UNITED STATES
SECURITIES & EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
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GAMCO INVESTORS, INC. |
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GAMCO INVESTORS, INC.
191 Mason Street, Greenwich, CT 06830
One Corporate Center, Rye, New York 10580
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NOTICE OF 20202021 ANNUAL MEETING OF SHAREHOLDERS
To Be Held on June 5, 20203, 2021
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To Our Shareholders:
We cordially invite you to attend the 20202021 Annual Meeting of Shareholders (the “Meeting”) of GAMCO Investors, Inc. (“we,” “us,” “our,” “GAMCO,” or the “Company”) at the Indian Harbor Yacht Club, 710 Steamboat Road, Greenwich, CT 06830in an audio, virtual-only format on Friday,Thursday, June 5, 20203, 2021 at 9:30 a.m. localEastern time. As part of our precautions regarding the coronavirus or COVID-19, we are planning for the possibility that theThe Meeting maywill not be held at the Company’s offices or virtually solely by means of remote communication or via a live webcast. If we take this step, we will announce the decision to do so in advance, and we will provide details on how to participate in a press release and on our website at www.gabelli.com. Any questions should be directed to our Secretary at (203) 629-2726.physical location. At the Meeting, we will ask shareholders:
1. | to elect seven directors to our Board of Directors to serve until the 20212022 Annual Meeting of Shareholders or until their respective successors have been duly elected and qualified; |
2. | to ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2020;2021; |
3. | to amend the Company’s Amended and Restated Certificate of Incorporation to decrease the total number of authorized shares of Class B common stock from 100,000,000 shares to 25,000,000 shares; |
4. | to re-approve the Amended and Restated Employment Agreement with Mario J. Gabelli, the Company’s Chairman and Chief Executive Officer; |
5. | to vote, on an advisory basis, on the Company’s named executive officer compensation; and |
6. | to vote on any other business that properly comes before the Meeting. |
At the Meeting, we will also review our 20192020 financial results and outlook for the future and will answer your questions.
Only shareholders of record at the close of business on April 21, 202015, 2021 are entitled to vote at the meeting or any adjournments or postponements thereof. Shareholders of record can access the virtual Meeting, vote their shares electronically, and submit questions during the virtual Meeting at www.meetingcenter.io/281590828. The password for the Meeting is GBL2021. It is important that your shares be represented at the Meeting, regardless of whether you plan to attend the Meeting in person.virtually. Please read the attached proxy statement carefully and vote your shares promptly. Any questions should be directed to our Secretary at (203) 629-2726.
We encourage all shareholders to attend the meeting.virtual Meeting.
By Order of the Board of Directors
KEVIN HANDWERKERPETER GOLDSTEIN
Secretary
April 29, 2020
2021
Important Notice Regarding the Availability of Proxy Materials for the Meeting to Be Held on June 5, 20203, 2021
This notice, the proxy statement, and the 20192020 annual report on Form 10-K are available free of charge on the following website: https://www.gabelli.com/corporate/investor_relations
TABLE OF CONTENTS
PROPOSAL 1 ELECTION OF DIRECTORS | | 76 |
PROPOSAL 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS | | 9 |
PROPOSAL 3 AMENDMENT OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO DECREASE THE AUTHORIZED SHARES OF CLASS B COMMON STOCK
| | 10
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PROPOSAL 4 RE-APPROVAL OF THE AMENDED AND RESTATED EMPLOYMENT AGREEMENT WITH MARIO J. GABELLI
| | 10
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PROPOSAL 5 ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
| | 118
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CORPORATE GOVERNANCE | | 129 |
INFORMATION REGARDING NAMED EXECUTIVE OFFICERS | | 1815 |
COMPENSATION OF EXECUTIVE OFFICERS | | 1916 |
Compensation Discussion and Analysis | | 1916 |
REPORT OF THE COMPENSATION COMMITTEE | | 2118 |
Summary Compensation Table for 20192020 | | 2219 |
CEO PAY RATIO | | 2825 |
CERTAIN OWNERSHIP OF OUR STOCK | | 2926 |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE | | 3027 |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | | 3027 |
REPORT OF THE AUDIT COMMITTEE | | 3430 |
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | | 3532 |
SHAREHOLDER PROPOSALS FOR THE 20212022 ANNUAL MEETING | | 3532 |
OTHER MATTERS | | 3532 |
GAMCO INVESTORS, INC.
191 Mason Street, Greenwich, CT 06830
One Corporate Center, Rye, New York 10580
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PROXY STATEMENT
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20202021 ANNUAL MEETING OF SHAREHOLDERS
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June 5, 20203, 2021
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INTRODUCTION; PROXY VOTING INFORMATION
Unless indicated otherwise, or the context otherwise requires, references in this proxy statement to “GAMCO Investors, Inc.,” “GAMCO,” “the Company,” “GBL,” “we,” “us,” and “our” or similar terms are to GAMCO Investors, Inc., a Delaware corporation, its predecessors and its subsidiaries.
We are sending you this proxy statement and the accompanying proxy card (collectively, the “Proxy Statement”) in connection with the solicitation of proxies by the Board of Directors of GAMCO (the “Board”) for use at our 20202021 Annual Meeting of Shareholders (the “Meeting”) toin an audio, virtual-only format on Thursday, June 3, 2021 at 9:30 a.m. Eastern time. The Meeting will not be held at a physical location. Only shareholders of record at the Indian Harbor Yacht Club, 710 Steamboat Road, Greenwich, CT 06830close of business on Friday, June 5, 2020April 15, 2021 are entitled to vote at 9:30 a.m. local time, and atthe meeting or any adjournments or postponements thereof. As partShareholders of our precautions regardingrecord can access the coronavirus or COVID-19, we are planningvirtual Meeting, vote their shares electronically, and submit questions during the virtual Meeting at www.meetingcenter.io/281590828. The password for the possibility that the Meeting may be held at the Company’s offices or virtually solely by means of remote communication or via a live webcast. If we take this step, we will announce the decision to do so in advance, and we will provide details on how to participate in a press release and on our website at www.gabelli.com.is GBL2021. Any questions should be directed to our Secretary at (203) 629-2726.
The purpose of the Meeting is to (i) elect seven directors to the Board to serve until the 20212022 Annual Meeting of Shareholders (the “2021“2022 Annual Meeting”) or until their respective successors have been duly elected and qualified; (ii) ratify the appointment of Deloitte & Touche LLP (“D&T”) as the Company’s independent registered public accounting firm for the year ending December 31, 2020; (iii) amend the Company’s Amended and Restated Certificate of Incorporation to decrease the total number of authorized shares of Class B common stock; (iv) re-approve the Amended and Restated Employment Agreement with Mario J. Gabelli; (v) hold an advisory vote on the Company’s named executive officer compensation (the “NEO Compensation Proposal”),2021; and (vi) act upon any other matters properly brought to the Meeting. We are sending you this Proxy Statement and our annual report on Form 10-K containing our financial statements and other financial information for the year ended December 31, 20192020 (the “2019“2020 Annual Report”) on or about April 29, 2020.2021. The 20192020 Annual Report, however, is not part of the proxy solicitation materials.
Only shareholders of record at the close of business on April 21, 2020,15, 2021, the record date for the Meeting (the “Record Date”), are entitled to notice of and to vote at the Meeting. On the Record Date, we had outstanding 8,671,0718,327,529 shares of Class A common stock, par value $0.001 per share (“Class A Stock”), and 19,024,117 shares of Class B common stock, par value $0.001 per share (“Class B Stock” and collectively with the Class A Stock, the “Common Stock”).
The presence, in personvirtually or by proxy, of a majority of the aggregate voting power of the Common Stock outstanding on April 21, 202015, 2021 shall constitute a quorum for the transaction of business at the Meeting. The Class A Stock and Class B Stock vote together as a single class on all matters. Each share of Class A Stock is entitled to one vote per share and each share of Class B Stock is entitled to ten votes per share. Directors who receive a plurality of the votes cast at the Meeting by the holders of the Common Stock outstanding on April 21, 202015, 2021 will be elected to serve until the 20212022 Annual Meeting or until their successors are duly elected and qualified. The affirmative vote of a majority of the Company’s outstanding Common Stock is required to approve the amendment to the Company’s Amended and Restated Certificate of Incorporation. Any otherAll matters will be determined by a majority of the votes cast at the Meeting.
