Exchange Traded Funds (ETFs) and Canvas offerings – each reaching record highs. ○ Leading provider of retail SMAs with $145 billion in assets, an increase of 29% from the prior year. ○ ETF AUM grew by 89% to $31 billion from prior year, with positive net flows for the 12th consecutive quarter with net flows at or exceeding $1 billion for eight consecutive quarters, with the last two quarters over $3 billion. ○ Canvas AUM increased by 94% year-over-year to $10 billion and has generated positive net inflows in every quarter since its acquisition in 2021. | • Strengthened ability to offer solutions across investment teams and public and private markets to clients; Investment Solutions AUM nearly doubled to $89 billion(5) from the prior year with the addition of K2 and Putnam’s target date funds and through organic growth. • Investing in innovation and cutting-edge technologies continues to be of strategic importance for the firm. Announced partnership with Microsoft to build an advanced financial artificial intelligence platform marking a significant step toward transforming the financial services industry. The platform will use composable business applications to help the Company rapidly embed AI in its processes and enable digital transformation at scale. • Strengthened the foundation of the business through disciplined expense management and operational efficiencies, including organizational changes to optimize operating model and operational efficiencies of select specialist investment managers and the selection of Aladdin to unify the Company’sinvestment management technology across Public Markets investment teams. • Recognized as industry leader and Franklin Templeton brand ambassador. Received 2024 Distinguished Leadership Award from the Committee for Economic Development, the public policy center of The Conference Board (Oct 2024). Listed as #4 in The Most Powerful Women in Finance 2024 by American Banker (Sept 2024). Named in Barron’s 2024 annual list as one of 100 Most Influential Women in US (February 2024). Recipient of 2024 Distinguished Leadership Award for Business Stewardship & Corp Citizenship by Economic Development (April 2024), as well as Franklin Templeton’s inclusion in P&I’s “Best Places to Work in Money Management” (Dec 2024). • Championed Diversity, Equity and Inclusion (DE&I) efforts within the Company and asset management industry. Continued to execute global DE&I strategy to diversify talent at all levels of the firm. 1. Mutual fund/ETF performance is sourced from Morningstar and measures the percentage of ranked fund AUM in the top two quartiles of their peer groups. Mutual Fund AUM measured for the 1-, 3-, 5- and 10-year periods represents 38%, 38%, 37% and 35%, respectively of the firm’s total AUM as of September 30, 2024. 2. Strategy composite performance measures the percentage of ranked fund AUM in the top two quartiles of their peer groups. Strategy composite AUM measured for the 1-, 3-, 5- and 10-year periods represents 54%, 54%, 53%, and 48%, respectively of the firm’s total AUM as of September 30, 2024. (3). The adjusted effective fee rate is annualized adjusted investment management fees, excluding performance fees, divided by average AUM for the period. (4). Includes direct investments in Consolidated Investment Products of $1.1 billion and approximately $355 million of employee-owned and other third-party investments made through partnerships, $289 million of investments related to long-term repurchase agreements and other net financing arrangements, and $441 million of cash and investments related to deferred compensation plans. (5). Investment Solutions includes assets managed by other teams as well as AUA ($4.1 billion in FY 2024). |
Compensation Discussion and Analysis
| • Continued focus on disciplined expense management keeping overall costs in line with original budget for the year while providing competitive compensation for key talent. • Partnered with CEO and the Executive Committee to drive efforts and investments in key strategic areas: ○ Successfully closed the acquisition of Putnam Investments on January 1, 2024, adding $148 billion in AUM (since increased to $180 billion in AUM, including approximately $11 billion in positive net flows); led successful integration across corporate functions and exceeded target annual run-rate cost savings of $150 million; and ○ Oversaw partnership with Power Corporation of Canada and Great West Lifeco funding $21 billion in new AUM and expanded new business growth opportunities to strengthen our presence in insurance and retirement. • Exceeded FY2024 projections for adjusted operating revenue, adjusted net income, and adjusted EPS. • Managed the firm’s balance sheet to maintain financial flexibility. For the fiscal year ended September 30, 2024, the Company returned $946 million to shareholders through dividends and share repurchases, funded the acquisition of Putnam and other acquisition-related payments and repaid $250 million of senior notes due 2024. | • Led continuous review and enhancement of corporate functions to drive effectiveness, efficiency and productivity across operations