We are asking our shareholders to ratify the selection of Deloitte & Touche LLP as the Company’s independent registered public accountants. 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 thebecome effective upon filing. If shareholders do not approve the
selection of Deloitte & Touche LLP,Amendment, we will not file the
Audit CommitteeAmendment and the Charter will
reconsider the selection of Deloitte & Touche LLP. Ultimately, however, the Audit Committee retains full discretion and will make all determinations with respect to the appointmentcontinue in its current form. Notwithstanding approval of the
independent auditors, whether or notAmendment by the
Company’s shareholders,
ratify the
appointment.Board may abandon the Amendment at any time prior to its effectiveness without further action by the shareholders.For additional information regarding the selection of Deloitte & Touche LLP as the Company’s independent registered public accountants, please see “Independent Registered Public Accounting Firm” appearing elsewhere in this proxy statement.TABLE OF CONTENTS
Recommendation
The Board recommends that shareholders vote “FOR” ratification of Deloitte & Touche LLP as the Company’s independent registered public accountants for the year ended December 31, 2018.
Vote Required
Approval of Proposal 2 requires the affirmative vote of a majorityA copy of the votes cast on the proposal. Shareholders who returnAmendment giving effect to this proposal is attached to this Proxy Statement as Appendix A and is incorporated herein by reference. Attached to this Proxy Statement as Appendix B is 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 this proposal. Abstentions will have the same effect as a vote against Proposal 2.
PROPOSAL 3
APPROVAL OF POTENTIAL ISSUANCE
Background and Overview
On September 30, 2017, the Company entered into a restricted stock unit agreement (the “Fourth Quarter 2017 RSU Agreement”) with Mario J. Gabelli, the Company’s Chief Executive Officer, pursuant to which the Company determined that any Variable Compensation (as defined below) earned by Mr. Gabelli during the period October 1, 2017 through December 31, 2017, be awarded in the form of restricted stock units (“RSUs”) under the Company’s 2002 Stock Award and Incentive Plan, as amended (the “Plan”), subject to certain exceptions as further described therein and herein. As defined under the Plan, a “restricted stock unit” award is an awardcopy of the rightcurrent Charter, as previously amended, marked to receive cash or sharesshow the effect of Class A Stock. As a resultdeleting Article EIGHTH upon effectiveness of the award, Mr. Gabelli will not be paid any cash compensation for the period October 1, 2017 through December 31, 2017 that he would otherwise be entitled to receive under his amended employment agreement approved by shareholders on May 5, 2015 (the “Amended Employment Agreement”), and consistent with Mr. Gabelli’s agreement since 1977.
Pursuant to the terms of the Amended Employment Agreement and the practice in place since the Company’s founding in 1977, Mr. Gabelli is entitled to variable compensation consisting of: (i) a percentage of the revenues or net operating contributions related to or generated by Mr. Gabelli’s business activities for the Company or its subsidiaries involving managing or overseeing the management of investment companies, attracting mutual fund accounts, attracting or managing separate accounts or otherwise generating revenues, which percentage rates have been and generally will be the same as those received by other professionals in the Company or the affected subsidiaries performing similar services, and (ii) currently 10% of the Company’s aggregate annual pre-tax profits as computed for financial reporting purposes in accordance with generally accepted accounting principles before consideration of the fee (the “Management Fee”) (collectively, the “Variable Compensation”).
Under the Fourth Quarter 2017 RSU Agreement, the number of RSUs granted was calculated by dividing (x) the Variable Compensation earned for the period October 1, 2017 through December 31, 2017, except that the portion of the RSU expense which is derived from the Management Fee for the period October 1, 2017 through December 31, 2017 was not considered in calculating the Management Fee in any period of time during the vesting period of the RSUs, by (y) the volume-weighted average price (as defined in the RSU Agreement) per share of the Class A Stock for the period October 1, 2017 through December 31, 2017. At the conclusion of the earnings period on December 31, 2017 and under this calculation, there were 530,662 RSUs granted under the Fourth Quarter 2017 RSU Agreement.
Subject to certain exceptions set forth in the Fourth Quarter 2017 RSU Agreement, the RSUs will vest in full on April 1, 2019 (the “Vesting Date”), provided that Mr. Gabelli remains employed by the Company on such date. On the Vesting Date, the Company intends to make a cash payment to Mr. Gabelli equal to (i) the lesser of (x) the value (as defined in the Fourth Quarter 2017 RSU Agreement) per share of the Company’s Class A stock as of the Vesting Date, orAmendment, if applicable, as of such earlier date upon which the restrictions otherwise lapse, and (y) the volume-weighted average price per share of the Company’s Class A stock for the period October 1, 2017 through December 31, 2017, as calculated in accordance with the preceding paragraph, multiplied by (ii) the number of RSUs with respect to which the restrictions have lapsed. However, notwithstanding this current intention, the Company reserves the right in its discretion to issue to Mr. Gabelli a number of shares of Class A Stock equal to the number of RSUs in lieu of such cash payment.
approved. The terms of the Fourth Quarter 2017 RSU Agreement are only briefly summarized above. For further information, please refer to the description contained in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 5, 2017, and the text of the RSU Agreement filedAmendment is subject to change to include such revisions as Exhibit 99.1 to such report. The discussion herein is qualified in its entiretymay be required by reference to the filed RSU Agreement.
Why the Company Needs Shareholder Approval
The Company is seeking shareholder approval for the potential issuance of shares of Class A Stock to Mr. Gabelli pursuant to the RSU Agreement in order to comply with NYSE Rule 312.03(b).
Under NYSE Rule 312.03(b), an issuer is required to obtain shareholder approval prior to the issuance of common stock, or of securities convertible into or exercisable for common stock, to a director, officer or substantial security holderoffice of the
company (a “Related Party”) if the numberSecretary of
shares of common stock to be issued, or if the number of shares of common stock into which the securities may be convertible or exercisable, exceeds either 1%State of the
numberState of
sharesDelaware or as the Board of
common stock or 1%Directors deems necessary and advisable to effect the intent of the
voting power outstanding beforeAmendment.Recommendation
The Board has declared the issuance. Mr. Gabelli is a Related Party.
It isAmendment advisable and recommends that the current intentionshareholders vote “FOR” the approval of the Company to make a cash payment to Mr. Gabelli in settlement of the RSUs granted under the Fourth Quarter 2017 RSU Agreement. However, if the Company elects to settle Mr. Gabelli’s award in shares of Class A Stock, Mr. Gabelli will receive 530,662 shares of the Company’s Class A Stock on the Vesting Date, constituting approximately 0.3% of the Company’s outstanding voting power and approximately 5.4% of the currently outstanding Class A Stock.
Therefore the Company believes any such potential issuance will exceed the threshold set forth under NYSE Rule 312.03(b). Accordingly, the Company is seeking shareholder approval in the event the potential issuance exceeds 1% of the number of shares of Class A Stock or 1% of the voting power outstanding before the issuance.
Recommendation
The Board recommends that shareholders vote “FOR” the potential issuance of shares of Class A Stock to Mr. Gabelli pursuant to the RSU Agreement in order to comply with NYSE Rule 312.03(b).
Vote Required
Approval of this proposal requires the affirmative vote of the holders of at least a majority of the votes cast at the Annual Meeting on this proposal. Shareholders who return a signed proxy card but do not indicate how they wish to vote on Proposal 3 will be deemed to have voted FOR the proposal. Broker non-votes will have no effect on the outcome of the vote. Abstentions will have the same effect as a vote against this proposal.Amendment. Mr. Gabelli, who controls approximately 96%92% of the combined voting power of the Company, intends to vote “FOR” this proposal.
CORPORATE GOVERNANCE
GAMCO continually strives to maintain the highest standards of ethical conduct: 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“FOR” approval of the New York Stock Exchange. A copy of these guidelines can be found as Exhibit B. These guidelines are also attached to the Board’s Corporate Governance Guidelines, which are available at the following website: http://www.gabelli.com/corporate/corp_gov.html. 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 subsidiariesAmendment.Vote Required
The affirmative vote of the Company collectively own on behalfholders of their investment advisory clients as of March 1, 2018 approximately 2.78% of the Company’s Class A Stock and 0.92% of the Common Stock of Gray Television, Inc. (“Gray”). This ownership represents approximately 1.75% of the total voting power of Gray. Mr. Prather served as President and Chief Operating Officer and a director of Gray until June of 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 9.45% of Ryman’s Common Stock representing approximately 9.45% of the total voting power of Ryman as of March 1, 2018. In addition, an investment advisory affiliate of the Company nominated Mr. Prather as a director of Diebold in 2013, and Mr. Prather was elected as a director of Diebold on April 25, 2013. The Company collectively owns on behalf of their investment advisory clients approximately 7.17% of Diebold’s Common Stock representing approximately 7.17% of the total voting power of Diebold as of March 1, 2018. From time to time, investment advisory affiliates of the Company have nominated and may continue to nominate Mr. Prather to the Boards of public companies.
The Company’s affiliates may also nominate other directors to the Boards 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 the 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 $39,495, $39,984 and $40,788 in rent to Miami Oil in 2015, 2016 and 2017, 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 the following directors 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: Messrs. Artzt, Avansino, Daniels, McGrath and Prather.
The table below sets forth certain information regarding the nominees to the Board and Committees on which they serve.
Name | Audit Committee | Governance Committee | | Nominating Committee |
Mario J. Gabelli
| | | | X |
Edwin L. Artzt
| X | | | |
Raymond C. Avansino, Jr. | X | X
(Chair)
| X | |
Leslie B. Daniels
| X | | | |
Eugene R. McGrath
| X | X | | |
Robert S. Prather, Jr.
| X
(Chair)
| | X
(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 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 Co-Chief Accounting Officers. 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 Chief Executive Officer in reviewing the significant elements of the Company’s compensation policies and programs for all staff. 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 2017, there were four 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 New York Stock Exchange 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 New York Stock Exchange requiring that a majority of the Board be independentoutstanding Common Stock is required to approve the Amendment. Abstentions and that all members ofbroker non-votes, if any, have 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 Chief Executive Officer to serve as Chairman given that Mr. Mario Gabelli is the controlling shareholder of the Company. By having Mr. Gabelli serve as the Chief Executive Officer 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 employees 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. Artzt, Avansino, Daniels, McGrath and Prather, each of whom is an independent director as defined by the corporate governance standards of the New York Stock Exchange and the Company’s guidelines as set forth in Exhibit B, are 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 five times during 2017. A copy of the Audit Committee’s charter is posted on our website at http://www.gabelli.com/corporate/corp_gov.html. A shareholder may also obtain a copy of the charter upon written request from our Secretary delivered to our principal executive offices.
The Compensation Committee reviews the amounts paid to the Chief Executive Officer for compliance with the terms of his employment agreement and generally reviews benefits and compensation for the other executive officers. It also administers our Stock Award and Incentive 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 five times during 2017. A copy of the Compensation Committee’s charter is posted on our website at http://www.gabelli.com/corporate/corp_gov.html. A shareholder may also obtain a copy of the charter upon written request from our Secretary delivered to our principal executive offices.
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 held three meetings during 2017. A copy of the Governance Committee’s charter is posted on our website at http://www.gabelli.com/corporate/corp_gov.html. A shareholder may also obtain a copy of the charter upon written request from our Secretary delivered to our principal executive offices.
The Nominating Committee advises the Board on the selection and nomination of individuals to serve as directors of GAMCO. Nominations for director, including nominations for director submitted to the committee by shareholders, are evaluated according to our needs and the nominee’s knowledge, experience and background. Mario Gabelli and Elisa 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 once during 2017. A copy of the Nominating Committee’s charter is posted on our website at http://www.gabelli.com/corporate/corp_gov.html. A shareholder may also obtain a copy of the charter upon written request from our Secretary delivered to our principal executive offices. The Nominating Committee has adopted the following policy regarding diversity: When identifying nominees as directors, the Committee will have a bias to have diverse representation of candidates who serve or have served as chief executive officers 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 servicesame effect 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.
Consideration of Director Candidates Recommended by Shareholders
Except as set forth in the Company’s Amended and Restated By-Laws, 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 One Corporate Center, Rye, NY 10580. 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 Amended and Restated By-Laws. At a minimum, candidates recommended for election to the Board must meet the independence standards of the New York Stock Exchange 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 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 Amended and Restated By-Laws 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 By-Laws 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 2019 Annual Meeting, such notice of nomination or other business must be received at GAMCO’s principal executive offices between January 8, 2019 and February 7, 2019.
Article III, Paragraph 6 of GAMCO’s Amended and Restated By-Laws sets out the procedures a shareholder must follow in order to nominate a candidate for Board membership. For these requirements, please refer to the Amended and Restated By-Laws 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 Amended and Restated By-Laws are also available in the “Investor Relations” section of the Company’s website.
Director Attendance
During 2017, 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. All of the directors attended our 2017 annual meeting of shareholders. We do not have a policy regarding directors’ attendance at our annual meetings.
COMPENSATION OF DIRECTORS
Mr. Mario Gabelli did not receive compensation for serving as a director of the Company during 2017. Effective July 1, 2010, all non-executive directors other than Mr. Gabelli receive annual cash retainers and meeting fees as follows:
Board Member | | $ | 60,000 | |
Audit Committee Chairman | | $ | 20,000 | |
Compensation Committee Chairman | | $ | 12,000 | |
Governance Committee Chairman | | $ | 12,000 | |
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 2017
The following table sets forth fees, awards, and other compensation paid to or earned by our non-executive directors in 2017.
Director Compensation Table for 2017. The following table sets forth fees, awards, and other compensation paid to or earned by our non-executive directors in 2017.
Name | Fees Earned or Paid in Cash ($) | Restricted Stock Awards ($) (a) (b) | Option Awards ($) | All Other Compensation ($) | |
Edwin L. Artzt | 116,000 | -0- | -0- | -0- | 116,000 |
Raymond C. Avansino, Jr. | 149,000 | -0- | -0- | -0- | 149,000 |
Leslie B. Daniels | 108,000 | -0- | -0- | -0- | 108,000 |
Eugene McGrath. | 122,000 | -0- | -0- | -0- | 122,000 |
Robert S. Prather, Jr. | 163,000 | -0- | -0- | -0- | 163,000 |
Elisa M. Wilson (c) | 100,000 | -0- | -0- | -0- | 100,000 |
(a) | There were no GAMCO restricted stock awards granted or outstanding to any non-executive director during 2017. |
(b) | There were no GAMCO option awards granted or outstanding to any non-executive director during 2017. |
(c) | We lease an approximately 60,000 square foot building located at 401 Theodore Fremd Avenue, Rye, New York as our 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 page 32 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., One Corporate Center, Rye, NY 10580-1422. 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 or directors.
Code of Business Conduct
We have adopted a Code of Business Conduct (the “Code of Conduct”) that applies to all of our officers, directors and staff members 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 http://www.gabelli.com/corporate/corp_gov.html. Any shareholder may also obtain a copy of the Code of Conduct upon written request to our Secretary at our principal executive offices. Shareholders may address a written request for a printed copy of the Code of Conduct to our Secretary at GAMCO Investors, Inc., One Corporate Center, Rye, New York 10580-1422. 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.
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 staff 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-employee relationships including compensation and benefits, ongoing arrangements that existed prior to our initial public offering 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, the 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 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 Voting Stock entitled to vote thereon, and the Transaction is specifically approved by vote of the holders of a majority of the voting power of the then outstanding Voting 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 voting 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, a 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 32 to 39 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 employee of the Company. During 2017, 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, 2018, the named executive officers of the Company are as follows (ages are as of March 31, 2018):
Name | Age | Position |
Mario J. Gabelli | 75 | Chairman, Chief Executive Officer and Chief Investment Officer – Value Portfolios |
Douglas R. Jamieson | 63 | President and Chief Operating Officer of GAMCO Asset Management Inc., a wholly-owned subsidiary of the Company, and Former President and Chief Operating Officer of the Company |
Kevin Handwerker
Kieran Caterina
Diane M. LaPointe
Agnes Mullady
| 61
44
60
59
| Executive Vice President, General Counsel and Secretary
Senior Vice President and Co-Chief Accounting Officer
Senior Vice President and Co-Chief Accounting Officer
Senior Vice President of the Company and President and Chief Operating Officer of the Fund Division
|
Bruce N. Alpert | 66 | Senior Vice President |
Henry G. Van der Eb | 72 | Senior Vice President |
Biographical information for Mr. Gabelli appears above under “Election of Directors – The Nominees”. 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 Chief Executive Officer of Associated Capital Group, Inc. since November 2016. He served as Executive Vice President and Chief Operating Officer of GAMCO Asset Management Inc. from 1986 to 2004 and has served as President and Chief Operating Officer of GAMCO Asset Management Inc. since 2004 and as a director of GAMCO Asset Management Inc. 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 Associated Capital) and GAMCO Asset Management (UK) Ltd. (a wholly-owned subsidiary of the Company). 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 Associated Capital, 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 since November 2013. Mr. Handwerker has also served as Executive Vice President, General Counsel and Secretary of Associated Capital since December 2015. 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 Co-Principal Financial Officer of the Company since July 2015, as Co-Chief Accounting Officer of the Company since 2012, and as Senior Vice President of the Company since 2011. 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.