Under the New York Stock Exchange (“NYSE”) rules, the proposal to approve the appointment of independent auditors is considered a “discretionary” item. This means that brokerage firms may vote in their discretion on this matter on behalf of clients who have not furnished voting instructions at least 10 days before the date of the Meeting. In contrast, the election of directors the vote to amend the Company’s Amended and Restated Certificate of Incorporation to decrease the total number of authorized shares of Class B Stock, the vote to re-approve Mr. Gabelli’s Amended and Restated Employment Agreement, and the vote to approve the NEO Compensation Proposal areis considered a “non-discretionary” items.item. This means brokerage firms that have not received voting instructions from their clients on these proposalsthis proposal may not vote on them. These so-called “broker non-votes” will be included in the calculation of the number of votes considered to be present at the Meeting for purposes of determining a quorum, but will not be considered in determining the number of votes necessary for approval. Accordingly, broker non-votes will have no effect on the outcome of the vote for the election of directors, the vote to re-approve Mr. Gabelli’s Amended and Restated Employment Agreement, or the vote to approve the NEO Compensation Proposal.directors. Abstentions will be included in the calculation of the number of votes considered to be present at the Meeting for purposes of determining a quorum, but will not be considered in determining the number of votes necessary for approval and, therefore, will have no effect on the outcome of the vote for the election of directors, the amendment to our Amended and Restated Articles of Incorporation to reduce the number of authorized shares of Class B Stock, the re-approval of Mr. Gabelli’s Amended and Restated Employment Agreement, and the NEO Compensation Proposal.directors. Abstentions will have the same effect as a vote against the ratification of our independent registered public accounting firm and the vote to amend the Company’s Amended and Restated Certificate of Incorporation to decrease the total number of authorized shares of Class B Stock. Broker non-votes will also have the effect of voting against the vote to amend the Company’s Amended and Restated Certificate of Incorporation to decrease the total number of authorized shares of Class B Stock.
firm.
We will pay for the costs of soliciting proxies and preparing the Meeting materials. We ask securities brokers, custodians, nominees, and fiduciaries to forward meeting materials to our beneficial shareholders as of the Record Date and we will reimburse them for the reasonable out-of-pocket expenses they incur. Our directors, officers, and staff members (“teammates”) may solicit proxies personally or by telephone, facsimile, e-mail, or other means, but will not receive additional compensation for doing so.
If you are the beneficial owner, but not the record holder, of shares of our Class A Stock, your broker, custodian, or other nominee may only deliver one copy of the Proxy Statement and 20192020 Annual Report to multiple shareholders who share an address, unless we have received contrary instructions from one or more of the shareholders. We will deliver promptly, upon written or oral request, a separate copy of the Proxy Statement and 20192020 Annual Report to a shareholder at a shared address to which a single copy of the documents was delivered. A shareholder who wishes to receive a separate copy of the Proxy Statement and 20192020 Annual Report, now or in the future or who wishes to receive directions to the Meeting, should submit this request by writing to our Secretary at GAMCO Investors, Inc., 191 Mason Street, Greenwich, CT 06830 or by calling our Secretary at (203) 629-2726. Beneficial owners sharing an address who are receiving multiple copies of proxy materials and annual reports and who wish to receive a single copy of such materials in the future will need to contact their broker, custodian, or other nominee to request that only a single copy of each document be mailed to all shareholders at the shared address in the future.
All shareholders of record and properly appointed proxy holders may attend the virtual Meeting. Shareholders who plan to attend must present valid photo identification. If you hold your shares in a brokerage account, please also bring proof of your share ownership, such as a broker’s statement showing that you owned shares of the Company on the Record Date or a legal proxy from your broker or nominee. A legal proxy is required if you hold your shares in a brokerage account and you plan to vote in person at the Meeting. Shareholders of record will be verified against an official list available at the Meeting. The Company reserves the right to deny admittance to anyone who cannot adequately show proof of share ownership as of the Record Date.
The Board has selected each of Kevin Handwerker,Peter Goldstein, Maximilian Caldwell, and Kieran Caterina to act as proxies. When you sign and return your proxy card, you appoint each of Messrs. Handwerker,Goldstein, Caldwell, and Caterina as your representatives at the Meeting. Unless otherwise indicated on the proxy card, all properly executed proxies received in time to be tabulated for the Meeting will be voted “FOR” the election of the nominees named below, “FOR” the ratification of the appointment of the Company’s independent registered public accounting firm, “FOR” the amendment of the Company’s Amended and Restated Certificate of Incorporation to decrease the total number of authorized shares of Class B Stock, “FOR” the vote to re-approve the Amended and Restated Employment Agreement with Mario J. Gabelli, “FOR” the advisory vote on the NEO Compensation Proposal, and as the proxyholders may determine in their discretion with regard to any other matter properly brought before the Meeting. You may revoke your proxy at any time before the Meeting by delivering a letter of revocation to our Secretary at GAMCO Investors, Inc., 191 Mason Street, Greenwich, CT 06830 or by properly submitting another proxy card bearing a later date or by voting in person at the Meeting.date. The last proxy you properly submit is the one that will be counted.
Important Notice Regarding the Availability of Proxy Materials for the Meeting to Be Held on June 5, 20203, 2021
This notice, the Proxy Statement, and the 20192020 Annual Report are available free of charge on the following website: https://www.gabelli.com/corporate/investor_relations
GAMCO makes available free of charge through its website, at www.gabelli.com, its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and certain other filings as soon as reasonably practicable after such material is electronically filed with the Securities and Exchange Commission (“SEC”). Copies of certain of these documents may also be accessed electronically by means of the SEC’s home page at www.sec.gov. GAMCO also makes available on its website at https://www.gabelli.com/corporate/investor_relations the charters for the audit committee of our Board (the “Audit Committee”), the compensation committee of our Board (the “Compensation Committee”), the governance committee of our Board (the “Governance Committee”), and the nominating committee of our Board (the “Nominating Committee”, each a “Committee” and together the “Committees”), as well as its code of business conduct (the “Code of Conduct”), code of conduct for Chief Executive and Senior Financial Officers, corporate governance guidelines, and its amended and restated bylaws (“Bylaws”). Printed copies of these documents are available upon written request to our Secretary at GAMCO Investors, Inc., 191 Mason Street, Greenwich, CT 06830.
SMALLER REPORTING COMPANY
We are a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act, and have elected to take advantage of certain of the scaled disclosure available for smaller reporting companies.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company’s Bylaws provide that the Board shall consist of not less than three nor more than twelve directors, the exact number thereof to be fixed from time to time by the Board pursuant to a resolution adopted by a majority of the directors then in office. The Board is currently fixed at seven. Currently serving as directors are Mario J. Gabelli, Edwin L. Artzt, Raymond C. Avansino, Jr., Leslie B. Daniels, Eugene R. McGrath, Robert S. Prather, Jr. and Elisa M. Wilson.
Our Nominating Committee recommended, and the Board approved, seven nominees for election as directors of the Company to serve until the 20212022 Annual Meeting or until their successors are duly elected and qualified. The nominees are as follows (ages are as of March 31, 2020)2021):
Name | Age | Position |
Mario J. Gabelli | 7778 | Chairman, Chief Executive Officer (“CEO”), Co-Chief Investment Officer (“CIO”) – Value |
Edwin L. Artzt | 8889 | Director |
Raymond C. Avansino, Jr. | 7677 | Director |
Leslie B. Daniels | 7273 | Director |
Eugene R. McGrath | 7879 | Director |
Robert S. Prather, Jr. | 7576 | Director |
Elisa M. Wilson | 4748 | Director |
All of the nominees are currently directors. Directors who receive a plurality of the votes cast at the Meeting shall be elected. Each of the nominees has consented to being named in the Proxy Statement and to serve if elected.
All properly executed proxies received in time to be tabulated for the Meeting will be voted “FOR” the election of the nominees named above, unless otherwise indicated on the proxy. If any nominee becomes unable or unwilling to serve between now and the Meeting, your proxies may be voted FOR the election of a replacement designated by the Board.
The following are brief biographical sketches of the seven nominees, including their principal occupations at present and for the past five years, as of March 31, 2020.2021. Unless otherwise noted, the nominated directors have been officers of the organizations named below or of affiliated organizations as their principal occupations for more than five years.
The Board believes that each of the below persons possesses the necessary attributes, skills, qualifications, and experience that are appropriate for them to serve as directors of the Company. Our directors have held senior positions as leaders of various entities, demonstrating their ability to perform at the highest levels. The expertise and experience of our directors enable them to provide broad knowledge and sound judgment concerning the issues facing the Company.
The Board has proposed all of the following nominees:
Mario J. Gabelli has served as Chairman, CEO, CIO – Value (Co-CIO – Value since the appointment of Christopher Marangi and Kevin Dreyer as Co-CIOs – Value in August 2015), and a director of the Company since November 1976. In connection with those responsibilities, he serves as director or trustee of registered investment companies managed by the Company and its affiliates (the “Funds”). Mr. Gabelli also serves as the CEO and Co-CIO of the value portfolios of GAMCO Asset Management Inc. (“GAMCO Asset”), a wholly-owned subsidiary of the Company. Mr. Gabelli has served as Executive Chairman of Associated Capital Group, Inc. (“AC”) since May 2015 and previously served as the CEO of AC from May 2015 until November 2016. AC is a public company that was spun-off from GAMCO in November 2015, which, at the time of the spin-off, contained the alternative investment management business, institutional research business, and certain cash and other assets previously owned and operated by GAMCO. Mr. Gabelli served as a portfolio manager for Teton Advisors, Inc. (“Teton”) from 1998 to February 2017. Since March 1, 2017, GAMCO serves as a sub-advisor to Teton, and Mr. Gabelli serves as a portfolio manager under that sub-advisory agreement. Teton is an asset management company, which was spun-off from the Company in March 2009. Mr. Gabelli has served as Chairman of LICT Corporation (“LICT”), a public company engaged in broadband transport and other communications services, since 2004 and has been the CEO of LICT since December 2010. He has also served as a director of CIBL, Inc. (“CIBL”), a public holding company that was spun-off from LICT in 2007, since 2007 and as Executive Chairman since February 2020. He served as the Chairman of Morgan Group Holding Co., a public holding company, from 2001 to October 2019 and as the CEO from 2001 to November 2012. He served as a director of ICTC Group, Inc., a rural telephone company serving southeastern North Dakota from July 2013 to October 2018. In addition, Mr. Gabelli is the CEO, a director and the controlling shareholder of GGCP, Inc. (“GGCP”), a private company whichthat owns a majority of our Class B Stock through an intermediate subsidiary, GGCP Holdings, LLC (“Holdings”), and the President of MJG Associates, Inc. (“MJG Associates”), which acts as an investment manager of various investment funds and other accounts. Mr. Gabelli serves as an overseer of the Columbia University Graduate School of Business and as a trustee associate of Boston College and trustee of Roger Williams University. He also serves as a director of the Foreign Policy Association, The Winston Churchill Foundation, The E. L. Wiegand Foundation, The American-Italian Cancer Foundation, and The Foundation for Italian Art & Culture. He is also Chairman of the Gabelli Foundation, Inc., a Nevada private charitable trust. Mr. Gabelli also servesserved as Co-President of Field Point Park Association, Inc.