to redesign and build capabilities to capture benefits of scale, create capacity to reinvest in growth areas, and foster best practices firmwide, including: ○ Successfully completed selection of investment management technology platform (Aladdin) to unify investment management technology across Public Markets investment teams with the goal of simplifying the Company’s investment operations and reducing of long-term capital expenses; ○ Implemented organizational changes to optimize operating model and operational efficiencies of select specialist investment managers; and ○ Optimized real estate strategy and led consolidation and monetization of excess office space globally, including consolidation of multiple offices in Manhattan to create cost savings and enhance collaboration across specialist investment managers. • Increased risk management resources across the firm focused on enterprise, investment, cyber security, and supplier risk management. • Executed investor relations program focused on communicating our differentiated business model, growth strategies (organic and M&A), and financial objectives to the investor community. |
Compensation Discussion and Analysis
| • Led continued improvement in mutual fund investment performance vs peers and relative strategy composite performance vs benchmarks. Compared to the prior year, mutual fund investment performance improved in the 1-, 3- and 10-year periods, and declined in the 5-year period. Compared to the prior year, investment performance acoss strategy composites improved in the 5- and 10- year periods and stayed flat in the 3-year period. Excluding cash management, 60% of our strategies composite AUM outperformed their 1-year benchmarks. • Drove efforts to strengthen the culture of investment risk management to complement alpha generation across Public Market investment teams. • Responsible for investment talent management, and this year, further evolved Public Markets investment team leadership, risk mananagment talent and processes, depth of research and succession planning with the goal of improving performance and client outcomes. • Enhanced best practices and collaboration across Public Markets investment teams and established a new Artificial Intelligence Investment Development team. • Oversaw the continued evolution of Public Markets investment teams including the integrations of Putnam Equity, Putnam Fixed Income into FT Fixed Income, Putnam Globall Asset Allocation and K2 Advisors into FT Investment Solutions, resulting in a more efficient and streamlined organization. | • Continued restructuring plan for FT Investment Solutions and investment in the ETF business leading to AUM growth of over 40%(1) and 76%(1), respectively this year. • Implemented strategic initiatives to create a more streamlined and efficient investment organization with a focus on public/private offerings efforts and on the OCIO business. • Developed and led a new collaboration between Public Markets investment teams, business development and global distribution, with a focus on growth and asset retention. • Led efforts to optimize our investment product offering to refocus on core investment competencies and improve performance. To date, 13% of our pooled vehicles have been merged, liquidated or repositioned into strategies to drive sales growth. • Responsible for continued evolution of consistent compensation plans across Public Markets investment teams to align with client outcomes. • Nurtured a culture of diversity and inclusion with the goal of increasing ratios of women and ethnically diverse investment professionals and senior management. 1. Excludes the impact of Putnam and K2 Advisor integrations. |
Compensation Discussion and Analysis
5. Our Compensation Decision-Making Process Compensation decisions are made by our Compensation Committee, considering input from its independent compensation consultant Exequity LLP (“Exequity”), our human resources group, our CEO (with respect to the compensation of other NEOs), and our stockholders. Role of CEO and Human Resources Group The Compensation Committee works with members of management, including our CEO, to seek input regarding our executive compensation. Twice a year the CEO evaluates each other NEO and his or her respective business unit’s progress in achieving its goals. In addition, the CEO works with our human resources group to determine the appropriate award amount to recommend for each such NEO based upon such performance. As part of this process, the human resources group conducts and reviews an analysis of competitive compensation by peer companies (those listed below under “Compensation Peer Group”), compares previous year-over-year performance and compensation paid to the NEO, and reviews third-party executive compensation surveys related generally to the financial services industry and specifically to the asset management industry. Upon completion of this review process, management presents performance evaluations to the Compensation Committee and the CEO, and the CEO makes a recommendation to the Compensation Committee regarding the appropriate level of incentive compensation