Diane M. LaPointe has served as Co-Principal Financial Officer of the Company since July 2015, as Co-Chief Accounting Officer of the Company since 2012, and as Senior Vice President of the Company since 2011. She has also served as the Financial and Operations Principal of G.distributors, LLC, the Company’s broker-dealer subsidiary, since 2011. Ms. LaPointe also serves as a member of the President’s Council at Wesleyan University. Ms. LaPointe earlier served as Vice President and Co-Principal Accounting Officer of the Company from 2008 to 2012 and as Acting Co-Chief Financial Officer of the Company from 2007 to 2008. From 2004 until early 2016, she also served as Vice President and Controller of GCIA (a former subsidiary of the Company which became a subsidiary of Associated Capital in November 2015) and its broker-dealer subsidiary, G.research, LLC. Prior to joining the Company in June 2004, Ms. LaPointe was the Chief Financial Officer and Treasurer of Security Capital Corporation and had previously held several senior financial positions at Ultramar PLC, including Director of Worldwide Financial Reporting and Director of Corporate Finance. She began her career at KPMG. She received her M.B.A. from New York University’s Stern School of Business after earning her B.A. from Wesleyan University. Ms. LaPointe is a Certified Public Accountant.
Agnes Mullady has served as a Senior Vice President of the Company since 2008. She has also served as Executive Vice President of Associated Capital Group, Inc. since November 2016, as the President and Chief Operating Officer of the Fund Division of Gabelli Funds, LLC since 2010, as a Vice President of Gabelli Funds, LLC since 2006, and since 2011, as Chief Executive Officer of G.distributors, LLC, the Company’s broker-dealer subsidiary. Ms. Mullady also serves as an officer of all of the Gabelli/GAMCO/Teton Funds. Ms. Mullady served as the President of the Closed-End Fund Division of Gabelli Funds, LLC from 2007 through 2010. Prior to joining the Company in December 2005, Ms. Mullady was a Senior Vice President at U.S. Trust Company and Treasurer and Chief Financial Officer of the Excelsior Funds from 2004 through 2005.
Bruce N. Alpert has served as Senior Vice President of the Company since May 2008. Mr. Alpert served as Vice President and Chief Operating Officer of Gabelli Funds, LLC or its predecessor from 1988 to 1999, and became Executive Vice President and Chief Operating Officer of Gabelli Funds, LLC in 1999. Since 1989, Mr. Alpert has been a Vice President of G.research, LLC, a subsidiary of Associated Capital Group, Inc. 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, LLC 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, LLC and GAMCO Asset Management Inc. 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.
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 personnel 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 assets under management. Since 1977, we have generally paid out up to 40% of the revenues or net operating contribution to the marketing staff and portfolio managers who introduce, service or generate our separate account and mutual fund business, with payments involving the separate accounts being typically based on revenues, and payments involving the mutual funds being typically based on net operating contribution. We believe that the variable compensation formulas in place for our marketing staff 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 personnel 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 personnel 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'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 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 Annual Meeting 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 proxy statement. A “say-on-pay” vote was again held at the 2017 Annual Meeting 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 2017 proxy statement. As a result of this favorable vote, 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 executives (other than for Mr. Mario Gabelli, whose compensation is described separately below under the section entitled “Chief Executive Officer Compensation”) is composed of base salary, annual bonus compensation, equity compensation, incentive-based variable compensation and employee 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 Committee’s review and approval, and are not at the discretion of the named executives. Mr. Gabelli received no base salary in 2017.
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 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 but are not specifically tied to the performance of client assets, objectives set for each executive, the firm as a whole or the market value of our stock.
A portion of the annual bonuses for our named executives may be deferred for approximately 15 to 18 months. The terms of the deferrals are recommended by Mr. Gabelli to the Compensation Committee, which terms are subject to the Committee’s review and approval, and are not at the discretion of the named executives. The deferrals typically earn a return equal to the greater of the return on our U.S. Treasury money market fund or the return of one of our investment partnerships after payment of the management fee but before payment of any incentive fee. In order to receive the deferred bonus payment, the named executive must be employed by the Company at the time of payment. There were no deferrals in 2017.
Our executive compensation program may also include stock option or restricted stock awards (sometimes referred to hereinafter as “RSAs”), which are intended to provide additional incentives to increase shareholder value as well as retain qualified individuals. Mr. Gabelli makes recommendations to the Compensation Committee for the grant of stock awards to corporate team members. Individual stock option award levels in past years and individual restricted stock award 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 option awards and RSAs for any individual.
To the extent that they have the proper regulatory registrations, all of our staff, including the named executives, are eligible to receive incentive-based variable compensation for attracting or providing client service to separate accounts, shareholders of the Gabelli/GAMCO 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 2017 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 brings on certain individuals to 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 for 2017 on pages 21 to 22 for further details.
Chief Executive Officer Compensation
Mr. Gabelli received no base salary, no bonus, no stock options and no restricted stock awards in 2017, as has been the case for each year since our initial public offering in 1999. All of the compensation earned by Mr. Gabelli in 2017 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 was, however, not paid any cash compensation during 2016 or during the first half or fourth quarter of 2017.
Furthermore, as disclosed in a press release issued by the Company on February 23, 2018, Mr. Gabelli has elected to waive all of his compensation that he would otherwise have been entitled to receive under his employment agreement for the period March 1, 2018 to December 31, 2018.
As described in the Company’s 2017 proxy statement, on December 21, 2015, the Company entered into a restricted stock unit agreement with Mr. Mario J. Gabelli, the Company’s Chief Executive Officer, pursuant to which the Company determined to award Mr. Gabelli’s Variable Compensation generated in fiscal 2016 in the form of RSUs under the Plan (the “2016 RSU Agreement”). Under the 2016 RSU Agreement, the number of RSUs granted was calculated by dividing the Variable Compensation generated in fiscal 2016 by the volume-weighted average price (as defined in the 2016 RSU Agreement) per share of the Class A Stock for fiscal 2016. If such RSUs are settled in shares of Class A Stock, Mr. Gabelli will receive 2,314,695 shares of Class A Stock under the Plan and accordingly, such shares have been reserved for issuance under the Plan. Subject to certain exceptions set forth in the 2016 RSU Agreement, the RSUs will vest in full on January 1, 2020, provided that Mr. Gabelli remains employed by the Company on such date. On January 1, 2020, the Company intends to make a cash payment to Mr. Gabelli in settlement of the RSUs granted under the 2016 RSU Agreement equal to (i) the lesser of (x) the value (as defined in the 2016 RSU Agreement) per share of the Company’s Class A stock as of such date, or if applicable, as of such earlier date upon which the restrictions otherwise lapse, or (y) the volume-weighted average price per share of the Company’s Class A stock for fiscal 2016, as calculated in accordance with the agreement, multiplied by (ii) the number of RSUs with respect to which the restrictions have lapsed. However, notwithstanding this current intention, the Company reserves the right in its discretion to issue to Mr. Gabelli a number of shares of Class A Stock equal to the number of RSUs in lieu of such cash payment.
As also described in the Company’s 2017 proxy statement, the Company entered into a second restricted stock unit agreement with Mr. Gabelli, pursuant to which any Variable Compensation earned by him during the period January 1, 2017 through June 30, 2017, 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 number of RSUs granted was calculated by dividing the Variable Compensation generated in the period January 1, 2017 through June 30, 2017 by the volume-weighted average price (as defined in the First Half 2017 RSU Agreement) per share of the Class A Stock for the period January 1, 2017 through June 30, 2017. If such RSUs are settled in shares of Class A Stock, Mr. Gabelli will receive 1,244,018shares of Class A Stock under the Plan and accordingly, such shares have been reserved for issuance under the Plan. Subject to certain exceptions set forth in the First Half 2017 RSU Agreement, the RSUs will vest in full on July 1, 2018, provided that Mr. Gabelli remains employed by the Company on such date. On July 1, 2018, the Company intends to make a cash payment to Mr. Gabelli in settlement of the RSUs granted under the First Half 2017 RSU Agreement equal to (i) the lesser of (x) the value (as defined in the First Half 2017 RSU Agreement) per share of the Company’s Class A stock as of such date, or if applicable, as of such earlier date upon which the restrictions otherwise lapse, or (y) the volume-weighted average price per share of the Company’s Class A stock for the period January 1, 2017 through June 30, 2017, as calculated in accordance with the agreement, multiplied by (ii) the number of RSUs with respect to which the restrictions have lapsed. However, notwithstanding this current intention, the Company reserves the right in its discretion to issue to Mr. Gabelli a number of shares of Class A Stock equal to the number of RSUs in lieu of such cash payment.
As described in Proposal 3, on September 30, 2017, the Company entered into a third restricted stock unit agreement with Mr. Gabelli, pursuant to which any Variable Compensation earned by him during the period October 1, 2017 through December 31, 2017, be awarded in the form of RSU’s under the Plan, subject to certain exceptions. If such RSUs are settled in shares of Class A Stock, Mr. Gabelli will receive 530,662shares of Class A Stock under the Plan. If Proposal 3 is approved by shareholders at the Annual Meeting, such shares will be reserved for issuance under the Plan. Subject to certain exceptions set forth in the Fourth Quarter 2017 RSU Agreement, the RSUs will vest in full on April 1, 2019, provided that Mr. Gabelli remains employed by the Company on such date. On April 1, 2019, the Company intends to make a cash payment to Mr. Gabelli equal to (i) the lesser of (x) the value (as defined in the Fourth Quarter 2017 RSU Agreement) per share of the Company’s Class A stock as of such date, or if applicable, as of such earlier date upon which the restrictions otherwise lapse, and (y) the volume-weighted average price per share of the Company’s Class A stock for the period October 1, 2017 through December 31, 2017, as calculated in accordance with the agreement, multiplied by (ii) the number of RSUs with respect to which the restrictions have lapsed. However, notwithstanding this current intention, the Company reserves the right in its discretion to issue to Mr. Gabelli a number of shares of Class A Stock equal to the number of RSUs in lieu of such cash payment.
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 of Directors 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 2017
The following table sets forth the cash and non-cash compensation for the fiscal years ended 2017, 2016 and 2015, respectively, paid to or earned by (i) our principal executive officer, (ii) our principal financial officers, and (iii) the other most highly compensated executive officers of the Company who were serving as of the end of the 2017 fiscal year. As used herein, the term “named executives” means all persons listed in the Summary Compensation Table for 2017 (the “Summary Compensation Table”).
| | | | | | | | | | | Change in | | | | |
| | | | | | | | | | | Pension Value | | | |
| | | | | | | | | | | and | | | | |
| | | | | | | | | Stock | | Nonqualified | | | | |
| | | | | Base | | | | Awards | Deferred | | All Other | | |
| | | | | Salary | | Bonus | | ($) | | Compensation | Compensation | Total |
Name and Principal Position | Year | | ($) | | ($) | | (k) | | Earnings ($) | | ($) | | ($) |
Mario J. Gabelli………………………… | 2017 | | -0- (a) | | -0- (b) | | -0- | | -0- | | 69,414,472 (c) | 69,414,472 |
| Chairman of the Board, | | 2016 | | -0- (a) | | -0- (b) | | -0- | | -0- | | 75,965,266 (c) | 75,965,266 |
| Chief Executive Officer | | 2015 | | -0- (a) | | -0- (b) | | -0- | | -0- | | 75,018,176 (c) | 75,018,176 |
| and Chief Investment | | | | | | | | | | | | | | |
| Officer - Value Portfolios | | | | | | | | | | | | | | |
The above compensation earned by Mr. Gabelli in 2017 and in 2016 was incentive-based variable compensation that was calculated in accordance with Mr. Gabelli’s Amended Employment Agreement. However, on December 21, 2015, the Company entered into a restricted stock unit agreement with Mr. Gabelli pursuant to which the Company determined to award Mr. Gabelli’s variable compensation generated in fiscal 2016 in the form of RSUs under the Plan and also entered into a second restricted stock unit agreement with Mr. Gabelli pursuant to which the Company determined to award Mr. Gabelli’s variable compensation generated in the period January 1, 2017 through June 30, 2017 in the form of RSUs under the Plan. Finally, as further described in Proposal 3 of this proxy statement on pages 9 to 10, on September 30, 2017, the Company entered into a third restricted stock unit agreement with Mr. Gabelli pursuant to which the Company determined to award Mr. Gabelli’s variable compensation generated in the period October 1, 2017 through December 31, 2017 in the form of RSUs under the Plan. |
(a) | Mr. Gabelli received no fixed salary. Refer to footnote (c). |
(b) | Mr. Gabelli received no bonus. Refer to footnote (c). |
(c) | Mr. Gabelli’s remuneration for the 2017, 2016 and 2015 fiscal years was comprised of the following: |
| Incentive Management Fee as CEO and Other of GAMCO* ($) | Portfolio Manager and Other Variable Remuneration ($) | Perquisites ($) | Total Remuneration ($) |
2017 | 13,261,327 | 56,153,145 | -0- | 69,414,472 |
2016 | 16,474,794 | 59,490,472 | -0- | 75,965,266 |
2015 | 12,767,406 | 62,250,770 | -0- | 75,018,176 |
* As described in the Compensation Discussion and Analysis herein.
The amounts set forth under the heading “Incentive Management Fee” consist of: $13,261,327 for 2017 (after reallocation to Mr. Jamieson of $250,000, to Mr. Handwerker of $100,000, to Mr. Caterina of $125,000, to Ms. LaPointe of $125,000, to Ms. Mullady of $100,000, and to other staff members of $694,000 and excludes $713,045 earned by Mr. Gabelli from Associated Capital); $16,474,794 for 2016 (after reallocation to Mr. Jamieson of $250,000, to Mr. Handwerker of $150,000, to Mr. Caterina of $125,000, to Ms. LaPointe of $125,000, to Ms. Mullady of $200,000, and to other staff members of $1,355,000, after a waiver of his receipt of $194,744, and excludes $1,065,575 earned by Mr. Gabelli from Associated Capital); and $12,767,406 for 2015 (after reallocation to Mr. Jamieson of $150,000, to Mr. Handwerker of $150,000, to Mr. Caterina of $175,000, to Ms. LaPointe of $125,000, to Ms. Mullady of $325,000, and to other staff members of $1,010,000, after a waiver of his receipt of $73,205, and excludes $177,055 earned by Mr. Gabelli directly from Associated Capital in the month of December 2015 (post-spin)). The amounts set forth under the heading “Portfolio Manager and Other Variable Remuneration” consist of: (1) $15,344,871, $17,226,411, and $18,719,804 for 2017, 2016 and 2015, respectively, for acting as portfolio manager and/or attracting and providing client service to a large number of GAMCO’s separate accounts, (2) $29,825,633, $30,299,529, and $34,033,084 for 2017, 2016 and 2015, respectively, for creating and acting as portfolio manager of several open-end GAMCO and Gabelli Funds, and (3) $10,982,641, $11,964,532, and $9,497,882 for 2017, 2016 and 2015, respectively, for creating and acting as portfolio manager of the closed-end Gabelli Funds. These amounts exclude the $493,330, $655,042 and $419,914 which relates to 2017, 2016, and 2015 amounts, respectively, earned by Mr. Gabelli from Associated Capital for acting as portfolio and relationship manager of investment partnerships. There were no perquisites or personal benefits provided by the Company to Mr. Gabelli for 2017, 2016, or 2015. Effective January 1, 2015, portfolio manager compensation that Mr. Gabelli earned by managing a fund for Teton, formerly a 42%-owned subsidiary of the Company whose shares were distributed to the Company’s shareholders on March 20, 2009, which relates entirely to what Mr. Gabelli earned for services he performed for Teton and that was paid to him by Teton and not by the Company, is excluded from his Portfolio Manager and Other Variable Remuneration in the above compensation table. Those amounts for 2017, 2016 and 2015 were $274,835, $1,458,148 and $1,741,117, respectively.