The Board believes that Mr. Gabelli’s qualifications to serve on the Board include his forty-threeforty-four years of experience with the Company; his control of the Company through his ownership as the majority shareholder; his position as the senior executive officer of the Company; and his direct responsibility for serving as the Co-CIO of the value portfolios accounting for approximately 75%73% of the Company’s assets under management (“AUM”) as of December 31, 2019.2020.
Edwin L. Artzt has been a director of the Company since May 2004. Mr. Artzt previously served as a senior advisor to GGCP from September 2003 to December 2008 and was a senior advisor to Kohlberg, Kravis, Roberts & Co., a private equity firm, from April 2001 to April 2008. Mr. Artzt held various senior executive management positions during his 42 year career (from 1953 to 1995) at The Procter & Gamble Company, a global manufacturer of consumer products, and served as its Chairman and CEO from 1990 until 1995. He also served as the senior director of Barilla S.p.A. Italy from 1995 until 1998. Mr. Artzt was a director of American Express from 1991 to 2002, Delta Airlines from 1990 to 2002, and GTE from 1992 to 2002.
The Board believes that Mr. Artzt’s qualifications to serve on the Board include his former position as a Chairman and CEO of The Procter & Gamble Company and his background as a director or an adviser to other public and private companies.
Raymond C. Avansino, Jr. has been a director of the Company since January 2008. Mr. Avansino has been the Chairman and CEO of The E. L. Wiegand Foundation of Reno, Nevada, a Nevada private charitable trust, since 1982. Mr. Avansino is the Chairman and President of Miami Oil Producers, Inc., a private corporation with investments in oil and gas properties, real properties, and securities. He served as President and Chief Operating Officer of Hilton Hotels Corporation from 1993 to 1996 and was a member of the Nevada Gaming Commission from 1981 to 1984. Mr. Avansino was also a director of the Company from 2000 to 2006.
The Board believes that Mr. Avansino’s qualifications to serve on the Board include his former position as the President and Chief Operating Officer of Hilton Hotels Corporation, his current position as the Chairman and CEO of a private charitable trust, and his background as a lawyer with an advanced tax degree.
Leslie B. Daniels has been a director of the Company since November 2016 and has served on the board of directors of Moeller Aerospace. Mr. Daniels was a former Chairman and a member of Florida’s State Board of Administration, Investment Advisory Council (IAC) and Commissioner and Chairman of the Health Care District of Palm Beach County. Mr. Daniels was a founding partner of CAI Managers & Co., L.P., a private equity firm located in New York City, from 1989 to 2014. He was previously President of Burdge, Daniels & Co., Inc., a company engaged as a principal in venture capital and buyout investments, as well as the trading of private placement securities. Prior to forming Burdge, Daniels & Co., Inc., Mr. Daniels was a Senior Vice President of Blyth, Eastman, Dillon & Co., having responsibility for the corporate fixed income sales and trading departments. Mr. Daniels is also a former director of AeroSat Corporation; Aster-Cephac SA; Bioanalytical Systems, Inc.; Douglas Machine & Tool Co., Inc.; IVAX Corporation; MIM Corporation; MIST Inc.; Mylan Laboratories Inc.; NBS Technologies Inc.; and Safeguard Health Enterprises Inc. Mr. Daniels also served as Chairman of TurboCombustor Technology Inc. and Zenith Laboratories, Inc.
The Board believes that Mr. Daniels’ qualifications to serve on the Board include his former positions as the founding partner of CAI Managers & Co., L.P. and President of Burdge, Daniels & Co., Inc., his former positions as a member of Florida’s State Board of Administration, Investment Advisory Council (IAC) and Commissioner and Chairman of the Health Care District of Palm Beach County, and his background as a director to other public and private companies.
Eugene R. McGrath has been a director of the Company since January 2007. Mr. McGrath previously served as Chairman, President and CEO of Consolidated Edison, Inc. (“Con Ed”), a public utility company, from October 1997 until September 2005 and as Chairman until February 2006. He served as Chairman and CEO of a subsidiary of Con Ed, Consolidated Edison Company of New York, Inc., from September 1990 until February 2006. Mr. McGrath was a director of Sensus from 2010 to 2017, Con Ed from 1989 to 2014, AEGIS Insurance Services from 2003 to October 2016, and Schering-Plough from 2000 to 2009.
The Board believes that Mr. McGrath’s qualifications to serve on the Board include his former position as the Chairman, President, and CEO of Con Ed and his background as a director of other public companies.
Robert S. Prather, Jr. has been a director of the Company since May 2004 and serves as the Board’s lead independent director. Mr. Prather has been the President and CEO of Heartland Media LLC, a private owner of television stations and media properties, since September 2013. He is the CEO of Allen Media Broadcasting, a private owner of television stations and media properties, since February 2020. He was the President and Chief Operating Officer of Gray Television, Inc., a television broadcast company, from September 2002 until June 2013. Mr. Prather was an Executive Vice President of Gray Television, Inc. from 1996 until September 2002. He was also a director of Gray Television, Inc. Mr. Prather is Chairman at Southern Community Newspapers, Inc., a publishing and communication company, since December 2005. He served as CEO and a director of Bull Run Corporation, a sports and affinity marketing and management company, from 1992 until its merger into Triple Crown Media, Inc. in December 2005. Since 2009, he has served as a director of a firm formerly known as Gaylord Entertainment Company, originally a hospitality and entertainment company, which converted into a real estate investment trust under the name Ryman Hospitality Properties, Inc. in October 2012. Mr. Prather also served as a director of Diebold Nixdorf, Inc. from April 2013 to April 2018.
The Board believes that Mr. Prather’s qualifications to serve on the Board include his position as President and CEO of Heartland Media LLC and his background as a director of other public and private companies.
Elisa M. Wilson has been a director of the Company since February 2009, a director of GGCP since January 2019, and a director of AC since February 2019. Ms. Wilson is President and a trustee of the Gabelli Foundation, Inc., a Nevada private charitable trust. Ms. Wilson also serves as a director of the Breast Cancer Alliance and is a member of the Board of Regents at Boston College. She earned a B.A. from Boston College and an M.A., Ed.M. from Columbia University. Ms. Wilson is the daughter of Mario J. Gabelli.
The Board believes that Ms. Wilson’s qualifications to serve on the Board include her position and experience as the President and trustee of the Gabelli Foundation, Inc. and her previous positions and experience with the Company.
Recommendation
The Board recommends that shareholders vote “FOR” all of the nominees to our Board.
Vote Required
Nominees who receive a plurality of the votes cast will be elected to serve as directors of the Company until the
20212022 Annual Meeting or until their successors are duly elected and qualified. “Withhold” votes and broker non-votes, if any, will have no effect on the outcome of this proposal.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
We are asking our shareholders to ratify the appointment of D&T as the Company’s independent registered public accountants for the year ending December 31, 20202021 (“Proposal 2”). In accordance with our governance documents, the Board believes that such submission is consistent with best practices in corporate governance and is an opportunity for shareholders to provide direct feedback to the Board on an important issue of corporate governance. In the event that our shareholders do not approve the appointment of D&T, the Audit Committee will reconsider the appointment of D&T. Ultimately, however, the Audit Committee retains full discretion and will make all determinations with respect to the appointment of the independent registered public accountants, whether or not our shareholders ratify the appointment.
For additional information regarding the appointment of D&T as the Company’s independent registered public accountants, please see “Independent Registered Public Accounting Firm” appearing elsewhere in this Proxy Statement.
Recommendation
The Board recommends that shareholders vote “FOR” ratification of D&T as the Company’s independent registered public accountants for the year ending December 31, 2020.2021.
Vote Required
Approval of Proposal 2 requires the affirmative vote of a majority of the votes cast on Proposal 2. Shareholders who return a signed proxy card but do not indicate how they wish to vote on Proposal 2 will be deemed to have voted FOR Proposal 2. Broker non-votes, if any, will have no effect on the outcome of Proposal 2. Abstentions will have the same effect as a vote against Proposal 2.