to be awarded to each NEO. The Company’s management has engaged McLagan Data & Analytics, an Aon plc company (“McLagan”), a financial services industry compensation consultant, to provide information on peer company compensation and pay trends. The Compensation Committee uses McLagan’s proprietary surveys and market data to analyze the competitiveness of the Company’s executive compensation program and to understand compensation forecasts and trends in the industry. Role of Exequity The Compensation Committee is empowered with the sole authority to retain and terminate any compensation consulting firm directly assisting it in the evaluation of director or executive compensation. The Compensation Committee also has the sole authority to approve fees and other retention terms for its consultant. The Compensation Committee recognizes that it is essential to receive objective advice from compensation consultants and has selected Exequity, and expects to continue to select any compensation consultants, on the basis of all factors relevant to the consultant’s independence including:
Compensation Discussion and Analysis
Compensation Timeline The following illustrates the indicative timeline by which the Compensation Committee determines pay. Compensation Peer Group For fiscal year 2024, the compensation peer group approved by the Compensation Committee is the following:
Compensation Discussion and Analysis
| What We Do | | ✔ Align pay with performance: a significant portion of total compensation for all NEOs is performance-based ✔ Grant long-term awards based on meaningful performance measures ✔ Maintain clawback policies ✔ Require significant stock ownership ✔ Limit perquisites ✔ Retain an independent consultant to the Compensation Committee ✔ Regularly review incentive compensation plans and compensation practices ✔ Engage with stockholders regarding compensation practices |
Compensation Discussion and Analysis
| What We Don’t Do | | ✘ Provide excessive severance benefits ✘ Enter into change in control agreements with NEOs ✘ Provide excise tax gross-ups ✘ Reprice underwater stock options ✘ Permit hedging of Company stock ✘ Allow pledging of Company stock received as compensation ✘ Offer executive-specific retirement plans ✘ Pay dividends or dividend equivalents to NEOs on unvested performance shares |
Compensation Discussion and Analysis
Benefits and Perquisites As a general practice, we do not provide material personal benefits and provide only limited perquisites to the NEOs that are not provided to other employees. All executive officers are eligible to receive medical, life and disability insurance coverage, participate in the Company’s 401(k) plan and receive other corporate benefits available to most of the Company’s employees, consistent with the terms of the applicable plans and policies. In addition, certain of our NEOs may use the Company’s aircraft for personal reasons. Termination/Change in Control Matters Our NEOs are employed on an “at will” basis. We do not have a severance policy. From time to time, we may consider severance in special situations. Except as needed in special circumstances such as during periods of transition, we generally do not have any commitments to provide our NEOs with post-employment termination benefits. We do not enter into change of control agreements. We have not entered into any agreement with any NEO that provides for additional payments or benefits solely on account of a change in control of the Company. Our only change in control provisions are included in existing compensation plans that apply to all participants in those plans. Stock Ownership Policy The Company believes that a significant ownership interest by certain senior officers tends to align the interests of members of management of the Company with the Company’s stockholders and strengthens the link between long-term Company performance and executive compensation. The following senior officers of the Company are expected to own shares of common stock of the Company with a value equal to a specific multiple of such senior officer’s base salary, as indicated in the table below, by five years from when he or she first assumed the particular senior officer position for which stock ownership is expected:
Compensation Discussion and Analysis
Both direct and certain indirect forms of ownership are recognized in achieving these guidelines, including shares owned outright, restricted stock, restricted stock units, 401(k) funds invested in shares of the Company’s common stock, and funds deemed invested in shares of the Company’s common stock under a deferred compensation plan. Shares of the Company’s common stock held by immediate family members (which includes an executive officer’s spouse, children and parents) or entities controlled by an executive officer may be considered holdings of the executive officer for purposes of the guidelines only and not as an admission of beneficial ownership for any other purpose. As of December 20, 2024, all officers were in compliance with these guidelines. Clawback Practices The Company’s general employee compensation clawback practices