| | | | | | | | | | | Change in | | | | |
| | | | | | | | | | | Pension Value | | | |
| | | | | | | | | | | and | | | | |
| | | | | | | | | Stock | | Nonqualified | | | | |
| | | | | Base | | | | Awards | Deferred | | All Other | | |
| | | | | Salary | | Bonus | | ($) | | Compensation | Compensation | Total |
Name and Principal Position | Year | | ($) | | ($) | | (k) | | Earnings ($) | | ($) | | ($) |
Douglas R. Jamieson………………….. | 2017 | | 250,000 | | 350,000 | | -0- | | -0- | | 3,336,915 (d) | 3,936,915 |
| President and Chief Operating | 2016 | | 400,000 | | 280,000 | | -0- | | -0- | | 2,694,206 (d) | 3,374,206 |
| Officer of GAMCO Asset | | 2015 | | 393,750 | | 32,711 | | -0- | | -0- | | 3,224,623 (d) | 3,651,084 |
| Management Inc. and Former | | | | | | | | | | | | | |
| President and Chief Operating | | | | | | | | | | | | | |
| Officer of the Company (d) | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Kevin Handwerker…………………… | 2017 | | 350,000 | | 350,000 | | -0- | | -0- | | 155,000 (e) | | 855,000 |
| Executive Vice President, General | 2016 | | 350,000 | | 350,000 | | -0- | | -0- | | 155,000 (e) | | 855,000 |
| Counsel and Secretary (e) | | 2015 | | 350,000 | | 350,000 | | -0- | | -0- | | 154,000 (e) | | 854,000 |
| | | | | | | | | | | | | | | |
Kieran Caterina……………………….. | 2017 | | 275,000 | | 275,000 | | -0- | | -0- | | 150,000 (f) | | 700,000 |
| Senior Vice President and | | 2016 | | 275,000 | | 275,000 | | -0- | | -0- | | 125,194 (f) | | 675,194 |
| Co-Chief Accounting Officer (f) | 2015 | | 275,000 | | 275,000 | | -0- | | -0- | | 175,000 (f) | | 725,000 |
| | | | | | | | | | | | | | | |
Diane M. LaPointe…………………… | 2017 | | 275,000 | | 275,000 | | -0- | | -0- | | 130,000 (g) | | 680,000 |
| Senior Vice President and | | 2016 | | 269,375 | | 275,000 | | -0- | | -0- | | 130,194 (g) | | 674,569 |
| Co-Chief Accounting Officer (g) | 2015 | | 230,000 | | 230,000 | | -0- | | -0- | | 125,000 (g) | | 585,000 |
| | | | | | | | | | | | | | | |
Agnes Mullady………………………… | 2017 | | 350,000 | | -0- | | -0- | | -0- | | 500,000 (h) | | 850,000 |
| Senior Vice President, | | 2016 | | 350,000 | | 200,000 | | -0- | | -0- | | 403,007 (h) | | 953,007 |
| and President and Chief Operating | 2015 | | 350,000 | | 180,000 | | -0- | | -0- | | 350,000 (h) | | 880,000 |
| Officer of the Fund Division (h) | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Bruce Alpert…………………………… | 2017 | | 350,000 | | 150,000 | | -0- | | -0- | | 11,883 (i) | | 511,883 |
| Senior Vice President, | | 2016 | | 350,000 | | 150,000 | | -0- | | -0- | | 15,029 (i) | | 515,029 |
| and Executive Vice President, | 2015 | | 350,000 | | 140,000 | | -0- | | -0- | | 60,284 (i) | | 550,284 |
| Chief Operating Officer, and | | | | | | | | | | | | | |
| Chief Compliance Officer | | | | | | | | | | | | | | |
| of Gabelli Funds, LLC (i) | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Henry G. Van der Eb………………….. | 2017 | | 300,000 | | -0- | | -0- | | -0- | | 191,726 (j) | | 491,726 |
| Senior Vice President | | 2016 | | 300,000 | | -0- | | -0- | | -0- | | 180,382 (j) | | 480,382 |
| | | 2015 | | 300,000 | | -0- | | -0- | | -0- | | 193,901 (j) | | 493,901 |
(d) | Mr. Jamieson’s all other compensation represents incentive-based variable compensation in the amount of $2,936,915, $2,444,206, and $2,774,623 for 2017, 2016 and 2015, respectively, for attracting and/or providing client service to separate accounts, shareholders of the Gabelli or GAMCO Funds or investors in other products sponsored by GAMCO (“Variable Compensation”), $150,000 and $300,000 for 2017 and 2015, respectively, for allocation of fees received by Mr. Gabelli for creating and acting as portfolio manager and/or attracting and providing client service to a large number of GAMCO’s separate accounts as described in the “Variable Compensation” section of the Compensation and Discussion Analysis and in footnote (c) above and $250,000, $250,000, and $150,000 for 2017, 2016 and 2015, respectively, for allocation of the incentive-based management fee (10% of GAMCO pre-tax profits) by Mr. Gabelli as described in the “Variable Compensation” section of the Compensation and Discussion Analysis and in footnote (c) above. The 2017 amounts reported in the above table for Mr. Jamieson’s total compensation exclude $1,100,000 earned by Mr. Jamieson for services rendered to Associated Capital pursuant to the Transition Services Agreement in his role as a named executive officer of that company in 2017 and $237,269 in incentive-based variable compensation earned from Associated Capital. The 2016 amounts reported in the above table for Mr. Jamieson’s total compensation exclude $400,000 earned by Mr. Jamieson for services rendered to Associated Capital pursuant to the Transition Services Agreement in his role as a named executive officer of that company for a portion of 2016 and $297,026 in incentive-based variable compensation earned from Associated Capital. The 2015 amounts reported in the above table for Mr. Jamieson’s total compensation include an amount of $215,246 that was allocated to the carve-out financials of Associated Capital in the pre-spin 2015 period (January 1, 2015 to November 30, 2015), include an amount of $9,436 that was allocated to Associated Capital pursuant to the Transition Services Agreement (as defined and described in “Certain Relationships and Related Transactions” below) for the month of December 2015 (post-spin), but exclude $115,480 earned by Mr. Jamieson from Associated Capital in the month of December (post-spin). |
(e) | Mr. Handwerker’s all other compensation in 2017 represents $50,000 for allocation of fees received by Mr. Gabelli for creating and acting as portfolio manager and/or attracting and providing client service to a large number of GAMCO’s separate accounts as described in the “Variable Compensation” section of the Compensation and Discussion Analysis and in footnote (c) above, his allocation of $100,000, $150,000, and $150,000 in 2017, 2016, and 2015, respectively, for allocation of the incentive-based management fee (10% of GAMCO pre-tax profits) by Mr. Gabelli as described in the “Variable Compensation” section of the Compensation and Discussion Analysis and in footnote (c) above, as well as a payment in lieu of health insurance of $5,000 in each of 2017 and 2016 and of $4,000 in 2015. The 2017 and 2016 amounts reported in the above table for Mr. Handwerker’s total compensation include an amount of $267,900 and $162,150, respectively, that was allocated to Associated Capital for services that Mr. Handwerker rendered to Associated Capital as a named executive officer in that company pursuant to the Transition Services Agreement. The 2015 amounts reported in the above table for Mr. Handwerker’s total compensation include an amount of $156,358 that was allocated to the carve-out financials of Associated Capital in the pre-spin 2015 period (January 1, 2015 to November 30, 2015) and an amount of $12,936 that was allocated to Associated Capital pursuant to the Transition Services Agreement for the month of December 2015. |
(f) | Mr. Caterina has served as the Co-Principal Financial Officer of the Company since July 1, 2015. Mr. Caterina’s all other compensation in 2017, 2016 and 2015 represents his allocation of $125,000, $125,000 and $175,000, respectively, of the incentive-based management fee (10% of GAMCO pre-tax profits) by Mr. Gabelli as described in the “Variable Compensation” section of the Compensation and Discussion Analysis and in footnote (c) above, in 2017 also represents $25,000 for allocation of fees received by Mr. Gabelli for creating and acting as portfolio manager and/or attracting and providing client service to a large number of GAMCO’s separate accounts as described in the “Variable Compensation” section of the Compensation and Discussion Analysis and in footnote (c) above and Variable Compensation (as defined in note (d)) of $194 in 2016. The 2016 amounts reported in the above table for Mr. Caterina’s total compensation include an amount of $82,500 that was allocated to Associated Capital for services that Mr. Caterina rendered to Associated Capital pursuant to the Transition Services Agreement. The 2015 amounts reported in the above table for Mr. Caterina’s total compensation include an amount of $71,042 that was allocated to the carve-out financials of Associated Capital in the pre-spin 2015 period (January 1, 2015 to November 30, 2015) and an amount of $42,396 that was allocated to Associated Capital pursuant to the Transition Services Agreement for the month of December 2015. |
(g) | Ms. LaPointe has served as the Co-Principal Financial Officer of the Company since July 1, 2015. Ms. LaPointe’s all other compensation in 2017, 2016, and 2015 represents her allocation of $125,000 in each year of the incentive-based management fee (10% of GAMCO pre-tax profits) by Mr. Gabelli as described in the “Variable Compensation” section of the Compensation and Discussion Analysis and in footnote (c) above, Variable Compensation (as defined in note (d)) of $194 in 2016, as well as a payment in lieu of health insurance of $5,000 in each of 2017 and 2016. The 2016 amounts reported in the above table for Ms. LaPointe’s total compensation include an amount of $54,937 that was allocated to Associated Capital for services that Ms. LaPointe rendered to Associated Capital pursuant to the Transition Services Agreement. The 2015 amounts reported in the above table for Ms. LaPointe’s total compensation include an amount of $167,745 that was allocated to the carve-out financials of Associated Capital in the pre-spin 2015 period (January 1, 2015 to November 30, 2015) and an amount of $38,680 that was allocated to Associated Capital pursuant to the Transition Services Agreement for the month of December 2015. |
(h) | Ms. Mullady’s all other compensation in 2017, 2016, and 2015 represents her allocation of $100,000, $200,000, and $325,000, respectively, of the incentive-based management fee (10% of GAMCO pre-tax profits) by Mr. Gabelli as described in the “Variable Compensation” section of the Compensation and Discussion Analysis and in footnote (c) above, Variable Compensation (as defined in note (d)) of $400,000 and $203,007 in 2017 and 2016, respectively, and $25,000 for her 2015 allocation of fees received by Mr. Gabelli for creating and acting as portfolio manager and/or attracting and providing client service to a large number of GAMCO’s separate accounts as described in the “Variable Compensation” section of the Compensation and Discussion Analysis and in footnote (c) above. The 2017 and 2016 amounts reported in the above table for Ms. Mullady’s total compensation exclude $568,750 and $400,000 earned by Ms. Mullady for services rendered to Associated Capital pursuant to the Transition Services Agreement. |
(i) | Mr. Alpert’s all other compensation consists of $50,000 for 2015 allocation of fees received by Mr. Gabelli for creating and acting as portfolio manager and/or attracting and providing client service to a large number of GAMCO’s separate accounts as described in the “Variable Compensation” section of the Compensation and Discussion Analysis and in footnote (c) above, and Variable Compensation (as defined in note (d)) of $11,883, $15,029, and $10,284 for 2017, 2016, and 2015, respectively. The 2017 and 2016 amounts reported in the above table for Mr. Alpert’s total compensation exclude $2,197 and $1,474 in incentive-based variable compensation earned from Associated Capital. The 2015 amounts reported in the above table for Mr. Alpert’s total compensation include an amount of $11,311 that was allocated to the carve-out financials of Associated Capital in the pre-spin 2015 period (January 1, 2015 to November 30, 2015), include an amount of $816 that was allocated to Associated Capital pursuant to the Transition Services Agreement for the month of December 2015, but exclude $960 earned by Mr. Alpert from Associated Capital in the month of December (post-spin). |
.(j) Mr. Van der Eb’s all other compensation for 2017, 2016, and 2015 consists of $30,000, $25,000, and $25,000, respectively, for allocation of fees received by Mr. Gabelli for creating and acting as portfolio manager of several open-end Gabelli Funds, as described in the “Variable Compensation” section of the Compensation and Discussion Analysis and in footnote (c) above and for 2017, 2016, and 2015 also consists of Variable Compensation (as defined in note (d)) of $161,726, $155,382, and $168,901, respectively.
(k) The only stock awards granted to any named executive officer during 2017 were RSUs granted to Mr. Gabelli on September 30, 2017. As described in Grants of Plan-Based Awards for 2017, the Company intends to settle the amount in cash at a value that is the lesser of: (a) the value of the Class A Stock at the Vesting Date times the number of units granted of 530,662 or (b) $15,488,708. Please see the notes to the Grants of Plan-Based Awards for 2017 table for a detailed discussion.
(l) | On December 29, 2017, the Company issued $11,673,571 million of promissory notes payable to certain executive officers and employees relating to compensation earned in 2017. $5,506,592 million of the notes were due on January 31, 2018 and $6,166,979 million were due on February 28, 2018, and all amounts were paid in full on those respective dates. These named executive officers were issued such promissory notes in the following amounts: $6,166,979 to Mr. Gabelli, $1,071,510 to Mr. Jamieson, $293,455 to Mr. Handwerker, $267,678 to Mr. Caterina, $252,120 to Ms. LaPointe, $602,547 to Ms. Mullady, and $94,545 to Mr. Alpert. |
Grants of Plan-Based Awards for 2017
The following table (the “Grants of Plan-Based Awards”) shows all plan-based awards granted to our named executives during the fiscal year ended December 31, 2017. For additional information, see the narrative disclosure to the Summary Compensation Table and Grants of Plan-Based Awards Table below.
| | | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | Grant Date Fair Value of Stock and Option Awards | |
Name | | Grant Date | | | Threshold # | | | Target # | | | Maximum # | | | |
Mario J. Gabelli | | 9/30/17(1) | | | | (2)(3) | | | | (2)(3) | | | | 530,662 (2) | | | $ | 15,488,708 (1) | |
Douglas R. Jamieson | | | -- | | | | -- | | | | -- | | | | -- | | | | | |
Kevin Handwerker | | | -- | | | | -- | | | | -- | | | | -- | | | | | |
Kieran Caterina | | | -- | | | | -- | | | | -- | | | | -- | | | | | |
Diane LaPointe | | | -- | | | | -- | | | | -- | | | | -- | | | | | |
Agnes Mullady | | | -- | | | | -- | | | | -- | | | | -- | | | | | |
(1) | As further described below, Mr. Gabelli was granted RSUs during 2017 under the Company’s 2002 Stock Award and Incentive Plan, as amended, in lieu of receiving any cash compensation for the period October 1, 2017 to December 31, 2017 that he would otherwise be entitled to receive under his Amended Employment Agreement. An RSU award is an award of the right to receive cash or shares of Class A Stock. The date of the Fourth Quarter 2017 RSU Agreement granting the RSUs was September 30, 2017, but the grant date fair value reflected above is the volume-weighted average price per share of the Company’s Class A Stock for the period from October 1, 2017 to December 31, 2017, which was $29.1875. See note (2) for details. |
(2) | The Fourth Quarter 2017 RSU Agreement provides only for a single payout based on Mr. Gabelli’s variable compensation generated in the period from October 1, 2017 to December 31, 2017. The number of RSUs granted was calculated by dividing Mr. Gabelli’s variable compensation generated in that three month period by the volume-weighted average price (as defined in the RSU Agreement) per share of the Class A Stock for the same three month period. On the Vesting Date, the Company intends to make a cash payment to Mr. Gabelli in settlement of the RSUs granted under the RSU Agreement equal to (i) the lesser of (x) the value (as defined in the Fourth Quarter 2017 RSU Agreement) per share of the Company’s Class A stock as of the Vesting Date, or if applicable, as of such earlier date upon which the restrictions otherwise lapse, or (y) the volume-weighted average price per share of the Company’s Class A stock for the period October 1, 2017 through December 31, 2017, as calculated in accordance with the above description, multiplied by (ii) the number of RSUs with respect to which the restrictions have lapsed. However, notwithstanding this current intention, the Company reserves the right in its discretion to issue to Mr. Gabelli a number of shares of Class A Stock equal to the number of RSUs in lieu of such cash payment.
|
(3) | The threshold and target amounts are not yet determinable as the Company intends to cash settle the award, and that cash settlement is limited as described in note (2) above. |
(4) | There were no stock awards granted to any other named executives during 2017. |
Employment Agreements. Mr. Gabelli is currently the only named executive who has an employment agreement with the Company.
Mario J. Gabelli. On February 6, 2008, Mr. Gabelli entered into the Amended Employment Agreement with the Company, which was approved by the Company’s shareholders on November 30, 2007 and which limits his activities outside of the Company. The Amended Employment Agreement has a three-year initial term with an automatic extension for an additional year on each anniversary of its effective date unless either party gives written notice of termination at least 90 days in advance of the expiration date. The Amended Employment Agreement allows Mr. Gabelli to perform investment management services for former subsidiaries that are spun off to shareholders or otherwise cease to be subsidiaries in similar transactions and permits new investors in the outside accounts if all of the performance fees, less expenses, generated by assets attributable to such investors are paid to the Company. The Amended Employment Agreement was last submitted to, and re-approved by, the Company’s shareholders at the Annual Meeting of Shareholders held on May 5, 2015.
Mr. Gabelli (or, at his option, his designee) receives an incentive-based management fee in the amount of 10% of our aggregate annual pre-tax profits, if any, as computed for financial reporting purposes in accordance with U.S. generally accepted accounting principles (before consideration of this fee) so long as he is an executive of the Company and devotes the substantial majority of his working time to our business. This incentive-based management fee is subject to the Compensation Committee’s review at least annually for compliance with the terms of the Amended Employment Agreement. The Amended Employment Agreement may not be amended without theagainst approval of the Compensation Committee and Mr. Gabelli.
Mr. Gabelli was, however, not paid any cash compensation during 2016, during the period January 1, 2017 to June 30, 2017, or during the period October 1, 2017 to December 31, 2017 due to the three restricted stock unit agreements that were entered into with respect to the compensation for those periods.