PROPOSAL 3
PROPOSAL TO DECREASE THE COMPANY’S AUTHORIZED SHARES OF CLASS B STOCK
Shareholders are asked to approve the amendment of the Company’s Amended and Restated Certificate of Incorporation to decrease the total number of authorized shares of Class B Stock from 100,000,000 shares to 25,000,000 shares. The Board believes it is in the best interest of the Company to decrease the number of shares of Class B Stock as the Company has no current intention to issue any additional Class B Stock. The text of the proposed Certificate of Amendment is attached hereto as Exhibit B (the “Certificate of Amendment”). If the proposal to decrease the number of authorized shares of Class B Stock is approved, the Company’s number of shares of authorized Class B Stock will be decreased to 25,000,000 shares upon the filing of the Certificate of Amendment with the Secretary of State of Delaware.
The Board recommends that shareholders vote “FOR” the amendment of the Company’s Amended and Restated Certificate of Incorporation to decrease the total number of authorized shares of Class B Stock from 100,000,000 shares to 25,000,000 shares.
Approval requires the affirmative vote of a majority of the Common Stock outstanding. Abstentions and broker non-votes, if any, will have the effect of voting “AGAINST” the proposal.
PROPOSAL 4
RE-APPROVAL OF THE AMENDED AND RESTATED EMPLOYMENT AGREEMENT
WITH MARIO J. GABELLI
Shareholders are asked to re-approve the Amended and Restated Employment Agreement with Mr. Gabelli (“Amended Employment Agreement”) that was entered into in February 2008. On November 30, 2007 and May 6, 2011, our shareholders approved the Amended Employment Agreement by 99.9% and 99.5%, respectively, of the votes cast or 210,128,528 votes and 200,887,209 votes, respectively, and most recently, the Amended Employment Agreement was re-approved by shareholders on May 5, 2015 by 99.3% of the votes cast or 190,492,172 votes. Of the votes cast on November 30, 2007, May 6, 2011, and May 5, 2015 in respect of shares not controlled by Mr. Gabelli, approximately 96%, 79%, and 74%, respectively, voted “FOR” the approval of the Amended Employment Agreement. A copy of the Amended Employment Agreement is attached to this proxy statement as Exhibit C and incorporated herein. The summary below is qualified by reference to the Amended Employment Agreement.
Mr. Gabelli’s Initial Employment Agreement
Prior to our initial public offering (“IPO”) in February 1999, the Company entered into an employment agreement (“Initial Employment Agreement”) with Mr. Gabelli relating to his service as Chairman of the Board, CEO, and CIO of the Company, as well as an executive for certain subsidiaries and portfolio manager for certain Funds and separate accounts. Mr. Gabelli agreed that while he was employed by us, he would not provide investment management services outside of the Company, except for certain permitted accounts. The Initial Employment Agreement could not be amended without the approval of the Compensation Committee.
Pursuant to the Initial Employment Agreement, Mr. Gabelli received an incentive-based management fee in the amount of 10% of the Company’s aggregate pre-tax profits, if any, as computed for financial reporting purposes in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) (before consideration of this fee) so long as he was an executive of the Company and devoted the substantial majority of his working time to our business. This incentive-based management fee was subject to the Compensation Committee’s review at least annually for compliance with its terms.
Under the Initial Employment Agreement and consistent with the Company’s practice since its inception in 1977, Mr. Gabelli also received a percentage of revenues or net operating contribution, which are substantially derived from AUM, as compensation relating to or generated by the following activities: (i) managing or overseeing the management of various investment companies and partnerships, (ii) attracting Fund shareholders, (iii) attracting and managing separate accounts and alternative investment funds, and (iv) or otherwise generating revenues for the Company. Such payments were made in a manner and at rates as agreed to from time to time by the Company, which rates have been and generally will be the same as those received by other professionals in the company performing similar services. With respect to our institutional and private wealth management, fund advisory, and brokerage business, we pay out up to 40% of the revenues or net operating contribution to the portfolio managers, brokers, and marketing teammates who introduce, service, or generate such business, with payments involving the separate accounts being typically based on revenues and payments involving the Funds being typically based on net operating contribution.
Mr. Gabelli’s Existing Employment Agreement
In 2007, the Company’s Compensation Committee and Mr. Gabelli agreed to terms of the Amended Employment Agreement. Our shareholders approved the Amended Employment Agreement in November 2007 and Mr. Gabelli and the Company signed the Amended Employment Agreement in February 2008. The Amended Employment Agreement modified Mr. Gabelli’s Initial Employment Agreement primarily by (i) eliminating outdated provisions, clarifying certain language and reflecting our name change; (ii) revising the term from an indefinite term to a three-year initial term that automatically extends the initial term for an additional year on each anniversary of the Amended Employment Agreement’s effective date unless either party gives written notice at least 90 days in advance of the expiration date; (iii) allowing for services to be performed for former subsidiaries that are spun-off to shareholders or otherwise cease to be subsidiaries in similar transactions; (iv) allowing new investors in the permitted outside accounts if all of the performance fees, less expenses, generated by assets attributable to such investors are paid to us; (v) allowing for the management fee to be paid directly to Mr. Gabelli or to an entity designated by him; and (vi) adding certain language to ensure that the Amended Employment Agreement complies with Section 409A of the Internal Revenue Code. The other substantive provisions of the Initial Employment Agreement with Mr. Gabelli remained the same in the Amended Employment Agreement.
While the terms of the Amended Employment Agreement do not require shareholder re-approval, our Board believes that our shareholders should be offered the ability to vote on Mr. Gabelli’s Amended Employment Agreement.
The Board recommends that shareholders vote “FOR” the re-approval of the Amended Employment Agreement with Mr. Gabelli. Mr. Gabelli, who controls approximately 92% of the combined voting power of the Company, intends to vote “FOR” the re-approval of the Amended Employment Agreement.
Approval requires the affirmative vote of a majority of the votes present and or represented by proxy and voting at the Annual Meeting. Abstentions and broker non-votes, if any, will have no effect on the outcome of this proposal.
PROPOSAL 5
ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires that we provide our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers for the fiscal year 2019 as disclosed in this Proxy Statement in accordance with the compensation disclosure rules of the SEC under Section 14A of the Exchange Act. At the 2017 annual meeting of shareholders, our shareholders approved holding this advisory vote every three years.
The Company's goal for its executive compensation program is to attract, motivate, and retain talented teammates. The Company seeks to accomplish this goal in a way that rewards performance and is aligned with its shareholders’ long-term interests. The Company believes that its executive compensation program satisfies this goal and is strongly aligned with the long-term interests of its shareholders. Accordingly, the Company is asking shareholders to approve the following advisory resolution:
“RESOLVED, that the compensation of the Company’s named executive officers as disclosed pursuant to SEC compensation disclosure rules (which disclosure includes the Compensation Discussion and Analysis, the compensation tables, and the narrative disclosures that accompany the compensation tables) is hereby approved.”
As an advisory vote, this proposal is not binding upon the Company. However, the Compensation Committee, which is responsible for designing and administering the Company’s executive compensation program, values the opinion expressed by shareholders on this proposal and will consider the outcome of the vote when making future compensation decisions for the named executive officers.
Recommendation
The Board recommends that shareholders vote “FOR” the advisory resolution approving the compensation of the Company’s named executive officers.
Vote Required
Approval of Proposal 5 requires the affirmative vote of a majority of the votes cast on Proposal 5. Shareholders who return a signed proxy card but do not indicate how they wish to vote on Proposal 5 will be deemed to have voted FOR Proposal 5. Broker non-votes, if any, will have no effect on the outcome of Proposal 5. Abstentions will have the same effect as a vote against Proposal 5.
CORPORATE GOVERNANCE
GAMCO continually strives to maintain the highest standards of ethical conduct, including by reporting results with accuracy and transparency and maintaining full compliance with the laws, rules, and regulations that govern the Company’s businesses. The Company is active in ensuring that its governance practices continue to serve the interests of its shareholders and remain at the leading edge of best practices.
Determination of Director Independence
The Board has established guidelines which it uses in determining director independence and that are based on the director independence standards of the NYSE. A copy of these guidelines can be found as Exhibit A to this Proxy Statement. These guidelines are also attached to the Board’s corporate governance guidelines, which are available at the following website: https://www.gabelli.com/corporate/investor_relations. A copy of these guidelines may also be obtained upon request from our Secretary.
In making its determination of independence with respect to Mr. Prather, the Board considered that the investment advisory subsidiaries of the Company collectively own on behalf of their investment advisory clients approximately 2.90%3.08% of the class A common stock and 0.79%0.75% of the common stock of Gray Television, Inc. (“Gray”) as of March 1, 2020.22, 2021. This ownership represents approximately 1.70%1.80% of the total voting power of Gray. Mr. Prather served as President and Chief Operating Officer and a director of Gray until June 2013. Furthermore, an investment advisory affiliate of the Company nominated Mr. Prather as a director of Gaylord Entertainment Company (“Gaylord”) in 2009 and Mr. Prather was elected as a director of Gaylord on May 7, 2009. Gaylord subsequently converted into a real estate investment trust named Ryman Hospitality Properties, Inc. (“Ryman”) in October 2012 and Mr. Prather remains on Ryman’s board of directors. The Company collectively owns on behalf of their investment advisory clients approximately 5.93%3.78% of Ryman’s common stock representing approximately 5.93%3.78% of the total voting power of Ryman as of March 1, 2020.22, 2021. In addition, an investment advisory affiliate of the Company nominated Mr. Prather as a director of Diebold Nixdorf, Inc. (“Diebold”) in 2013 and Mr. Prather served as a director of Diebold from April 2013 to April 2018. The Company collectively owns on behalf of their investment advisory clients approximately 8.74%6.40% of Diebold’s common stock representing approximately 8.74%6.40% of the total voting power of Diebold as of March 1, 2020.22, 2021. Investment advisory affiliates of the Company may continue to nominate Mr. Prather to the boards of directors of public companies.