provide for recovery of compensation amounts (i) in connection with fraud or a breach of securities law by an executive officer or (ii) when (A) the Company issues a restatement of financial results to correct a material error; (B) the Compensation Committee determines, in good faith, that a Participant’s fraud or willful misconduct was a significant contributing factor to the need to issue such restatement; and (C) some or all of an award awarded to that executive officer prior to such restatement and/or shares of the Company’s common stock or mutual fund shares that were awarded and/or other property earned by the Participant prior to such restatement would not have been awarded and/or earned, as applicable, based upon the restated financial results. In addition, effective for compensation awarded for periods beginning on or after October 1, 2023, the Board adopted an Executive Compensation Clawback Policy (“Clawback Policy”). The Clawback Policy provides for the mandatory recovery of erroneously awarded incentive-based compensation following accounting restatements from persons who served as an executive officer of the Company at any time during the performance period for such incentive-based compensation and who received such compensation during the three fiscal years preceding the date on which the Company is required to prepare an accounting restatement. The compensation to be recovered is the amount in excess of what would have been paid based on the restated results. Recovery will be required on a “no fault” basis, without regard to whether any misconduct occurred and without regard to whether an executive officer was responsible for the erroneous financial statements. For the fiscal year ended September 30, 2024, there were no compensation awards subject to clawback under the Clawback Policy. However, for the quarter ended March 31, 2024, the Company revised the comparative prior period amounts included in the consolidated statements of income, consolidated statements of stockholders’ equity, consolidated statements of cash flows, and related footnote disclosures. The Company determined this did not result in a material misstatement to its previously issued consolidated financial statements, and that there was no impact on operating income, net income attributable to the Company, earnings per share, total assets, total liabilities, retained earnings, total stockholders’ equity, or the financial results attributable to the Company’s stockholders. The Company concluded that there was no erroneously awarded executive compensation requiring recovery under the Clawback Policy because the revised prior period amounts did not impact any metric used in determining executive compensation. Prohibition Against Certain Hedging Transactions Pursuant to the Company’s Code of Ethics and Business Conduct, which is applicable to all employees, temporary employees, directors and officers of the Company and its subsidiaries and affiliates, short sales of securities, including “short sales against the box” (i.e., a short sale by the holder of a long position in the same stock) of securities issued by the Company, and securities issued by any closed-end fund sponsored or advised by the Company, are prohibited. This prohibition also applies to effecting economically equivalent transactions, including, but not limited to, purchasing and selling call or put options and swap transactions or other derivatives that would result in a net short exposure to the Company or any closed-end fund sponsored or advised by the Company. Prohibition Against Pledging Pursuant to the Company’s Code of Ethics and Business Conduct, unless otherwise previously approved by the Compensation Committee, directors and executive officers are prohibited from directly or indirectly pledging, hypothecating or otherwise encumbering securities issued to them by the Company as collateral for indebtedness. This prohibition includes, but is not limited to, holding such securities in a margin account that could cause securities issued by the Company to be subject to a margin call or serve as collateral for a margin loan. Securities issued by the Company that were not received as compensation are not subject to the prohibition as long as the holder of such securities remains in compliance with applicable Stock Ownership Guidelines. If any person has subject securities issued by the Company pledged as collateral or held in a margin account when such person becomes a director or executive officer of the Company, the pledge must be released within one year from the date the person became a director or executive officer.
Executive Compensation