On December 21, 2015, the Company entered into a restricted stock unit agreement with Mr. Gabelli, the Company’s Chief Executive Officer, pursuant to which the Company determined to award Mr. Gabelli’s Variable Compensation generated in fiscal 2016 in the form of RSUs under the Plan. Under the 2016 RSU Agreement, the number of RSUs granted was calculated by dividing the Variable Compensation generated in fiscal 2016 by the volume-weighted average price (as defined in the 2016 RSU Agreement) per share of the Class A Stock for fiscal 2016. If such RSUs are settled in shares of Class A Stock, Mr. Gabelli will receive 2,314,695 shares of Class A Stock under the Plan and accordingly, such shares have been reserved for issuance under the Plan. Subject to certain exceptions set forth in the 2016 RSU Agreement, the RSUs will vest in full on January 1, 2020, provided that Mr. Gabelli remains employed by the Company on such date. On January 1, 2020, the Company intends to make a cash payment to Mr. Gabelli in settlement of the RSUs granted under the 2016 RSU Agreement equal to the lesser of (x) the value (as defined in the 2016 RSU Agreement) per share of the Company’s Class A stock as of such date, or if applicable, as of such earlier date upon which the restrictions otherwise lapse, multiplied by the number of RSUs with respect to which the restrictions have lapsed, or (y) $75,965,266 which is the volume-weighted average price per share of the Company’s Class A stock for the 2016 fiscal year and is equivalent to Mr. Gabelli’s variable compensation for that period. However, notwithstanding this current intention, the Company reserves the right in its discretion to issue to Mr. Gabelli a number of shares of Class A Stock equal to the number of RSUs in lieu of such cash payment.
On December 23, 2016, the Company entered into a second restricted stock unit agreement with Mr. Gabelli pursuant to which the Company determined to award Mr. Gabelli’s Variable Compensation generated in first half of fiscal 2017 in the form of RSUs under the Plan. Under the First Half 2017 RSU Agreement, the number of RSUs granted was calculated by dividing the Variable Compensation generated in period from January 1, 2017 to June 30, 2017 by the volume-weighted average price (as defined in the First Half 2017 RSU Agreement) per share of the Class A Stock for that six month period. If such RSUs are settled in shares of Class A Stock, Mr. Gabelli will receive 1,244,018 shares of Class A Stock under the Plan and accordingly, such shares have been reserved for issuance under the Plan. Subject to certain exceptions set forth in the First Half 2017 RSU Agreement, the RSUs will vest in full on July 1, 2018, provided that Mr. Gabelli remains employed by the Company on such date. On July 1, 2018, the Company intends to make a cash payment to Mr. Gabelli in settlement of the RSUs granted under the First Half 2017 RSU Agreement equal to the lesser of (x) the value (as defined in the First Half 2017 RSU Agreement) per share of the Company’s Class A stock as of such date, or if applicable, as of such earlier date upon which the restrictions otherwise lapse, multiplied by the number of RSUs with respect to which the restrictions have lapsed, or (y) $36,897,086 which is the volume-weighted average price per share of the Company’s Class A stock for the January 1, 2017 to June 30, 2017 period and is equivalent to Mr. Gabelli’s variable compensation for that period. However, notwithstanding this current intention, the Company reserves the right in its discretion to issue to Mr. Gabelli a number of shares of Class A Stock equal to the number of RSUs in lieu of such cash payment.
On September 30, 2017, the Company entered into a third restricted stock unit agreement with Mr. Gabelli pursuant to which the Company determined to award Mr. Gabelli’s Variable Compensation generated in fourth quarter of fiscal 2017 in the form of RSUs under the Plan. Under the Fourth Quarter 2017 RSU Agreement, the number of RSUs granted was calculated by dividing the Variable Compensation generated in period from October 1, 2017 to December 31, 2017 by the volume-weighted average price (as defined in the Fourth Quarter 2017 RSU Agreement) per share of the Class A Stock for that three month period. If such RSUs are settled in shares of Class A Stock, Mr. Gabelli will receive 530,662 shares of Class A Stock under the Plan and accordingly, Proposal 3 on Pages 9 to 10 reflects a proposal to reserve such shares for issuance under the Plan. Subject to certain exceptions set forth in the Fourth Quarter 2017 RSU Agreement, the RSUs will vest in full on April 1, 2019, provided that Mr. Gabelli remains employed by the Company on such date. On April 1, 2019, the Company intends to make a cash payment to Mr. Gabelli in settlement of the RSUs granted under the Fourth Quarter 2017 RSU Agreement equal to the lesser of (x) the value (as defined in the Fourth Quarter 2017 RSU Agreement) per share of the Company’s Class A stock as of such date, or if applicable, as of such earlier date upon which the restrictions otherwise lapse, multiplied by the number of RSUs with respect to which the restrictions have lapsed, or (y) $15,488,708 which is the volume-weighted average price per share of the Company’s Class A stock for the October 1, 2017 to December 31, 2017 period and is equivalent to Mr. Gabelli’s variable compensation for that period. However, notwithstanding this current intention, the Company reserves the right in its discretion to issue to Mr. Gabelli a number of shares of Class A Stock equal to the number of RSUs in lieu of such cash payment.
In accordance with the Amended Employment Agreement, Mr. Gabelli chose to allocate $1,394,000, $2,205,000, and $1,935,000 of his management fee to certain other professional staff members of the Company in 2017, 2016 and 2015, respectively. He also elected to waive receipt of $194,744 and $73,205 of his management fee in 2016 and 2015, respectively.
Furthermore, as disclosed in a press release issued by the Company on February 23, 2018, Mr. Gabelli has elected to waive all of his compensation that he would otherwise have been entitled to receive under his employment agreement for the period March 1, 2018 to December 31, 2018.
Mr. Gabelli earned (after allocations and waiver) the following incentive-based management fees during the past five years:
| 2013 | 2014 | 2015 | 2016* | 2017 * |
Management Fee ($ in millions) | 16.5 | 14.4 | 12.8 | 16.5 | 13.3 |
* The management fee for 2017 and 2016 excludes $0.7 and $1.1 million, respectively, earned from Associated Capital. In addition, the management fee for the First Half and Fourth Quarter of 2017 and for all of 2016 is subject to the RSU agreements described above. The management fee for 2015 excludes $0.2 million earned from Associated Capital in December 2015 (post-spin). | | | | | |
Consistent with the Company’s practice since its inception in 1977, Mr. Gabelli will also continue receiving a percentage of revenues or net operating contribution, which are substantially derived from assets under management, as compensation relating to or generated by the following activities: (i) managing or overseeing the management of various investment companies and partnerships, (ii) attracting mutual fund shareholders, (iii) attracting and managing separate accounts and alternative funds, and (iv) otherwise generating revenues for the Company. Such payments are made in a manner and at rates as agreed to from time to time by GAMCO, which rates have been and generally will be the same as those received by other professionals at GAMCO performing similar services. With respect to our institutional and high net worth asset management and mutual fund advisory business, we pay out up to 40% of the revenues or net operating contribution to the portfolio managers and marketing staff who introduce, service or generate such business, with (i) payments involving the separate accounts being typically based on revenues and (ii) payments involving the mutual funds being typically based on net operating contribution.
In accordance with the terms of his Amended Employment Agreement, Mr. Gabelli has agreed that while he is employed by us he will not provide investment management services outside of GAMCO, except for certain permitted accounts or except for services to be performed for former subsidiaries that are spun off from the Company such as Teton. During January and February, 2017, Mr. Gabelli served as a portfolio manager for Teton, and during the full year 2017, he served as a portfolio manager for various privately offered funds.
Outstanding Equity Awards at December 31, 2017
The following table summarizes the number of securities underlying outstanding equity awards for the named executives as of December 31, 2017.
| Number of Securities Underlying Unexercised Options at December 31, 2017 | Option Exercise | Option Expiration | Number of Unvested Restricted Stock Awards and | Market Value of Unvested Restricted Stock Awards and Restricted Stock Units |
Name | Exercisable (#) | Unexercisable (#) | Price | Date | Restricted Stock Units | |
Mario J. Gabelli | -0- | -0- | N/A | N/A | 4,089,375(a) | 121,249,969(a) |
Douglas R. Jamieson | -0- | -0- | N/A | N/A | 5,000(b) | 148,250(b) |
Kevin Handwerker | -0- | -0- | N/A | N/A | 700(b) | 20,755(b) |
Agnes Mullady | -0- | -0- | N/A | N/A | 13,700(b) | 406,205(b) |
Amendment.(a) | As discussed under Employment Agreements on page 25, the Company has entered into three restricted stock unit agreements with Mr. Gabelli. Although the Company intends to make a cash payment to settle these awards on the vesting dates and that cash payment can be less than the market value of the Class A Stock on the vesting dates due to the terms described on pages 25 to 26, the above table reflects the market value of the outstanding unvested GAMCO restricted stock units for Mr. Gabelli determined with reference to the $29.65 per share closing price of GAMCO’s Class A Stock on December 29, 2017. The Company at its discretion can settle the awards, in whole or in part, in stock notwithstanding its current cash settlement intention. The first award of 2,314,695 units vests 100% on January 1, 2020 and, if settled in cash, will be at the lesser of $32.8187 per share or the price of GAMCO’s Class A stock on the vesting date. The second award of 1,244,018 units vests on July 1, 2018, and, if settled in cash, will be at the lesser of $29.6596 per share or the price of GAMCO’s Class A stock on the vesting date. The third award of 530,662 units vests on April 1, 2019, and, if settled in cash, will be at the lesser of $29.1875 per share or the price of GAMCO’s Class A stock on the vesting date. 7 |
(b) | The market value of the outstanding unvested GAMCO restricted stock awards on the above table is determined with reference to the $29.65 per share closing price of GAMCO’s Class A Stock on December 29, 2017. On January 5, 2018, the Compensation Committee of GAMCO’s Board of Directors approved the accelerated vesting on January 12, 2018 of the remaining total 19,400 outstanding GAMCO RSAs held by Mr. Jamieson, Mr. Handwerker, and Ms. Mullady. |
TABLE OF CONTENTS
Options Exercises and Stock Vested for 2017
The following table summarizes stock options exercised by and restricted stock awards which vested for the named executives during 2017.
| Option awards | Restricted stock awards | |
Name | Number of shares acquired on exercise (#) | Value realized on exercise ($) | Number of shares acquired on vesting (#) | Value realized on vesting ($) | |
Mario J. Gabelli | -0- | -0- | -0- | -0- | |
Douglas R. Jamieson | -0- | -0- | 1,200 | 36,492 | (a) (b) |
Kevin Handwerker | -0- | -0- | 300 | 8,859 | (a) (b) |
Kieran Caterina | -0- | -0- | 5,500 | 168,675 | (a) (b) |
Diane M. LaPointe | -0- | -0- | 5,000 | 153,580 | (a) (b) |
Agnes Mullady | -0- | -0- | 2,600 | 79,242 | (a) (b) |
Bruce Alpert | -0- | -0- | 2,800 | 86,892 | (a) (b) |
Henry Van der Eb | -0- | -0- | 700 | 21,723 | (a) (b) |
(a) | Includes $1,356, $222, $6,440, $6,080, $3,016, $4,256, and $1,064 payment on the vesting date of accumulated cash dividends on these RSAs for Mr. Jamieson, Mr. Handwerker, Mr. Caterina, Ms. LaPointe, Ms. Mullady, Mr. Alpert and Mr. Van der Eb, respectively. |
(b) | On November 30, 2015, pursuant to the spin-off of Associated Capital which contained the Company’s alternative investment management business, its institutional research services business and certain cash and other assets, our named executive officers, along with certain of the Company’s other teammates, received shares of Associated Capital’s Class A common stock as a result of their ownership of their GAMCO unvested restricted stock awards. These GAMCO awards entitled them to the same benefits as holders of the Company’s Class A Stock, which was one share of Associated Capital’s Class A common stock for each share of GAMCO’s Class A Stock. The vesting and other provisions of the Associated Capital awards that were received on the spin-off date were identical to those of the related GAMCO awards. However, during 2017, the Compensation Committee of GAMCO’s Board of Directors accelerated the vesting of a portion of the outstanding GAMCO RSAs held by teammates including those held by some of our named executive officers, and the Compensation Committee of Associated Capital’s Board of Directors accelerated the vesting of all of the outstanding Associated Capital RSAs held by our teammates and our named executive officers. |
(c) | As discussed in note (b) above, the value realized on vesting in 2017 of the GAMCO restricted stock awards in the above table is reflective of the transfer of value of that portion of the Company that was distributed to, and ascribed to the value of the stock of, Associated Capital. To reflect the full value realized on vesting of the awards that vested for each named executive officer during 2017, one needs to add the value realized on vesting of the GAMCO restricted stock awards that vested during 2017 shown in the above table to the value realized on vesting of the Associated Capital restricted stock awards that also vested during 2017. The value realized on vesting of the Associated Capital awards that vested during 2017 (including the payment of accumulated cash dividends on the vesting date) was $214,210, $34,550, $190,025, $172,750, $563,165, $96,740, and $24,185 for Mr. Jamieson, Mr. Handwerker, Mr. Caterina, Ms. LaPointe, Ms. Mullady, Mr. Alpert, and Mr. Van der Eb, respectively. Therefore the total value realized on the vesting of the GAMCO and Associated Capital awards that vested during 2017 (including the payment of accumulated cash dividends on the vesting date) was $250,702, $43,409, $358,700, $326,330, $642,407, $183,632, and $45,908 for Mr. Jamieson, Mr. Handwerker, Mr. Caterina, Ms. LaPointe, Ms. Mullady, Mr. Alpert, and Mr. Van der Eb, respectively. |
Nonqualified Deferred Compensation Table for 2017
There was no nonqualified deferred compensation payable to the named executives during 2017.
Pension Benefits for 2017
| There were no pension benefit plans for any of the named executives during 2017. |
Potential Payments Upon Termination of Employment or Change-of-Control.
Upon a change-of-control of the Company, Mr. Gabelli’s deferred compensation in cash or RSUs and all RSAs held by the other named executives (if still employed by the Company at such time) automatically vest, and the accumulated but unpaid dividends associated with the RSAs would become immediately payable. There are no accumulated dividends associated with the RSUs.
The following table sets forth information on the value of GAMCO RSUs and RSAs held on December 31, 2017 and the accumulated but unpaid dividends on the RSAs through December 31, 2017, which would have been payable had a change-of-control occurred on that date. The price per share assumed is $29.65, which was the closing price of Class A Stock on December 29, 2017.
Name | | Fair Value of Unvested GBL RSAs and RSUs at December 31, 2017 | | | Accumulated but Unpaid Dividends on These RSAs at December 31, 2017 | | | Total ($) | |
Mario J. Gabelli | | $ | 121,249,969(a | ) | | $ | -0- | | | $ | 121,249,969(a | ) |
Douglas R. Jamieson | | | 148,250 | | | | 6,680 | | | | 154,930 | |
Kevin Handwerker | | | 20,755 | | | | 532 | | | | 21,287 | |
Agnes Mullady | | | 406,205 | | | | 16,332 | | | | 422,537 | |
Total | | $ | 121,825,179 | | | $ | 23,544 | | | $ | 121,848,723 | |
(a) | Mr. Gabelli was granted RSUs as deferred compensation in lieu of cash compensation during both 2016 and 2017. All of the compensation earned by Mr. Gabelli in 2016 and 2017 was incentive-based variable compensation that was calculated in accordance with Mr. Gabelli’s Amended Employment Agreement. Mr. Gabelli was, however, not paid any cash compensation during 2016 nor during the first half or fourth quarter of 2017. Although the Company intends to make a cash payment to settle these awards on the vesting dates and that cash payment can be less than the market value of the Class A Stock on the vesting dates due to the terms described on pages 25 to 26, the above table reflects the market value of the outstanding unvested GAMCO restricted stock units for Mr. Gabelli determined with reference to the $29.65 per share closing price of GAMCO’s Class A Stock on December 29, 2017. The Company at its discretion can settle the awards, in whole or in part, in stock notwithstanding its current cash settlement intention. Also see note (a) regarding outstanding equity grants in lieu of cash compensation on page 27 for further discussion of Mr. Gabelli’s RSU awards.
|
(b) | On January 5, 2018, the Compensation Committee of GAMCO’s Board of Directors approved the accelerated vesting on January 12, 2018 of all of the remaining outstanding GAMCO RSAs (shown above) held by Mr. Jamieson, Mr. Handwerker, and Ms. Mullady. |
CEO PAY RATIO
As a result of rules adopted under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC has adopted a rule requiring us to disclose in this proxy statement the ratio of the annual total compensation of Mr. Gabelli, our Chairman and CEO, to the median of the annual total compensation of all of our employees (excluding Mr. Gabelli). We determined that Mr. Gabelli’s 2017 annual total compensation was $69,414,472 (as further described in the Summary Compensation Table set forth above), the median of the 2017 annual total compensation of all of our employees (excluding Mr. Gabelli) was $215,615, and the ratio of these amounts was 322 to 1.
To identify the “median employee” for purposes of this disclosure (i.e., the individual employee whose compensation was at the median level among our entire employee group), we used a determination date of December 31, 2017 and analyzed, for all of the individuals employed by us or any of our consolidated subsidiaries on that date, the compensation that we paid to each of those individuals for the 12-month period ending on that date. We considered each employee’s “compensation” to consist of the employee’s total gross earnings for the 12-month period ending December 31, 2017, including base salary, bonus, variable compensation, and the fair value of stock awards vested under the Plan. The compensation for employees, other than temporary employees, who were not employed by us for the entire 12-month period ending December 31, 2017 was annualized to reflect compensation for the entire 12-month period.