The Company’s affiliates may also nominate other directors to the boards of directors of companies that are beneficially owned on behalf of its clients. The Board further considered the difficulty the Company would encounter in attempting to unilaterally affect the management of Gray, Ryman, or Diebold through the use of its voting power.
In making its determination of independence with respect to Mr. Avansino, the Board considered that he has a daughter who works for the Company in a non-executive role, as described under “Certain Relationships and Related Transactions.” In addition, the Board considered that he is the Chairman and President of Miami Oil Producers, Inc. (“Miami Oil”), the landlord of a lease that was entered into in 1999 with the Company for office space in Nevada. The Company paid $34,780 and $41,736 in rent to Miami Oil in each of2020 and 2019, and 2018.respectively. Mr. Avansino is not a shareholder of Miami Oil.
With respect to these relationships, the Board considered Messrs. Avansino’s and Prather’s lack of economic dependence on the Company and other personal attributes that need to be possessed by independent-minded directors. Based on the guidelines attached as Exhibit A hereto and the foregoing considerations, the Board concluded that Messrs. Artzt, Avansino, Daniels, McGrath, and Prather were independent and determined that none of them had a material relationship with us which would impair his ability to act as an independent director.
The table below sets forth certain information regarding the nominees to the Board and the Committees on which they currently serve.
| | | | |
Mario J. Gabelli | | | | X |
Edwin L. Artzt | | | | |
Raymond C. Avansino, Jr. | X | X (Chair) | X (Co-Chair) | |
Leslie B. Daniels | X | | | |
Eugene R. McGrath | X | X | | |
Robert S. Prather, Jr. | X (Chair) | | X (Co-Chair) | |
Elisa M. Wilson | | | | X (Chair) |
The Board’s Role in the Oversight of Risk
The Board’s oversight of risk is administered directly through the Board, as a whole, or through its Committees. Various reports and presentations regarding risk management are presented to the Board, including the procedures that the Company has adopted to identify and manage risk. Each of the Board’s Committees addresses risks that fall within the respective Committee’s area of responsibility. For example, the Audit Committee is responsible for “overseeing the quality and objectivity of GAMCO’s financial statements and the independent audit thereof.” The Audit Committee reserves time at each of its quarterly meetings to meet with the Company’s independent registered public accounting firm outside of the presence of the Company’s management. The Director of Internal Audit also is significantly involved in risk management evaluation and designs the Company’s internal audit programs to take account of risk evaluation and work in conjunction with the Chief Accounting Officer. The Director of Internal Audit reports directly to the Company’s Audit Committee.
Relationship of Compensation and Risk
The Compensation Committee of the Board works with the CEO in reviewing the significant elements of the Company’s compensation policies and programs for all teammates. They evaluate the intended behaviors each program is designed to incentivize to ensure that such policies and programs are appropriate for the Company.
The Board and Committees
During 2019,2020, there were foureight meetings of the Board. Our Board has an Audit Committee, a Compensation Committee, a Governance Committee, and a Nominating Committee. We are deemed to be a “controlled company” as defined by the corporate governance standards of the NYSE by virtue of the fact that GGCP holds more than 50% of the voting power of the Company. As a result, we are exempt from the corporate governance standards of the NYSE requiring that a majority of the Board be independent and that all members of the Governance, Nominating, and Compensation Committees be independent. While the Company is a controlled company, the Board nevertheless is comprised of a majority of independent directors.
The Board believes that the most effective leadership structure is for the Company’s CEO to serve as Chairman given that Mr. Mario Gabelli is the controlling shareholder of the Company. By having Mr. Gabelli serve as the CEO and as Chairman, the Board believes that it enables Mr. Gabelli to ensure that the Board’s agenda responds to strategic challenges, that the Board is presented with information required for it to fulfill its responsibilities, and that Board meetings are as productive and effective as possible.
Our non-management directors meet, without any management directors or teammates present, immediately after our regular quarterly Board meetings. At least once each year, our independent directors meet in a separate executive session. Mr. Prather serves as lead independent director and chairs the meetings of our non-management and independent directors.
The Audit Committee regularly meets with our independent registered public accounting firm to ensure that satisfactory accounting procedures are being followed and that internal accounting controls are adequate, reviews fees charged by the independent registered public accounting firm, and selects our independent registered public accounting firm. Messrs. Avansino, Daniels, McGrath, and Prather, each of whom is an independent director as defined by the corporate governance standards of the NYSE and the Company’s guidelines, as set forth in Exhibit A, are the current members of the Audit Committee. The Board has determined that Mr. Prather meets the standards of an “audit committee financial expert,” as defined by the applicable securities regulations. The Audit Committee met sixfive times during 2019.2020.
The Compensation Committee reviews the amounts paid to the CEO for compliance with the terms of his Amended Employment Agreement and generally reviews benefits and compensation for the other executive officers. It also administers our Stock Award and Incentive Plan (the “Plan”). Messrs. Avansino and Prather, each of whom is an independent director, are the members of the Compensation Committee. The Compensation Committee does not have a formal policy regarding delegation of its authority. The Compensation Committee met twofour times during 2019.2020.
The Governance Committee advises the Board on governance policies and procedures. Messrs. Avansino and McGrath, each of whom is an independent director, are the members of the Governance Committee. The Governance Committee met oncedid not meet during 2019.2020.
The Nominating Committee advises the Board on the selection and nomination of individuals to serve as directors of GAMCO’s Board. Nominations for director, including nominations for director submitted to the Nominating Committee by shareholders, are evaluated according to our needs and the nominee’s knowledge, experience, and background. Mr. Gabelli and Ms. Wilson are the members of the Nominating Committee. Neither Mr. Gabelli nor Ms. Wilson is an independent director as defined by the corporate governance standards of the Company. The Nominating Committee met oncedid not meet during 2019.2020. The Nominating Committee has adopted the following policy regarding diversity: when identifying nominees as directors, the Nominating Committee will have a bias to have diverse representation of candidates who serve or have served as CEOs or presidents of public or private corporations or entities that are either for-profit or not-for-profit. In accordance with its charter, the Nominating Committee will review the suitability for continued service as a director of each Board member when his or her term expires and when he or she has a change in status, including, but not limited to, an employment change, and recommend whether or not the director should be re-nominated. The Nominating Committee will review annually with the Board the composition of the Board as a whole and recommend, if necessary, measures to be taken.
A copy of the Committees’ charters is posted on our website at https://www.gabelli.com/corporate/investor_relations. A shareholder may also obtain a copy of the Committees’ charters upon written request to our Secretary delivered to one of our principal executive offices at GAMCO Investors, Inc., 191 Mason Street, Greenwich, CT 06830.
Consideration of Director Candidates Recommended by Shareholders
Except as set forth in the Company’s Bylaws, the Nominating Committee does not have a formal policy regarding the recommendation of director candidates by shareholders. The Board believes it is appropriate not to have such a policy because GGCP holds the majority of the voting power. Nevertheless, the Nominating Committee will consider appropriate candidates recommended by shareholders. Under the process described below, a shareholder wishing to submit such a recommendation should send a letter to our Secretary at GAMCO Investors, Inc., 191 Mason Street, Greenwich, CT 06830. The mailing envelope must contain a clear notation that the enclosed letter is a “Director Nominee Recommendation.” The letter must identify the author as a shareholder and provide a brief summary of the candidate’s qualifications and otherwise comply with the requirements of our Bylaws. At a minimum, candidates recommended for election to the Board must meet the independence standards of the NYSE as well as any criteria used by the Nominating Committee. The Nominating Committee will consider and evaluate candidates recommended by shareholders in the same manner as it considers candidates from other sources. Acceptance of a recommendation does not imply that the Nominating Committee will ultimately nominate the recommended candidate.
Process for the Consideration of Director Candidates Nominated by Shareholders and of Business Proposed by Shareholders
GAMCO’s Bylaws set forth the processes and advance notice procedures that shareholders of GAMCO must follow, and specifies additional information that shareholders of GAMCO must provide, when proposing director nominations at any annual or special meeting of GAMCO’s shareholders or other business to be considered at an annual meeting of shareholders. Generally, the Bylaws provide that advance notice of shareholder nominations or proposals of business be provided to GAMCO not less than ninety (90) days nor more than one hundred twenty (120) days prior to the anniversary date of the preceding annual meeting of shareholders. For the 20212022 Annual Meeting, such notice of nomination or other business must be received at GAMCO’s principal executive offices between January 5, 20212022 and February 4, 2021.