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total ($) | | Jennifer M. Johnson President and Chief Executive Officer | 2024 | 750,000 | — | 10,896,930 | 5,525,000 | 66,486 | 17,238,416 | | | 2023 | 750,000 | — | 11,082,400 | 3,650,000 | 211,827 | 15,694,227 | | | 2022 | 752,885 | — | 11,158,859 | 3,650,000 | 173,255 | 15,734,998 | | Matthew Nicholls(4) Executive Vice President, Chief Financial Officer and Chief Operating Officer | 2024 | 600,000 | 750,000 | 5,927,957 | 4,520,000 | 63,534 | 11,861,491 | | | 2023 | 600,001 | — | 5,939,544 | 3,000,000 | 103,437 | 9,642,982 | | | 2022 | 591,924 | — | 5,221,849 | 3,025,000 | 177,307 | 9,016,080 | | Gregory E. Johnson Executive Chairman and Chairman of the Board | 2024 | 600,000 | — | 1,338,023 | 1,335,000 | 306,133 | 3,579,156 | | | 2023 | 600,001 | — | 1,385,777 | 1,100,000 | 134,230 | 3,220,008 | | | 2022 | 602,308 | — | 1,676,263 | 1,150,000 | 219,882 | 3,648,453 | | Terrence Murphy(5) Executive Vice President | 2024 | 500,000 | — | 1,588,299 | 14,303,788 | 29,558 | 16,421,645 | | | 2023 | 509,615 | 11,798,674 | 933,771 | 2,801,250 | 41,744 | 16,085,054 | | Adam B. Spector(6) Executive Vice President | 2024 | 525,000 | — | 10,428,740 | 2,673,750 | 28,794 | 13,656,284 | | | 2023 | 525,001 | — | 3,035,824 | 3,547,500 | 68,067 | 7,176,392 | | | 2022 | 527,020 | — | 2,891,215 | 4,988,415 | 31,988 | 8,438,638 |
Executive Compensation
| Additional information is set forth in the “Grants of Plan-Based Awards for Fiscal Year 2024” table below. See “Compensation Discussion and Analysis—Fiscal Year 2024 Executive Compensation Decisions—Payment of Performance Awards Granted in 2021-2023” above and “Note 16—Stock-Based Compensation” in the Company’s Annual Report on Form 10-K for fiscal year 2024 filed with the SEC on November 12, 2024, for further details. |
Executive Compensation
| | Estimated Potential Payments Upon Termination | | | | | | Name | Death or Disability(1) ($) | Retirement(2) ($) | Involuntary Termination other than for Cause(3) ($) | Other Voluntary Termination(4) ($) | Change in Control(5) ($) | | Jennifer M. Johnson | 6,501,539 – 20,220,294 | 6,501,539 – 12,026,539 | 0 – 5,525,000 | 0 – 5,525,000 | 0 – 20,220,294 | | Matthew Nicholls | 2,357,812 – 14,302,180 | 0 – 6,877,812 | 0 – 4,520,000 | 0 – 4,520,000 | 0 – 14,302,180 | | Gregory E. Johnson | 711,376 – 3,326,888 | 711,376 – 2,046,376 | 0 – 1,335,000 | 0 – 1,335,000 | 0 – 3,326,888 | | Terrence J. Murphy | 1,439,718 – 10,978,657 | 1,439,718 – 10,978,657 | 0 – 9,538,939 | 0 – 9,538,939 | 0 – 10,978,657 | | Adam B. Spector | 7,387,957 – 12,781,455 | 0 – 9,811,707 | 0 – 2,423,750 | 0 – 2,423,750 | 0 – 12,781,455 |
Executive Compensation
| | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total for Non-PEO NEOs(1) | Average Compensation Actually Paid to Non-PEO NEOs(2) | Total Shareholder Return(3) | Peer Group Total Shareholder Return(4) | Net Income (in millions)(5) | Adjusted Operating Revenue (in millions)(6) | | 2024 | $17,238,416 | $11,588,445 | $11,379,644 | $9,309,241 | $118.44 | $229.35 | $464.8 | $6,564.8 | | 2023 | $15,694,227 | $18,802,919 | $9,031,109 | $9,933,412 | $137.31 | $150.62 | $882.8 | $6,104.1 | | 2022 | $15,734,998 | $10,146,059 | $6,350,606 | $4,469,455 | $114.74 | $121.70 | $1,291.9 | $6,473.7 | | 2021 | $9,862,161 | $13,230,952 | $5,619,550 | $7,520,899 | $151.77 | $168.68 | $1,831.2 | $6,317.2 |
Executive Compensation
| (2) The adjustments to the summary compensation table totals to arrive to compensation actually paid in 2024, 2023 and 2022 are outlined below. Dollar amounts reflect “compensation actually paid” for our PEO and average “compensation actually paid” for our non-PEO NEOs for each of the 2024, 2023, and 2022 fiscal years. No awards were modified in fiscal year 2024. These valuations assume a September 30, 2024 share price of $20.15, and average vest share price of $21.74, which is the average price for all shares vested in fiscal year 2024. |
PEO Summary Compensation Table Total Compensation to Compensation Actually Paid Reconciliation
PEO Summary Compensation Table Total Compensation to Compensation Actually Paid Reconciliation
PEO Summary Compensation Table Total Compensation to Compensation Actually Paid Reconciliation
| Year | Year End Fair Value of Equity Awards Granted in the Year | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Equity Award Adjustments | | 2024 | $6,265,691 | ($2,250,873) | $2,121,779 | ($702,884) | ($933,442) | $746,689 | $5,246,959 | | 2023 | $9,290,226 | $187,096 | $3,021,486 | $941,091 | ($100,824) | $852,016 | $14,191,092 | | 2022 | $5,081,744 | ($1,630,192) | $1,908,689 | ($193,850) | ($166,175) | $569,703 | $5,569,920 |
Average Non-PEO NEO Summary Compensation Table Total Compensation to Compensation Actually Paid Reconciliation
Average Non-PEO NEO Summary Compensation Table Total Compensation to Compensation Actually Paid Reconciliation
Average Non-PEO NEO Summary Compensation Table Total Compensation to Compensation Actually Paid Reconciliation
| Year | Year End Fair Value of Equity Awards Granted in the Year | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Equity Award Adjustments | | 2024 | $3,208,395 | ($741,806) | $453,664 | ($124,409) | ($311,148) | $265,657 | $2,750,352 | | 2023 | $2,515,460 | $46,616 | $598,876 | $357,770 | ($18,905) | $226,216 | $3,726,032 | | 2022 | $1,529,579 | ($644,757) | $373,088 | ($113,981) | ($132,898) | $204,414 | $1,215,446 |
Average Non-PEO NEO Summary Compensation Table Total Compensation to Compensation Actually Paid Reconciliation
See “Summary Compensation Table for Fiscal Year 2024” for Equity Award Valuation Assumptions.