The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
CERTAIN OWNERSHIP OF OUR STOCK
The following table sets forth, as of March 1, 2018,June 18, 2021, certain information with respect to all persons known to us who beneficially own more than 5% of the Class A Stock or Class B Stock. The table also sets forth information with respect to stock ownership of the directors, nominees, each of the named executive officers, named in the Summary Compensation Table, and all directors and executive officers as a group. The number of shares beneficially owned is determined under rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares over which a person has the sole or shared voting or investment power and any shares which the person can acquire within 60 days (e.g., through the exercise of stock options). Except as otherwise indicated, the shareholders listed in the table have sole voting and investment power with respect to the shares set forth in the table.
Name of Beneficial Owner* | | Title of Class | | Number of Shares | | Number of Shares Acquirable within 60 days | | Percent of Class (%) |
5% or More Shareholders | | | | | | | | |
Frederick J. Mancheski | | Class A | | 1,136,704 | (1) | -0- | | 11.48 |
E.S. Barr & Company | | Class A | | 523,207 | (2) | -0- | | 5.29 |
| | | | | | | | |
Directors and Executive Officers | | | | | | | | |
Mario J. Gabelli | | Class A | | 4,410,055 | (3) | -0- | | 44.55 |
| | Class B | | 18,767,036 | (4) | -0- | | 98.65 |
Douglas R. Jamieson | | Class A | | 12,539 | (5) | -0- | | ** |
| | Class B | | 29,471 | | -0- | | ** |
Kevin Handwerker | | Class A | | 404 | | -0- | | ** |
Kieran Caterina | | Class A | | 2,663 | | -0- | | ** |
Diane M. LaPointe | | Class A | | 3,996 | (6) | -0- | | ** |
Agnes Mullady | | Class A | | 21,939 | | -0- | | ** |
Bruce Alpert | | Class A | | 9,119 | | -0- | | ** |
| | Class B | | 1,720 | | -0- | | ** |
Henry Van der Eb | | Class A | | -0- | | -0- | | ** |
| | | | | | | | |
Edwin L. Artzt | | Class A | | 3,000 | | -0- | | ** |
Raymond C. Avansino, Jr. | | Class A | | 90,000 | (7) | -0- | | ** |
Leslie B. Daniels | | Class A | | -0- | | -0- | | ** |
| | | | | | | | |
| | | | | | | | |
Eugene R. McGrath | | Class A | | 5,300 | (8) | -0- | | ** |
Robert S. Prather, Jr. | | Class A | | 10,010 | | -0- | | ** |
Elisa M. Wilson | | Class A | | 3,500 | | -0- | | ** |
| | Class B | | 15,808 | | -0- | | ** |
All Directors & Executive Officers as a Group (14 persons) | | Class A | | 4,572,525 | | -0- | | 46.19 |
| | Class B | | 18,814,035 | | -0- | | 98.89 |
Percentage of class is calculated based on 8,223,431 shares of Class A Stock and 19,024,117 shares of Class B Stock outstanding as of June 18, 2021.Name of Beneficial Owner* | Title of Class | Number of Shares | | Number of Shares Acquirable within 60 days | | Percent of Class (%) |
5% or More Shareholders | | | | | | |
BlackRock, Inc. | Class A | 461,490 | | -0- | | 5.61 |
| | | | | | |
Directors and Executive Officers | | | | | | |
Mario J. Gabelli | Class A | 2,557,858 | (1) | -0- | | 31.10 |
| Class B | 18,767,036 | (2) | -0- | | 98.65 |
Douglas R. Jamieson | Class A | 107,704 | | -0- | | 1.31 |
| Class B | 29,471 | | -0- | | ** |
Kevin Handwerker (3) | Class A | 14,536 | | -0- | | ** |
Kieran Caterina | Class A | 19,412 | | -0- | | ** |
Bruce Alpert | Class A | 11,684 | | -0- | | ** |
| Class B | 1,720 | | -0- | | ** |
Henry Van der Eb | Class A | 1,700 | | -0- | | ** |
Edwin L. Artzt | Class A | 3,000 | | -0- | | ** |
Raymond C. Avansino, Jr. | Class A | 141,500 | (4) | -0- | | 1.72 |
Leslie B. Daniels | Class A | 10,000 | | -0- | | ** |
Eugene R. McGrath | Class A | 12,455 | (5) | -0- | | ** |
Robert S. Prather, Jr. | Class A | 10,010 | | -0- | | ** |
Elisa M. Wilson | Class A | -0- | | -0- | | ** |
| Class B | 23,808 | | -0- | | ** |
All Directors & Executive Officers as a Group (12 persons) | Class A Class B | 2,931,798 18,822,035 | | -0- -0- | | 35.65 98.94 |
__________________
| (*) | The address of each beneficial owner of more than 5% of the Class A Stock or Class B Stock is as follows: Frederick J. Mancheski, 5400 Plantation Road, Unit 1256, Captiva, Florida 33924 or Philip M. Halpern, Esq.BlackRock, Inc., Collier, Halpern, Newberg & Nolletti, LLP, One North Lexington Avenue, White Plains,55 East 52nd Street, New York, 10601; E.S. Barr & Company, 1999 Richmond Road, Suite 1B, Lexington, Kentucky 40502;NY 10055 and Mario J. Gabelli, GAMCO Investors, Inc., One Corporate Center, Rye, New York 10580.191 Mason Street, Greenwich, CT 06830. |
| (**) | Represents beneficial ownership of less than 1%.
Pursuant to a resolution approved by the Board, as of February 6, 2018, there are 600,230 shares of the Class B Stock that may be converted into Class A Stock. |
Pursuant to a resolution approved by the Board, as of March 31 2021, there are 599,943 shares of the Class B Stock that may be converted into Class A Stock.
(1) | As reported in Amendment No. 7 to Schedule 13D filed with the SEC by Frederick J. Mancheski on November 30, 2016, Mr. Mancheski beneficially owns 1,136,704 shares of Class A Stock. According to this filing, all 1,136,704 of the shares are owned by Mr. Mancheski. |
(2) | As reported in Amendment No. 7 to Schedule 13G that was filed with the SEC by E.S. Barr & Company on February 13, 2018. According to this filing, E.S. Barr & Company beneficially owns 523,207 shares, Edward S. Barr beneficially owns 528,944 shares which includes 5,737 shares he holds individually (or through retirement accounts for his benefit), and E.S. Barr Holdings, LLC beneficially owns 523,207 shares. |
(3)(1) | Of this amount, 2,0008,642 are owned directly by Mr. Gabelli, 15,00021,006 shares are held by GGCP, 2,193,055Inc. (“GGCP”), 816,501 shares are held by Gabelli & Company Investment Advisers, Inc. (“GCIA”), and 2,200,0001,711,709 shares held by G.research, LLC.Associated Capital Group, Inc. (“AC”) Mr. Gabelli has voting and dispositive control of these shares. Mr. Gabelli is deemed to be the controlling person of AC on the basis of his ownership of a majority of the voting stock and the capital stock of GGCP, which, through GGCP Holdings, LLC (“GGCP Holdings”), owns a majority of the voting stock and a majority of the capital stock of AC. GCIA is a 100% owned subsidiary of AC. |
(4) | (2) | Of this amount, 453,295 are owned directly by Mr. Gabelli and 18,313,741 of these shares are owned by GGCP Holdings via GGCP. Mr. Gabelli may be deemed to have beneficial ownership of the Class B Stock held by GGCP Holdings on the basis of (i) his position as the Chief Executive OfficerCEO of, a director of, and the controlling shareholder of GGCP which is the manager and the majority member of GGCP Holdings, and (ii) a certain profit interest in GGCP Holdings. Mr. Gabelli disclaims beneficial ownership of the shares owned by GGCP Holdings except to the extent of his pecuniary interest therein. |
(5) | Includes 820 shares for which (3) | Mr. Jamieson is the Uniform Gift to Minors Act Custodian forHandwerker retired from his minor child’s accountroles at GAMCO and 3,280 shares held by four of his children who have reached the age of legal majority but who continue to reside in Mr. Jamieson’s household. Mr. Jamieson has votingAC effective April 16, 2021 and dispositive control of these shares.was retained as a consultant through December 31, 2021. |
(6) | These(4) | Of these shares, are held by a Revocable Trust for which Ms. LaPointe is a trustee and therefore71,000 shares voting and dispositive power over these shares. |
(7) | Includes 60,000 shares that are owned by two entitiesan entity for which Mr. Avansino serves as a director, and officer.officer, or trustee. Mr. Avansino disclaims beneficial ownership of these 60,000 shares. |
(8) | (5) | Includes 1,0002,350 shares held by a trust for which Mr. McGrath is a trustee and has shared voting and dispositive power with respect to these shares with his spouse. |
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on a reviewWHERE YOU CAN FIND MORE INFORMATION
GAMCO makes available free of filings made under Section 16(a) of the Securities Exchange Act of 1934, we believe that our directors and executive officers and our shareholders who own 10% or more of our Class A Stock or Class B Stock have complied with the requirements of Section 16(a) of the Securities Exchange Act of 1934 to report ownership, and transactions which change ownership, on time for 2017, except for one Form 4 filing reporting a transaction occurring on June 19, 2017 by Douglas R. Jamieson which was not filed on a timely basis.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
GGCP,charge through Holdings, owns a majority of our Class B Stock representing approximately 91% of the combined voting power and approximately 63% of the outstanding shares of our common stock at December 31, 2017. Mr. Mario Gabelli serves as the Chief Executive Officer, a director and is the controlling shareholder of GGCP. Various family members of Mr. Mario Gabelli are shareholders of GGCP including Mr. Marc Gabelli and Ms. Wilson. Mr. Marc Gabelli serves as President and Managing Director of GGCP.
AC and its subsidiaries owned approximately 4.4 million shares of our Class A Stock, representing approximately 2% of the combined voting power and 15% of the outstanding shares of our Class A common stock at December 31, 2017. On March 5, 2018, AC completed an exchange offer with respect to its Class A common stock. Tendering shareholders received 1.35 shares of GBL Class A common stock for each share of AC Class A common stock that they tendered, together with cash in lieu of any fractional share. There were approximately 490,000 shares of AC Class A common stock tendered and accepted by AC. AC delivered approximately 660,000 shares of GBL Class A common stock that they held to the tendering shareholders. After the exchange, AC and its subsidiaries, own approximately 3.7 million shares of our Class A common stock, representing approximately 2% of the combined voting power and 13% of the outstanding shares of our Class A common stock.
For 2017, the Company incurred variable costs of $327,707 for actual usage (but not the fixed costs) relating to our use of aircraft in which GGCP owns the fractional interests.
Since 1997, we have leased an approximately 60,000 square foot building located at 401 Theodore Fremd Avenue, Rye, New York as our headquarters (the “Building”) from M4E, an entity that is owned by family members of Mr. Mario Gabelli, including Ms. Wilson. Under the lease for the Building, which, on June 11, 2013, was extended to December 31, 2028 with no change to the base rental of $18 per square foot, we are responsible for all operating expenses, costs of electricity and other utilities and taxes. For 2017, the rent was $1,210,614, or $20.18 per square foot. As a member of M4E, Ms. Wilson is entitled to receive her pro-rata share of payments received by M4E under the lease.
As of April 1, 2016, we lease approximately 15,000 square feet in the Building to AC. We entered into the initial lease on April 1, 2016 for a one year term and entered into the current lease on April 1, 2017 with another one year term. The total amount paid in 2017 for rent and other expenses under these leases was $374,401. We entered into a new lease in February 2018 for an additional one year term which will begin on April 1, 2018 at a rate of $36.71 per square foot plus $3 per square foot for electricity, subject to adjustment for increases in taxes and other operating expenses.
We sublease approximately 3,300 square feet in the Building to LICT, a company for which Mr. Mario Gabelli serves as Chairman and CEO and is deemed to be the controlling shareholder. LICT pays rent to us at the rate of $28 per square foot plus $3 per square foot for electricity, subject to adjustment for increases in taxes and other operating expenses. The total amount paid to us in 2017 for rent and other expenses under this lease was $116,756. This sublease expires on December 5, 2023.
We also sublease approximately 1,600 square feet in the Building to Teton, a company for which, since March 1, 2017, GAMCO serves as a subadvisor, and Mr. Gabelli serves as portfolio manager under that subadvisory agreement. Mr. Gabelli previously served as portfolio manager for Teton from 1998 to February 2017. Teton is an asset management company which was spun-off from the Company in March 2009. Teton pays rent to us at the rate of $37.75 per square foot plus $3 per square foot for electricity, subject to adjustment for increases in taxes and other operating expenses. The total amounts paid in 2017 to us for rent and other expenses under this lease were $68,293.
We lease 1,599 square feet of office space in Reno, Nevada from Miami Oil Producers, Inc., for which Mr. Avansino serves as the Chairman and President. We pay a base rent of $3,279 per month plus the cost of parking and subject to adjustment annually for changes in the consumer price index. We entered into the current lease on January 1, 2011 with a 3 year term and thereafter subject to an option to extend the term for a year at a time. We extended the term by one year on January 1, 2015 with it remaining subject to an option to extend the term for one year at a time. We further extended the term by one year each on January 1, 2016 and January 1, 2017 with it remaining subject to an option to extend the term for one year at a time. We are currently in negotiations to extend the term for an additional one year through December 31, 2018. For the period January 1, 2017 through December 31, 2017, the rent was $40,788, or $25.51 per square foot. In 2009, GAMCO entered into a sublease of a portion of this office space in Reno, Nevada to CIBL, Inc. (“CIBL”). Mr. Mario Gabelli is a director of CIBL, and an affiliate of Mr. Gabelli is its largest shareholder. Under the terms of the Reno sublease, the Company granted CIBL the right to use such part of GAMCO’s Reno office as the Company and CIBL shall from time to time agree. The sublease granted CIBL the right to use space in the Reno office until July 31, 2009 with an automatic renewal for one additional calendar year which extended the sublease until July 31, 2010. Since August 1, 2010, the space has been subleased on a month-to-month basis. For 2017, the rent for the Reno sublease was $6,000.
In addition to the sublease of space in the Building, we entered into a number of agreements in connection with the Company’s distribution of the shares of Class A and B common stock in Teton in March 2009. These agreements are as follows: a Separation and Distribution Agreement, an Administrative and Management Services Agreement (“Administrative Agreement”) and Service Mark and Name License Agreement (the “License Agreement”). Pursuant to the Administrative Agreement, we provide certain services to Teton including senior executive functions, strategic planning and general corporate management services; mutual fund administration services; treasury services, including insurance and risk management services and administration of benefits; operational and general administrative assistance including office space, office equipment, administrative personnel, payroll, and procurement services as needed; accounting and related financial services; legal, regulatory and compliance advice, including the retention of a Chief Compliance Officer; and human resources functions, including sourcing of permanent and temporary employees as needed, recordkeeping, performance reviews and terminations. Effective January 1, 2011, the Administrative Agreement was amended to be based on a tiered formula as opposed to a fixed rate. Under the amended agreement, the Company is compensated by Teton 20 basis points annually on the first $370 million of average assets under management (“AUM”) in the Teton funds, 12 basis points annually on the next $630 million of average AUM in the Teton funds, and 10 basis points annually of average AUM in the Teton funds in excess of $1 billion. The License Agreement provides Teton and the funds that it manages the use of certain names and service marks. Effective April 1, 2014, the Administrative Agreement was further amended to increase the fixed monthly component of it from $15,000 per month to $25,000 per month. Pursuant to the Administrative Agreement and the License Agreement, the Company was compensated by Teton in the amount of $25,000 per month from April 1, 2014 through September 30, 2016, $18,750 for October 1, 2016 through May 31, 2017, and $4,167 per month for June 1, 2017 through December 31, 2017. For the full year 2017, the Company was compensated by Teton $122,917 for the full year, plus an average of 13.4 basis points of the average AUM in the Teton funds (pursuant to the tiered formula) for providing mutual fund administration services to these funds, or $1,936,662 for 2017. We sublease space in the Building to Teton as discussed above. G.distributors, LLC (“G.distributors”), an affiliated broker-dealer of the Company, served as distributor to the seven mutual funds that are managed by Teton during 2016. In 2017, the funds managed by Teton paid G.distributors $3,683,379 in distribution fees, of which $3,318,419 was reallocated to other broker dealers by G.distributors. In addition, in 2017 Keeley-Teton Advisors, Inc., a wholly-owned subsidiary of Teton, paid G.distributors $150,000 in distribution fees. In 2017, Mr. Mario Gabelli earned $274,835 in portfolio manager compensation for acting as co-manager of the GAMCO Westwood Mighty Mites Fund, a Teton micro-cap fund; such amount is excluded from his compensation earned for 2017 shown earlier in the Summary Compensation Table for 2017 as indicated in footnote (c) to that table.
Effective January 1, 2014, GAMCO and Funds Advisor each entered into a research services agreement with G.research, LLC, a wholly-owned subsidiary of GCIA (which is a wholly-owned subsidiary of Associated Capital subsequent to the spin-off), for G.research, LLC to provide them with the same types of research services that it provides to its other clients. In 2017, GAMCO and Funds Advisor paid G.research, LLC $2,250,000 and $2,280,000, respectively.