Article III, Section 6 of GAMCO’s Bylaws sets out the procedures a shareholder must follow in order to nominate a candidate for Board membership. For these requirements, please refer to the Bylaws as of November 20, 2013, filed with the Securities and Exchange Commission on November 22, 2013 as Exhibit 3.2 to a Current Report on Form 8-K. The Bylaws are also available in the “Investor Relations” section of the Company’s website.
Director Attendance
During 2019,2020, all of the directors attended at least 75% of the meetings of the Board and the Board committees of which he or she was a member. Most of the directors virtually attended our 20192020 annual meeting of shareholders. We do not have a policy regarding director attendance at our annual meetings.
COMPENSATION OF DIRECTORS
Mr. Mario Gabelli did not receive compensation for serving as a director of the Company during 2019.2020. Effective July 1, 2018, all non-executive directors other than Mr. Gabelli receive annual cash retainers and meeting fees as follows:
Board Member | | $ | 70,000 | |
Audit Committee Chairman | | $ | 20,000 | |
Compensation Committee Chairman | | $ | 12,000 | |
Goverance Committee Co-Chairman | | $ | 6,000 | |
Attendance per Board Meeting | | $ | 10,000 | |
Attendance per Audit Committee Meeting | | $ | 4,000 | |
Attendance per Compensation and Governance Committees Meeting | | $ | 3,000 | |
Board Member | | $ | 70,000 | |
Audit Committee Chairman | | $ | 20,000 | |
Compensation Committee Chairman | | $ | 12,000 | |
Governance Committee Co-Chairmen | | $ | 6,000 | |
Attendance per Board Meeting | | $ | 10,000 | |
Attendance per Audit Committee Meeting | | $ | 4,000 | |
Attendance per Compensation and Governance Committees Meeting
| | $ | 3,000 | |
DIRECTOR COMPENSATION TABLE FOR 20192020
The following table sets forth fees, awards, and other compensation paid to or earned by our non-executive directors in 2019.2020.
| Fees Earned or Paid in Cash ($) | Restricted Stock Awards ($) (a) | Stock Option Awards ($) (b) | All Other Compensation ($) | | Fees Earned or Paid in Cash ($) | Restricted Stock Awards ($) (a) | Stock Option Awards ($) (b) | All Other Compensation ($) | |
Edwin L. Artzt | 110,000 | -0- | 110,000 | 140,000 | -0- | 140,000 |
Raymond C. Avansino, Jr. | 158,000 | -0- | 158,000 | 173,000 | -0- | 173,000 |
Leslie B. Daniels | 118,000 | -0- | 118,000 | 172,000 | -0- | 172,000 |
Eugene McGrath. | 134,000 | -0- | 134,000 | 156,000 | -0- | 156,000 |
Robert S. Prather, Jr. | 166,000 | -0- | 166,000 | 191,000 | -0- | 191,000 |
Elisa M. Wilson (c) | 110,000 | -0- | 110,000 | 140,000 | -0- | 140,000 |
(a) | There were no GAMCO restricted stock awards (“RSAs”) granted or outstanding to any non-executive director during 2019.2020. |
(b) | Mr. Daniels had stock options granted in May 2018 that are currently exercisable to purchase 10,000 shares of Class A Stock at an exercise price of $25.55. There were no GAMCO stock option awards granted or outstanding to any other non-executive director during 2019.2020. |
(c) | We lease an approximately 60,000 square foot building located at One Corporate Center, Rye, New York as one of our two headquarters (the “Building”) from M4E, LLC, (“M4E”), an entity that is owned by family members of Mr. Gabelli, including Ms. Wilson. As a member of M4E, Ms. Wilson is entitled to receive her pro-rata share of payments received by M4E under the lease. See “Certain Relationships and Related Transactions” on pages 3027 to 3431 of this Proxy Statement for further details. |
Communications with the Board
Our Board has established a process for shareholders and other interested parties to send communications to the Board. Shareholders or other interested parties who wish to communicate with the Board, the non-management or independent directors, or a particular director may send a letter to our Secretary at GAMCO Investors, Inc., 191 Mason Street, Greenwich, CT 06830. The mailing envelope must contain a clear notation indicating that the enclosed letter is a “Board Communication” or “Director Communication.” All such letters must identify the author and clearly state whether the intended recipients are all members of the Board or just certain specified individual directors. The Secretary will make copies of all such letters and circulate them to the appropriate director(s).
Code of Business Conduct
We have adopted the Code of Conduct that applies to all of our officers, directors, and teammates with additional requirements for our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Code of Conduct is posted on our website at https://gabelli.com/corporate/investor_relations. Any shareholder may also obtain a copy of the Code of Conduct upon written request to our Secretary delivered to one of our principal executive offices at GAMCO Investors, Inc., 191 Mason Street, Greenwich, CT 06830. We intend to satisfy the disclosure requirement regarding any amendment to, or a waiver of, a provision of the Code of Conduct by posting such information on our website.
Employee, Officer, and Director Hedging
Pursuant to our policies and procedures for transacting in Company securities, all employees, including our named executive officers, are prohibited from engaging in any transaction intended to hedge or minimize losses in the Company’s securities, including engaging in transactions in puts, calls, or other derivatives of the Company’s securities or short-selling the Company’s securities or “selling against the box” (i.e., failing to deliver sold securities).
Transactions with Related Persons
Our Board has adopted written procedures governing the review, approval, or ratification of any transactions with related persons required to be reported in this Proxy Statement. The procedures require that all related party transactions, other than certain pre-approved categories of transactions, be reviewed and approved by our Governance Committee or the Board. Under the procedures, directors may not participate in any discussion or approval by the Board of related party transactions in which they or a member of their immediate family is a related person, except that they shall provide information to the Board concerning the transaction. Only transactions that are found to be in the best interests of the Company will be approved.
Currently, we have a number of policies and procedures addressing conflicts of interest. Our Code of Conduct addresses the responsibilities of our officers, directors, and teammates to disclose conflicts of interest to our Legal/Compliance Department, which determines whether the matter constitutes a related party transaction that should be reviewed by our Governance Committee or Board. Generally, matters involving employer-teammate relationships, including compensation and benefits, ongoing arrangements that existed prior to our IPO, and financial service relationships including investments in our funds, are not presented for review, approval, or ratification by our Governance Committee or Board.
Furthermore, our Amended and Restated Certificate of Incorporation provides that no contract, agreement, arrangement, or transaction, or any amendment, modification, or termination thereof, or any waiver of any right thereunder (each, a “Transaction”) between GAMCO and:
(i) | Mario J. Gabelli, any member of his immediate family who is at the time an officer or director of GAMCO, and any entity in which one or more of the foregoing beneficially own a controlling interest of the outstanding voting securities or comparable interests (each, a “Gabelli”), |
(ii) | any customer or supplier, |
(iii) | any entity in which a director of GAMCO has a financial interest (a “Related Entity”), or |
(iv) | one or more of the directors or officers of GAMCO or any Related Entity; |
will be voidable solely because any of the persons or entities listed in (i) through (iv) above are parties thereto, if the standard specified below is satisfied.
Further, no Transaction will be voidable solely because any such directors or officers are present at or participate in the meeting of the Board or Committee thereof that authorizes the Transaction or because their votes are counted for such purpose, if the standard specified below is satisfied. That standard will be satisfied, and such Gabelli, such Related Entity, and the directors and officers of GAMCO or the Related Entity, as applicable, will be deemed to have acted reasonably and in good faith, to the extent such standard is applicable to such person’s conduct, and fully to have satisfied any duties of loyalty and fiduciary duties they may have to GAMCO and its shareholders with respect to such Transaction, if any of the following four requirements are met:
| (i) | the material facts as to the relationship or interest and as to the Transaction are disclosed or known to the Board or the applicable Committee thereof that authorizes the Transaction, and the Board or such Committee in good faith approves the Transaction by the affirmative vote of a majority of the disinterested directors on the Board or such Committee, even if the disinterested directors are less than a quorum; |
(ii) | the material facts as to the relationship or interest and as to the Transaction are disclosed or known to the holders of Common Stock entitled to vote thereon, and the Transaction is specifically approved by a vote of the holders of a majority of the voting power of the then outstanding Common Stock not owned by such Gabelli or such Related Entity, voting together as a single class; |
(iii) | the Transaction is effected pursuant to guidelines that are in good faith approved by a majority of the disinterested directors on the Board or the applicable Committee thereof or by vote of the holders of a majority of the then outstanding Common Stock not owned by such Gabelli or such Related Entity, voting together as a single class; or |
(iv) | the Transaction is fair to GAMCO as of the time it is approved by the Board, the applicable Committee thereof, or the shareholders of GAMCO. |
Our Amended and Restated Certificate of Incorporation also provides that any such Transaction authorized, approved, or effected, and each of such guidelines so authorized or approved, as described in (i), (ii), or (iii) above, will be deemed to be entirely fair to GAMCO and its shareholders, except that, if such authorization or approval is not obtained, or such Transaction is not so effected, no presumption will arise that such Transaction or guideline is not fair to GAMCO and its shareholders. In addition, our Amended and Restated Certificate of Incorporation provides that a Gabelli will not be liable to GAMCO or its shareholders for breach of any fiduciary duty that a Gabelli may have as a director of GAMCO by reason of the fact that a Gabelli takes any action in connection with any transaction between such Gabelli and GAMCO. For purposes of these provisions, interests in an entity that are not equity or ownership interests or that constitute less than 10% of the equity or ownership interests of such entity will not be considered to confer a financial interest on any person who beneficially owns such interests.