Average Non-PEO NEO Summary Compensation Table Total Compensation to Compensation Actually Paid Reconciliation
| (3) Represents the cumulative total shareholder return (TSR) of the Company for the periods ended on September 30, 2024, 2023, and 2022, respectively, based on an initial fixed investment of $100 in Franklin Resources, Inc. common stock on September 30, 2021. For 2024, represents the three-year TSR, for 2023, represents the two-year TSR and for 2022 represents the one-year TSR. |
Average Non-PEO NEO Summary Compensation Table Total Compensation to Compensation Actually Paid Reconciliation
| (4) Our peer group total stockholder return is calculated with respect to the S&P U.S. BMI Asset Management & Custody Bank Index, which is the same peer group used for our total shareholder return graph based on an initial fixed investment of $100 in the respective peer’s common stock on September 30, 2021. For 2024, represents the three-year TSR, for 2023, represents the two-year TSR and for 2022 represents the one-year TSR. |
Average Non-PEO NEO Summary Compensation Table Total Compensation to Compensation Actually Paid Reconciliation
| (5) Reflects “Net Income” in the Company’s Consolidated Income Statements included in the Company’s Annual Reports on Form 10-K for each of the fiscal years ended September 30, 2024, 2023, and 2022, respectively. |
Average Non-PEO NEO Summary Compensation Table Total Compensation to Compensation Actually Paid Reconciliation
| (6) See discussion of supplemental non-GAAP financial measures in Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024. |
Average Non-PEO NEO Summary Compensation Table Total Compensation to Compensation Actually Paid Reconciliation
| 2025 Proxy Statement | 57 |
Relationship between Compensation Actually Paid and Performance Measures Disclosed in the Pay Versus Performance Table
Relationship between Compensation Actually Paid and Performance Measures Disclosed in the Pay Versus Performance Table The charts below illustrate the correlation between NEO compensation actually paid as defined by Item 402(v) of Regulation S-K and (i) total stockholder return, (ii) net income, and (iii) Adjusted Operating Revenue for fiscal years 2024, 2023, and 2022. The charts below also provide a comparison between the Company’s total shareholder return against the total shareholder return of our peer group. These charts reflect “compensation actually paid” for our PEO and average “compensation actually paid” for our non-PEO NEOs for each of the 2024, 2023, and 2022 fiscal years as defined by SEC rules. In determining the “compensation actually paid” to our NEOs, we are required by SEC rules to include various adjustments to amounts that have been reported in the Summary Compensation Table for the applicable fiscal year, as the SEC’s valuation methods for this section differ from those required in the Summary Compensation Table. These amounts do not reflect the year-end executive pay decisions made by the Compensation Committee. For information regarding the decisions made by our Compensation Committee in regard to our NEO’s compensation for each fiscal year, please see the Compensation Discussion and Analysis sections of the proxy statements reporting pay for the fiscal years covered in the table above, including the discussion beginning on page 28 of this Proxy Statement.
Relationship between Compensation Actually Paid and Performance Measures Disclosed in the Pay Versus Performance Table
| 58 | Franklin Resources |