In connection with the spin-off of Associated Capital in November 2015, we entered into certain other agreements with Associated Capital to define our ongoing relationship with Associated Capital after the spin-off. These other agreements define responsibility for obligations arising before and after the distribution date, including certain transitional services and taxes and are summarized below.
Separation and Distribution Agreement
On November 30, 2015, we entered into a Separation and Distribution Agreement with Associated Capital (the “Separation Agreement”), which contains the key provisions relating to the separation of Associate Capital’s business from that of GAMCO and the distribution of the Associated Capital common stock. The Separation Agreement identified the assets transferred, liabilities assumed and contracts assigned to Associated Capital by GAMCO and by Associated Capital to GAMCO in the spin-off and describes when and how these transfers, assumptions and assignments occurred. The Separation Agreement also includes procedures by which GAMCO and Associated Capital became separate and independent companies. The Separation Agreement also provides that, as of November 30, 2015, each party released the other party and their respective affiliates and their directors, officers, employees and agents from all claims, demands and liabilities, in law and in equity, against such other party, which such releasing party has or may have had relating to events, circumstances or actions taken by such other party prior to the distribution. This release does not apply to claims arising from the Separation Agreement.
Indemnification
GAMCO has agreed to indemnify Associated Capital and its directors, officers, employees, agents and affiliates (collectively, ‘‘Associated Capital indemnitees’’) against all losses, liabilities and damages incurred or suffered by any of the Associated Capital indemnitees arising out of:
•GAMCO’s business;
•the failure or alleged failure of GAMCO or any of its subsidiaries to pay, perform or otherwise discharge in due course any of GAMCO liabilities;
•a breach by GAMCO of any of its obligations under the Separation Agreement; and
•any untrue statement or alleged untrue statement of a material fact: (i) contained in any document filed with the SEC by GAMCO pursuant to any securities rule, regulation or law, (ii) otherwise disclosed by GAMCO or its subsidiaries to investors or potential investors in GAMCO or its subsidiaries or (iii) furnished to any Associated Capital indemnitee by GAMCO or any of its subsidiaries for inclusion in any public disclosures to be made by any Associated Capital indemnitee; or any omission or alleged omission to state in any information described in clauses (i), (ii) or (iii) a material fact necessary to make the statements not misleading. The indemnity described in this paragraph is available only to the extent that Associated Capital losses are caused by any such untrue statement or omission or alleged untrue statement or omission, and the information which is the subject of such untrue statement or omission or alleged untrue statement or omission was not supplied after the spin-off by Associated Capital or its agents.
Similarly, Associated Capital has agreed to indemnify GAMCO and its directors, officers, employees, agents and affiliates (collectively, ‘‘GAMCO indemnitees’’) against all losses, liabilities and damages incurred or suffered by any of the GAMCO indemnitees arising out of:
•Associated Capital’s business;
•the failure or alleged failure of Associated Capital or any of its subsidiaries to pay, perform or otherwise discharge in due course any of Associated Capital liabilities;
•a breach by Associated Capital of any of its obligations under the Separation Agreement; and
•any untrue statement or alleged untrue statement of a material fact: (i) contained in any document filed with the SEC by Associated Capital following the distribution pursuant to any securities rule, regulation or law, (ii) otherwise disclosed following the distribution by Associated Capital or its subsidiaries to investors or potential investors in Associated Capital or its subsidiaries or (iii) furnished to any GAMCO indemnitee by Associated Capital or any of its subsidiaries for inclusion in any public disclosures to be made by any GAMCO indemnitee; or any omission or alleged omission to state in any information described in clauses (i), (ii) or (iii) a material fact necessary to make the statements not misleading. The indemnity described in this paragraph is available only to the extent that GAMCO losses are caused by any such untrue statement or omission or alleged untrue statement or omission, and the information which is the subject of such untrue statement or omission or alleged untrue statement or omission was not supplied by GAMCO or its agents.
Transitional Administrative and Management Services Agreement
On November 30, 2015, we entered into a Transitional Administrative and Management Services Agreement with Associated Capital (the “Transition Services Agreement”) pursuant to which GAMCO will provide Associated Capital with a variety of services and Associated Capital will provide payroll services to GAMCO following the spin-off. Among the principal services GAMCO will provide to Associated Capital are:
accounting, financial reporting and consolidation services, including the services of a financial and operations principal;
treasury services, including, without limitation, insurance and risk management services and administration of benefits;
•tax planning, tax return preparation, recordkeeping and reporting services;
•human resources, including but not limited to the sourcing of permanent and temporary employees as needed, recordkeeping, performance reviews and terminations;
•legal and compliance advice, including the services of a Chief Compliance Officer;
•technical/technology consulting; and
•operations and general administrative assistance, including office space, office equipment and furniture, payroll, procurement, and administrative personnel.
In providing the services pursuant to this agreement, GAMCO may, subject to the prior written consent of Associated Capital, employ consultants and other advisers in addition to utilizing its own employees. Services provided by GAMCO to Associated Capital or by Associated Capital to GAMCO under the Transition Services Agreement are charged at cost and for the fiscal year ended December 31, 2017, we paid Associated Capital approximately $6,363,040, and Associated Capital paid $16,138,634 to us.
The Transition Services Agreement had an initial term of twelve months but has continued in full force and has not been terminated to date. The Transition Services Agreement is terminable by either party on 30 days’ prior written notice to the other party.
Each of the following named executives of GAMCO earned an amount during 2017 for services rendered to Associated Capital pursuant to the Transition Services Agreement and/or, in some cases, an additional amount that was earned by them directly for incentive-based variable compensation from Associated Capital.
| | GAMCO Named Executives’ Compensation From Associated Capital During 2017 |
Name | | Earned for services rendered to Associated Capital pursuant to the Transition Services Agreement ($) | | Earned directly as incentive-based variable compensation from Associated Capital ($) |
Mario J. Gabelli | | -0- | | 1,206,375 |
Douglas R. Jamieson | | 1,100,000 | | 237,269 |
Kevin Handwerker | | 267,900 | | -0- |
Kieran Caterina | | -0- | | -0- |
Diane LaPointe | | -0- | | -0- |
Agnes Mullady | | 568,750 | | -0- |
Bruce Alpert | | -0- | | 2,197 |
Henry Van der Eb | | -0- | | -0- |
Tax Indemnity and Sharing Agreement
On November 30, 2015, we entered into a Tax Indemnity and Sharing Agreement with Associated Capital that provides for certain agreements and covenants related to tax matters involving Associated Capital and us. This agreement covers time periods before and after the distribution. Among the matters addressed in the agreement are filing of tax returns, retention and sharing of books and records, cooperation in tax matters, control of possible tax audits and contests and tax indemnities. The agreement also provides for limitations on certain corporate transactions that could affect the qualification of the spin-off as tax free under the Internal Revenue Code.
Promissory Note
In connection with the spin-off of Associated Capital (“AC”) on November 30, 2015, the Company issued a promissory note (the “AC 4% PIK Note”) to AC in the original principal amount of $250 million used to partially capitalize AC. The AC 4% PIK Note bears interest at 4% per annum and has a maturity date of November 30, 2020 with respect to the original principal amount. Interest on the AC 4% PIK Note will accrue from the most recent date for which interest has been paid. Prior to November 30, 2019, at the election of the Company, payment of interest on the AC 4% PIK Note may, in lieu of being paid in cash, be paid, in whole or in part, in kind (a “PIK Amount”). The Company will repay all PIK Amounts added to the outstanding principal amount of the AC 4% PIK Note in cash on the fifth anniversary of the date on which each such PIK Amount was added to the outstanding principal amount of the AC 4% PIK Note. The Company may prepay the AC 4% PIK Note prior to maturity without penalty.
During 2017, the Company prepaid $50 million of principal of the AC 4% PIK Note. In total through December 31, 2017, the Company has made principal repayments totaling $200 million on the AC 4% PIK Note. The $50 million principal amount outstanding as of December 31, 2017 is due on November 30, 2020. During 2017, the Company accrued interest expense of $3,022,192 for the AC 4% PIK Note.
AC 1.6% Note
On December 26, 2017, the Company issued a promissory note to AC for $15 million which bears interest at 1.6% per annum and is secured by a second lien on certain marketable securities held by the Company. The note matured and was repaid on February 28, 2018. During 2017, the Company accrued interest expense of $4,000.
Promissory Notes Payable to Certain Executive Officers and Employees
On December 29, 2017, the Company issued $11,673,571 million of promissory notes payable to certain executive officers and employees relating to compensation earned in 2017. $5,506,592 million of the notes were due on January 31, 2018 and $6,166,979 million were due on February 28, 2018, and all amounts were paid in full on those respective dates. During 2017, GBL recorded interest expense of $822.
Service Mark and Name License Agreement
On November 30, 2015, we entered into the Service Mark and Name License Agreement with Associated Capital pursuant to which Associated Capital has certain rights to use the ‘‘Gabelli’’ name and the ‘‘GAMCO’’ name.
Other Related Party Transactions
In connection with the issuance via a private placement a 5-year, $110 million convertible note (“Convertible Note”) to Cascade Investment, L.L.C., GGCP deposited cash equal to the principal amount of the Note and six months interest into an escrow account established pursuant to an escrow agreement by and among GGCP, the Company, the Convertible Note holder and the escrow agent. During 2017, the Company paid the $55,000 annual costs of the escrow account. The Company did not pay any fees to GGCP in connection with the funding of the escrow account. On September 30, 2017, in connection with an amendment to the Escrow Agreement and in exchange for approximately 53% of the assets in the escrow account, the Company paid GGCP $60 million. In connection with the initial deposit made by GGCP, the Company had agreed that GGCP had a right to demand payment in an amount equal to any funds withdrawn from the escrow account by the Convertible Note holder. On November 21, 2017, the date that the Company redeemed the Convertible Note in full, the Company paid GGCP $53 million for the remaining 47% of the assets in the escrow account that it did not previously own.
GAMCO Asset Management Inc. (“GAMCO Asset Management”), a wholly-owned subsidiary of the Company, has entered into an agreement to provide advisory and administrative services to MJG Associates, which has been wholly-owned by our Chairman and CEO, Mr. Mario Gabelli, since 1990, with respect to the private investment funds that it manages. Pursuant to this agreement, MJG Associates paid GAMCO Asset Management $10,000 (excluding reimbursement of expenses) for 2017. Mr. John Gabelli, the brother of our Chairman and CEO, is the sole shareholder of an entity that, up until August 16, 2017, was the general partner of two investment partnerships - Manhattan Partners I, L.P. (“Manhattan I”) and Manhattan Partners II, L.P. (“Manhattan II”). Manhattan I and Manhattan II paid GAMCO Asset Management investment advisory fees in the amount of $9,851 for 2017. In addition, an entity that Mr. John Gabelli’s wife is the sole shareholder of was, up until August 16, 2017, the general partner of S.W.A.N. Partners, LP (“S.W.A.N.”), which is a separately managed account of GAMCO Asset Management. S.W.A.N. paid GAMCO Asset Management investment advisory fees in the amount of $19,776 for 2017.
GAMCO serves as the investment advisor for twenty-one open-end funds, sixteen closed-end funds and two actively-managed, exchange-traded funds (collectively, the “Funds”) and earns advisory fees based on predetermined percentages of the average net assets of the Funds. In addition, G.distributors, LLC, the broker dealer subsidiary of GAMCO, has entered into distribution agreements with each of the Funds. As principal distributor, G.distributors, LLC incurs certain promotional and distribution costs related to the sale of Fund shares, for which it receives a distribution fee from the Funds or reimbursement from the investment advisor. For 2017, G.distributors, LLC received $39,857,287 in distributions fees. Advisory and distribution fees receivable from the Funds were $30,427,649 at December 31, 2017.
Pursuant to an agreement between GCIA and Funds Advisor, Funds Advisor pays to GCIA 90% of the net revenues received by Funds Advisor related to being the advisor to the SICAV. Net revenues are defined as gross advisory fees less expenses related to payouts and expenses of the SICAV paid by Funds Advisor. The amount paid by Funds Advisor to GCIA for 2017 was $2,837,579.
We incur expenses for certain professional and administrative services, and purchase services from third party providers, such as payroll, transportation, insurance and public relations services, on behalf of GGCP and MJG Associates. GGCP and MJG Associates reimburse us for these expenses. GGCP also incurs expenses for certain professional and administrative services on behalf of the Company, and we reimburse GGCP for these expenses. The net amount reimbursable from GGCP and MJG Associates to us for such expenses for 2017 was $75,086 and $497,380, respectively. At December 31, 2017, $27,681 was owed to the Company by GGCP, and $497,380 was owed to the Company by MJG Associates. The GGCP amount was paid in full to the Company on February 1, 2018, and the MJG Associates amount was paid in full to the Company on March 14, 2018.
Certain directors and executive officers have immediate family members who are employed by us, our subsidiaries, and certain related entities. The base salaries and bonuses of each of these immediate family members are established in accordance with our compensation practices applicable generally to staff members with equivalent qualifications and responsibilities and holding similar positions. None of the directors or executive officers has a material interest in any of these employment relationships of their immediate family members, and all of the immediate family members of our directors mentioned below are financially independent adult children. None of the immediate family members mentioned below is an executive officer of GAMCO.
A daughter of Mr. Avansino, one of our directors, is employed by one of our subsidiaries in a sales and marketing role and earned from GAMCO in 2017 incentive-based variable compensation based on revenues generated by certain relationships (“Variable Compensation”) of $277,680 plus usual and customary benefits. She also received 2,000 restricted stock awards on August 6, 2013 (1,400 of which vested in 2017) with a grant date fair value of $57.86 per share and 500 restricted stock awards with an effective grant date, under FASB guidance, of December 23, 2014 and a legal grant date of January 15, 2015 (all of which vested in 2017) with a grant date fair value of $87.99 per share. The prices were reflective of the value of GAMCO’s stock prior to the spin. As with all Company restricted stock awards, fair value equals the closing price of the Company’s Class A Stock on the day preceding the effective grant date. Compensation expense of $60,571 was recognized for all of her awards for financial statement reporting purposes for the fiscal year ended December 31, 2017 calculated in accordance with FASB guidance. She also received $2,708 in accumulated dividends on the restricted stock awards that vested during 2017. The total compensation that she earned from GAMCO in 2017 was $340,959.
A son of our Chairman is employed by a subsidiary of Associated Capital, but he also earned from GAMCO in 2017 $91,737 in Variable Compensation from GAMCO in 2017 plus usual and customary benefits. He also received 4,000 restricted stock awards on August 6, 2013 (2,800 of which vested in 2017) with a grant date fair value of $57.86 per share, 1,000 restricted stock awards on September 15, 2014 (all of which vested in 2017) with a grant date fair value of $73.41 per share, and 500 restricted stock awards with an effective grant date, under FASB guidance, of December 23, 2014 and a legal grant date of January 15, 2015 (all of which vested in 2017) with a grant date fair value of $87.99 per share. The prices were reflective of the value of GAMCO’s stock prior to the spin. As with all Company restricted stock awards, fair value equals the closing price of the Company’s Class A Stock on the day preceding the effective grant date. Total compensation expense of $135,770 was recognized for all of his awards for financial statement reporting purposes for the fiscal year ended December 31, 2017 calculated in accordance with FASB guidance. He also received $6,186 in accumulated dividends on the restricted stock awards that vested during 2017. The total compensation that he earned from GAMCO in 2017 was $233,693.
A son of our Chairman is employed by a subsidiary of Associated Capital, but he also earned from GAMCO in 2017 an allocation of $150,000 of the incentive-based management fee (10% of GAMCO pre-tax profits) by Mr. Mario Gabelli as described in the “Variable Compensation” section of the Compensation and Discussion Analysis and in footnote (c) to the Summary Compensation Table for 2017, and $726,843 in Variable Compensation plus usual and customary benefits. The total compensation that he earned from GAMCO in 2017 was $876,843.
A son of our Chairman is employed by a subsidiary of Associated Capital, but he also earned from GAMCO in 2017 an allocation of $725,000 of fees received by Mr. Gabelli for creating and acting as portfolio manager and/or attracting and providing client service to a large number of GAMCO’s separate accounts as described in the “Variable Compensation” section of the Compensation and Discussion Analysis and in footnote (c) to the Summary Compensation Table for 2017 and $95,118 in Variable Compensation plus usual and customary benefits. The total compensation that he earned from GAMCO in 2017 was $820,118.