A description of certain related party transactions appears under the heading “Certain Relationships and Related Transactions” on pages 3027 to 3431 of this Proxy Statement.
Compensation Committee Interlocks and Insider Participation
Our Compensation Committee consists of Messrs. Avansino and Prather. Neither of these individuals has ever been an officer or teammate of the Company. During
2019,2020, none of our executive officers served on the board of directors or compensation committee of any entity that employed any member of our Compensation Committee or served on the compensation committee of any entity that employed any member of our Board.
INFORMATION REGARDING NAMED EXECUTIVE OFFICERS
As of March 31, 2020,2021, the named executive officers of the Company are as follows:
Name | Age | Position |
Mario J. Gabelli | 7778 | Chairman, CEO, and Co-CIO – Value |
Douglas R. Jamieson | 6566 | President and Chief Operating Officer of GAMCO Asset, and Former President and Chief Operating Officer of the Company |
Kevin HandwerkerHandwerker* | 6364 | Executive Vice President, General Counsel, and Secretary |
Kieran Caterina | 4647 | Senior Vice President, Chief Accounting Officer, and Principal Financial Officer |
Bruce N. Alpert | 6869 | Senior Vice President |
Henry G. Van der Eb | 7475 | Senior Vice President |
* Mr. Handwerker retired from his roles at GAMCO and AC effective April 16, 2021 and was retained as a consultant through December 31, 2021. Peter D. Goldstein (age 68), Senior Vice President, was appointed GAMCO’s and AC’s General Counsel and Secretary effective April 16, 2021.
Biographical information for Mr. Gabelli appears above under “Proposal 1 – Election of Directors.” Brief biographical sketches of the other executive officers listed above are set forth below.
Douglas R. Jamieson served as President and Chief Operating Officer of the Company from August 2004 to November 2016. He has served as President and CEO of AC since November 2016. He served as Executive Vice President and Chief Operating Officer of GAMCO Asset from 1986 to 2004 and has served as President and Chief Operating Officer of GAMCO Asset since 2004 and as a director of GAMCO Asset from 1991 to the present. Mr. Jamieson also serves as President and a director of Gabelli & Company Investment Advisers, Inc. (“GCIA”) (a wholly-owned subsidiary of AC) and GAMCO Asset Management (UK) Ltd. (a wholly-owned subsidiary of the Company). Mr. Jamieson also serves as the non-executive co-chairman of PMV Consumer Acquisition Corp. (NYSE:PMVC), a special purpose acquisition corporation in which AC, through PMVC’s sponsor, holds a controlling interest. Mr. Jamieson served on the Board of Teton from 2005 through 2010. Mr. Jamieson also serves as a director of several investment partnerships that are managed by GCIA. Mr. Jamieson was a securities analyst with G. research, LLC, the broker-dealer subsidiary of AC, from 1981 to 1986. He was a director of GGCP from December 2005 through December 2009, and served as an advisor to the GGCP board through 2010.
Kevin Handwerker has served as Executive Vice President, General Counsel, and Secretary of the Company sincefrom November 2013.2013 to April 2021. Mr. Handwerker has also served as Executive Vice President, General Counsel, and Secretary of AC sincefrom December 2015.2015 to April 2021. Mr. Handwerker has been retained as a consultant through December 31, 2021. Mr. Handwerker was Managing Director at Neuberger Berman LLC from 2000 through October 2013. Previously, Mr. Handwerker held senior positions in National Financial Partners Corp. and J.P. Morgan Investment Management Inc. He began his law career at Shearman & Sterling LLP, representing financial institutions and other entities in public and private financings, mergers and acquisitions, and merchant banking transactions. Mr. Handwerker received his J.D. from Fordham University School of Law after earning his B.S. in Accounting, summa cum laude, from the State University of New York at Albany.
Kieran Caterina has served as Principal Financial Officer of the Company since June 2019, as Chief Accounting Officer of the Company since June 2019, and as Senior Vice President of the Company since 2011. Previously, Mr. Caterina served as Co-Principal Financial Officer of the Company from July 2015 to June 2019 and as Co-Chief Accounting Officer of the Company from 2012 to June 2019. Mr. Caterina earlier served as Vice President and Co-Principal Accounting Officer of the Company from 2008 to 2012, as Vice President and Acting Co-Chief Financial Officer from 2007 to 2008, and as Controller from 2002 to 2008. Mr. Caterina joined GAMCO in March 1998 as a staff accountant. He received his M.S. in Accounting from Binghamton University after earning his B.S. in Accounting from the State University of New York at Oswego.
Bruce N. Alpert has served as Senior Vice President of the Company since May 2008 and2008. Previously, Mr. Alpert served as CEO of G.distributors sincefrom January 2020 to November 2020. Mr. Alpert served as Vice President and Chief Operating Officer of Gabelli Funds or its predecessor from 1988 to 1999 and became Executive Vice President and Chief Operating Officer of Gabelli Funds in 1999. Since 1989, Mr. Alpert has been a Vice President of G.research. Mr. Alpert is an officer of certain of the Gabelli/GAMCO Funds. Mr. Alpert also served as a director of Teton Advisors, Inc. from 1998 through May 2012 and was its President from 1998 through 2008 and Chairman from 2008 through 2010. He served as Chief Compliance Officer of the Gabelli/GAMCO Funds from 2012 through 2014 and Gabelli Funds from 2012 through March 2015. From 1986 until June 1988, he worked at the InterCapital Division of Dean Witter as Vice President and Treasurer of the mutual funds sponsored by Dean Witter. From 1983 through 1986, he worked at Smith Barney Harris Upham & Co. (“Smith Barney”) as Vice President in the Financial Services Division and as Vice President and Treasurer of the mutual funds sponsored by Smith Barney. Prior to Smith Barney, Mr. Alpert was an Audit Manager and Specialist at Price Waterhouse in the Investment Company Industry Services Group, where he was employed from 1975 through 1983. Mr. Alpert is a Certified Public Accountant.
Henry G. Van der Eb has served as Senior Vice President of the Company since August 2004 and is a senior advisor to management in all aspects of our business. He has served as a Senior Vice President with Gabelli Funds and GAMCO Asset since October 1999, when he joined the Company after managing his privately held investment advisory firm (Mathers and Company, Inc.), which was acquired by the Company in October 1999. Mr. Van der Eb is a portfolio manager for the Company, and is a Chartered Financial Analyst.Analyst, and served as President of the CFA Society Chicago during 1979-1980.
COMPENSATION OF EXECUTIVE OFFICERS
COMPENSATION DISCUSSION AND ANALYSIS
The investment management and securities industries are highly competitive and experienced professionals have significant career mobility. We believe that the ability to attract, retain, and provide appropriate incentives for the highest quality professional teammates is important for maintaining our competitive position in the investment management and securities industries, as well as for providing for the long-term success of GAMCO.
Most of GAMCO’s compensation expense is incentive-based variable compensation that will increase or decrease based on the revenues from our AUM. Since 1977, we have generally paid out up to 40% of the revenues or net operating contribution to the marketing teammates and portfolio managers who introduce, service, or generate our separate account and Fund business, with payments involving the separate accounts being typically based on revenues and payments involving the Funds being typically based on net operating contribution. We believe that the variable compensation formulas in place for our marketing teammates and portfolio managers provide significant incentives for the growth of our business and a cushion during periods of market decline.
Our administrative, operations, legal, and finance teammates generally receive the majority of their compensation in the form of base salaries and annual bonuses. We believe that GAMCO must pay competitive levels of cash compensation. We also believe that appropriate equity incentive programs may motivate and retain our professional teammates, but that these programs must always be consistent with shareholder interests.
The Compensation Committee and the Board have continued to consider the results of the shareholders’ non-binding vote in 2011 on our “say-on-pay” proposal. A substantial majority (over 99%) of the shares voted on our “say-on-pay” proposal approved the Company'sCompany’s executive compensation as described in our Compensation Discussion and Analysis and the accompanying tabular disclosures in the 2011 proxy statement. Because a majority of votes cast at the 2011 annual meeting of shareholders, and most recently again at the 2017 annual meeting of shareholders, were in favor of having a “say-on-pay” vote every three years, the Board has adopted a triennial frequency policy. Therefore, a “say-on-pay” vote was again held at the 2014, 2017, and 20172020 annual meetings of shareholders. Once again, a substantial majority (over 99%) of the shares voted on our “say-on-pay” proposal approved the Company’s executive compensation as described in our Compensation Discussion and Analysis and the accompanying tabular disclosures in the 2014, 2017, and 20172020 proxy statements. As a result of these favorable votes on our past “say-on-pay” proposals, it was determined that no changes were necessary to our executive compensation program’s design and administration. The Board believes that this continues to be the case.