Our Chairman’s spouse, who has been employed by a subsidiary of the Company in a sales and marketing role since 1984, has been a director of that subsidiary since 1991 and has been his spouse since 2002, earned from GAMCO in 2017 no base salary, a bonus of $86,000, an allocation of $39,000 of the incentive-based management fee (10% of GAMCO pre-tax profits) by Mr. Gabelli as described in the “Variable Compensation” section of the Compensation and Discussion Analysis and in footnote (c) to the Summary Compensation Table for 2017, an allocation of $50,000 of fees received by Mr. Gabelli for creating and acting as portfolio manager and/or attracting and providing client service to a large number of GAMCO’s separate accounts as described in the “Variable Compensation” section of the Compensation and Discussion Analysis and in footnote (c) to the Summary Compensation Table for 2017, and $5,037,153 in Variable Compensation plus usual and customary benefits. She also received 5,000 restricted stock awards on August 6, 2013 (3,500 of which vested in 2017) with a grant date fair value of $57.86 per share, 1,500 restricted stock awards on September 15, 2014 (all of which vested in 2017) with a grant date fair value of $73.41 per share, and 2,000 restricted stock awards with an effective grant date, under FASB guidance, of December 23, 2014 and a legal grant date of January 15, 2015 (all of which vested in 2017) with a grant date fair value of $87.99 per share. The prices were reflective of the value of GAMCO’s stock prior to the spin. As with all Company restricted stock awards, fair value equals the closing price of the Company’s Class A Stock on the day preceding the effective grant date. Total compensation expense of $242,029 was recognized by the Company for all of her awards for financial statement reporting purposes for the fiscal year ended December 31, 2017 calculated in accordance with FASB guidance. She also received $8,851 in accumulated dividends on the restricted stock awards that vested during 2017. The total compensation that she earned from GAMCO in 2017 was $5,463,033.
A brother of our Chairman earned $417,589 in Variable Compensation from GAMCO in 2017 plus usual and customary benefits.
Ms. Wilson, a director and the daughter of our Chairman, is also a professional staff member of the Company. Ms. Wilson has been on extended unpaid leave from the Company since January 1, 2004 and therefore received no compensation during 2017 other than compensation she received as a director disclosed in the Director Compensation Table for 2017 and her previously-discussed entitlement, as a member of M4E, to receive her pro-rata share of payments received by M4E under the lease on the Building.
The spouse of Ms. LaPointe, our Senior Vice President and Co-Chief Accounting Officer, is employed as the Executive Vice President, Chief Financial Officer and a Director of LICT, the Interim Chief Executive Officer and Chief Financial Officer of CIBL, and the Interim Chief Executive Officer, Chief Financial Officer and a Director of Morgan Group Holding, Inc. (“Morgan”). In addition to serving as the Chairman and Chief Executive Officer of LICT and as a Director of CIBL, our Chairman and CEO, Mr. Mario Gabelli, also serves as the Chairman of Morgan.
As required by our Code of Ethics, our staff members are required to maintain their brokerage accounts at G.research unless they receive permission to maintain an outside account. G.research offers all of these staff members the opportunity to engage in brokerage transactions at discounted rates. Accordingly, many of our staff members, including the executive officers or entities controlled by them, have brokerage accounts at G.research and have engaged in securities transactions through it at discounted rates. From time to time, we, through our subsidiaries, in the ordinary course of business have also provided brokerage or investment advisory services to our directors, the substantial shareholders listed in the table under “Certain Ownership of Our Stock” or entities controlled by such persons for customary fees.
REPORT OF THE AUDIT COMMITTEE
Messrs. Artzt, Avansino, Daniels, McGrath and Prather, each of whom is an independent director, are the members of the Audit Committee. In this report, the term “we” refers to the members of the Audit Committee.
The Board has adopted a written charter for the Audit Committee. A copy of that charter can be found on our website, at http://www.gabelli.com/corporate/corp_gov.html. Our job is one of oversight as set forth in our charter. The Company’s management is responsible for preparingwww.gabelli.com, its financial statements and for maintaining internal controls. The independent registered public accounting firm is responsible for auditing the financial statements and expressing an opinion as to whether those audited financial statements fairly represent the financial position, results of operations and cash flows of the Company in conformity with U.S. generally accepted accounting principles.
We have reviewed and discussed the Company’s audited 2017 financial statements with management and with Deloitte & Touche LLP (“D&T”), the Company’s independent registered public accounting firm.
We have discussed with D&T the matters required to be discussed by Statement on Auditing Standard No. 1301, “Communications with Audit Committees,” issued by the Public Company Accounting Oversight Board (the “PCAOB”).
We have received from D&T the written statements required by the PCAOB regarding the independent accountant’s communications with the audit committee concerning independence and have discussed with the independent accountant the independent accountant’s independence.
Based on the review and discussions referred to above, we have recommended to the Board that the audited financial statements be included in the Company’s Annual Reportannual reports on Form 10-K, for the year ended December 31, 2017 for filingquarterly 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.
AUDIT COMMITTEE
Robert S. Prather, Jr. (Chairman)
Edwin L. Artzt
Raymond C. Avansino, Jr.
Leslie B. Daniels
Eugene R. McGrath
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
SelectionCommission (“SEC”). Copies of Deloitte & Touche LLP
Our Audit Committee approvedcertain of these documents may also be accessed electronically by means of the engagement of Deloitte & Touche LLP (“D&T”) asSEC’s home page at www.sec.gov. GAMCO also makes available on its website at https://www.gabelli.com/corporate/investor_relations the Company’s independent registered public accounting firmcharters for the year-ending December 31, 2017. D&T has been the auditor of the Company since March 27, 2009. In deciding to engage D&T, the Audit Committee reviewed auditor independence and existing commercial relationships with D&T and concluded that D&T has no commercial relationship with the Company that would impair its independence. During the fiscal year ended December 31, 2017 and in the subsequent interim period through March 31, 2018, neither the Company nor anyone acting on its behalf has consulted with D&T on any of the matters or events set forth in Item 304(a)(2) of Regulation S−K.
A representative of D&T will be present at the 2018 Annual Meeting. The representative will have the opportunity to make a statement and respond to appropriate questions from shareholders.
Deloitte & Touche LLP Fees For 2016 and 2017
Fees for professional services provided by our independent registered public accounting firm in 2016 and 2017, in each of the following categories are:
| | 2016 | | | 2017 | |
Audit Fees.............................................................................................. | | $ | 1,030,000 | | | $ | 1,060,000 | |
Audit-Related Fees................................................................................ | | | 5,000 | | | | 0 | |
Tax Fees................................................................................................... | | | 0 | | | | 0 | |
All Other Fees......................................................................................... | | | 2,792 | | | | 1,432 | |
Audit fees include fees relating to the audit committee of our annual financial statements and review of financial statements included in our quarterly reports on Form 10-Q. Audit fees also include fees for services related to Section 404 ofBoard (the “Audit Committee”), the Sarbanes-Oxley Act which consist of the review of documentation and testingcompensation committee of our proceduresBoard (the “Compensation Committee”), the governance committee of our Board (the “Governance Committee”), and controls. Audit feesthe 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 2017 also include $5,000 for fees for a consent letter provided in connection with the filingChief Executive and Senior Financial Officers, corporate governance guidelines, and its amended and restated bylaws (“Bylaws”). Printed copies of a registration statement on Form S-3. Audit–related fees for 2016 consist of fees for services provided in connection with the Securities Investor Protection Corporation membership exemption for the Company's registered broker-dealer subsidiary. All other fees were for accessthese documents are available upon written request to online technical research services.
SHAREHOLDER PROPOSALS FOR THE 2019 ANNUAL MEETING
Qualified shareholders who want to have proposals included in our proxy statement in connection with our 2019 Annual Meeting pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)Secretary at GAMCO Investors, Inc., must deliver such proposals so that they are received at our principal executive offices at One Corporate Center, Rye, New York 10580 by December 21, 2018 in order to be considered for inclusion in next year’s proxy statement and proxy. For any shareholder proposal submitted outside Rule 14a-8 of the Exchange Act to be considered timely under our Amended and Restated Bylaws, the Company must receive notice of such proposal, or any nomination of a director by a shareholder, no earlier than January 8, 2019 and no later than February 7, 2019.
191 Mason Street, Greenwich, CT 06830.OTHER MATTERS
We know of no other matters to be presented at the 2018 Annual Meeting other than approval of the election of directors, the ratification of auditors, and the vote to approve the Potential Issuance, allAmendment, as described above. If other matters are properly presented at the 2018 Annual Meeting, the proxies will vote on these matters in accordance with their judgment of the best interests of the Company.
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THIS SPECIAL MEETING YOU ARE URGED TO SIGN AND RETURN YOUR PROXY PROMPTLY.
By order of the Board of Directors, |
|
_________ |
|
PETER GOLDSTEIN Secretary |
APPENDIX A
FORM OF
CERTIFICATE OF AMENDMENT
OF THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
GAMCO INVESTORS, INC.
________________________________
Pursuant to Section 242 of the Delaware General Corporation Law
GAMCO INVESTORS, INC., a corporation duly organized and existing under the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify:
| 1. | The name of the corporation is: GAMCO Investors, Inc. (the “Corporation”). |
| 2. | That at a meeting of the Board of Directors of the Corporation, the following resolutions were duly adopted setting forth a proposed amendment to the Amended and Restated Certificate of Incorporation of the Corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of the Corporation for consideration thereof. The resolutions setting forth the proposed amendment are as follows: |
RESOLVED, that subject to approval of the Corporation’s stockholders, the Amended and Restated Certificate of Incorporation of the Corporation (the “Charter”) be amended so that as amended, Article EIGHTH of the Charter is deleted in its entirety (the “Amendment”); and be it further
RESOLVED, that the Board of Directors hereby approves the Amendment and declares the Amendment advisable, and recommends that the stockholders of the Corporation approve the Amendment at a special meeting of the stockholders of the Corporation duly called and held; and be it further
RESOLVED, that the Amendment be submitted to the Corporation’s stockholders for approval at a special meeting of the stockholders of the Corporation duly called and held.
| 3. | That thereafter, pursuant to resolution of its Board of Directors, a special meeting of the stockholders of the Corporation was duly called and held upon notice in accordance with Section 222 of the DGCL at which meeting the necessary number of shares as required by statute were voted in favor of the Amendment. |
| 4. | The amendment of the Amended and Restated Certificate of Incorporation of the Corporation herein certified has been duly adopted in accordance with the provisions of Section 242 of the DGCL. |
| 5. | The foregoing amendment shall be effective upon the filing of this Certificate of Amendment of the Amended and Restated Certificate of Incorporation of the Corporation with the Secretary of State of the State of Delaware. |
[Signature Page Follows]
IN WITNESS WHEREOF, said Corporation has caused this Certificate of Amendment to be signed by its duly authorized officer on this ____ day of _________, 2021.
| GAMCO INVESTORS, INC. |
| |
| |
| By: | |
| Name: | | |
| Title: | | |
| | | | |
APPENDIX B
CHARTER AFTER GIVING EFFECT TO THE AMENDMENT
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
GAMCO INVESTORS, INC.
First The name of this Corporation is: GAMCO Investors, Inc. (the “Corporation”).
Second The address, including street, number, city and county, of the registered office of the Corporation in the State of Delaware is: 874 Walker Road, Suite C, Dover, DE 19904, County of Kent; and the name of the registered agent of the Corporation in the State of Delaware at such address is: United Corporate Services, Inc.
Third The nature of the business and of the purposes to be conducted and promoted by the Corporation is to conduct any lawful business, to promote any lawful purpose, and to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law (the “DGCL”).
FOURTH (a)[1] The total number of shares of all classes of stock which the Corporation shall be authorized to issue is 135,000,000 shares, consisting of: (i) 100,000,000 shares of Class A Common Stock, par value of $.001 per share (the “Class A Common Stock”), (ii) 25,000,000 shares of Class B Common Stock, par value of $.001 per share (the “Class B Common Stock”), and (iii) 10,000,000 shares of Preferred Stock, having a par value of $.001 per share (the “Preferred Stock”). The powers, preferences and rights, and the qualifications, limitations and restrictions of each class of stock of the Corporation are as follows:
1. Voting. (A) At each annual or special meeting of stockholders, in the case of any written consent of stockholders in lieu of a meeting and for all other purposes, each holder of record of shares of Class A Common Stock on the relevant record date shall be entitled to one (1) vote for each share of Class A Common Stock standing in such person’s name on the stock transfer records of the Corporation, and each holder of record of Class B Common Stock on the relevant record date shall be entitled to ten (10) votes for each share of Class B Common Stock standing in such person’s name on the stock transfer records of the Corporation. Except as otherwise required by law and subject to the rights of holders of any series of Preferred Stock of the Corporation that may be issued from time to time, the holders of shares of Class A Common Stock and of shares of Class B Common Stock shall vote as a single class on all matters with respect to which a vote of the stockholders of the Corporation is required under applicable law, the Certificate of Incorporation, or the By-Laws of the Corporation, or on which a vote of stockholders is otherwise duly called for by the Corporation, including, but not limited to, the election of directors, matters concerning the sale, lease or exchange of all or substantially all of the property and assets of the Corporation, mergers or consolidations with another entity or entities, dissolution of the Corporation and amendments to the Certificate of Incorporation of the Corporation. Except as otherwise provided in this Article FOURTH or required by applicable law, whenever applicable law, the Certificate of Incorporation of the Corporation or the By-Laws of the Corporation provide for the necessity of an affirmative vote of the stockholders entitled to cast at least a “majority (or any other greater percentage) of the votes which all stockholders are entitled to cast thereon,” or a “majority (or any other greater percentage) of the Voting Stock” (as defined below), or language of similar effect, any and all such language shall mean that the holders of shares of Class A Common Stock and the holders of shares of Class B Common Stock shall vote as one class and that such majority (or any other greater percentage) consists of a majority (or such other greater percentage) of the total number of votes entitled to be cast in accordance with the provisions of this Article FOURTH. For purposes of this Certificate of Incorporation, “Voting Stock” shall mean all the then outstanding shares of capital stock entitled to vote generally in the election of directors, considered as a single class.
[1] Subparagraph (a) of Article FOURTH of the Corporation’s Amended and Restated Certificate of Incorporation was amended by that certain Certificate of Amendment filed with the Secretary of State of the State of Delaware on June 8, 2020 to reduce the amount of Class B Common Stock from 100,000,000 to 25,000,000.
(B) Neither the holders of shares of Class A Common Stock nor the holders of shares of Class B Common Stock shall have cumulative voting rights.
2. Dividends; Stock Splits. Subject to the rights of the holders of shares of any series of Preferred Stock, and subject to any other provisions of the Certificate of Incorporation of the Corporation, holders of shares of Class A Common Stock and shares of Class B Common Stock shall be entitled to receive such dividends and other distributions in cash, stock or property of the Corporation as may be declared thereon by the Board of Directors of the Corporation (the “Board of Directors”) from time to time out of assets or funds of the Corporation legally available therefor. If at any time a dividend or other distribution in cash or other property (other than dividends or other distributions payable in shares of common stock or other voting securities or options or warrants to purchase shares of common stock or other voting securities or securities convertible into or exchangeable for shares of common stock or other voting securities) is paid on the shares of Class A Common Stock or shares of Class B Common Stock, a like dividend or other distribution in cash or other property shall also be paid on shares of Class B Common Stock or shares of Class A Common Stock, as the case may be, in an equal amount per share. If at any time a dividend or other distribution payable in shares of common stock or options or warrants to purchase shares of common stock or securities convertible into or exchangeable for shares of common stock is paid on shares of Class A Common Stock or Class B Common Stock, a like dividend or other distribution shall also be paid on shares of Class B Common Stock or Class A Common Stock, as the case may be, in an equal amount per share; provided that, for this purpose, if shares of Class A Common Stock or other voting securities, or options or warrants to purchase shares of Class A Common Stock or other voting securities or securities convertible into or exchangeable for shares of Class A Common Stock or other voting securities, are paid on shares of Class A Common Stock and shares of Class B Common Stock or voting securities identical to the other securities paid on the shares of Class A Common Stock (except that the voting securities paid on the Class B Common Stock may have up to ten (10) times the number of votes per share as the other voting securities to be received by the holders of the Class A Common Stock) or options or warrants to purchase shares of Class B Common Stock or such other voting securities or securities convertible into or exchangeable for shares of Class B Common Stock or such other voting securities, are paid on shares of Class B Common Stock, in an equal amount per share of Class A Common Stock and Class B Common Stock, such dividend or other distribution shall be deemed to be a like dividend or other distribution. In the case of any split, subdivision, combination or reclassification of shares of Class A Common Stock or Class B Common Stock, the shares of Class B Common Stock or Class A Common Stock, as the case may be, shall also be split, subdivided, combined or reclassified so that the number of shares of Class A Common Stock and Class B Common Stock outstanding immediately following such split, subdivision, combination or reclassification shall bear the same relationship to each other as did the number of shares of Class A Common Stock and Class B Common Stock outstanding immediately prior to such split, subdivision, combination or reclassification.
3. Liquidation, Dissolution, etc. In the event of any liquidation, dissolution or winding up (either voluntary or involuntary) of the Corporation, the holders of shares of Class A Common Stock and the holders of shares of Class B Common Stock shall be entitled to receive the assets and funds of the Corporation available for distribution to stockholders, subject to the rights of the holders of any Preferred Stock of the Corporation that may at the time be outstanding, in proportion to the number of shares held by them, respectively, without regard to class.