Compensation of the Named Executive Officers
The compensation for our named executive officers (other than for Mr. Mario Gabelli, whose compensation is described separately below under the section entitled “CEO Compensation”) is composed of base salary, annual bonus, equity compensation, incentive-based variable compensation, and benefits. As used herein, the term “named executives” means all persons listed in the Summary Compensation Table set forth below.
Mr. Gabelli recommends to the Compensation Committee the amounts of the base salaries for our named executives, other than himself, which amounts are subject to the Compensation Committee’s review and approval, and are not at the discretion of the named executives. Mr. Gabelli received no base salary in 2019.2020.
Mr. Gabelli recommends to the Compensation Committee the amounts of the annual bonuses for our named executives, other than himself, which amounts are subject to the Compensation Committee’s review and approval. The factors considered by Mr. Gabelli in making annual bonus recommendations are typically subjective, such as perceptions of the named executives’ experience, performance, and responsibilities. His recommendations may be based on, but are not specifically tied to, the performance of client assets, the objectives set for each executive, the performance of the firm as a whole, and the market value of our stock.
Our executive compensation program may also include stock option awards or RSAs, which are intended to provide additional incentives to increase shareholder value as well as retain qualified teammates. Mr. Gabelli makes recommendations to the Compensation Committee for the grant of equity awards to our named executives. Individual stock option award levels and individual RSA levels in past years were based upon a subjective evaluation of each named executive’s overall past and expected future contribution. No formula was used to determine the timing or amount of stock option awards and RSAs for any individual.
To the extent that they have the proper regulatory registrations, all of our teammates, including the named executives, are eligible to receive incentive-based variable compensation for attracting or providing client service to separate accounts, shareholders of the Funds, or investors in our other products. Mr. Jamieson, who provides client service to a significant number of separate accounts, received the majority of his total 20192020 compensation from variable compensation payments, as described below in note (d) to the Summary Compensation Table.
In the course of fulfilling Mr. Gabelli’s duties, the Company at times has certain individuals aid him. When this occurs, the Company offsets those costs by a reduction in compensation payable to Mr. Gabelli. Refer to the notes to the Summary Compensation Table on pages 2219 to 2421 for further details.
CEO Compensation
Mr. Gabelli received no base salary, no bonus, no stock option awards, and no RSAs in 2019,2020, as has been the case for each year since our IPO in 1999. Mr. Gabelli elected to waive all of his compensation that he would otherwise have been entitled to receive under his Amended Employment Agreement for the periods March 1, 2018 to December 31, 2018 (as disclosed in a press release issued by the Company on February 23, 2018), January 1, 2019 to March 31, 2019 (as disclosed in a press release issued bycurrent report on Form 8-K filed with the CompanySEC on December 26, 2018), and September 1, 2019 to November 30, 2019 (as disclosed in a current report on Form 8-K filed with the SEC on August 29, 2019), and July 1, 2020 to November 10, 2020 (as disclosed in a current report on Form 8-K filed with the SEC on July 1, 2020). All of the compensation earned and not waived by Mr. Gabelli in 20192020 and 20182019 was incentive-based variable compensation that was calculated in accordance with Mr. Gabelli’s Amended Employment Agreement, which revised his 1999 employment agreement as described under the heading “Employment Agreements” below.
Mr. Gabelli’s compensation for 2016 and 2017 was also calculated in accordance with his Amended Employment Agreement and was further subject to the terms of restricted stock unit (“RSU”) agreements through which he deferred cash compensation during 2016 and the first half and fourth quarter of 2017. He was, therefore, not paid any cash compensation during 2016 or during the first half or fourth quarter of 2017 and such deferred cash compensation, as adjusted, was paid upon vesting in 2018, 2019 or 2020 as described below.
As described in the Company’s 2017 proxy statement, on December 21, 2015, the Company entered into an RSU agreement with Mr. Gabelli, pursuant to which any variable compensation earned by him in fiscal 2016 would be awarded in the form of RSUs under the Plan (the “2016 RSU Agreement”). Under the 2016 RSU Agreement, the Company issued 2,314,695 RSUs, based upon the volume weighted average price (“VWAP”) of the Company’s Class A Stock for 2016 of $32.8187, in satisfaction of Mr. Gabelli’s variable compensation of $76.0 million for 2016. These RSUs vested 100% on January 2, 2020, and a cash payment in the amount of $43.7 million was made to the CEO. This payment was reduced by $32.3 million resulting from the RSUs being indexed to the Company’s Class A Stock price and utilizing the lesser of the VWAP on the vesting date ($18.8812) versus the VWAP over 2016 ($32.8187).
As also described in the Company’s 2017 proxy statement, on December 23, 2016, the Company entered into a second RSU agreement with Mr. Gabelli, pursuant to which any variable compensation earned by him during the period January 1, 2017 through June 30, 2017 (“First Half 2017”) would be awarded in the form of RSU’s under the Plan (the “First Half 2017 RSU Agreement”). Under the First Half 2017 RSU Agreement, the Company issued 1,244,018 RSUs, based upon the VWAP of the Company’s Class A Stock for the First Half 2017 of $29.6596, in satisfaction of Mr. Gabelli’s variable compensation of $36.9 million for that period. These RSUs vested 100% on July 2, 2018, and a cash payment in the amount of $28.3 million was made to the CEO. This payment was after a waiver of $6.0 million by the CEO and a reduction of $2.6 million resulting from the RSUs being indexed to the Company’s Class A Stock price and utilizing the lesser of the VWAP on the vesting date ($27.1837) versus the VWAP over the First Half 2017 ($29.6596).
As described in the Company’s 2018 proxy statement, on September 30, 2017, the Company entered into a thirdan RSU agreement with Mr. Gabelli, pursuant to which any variable compensation earned by him during the period October 1, 2017 through December 31, 2017 (“Fourth Quarter 2017”) would be awarded in the form of RSU’s under the Plan (the “Fourth Quarter 2017 RSU Agreement”). Under the Fourth Quarter 2017 RSU Agreement, the Company issued 530,662 RSUs, based upon the VWAP of the Company’s Class A Stock for the Fourth Quarter 2017 of $29.1875, in satisfaction of Mr. Gabelli’s variable compensation of $15.5 million for that period. These RSUs vested 100% on April 1, 2019, and a cash payment in the amount of $11.0 million was made to the CEO. This payment was reduced by $4.5 million resulting from the RSUs being indexed to the Company’s Class A Stock price and utilizing the lesser of the VWAP on the vesting date ($20.7916) versus the VWAP over the Fourth Quarter 2017 ($29.1875).
Compensation Consultants
The Company has not retained compensation consultants to assist in determining or recommending the amount or form of executive and director compensation during its last fiscal year.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee reviewed and discussed with management the Compensation Discussion and Analysis appearing above. Based on this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis section be included in this Proxy Statement, which section is also incorporated by reference in GAMCO’s Annual Report on Form 10-K.
COMPENSATION COMMITTEE
Robert S. Prather, Jr. (Chairman)
Raymond C. Avansino, Jr.
SUMMARY COMPENSATION TABLE FOR 20192020
The following table sets forth the cash and non-cash compensation for the fiscal years ended 20192020 and 20182019 paid to or earned by (i) our principal executive officer, (ii) our principal financial officers,officer, and (iii) the other most highly compensated executive officers of the Company who were serving as of the end of the 20192020 fiscal year. As used herein, the term “named executives” means all persons listed in the Summary Compensation Table for 20192020 (the “Summary Compensation Table”).
| | | | | | | | | | | Change in | | | | | | | | | | | | | | | Change in | | | | |
| | | | | | | | | | | Pension Value | | | | | | | | | | | | | | | Pension Value | | | |
| | | | | | | | | | | and | | | | | | | | | | | | | | | and | | | | |
| | | | | | | | | Stock | | Nonqualified | | | | | | | | | | | | | Stock | | Nonqualified | | | | |
| | | | | Base | | | | Awards | | Deferred | | All Other | | | | | | | Base | | | | Awards | Deferred | | All Other | | |
| | | | | Salary | | Bonus | | ($) | | Compensation | | Compensation | | Total | | | | | Salary | | Bonus | | ($) | | Compensation | Compensation | Total |
Name and Principal Position | Name and Principal Position | | Year | | ($) | | ($) | | (k) | | Earnings ($) | | ($) | | ($) | Name and Principal Position | Year | | ($) | | ($) | | (k) | | Earnings ($) | | ($) | | ($) |
Mario J. Gabelli………………………… | Mario J. Gabelli………………………… | 2019 | | -0- (a) | | -0- (b) | | -0- | | -0- | | 32,236,004 (c) | | 32,236,004 | Mario J. Gabelli………………………… | 2020 | | -0- (a) | | -0- (b) | | -0- | | -0- | | 29,232,929 (c) | 29,232,929 |
| Chairman of the Board, | | 2018 | | -0- (a) | | -0- (b) | | -0- | | -0- | | 10,660,345 (c) | | 10,660,345 | Chairman of the Board, | | 2019 | | -0- (a) | | -0- (b) | | -0- | | -0- | | 32,236,004 (c) | 32,236,004 |
| CEO, and Co-CIO - Value | | | | | | | | | | | | | | | CEO, and Co-CIO - Value | | | | | | | | | | | | | |
* As described in the Compensation Discussion and Analysis herein.