4. Mergers, etc. In the event of any corporate merger, consolidation, purchase or acquisition of property or stock, or other reorganization in which any consideration is to be received by the holders of shares of Class A Common Stock or the holders of shares of Class B Common Stock, the holders of shares of Class A Common Stock and the holders of shares of Class B Common Stock shall receive the same consideration on a per share basis; provided that, if such consideration shall consist in any part of voting securities (or of options or warrants to purchase, or of securities convertible into or exchangeable for, voting securities), the holders of shares of Class B Common Stock may receive, on a per share basis, voting securities with up to ten (10) times the number of votes per share as those voting securities to be received by the holders of shares of Class A Common Stock (or options or warrants to purchase, or securities convertible into or exchangeable for, voting securities with up to ten (10) times the number of votes per share as the voting securities issuable upon exercise of the options or warrants to be received by the holders of the shares of Class A Common Stock, or into which the convertible or exchangeable securities to be received by the holders of the shares of Class A Common Stock may be converted or exchanged).
5. Power to Sell and Purchase Shares. Subject to applicable law, the Corporation shall have the power to issue and sell all or any part of any shares of any class of stock herein or hereafter authorized to such persons, and for such consideration, as the Board of Directors shall from time to time, in its discretion, determine, whether or not greater consideration could be received upon the issue or sale of the same number of shares of another class, and as otherwise permitted by law. Subject to the requirements of applicable law, the Corporation shall have the power to purchase any shares of any class of stock herein or hereafter authorized from such persons, and for such consideration, as the Board of Directors shall from time to time, in its discretion, determine, whether or not less consideration could be paid upon the purchase of the same number of shares of another class, and as otherwise permitted by law.
6. Rights Otherwise Identical. Except as otherwise expressly set forth in this Article FOURTH, the rights of the holders of Class A Common Stock and the rights of the holders of Class B Common Stock shall be in all respects identical.
7. Preemptive Rights. The holders of the Class A and Class B Common Stock shall have no preemptive rights to subscribe for any shares of any class or series of stock of the Corporation whether now or hereafter authorized.
1. The holders of the Preferred Stock shall have no preemptive rights to subscribe for any shares of any class or series of stock of the Corporation whether now or hereafter authorized.
2. The Preferred Stock may be issued from time to time in one or more series. The Board of Directors is authorized to establish and designate one or more series of the Preferred Stock, to issue shares of the Preferred Stock in such series and to fix the number of shares in a series, the rights, designations, powers and preferences, and the qualifications, limitations and restrictions, of each series and the relative rights, preferences and limitations as between series. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following:
(A) the number of shares constituting that series and the distinctive designation of that series;
(B) the dividend rate on the shares of that series, whether dividends shall be cumulative, and, if so, from which date or dates, and the rights of priority, if any, of payments of dividends on shares of that series relative to shares of other classes or series;
(C) whether that series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights;
(D) whether that series shall have conversion or exchange privileges or be subject to conversion or exchange obligations, and, if so, the terms and conditions of such conversion or exchange, including provision for adjustment of the conversion or exchange rate in such events as the Board of Directors shall determine;
(E) whether or not the shares of that series shall be redeemable, and, if so, the terms and conditions of such redemption, including the manner of selecting shares for redemption if less than all shares are to be redeemed, the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;
(F) whether that series shall have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund;
(G) the right of the shares of that series to the benefit of conditions and restrictions upon the creation of indebtedness of the Corporation or any subsidiary, upon the issue of any additional shares (including additional shares of such series or any other series) and upon the payment of dividends or the making of other distributions on, and the purchase, redemption or other acquisition by the Corporation or any subsidiary of any outstanding shares of the Corporation;
(H) the rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the rights of priority, if any, of payment of shares of that series relative to shares of other classes or series;
(I) any restrictions on transfers of shares of that series; and
(J) any other relative, participating, optional or other special rights, qualifications, limitations or restrictions of that series.
FIFTH The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its Board of Directors and stockholders:
(a) The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.
(b) The Board of Directors shall have the power to make, adopt, alter, amend and repeal the By-laws of the Corporation without the assent or vote of the stockholders, including, without limitation, the power to fix, from time to time, the number of directors that shall constitute the whole Board of Directors, subject to the right of the stockholders to alter, amend and repeal the By-laws made by the Board of Directors.
(c) The number of directors of the Corporation shall consist of one or more members and shall be from time to time fixed by, or in the manner provided in, the By-Laws of the Corporation. Election of directors need not be by written ballot unless the By-Laws so provide.
(d) In addition to the powers and authority hereinbefore or by statute expressly conferred upon them, the Board of Directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the DGCL, this Certificate of Incorporation, and any By-Laws adopted by the stockholders; provided, however, that no By-Laws hereafter adopted by the stockholders shall invalidate any prior act of the Board of Directors which would have been valid if such By-Laws had not been adopted.
(e) Subject to any rights of holders of Preferred Stock or any other series or class of stock, any member of the Board of Directors or the entire Board of Directors may be removed, with or without cause, at any time prior to the expiration of his term by the holders of a majority of the shares entitled to vote at an election of directors.
(f) Subject to any rights of holders of Preferred Stock or any other series or class of stock, and unless the Board of Directors otherwise determines, any vacancies will providebe filled only by the affirmative vote of a free copymajority of our Annual Reportthe remaining directors, even if less than a quorum.
Sixth (a) To the fullest extent permitted by the DGCL, as it exists on the date hereof or as it may hereafter be amended, a director of this Corporation shall not be personally liable to this Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) under Section 174 of the DGCL; or (iv) for any transaction from which the director derived any improper personal benefit. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.
(b) The Corporation shall, to the fullest extent permitted by law, indemnify and hold harmless and advance expenses to any person made or threatened to be made a party to an action or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he, his testator or intestate is or was a director or officer of the Corporation or any predecessor of the Corporation, or serves or served at any other enterprise as a director or officer at the request of the Corporation, any predecessor to the Corporation or any subsidiary or affiliate of the Corporation. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article SIXTH and applicable law shall not be deemed to be exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise.
(c) Neither any amendment nor repeal of this Article SIXTH, nor the adoption of any provision of this Certificate of Incorporation inconsistent with this Article SIXTH, shall eliminate or reduce the effect of this Article SIXTH in respect of any matter occurring, or any action or proceeding accruing or arising or that, but for this Article SIXTH, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.
Seventh The Corporation hereby expressly elects not to be governed by or subject to Section 203 of the DGCL.
EIGHTH The Corporation, GGCP, Inc. (“GGCP”) and other Gabellis (as defined below) may engage in the same areas of corporate opportunities, and benefits will be derived by the Corporation through its continued contractual, corporate and business relations with GGCP and other Gabellis (including possible service of officers and directors of GGCP, or any other Gabelli, as officers and directors of the Corporation). The provisions of this Article EIGHTH are set forth to regulate and define the permitted conduct of certain affairs of the Corporation as they may involve a Gabelli (including GGCP) and their officers and directors, and the powers, rights, duties and liabilities of the Corporation and its officers, directors and stockholders in connection therewith.
(a) Definitions. For purposes of this Article EIGHTH:
(1) “corporate opportunities” potentially allocable to the Corporation consist of business opportunities that (i) the Corporation is financially able to undertake; (ii) are, from their nature, in the Corporation’s actual line or lines of business and are of practical advantage to the Corporation; and (iii) are ones in which the Corporation has an interest or reasonable expectancy; provided, that “corporate opportunities” do not include transactions in which the Corporation or a Gabelli is permitted to participate pursuant to any agreement between the Corporation and such Gabelli that is entered into with the approval of the members of the Board of Directors and do not include passive investments;
(2) the “Corporation” includes its subsidiaries and other entities in which it beneficially owns, directly or indirectly, 50% or more of the outstanding voting securities or comparable interests;
(3) a “Gabelli” includes (i) Mr. Gabelli (as hereinafter defined), so long as he is an officer or director of the Corporation or beneficially owns a controlling interest in the Corporation, (ii) any member of his “immediate family” (which shall include Mr. Gabelli’s spouse, parents, children and siblings) who is at the time an officer or director of the Corporation and (iii) any entity in which persons qualifying as Gabellis pursuant to clauses (i) and (ii) above beneficially own in the aggregate a controlling interest of the outstanding voting securities or comparable interests;
(4) “Mr. Gabelli” means Mr. Mario J. Gabelli;
(5) “Permissible Accounts” mean (i) those investment funds and accounts currently managed by Mr. Gabelli outside the Corporation under performance fee arrangements but only to the extent, in the case of an investment fund, such fund’s investors consist solely of one or more of the persons who were investors as of the date of the initial issuance of the Corporation’s Class A Common Stock in the public offering contemplated by the Corporation’s Registration Statement on Form 10-KS-1 (File No. 333-51023) (the “IPO Consummation Date”) and the successors, heirs, donees or immediate families thereof and, in the case of an investment account, the parties to such account are solely one or more of the persons who were parties to such account as of the IPO Consummation Date and the successors, heirs, donees or immediate families thereof (collectively, “Qualifying Persons”) and (ii) successor funds and accounts which serve no persons other than the Qualifying Persons referred to in clause (i), which funds and accounts operate according to an investment style similar to such other accounts or funds and which style is not used at the Corporation as of the IPO Consummation Date and which are subject to performance fee arrangements; and
(6) “Trigger Date” means the date on which Mr. Gabelli “beneficially” owns (within the meaning of Section 13(d) of the of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as in effect on the effective date of this Certificate of Incorporation) less than a majority of the voting power of the Voting Stock.
(b) Corporate Opportunities Policy.
(1) Except with respect to corporate opportunities that involve Permissible Accounts, if a Gabelli acquires knowledge of a potential transaction on a matter that is a corporate opportunity for both any Gabelli and the Corporation, such Gabelli will have a duty to communicate that opportunity to the Corporation and may not pursue that opportunity or direct it to another person except as permitted by paragraph (3) of this Section (b) of Article EIGHTH.
(2) If a director or officer of the Corporation other than a Gabelli acquires knowledge of a potential transaction or matter that may be a corporate opportunity for both the Corporation and a Gabelli, such director or officer must act in good faith in accordance with the following two-part policy.
(A) A corporate opportunity offered to any person who is a director but not an officer of the Corporation and who is also a director (whether or not an officer) of an entity which is at the time a Gabelli will belong to such Gabelli or to the Corporation, as the case may be, depending on whether the opportunity is expressly offered to the person primarily in his or her capacity as an officer or director of the entity which is at the time a Gabelli or of the Corporation, respectively. Otherwise, the opportunity will belong to the Corporation to the same extent as if the opportunity came directly to the Corporation.
(B) A corporate opportunity offered to any person who is an officer (whether or not a director) of the Corporation and who is also a director or an officer of an entity which is at the time a Gabelli will belong to the Corporation, unless the opportunity is expressly offered to that person primarily in his or her capacity as a director or officer of the entity which is at the time a Gabelli, in which case the opportunity will belong to such Gabelli to the same extent as if the opportunity came directly to a Gabelli.
To the fullest extent permitted by law, a director or officer of the Corporation (other than a Gabelli) who acts in accordance with the foregoing two-part policy (i) will be deemed fully to have satisfied his or her fiduciary duties to the Corporation and its stockholders with respect to such corporate opportunity, (ii) will not be liable to the Corporation or its stockholders for any breach of fiduciary duty by reason of the fact that a Gabelli pursues or acquires such opportunity or directs such corporate opportunity to another person or entity or does not communicate information regarding such opportunity to the Corporation, (iii) will be deemed to have acted in good faith and in a manner he or she reasonably believes to be in the best interests of the Corporation, and (iv) will be deemed not to have breached his or her duty of loyalty to the Corporation or its stockholders and not to have derived an improper benefit therefrom.
(3) Any corporate opportunity that belongs to a Gabelli or to the Corporation pursuant to the foregoing paragraphs shall not be pursued by the other (or directed by the other to another person or entity) unless and until such Gabelli or the Corporation, as the case may be, determines not to pursue the opportunity. If the party to whom the corporate opportunity belongs does not, however, within a reasonable period of time, begin to pursue, or thereafter continue to pursue, such opportunity diligently and in good faith, the other party may pursue such opportunity (or direct it to another person or entity).
(c) Conflict of Interest Policy. (1) To the fullest extent permitted by law, no contract, agreement, arrangement, or transaction between the Corporation and a Gabelli or any customer or supplier or any entity in which a director of the Corporation has a financial interest (a “Related Entity”), or one or more of the directors or officers of the Corporation, or any Related Entity, any amendment, modification, or termination thereof, or any waiver of any right thereunder, will be voidable solely because a Gabelli or such customer or supplier, any Related Entity, or any one or more of the officers or directors of the Corporation or any Related Entity are parties thereto, or solely because any such directors or officers are present at or participate in the meeting of the Board of Directors, or committee thereof, that authorizes the contract, agreement, arrangement, transaction, amendment, modification, termination, or waiver (each a “Transaction”) or solely because their votes are counted for such purpose, if any of the following four requirements are met:
(A) the material facts as to the relationship or interest and as to the Transaction are disclosed or known to the Board of Directors or the committee thereof that authorizes the Transaction, and the Board of Directors or such committee in good faith approves the Transaction by the affirmative vote of a majority of the disinterested directors on the Board of Directors or such committee, even if the disinterested directors are less than a quorum;
(B) the material facts as to the relationship or interest and as to the Transaction are disclosed or known to the holders of Voting Stock entitled to vote thereon, and the Transaction is specifically approved by vote of the holders of a majority of the voting power of the then outstanding Voting Stock not owned by such Gabelli or such Related Entity, voting together as a single class;
(C) the Transaction is effected pursuant to guidelines that are in good faith approved by a majority of the disinterested directors on the Board of Directors or the applicable committee thereof or by vote of the holders of a majority of the then outstanding Voting Stock not owned by such Gabelli or such Related Entity, voting together as a single class; or
(D) the Transaction is fair to the Corporation as of the time it is approved by the Board of Directors, a committee thereof or the stockholders of the Corporation.
(2) To the fullest extent permitted by law, if the requirements of (A), (B), (C) or (D) of paragraph (1) above are met, such Gabelli, the Related Entity, and the directors and officers of the Corporation, 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 the Corporation and its stockholders with respect to such Transaction.
(3) To the fullest extent permitted by law, any Transaction authorized, approved, or effected, and each of such guidelines so authorized or approved, as described in (A), (B), or (C) above, will be deemed to be entirely fair to the Corporation and its stockholders, 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 the Corporation and its stockholders. To the fullest extent permitted by law and this Certificate of Incorporation, a Gabelli will not be liable to the Corporation or its stockholders for breach of any fiduciary duty that a Gabelli may have as a director of the Corporation by reason of the fact that a Gabelli takes any action in connection with any transaction between such Gabelli and the Corporation.
(d) For purposes of the provisions contained in this Article EIGHTH, a “disinterested director” shall mean a director that is not a Gabelli and who does not have a financial interest in the Transaction and 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.
(e) Before the Trigger Date, the affirmative vote of the holders of a majority of the outstanding Voting Stock, voting together as a single class, will be required to alter, amend, or repeal any of these conflict of interest or corporate opportunity provisions contained in this Article EIGHTH in a manner adverse to the interests of any Gabelli. After the Trigger Date, such required vote will be increased to 80% to alter, amend, repeal or replace any of the conflict of interest and corporate opportunity provisions contained herein.
ENDORSEMENT_LINE__________ SACKPACK________ MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 | | |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card. |
| Online Go to www.investorvote.com/GBL or scan the OR code – login details are located in the shaded bar below. |
| Phone Call toll free 1-800-652-V0TE (8683) within the USA, US territories and Canada |
Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. | | | Save paper, time and money! Sign up for electronic delivery at www.investorvote.com/GBL |
| | |
Special Meeting Proxy Card | | 1234 5678 9012 345 |
| | | |
IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE
A | Proposals – The Board of Directors recommends a vote FOR Proposal 1. |
| 1. | To approve an amendment to the Amended and Restated Certificate of Incorporation of GAMCO Investors, Inc. in order to delete the entirety of article EIGHTH thereof. |
The proxies are authorized to vote in their discretion upon such other business as may properly come before the meeting or any adjournments or postponements thereof.
B | Authorized Signatures – This section must be completed for your vote to be counted - Date and Sign Below. |
Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.
Date (mm/dd/yyyy) – Please print date below. | | Signature 1 – Please keep signature within the box. | | Signature 2 – Please keep signature within the box. |
| | | | |
| | | | |
| | | | MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND |
The Special Meeting of Shareholders of GAMCO Investors, Inc. will be held on
July 20, 2021 at 9:30 a.m. Eastern Time, at 191 Mason Street, Greenwich, CT 06830.
Important Notice Regarding the Availability of Proxy Materials for the year ended December 31, 2017. Requests should be in writingSpecial Meeting of
Shareholders to Be Held on July 20, 2021.
The Proxy Statement is available free of charge on the following website:
https://www.gabelli.com/corporate/investor_relations
IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE
Proxy – GAMCO Investors, Inc. Class A and Class B Common Stock |
Proxy Solicited by the Board of Directors
for the Special Meeting of Shareholders, July 20, 2021
(See Proxy Statement for discussion of items)
The undersigned hereby appoints Peter Goldstein, Kieran Caterina and addressedMaximilian Caldwell and each of them, jointly and severally, as proxies, with power of substitution, to our Secretary atvote all shares of GAMCO Investors, Inc. Class A and Class B Common Stock which the undersigned is entitled to vote on all matters which may properly come before the Special Meeting of Shareholders of GAMCO Investors, Inc., One Corporate Center, Rye, NY 10580-1422.
EXHIBIT A
GUIDELINES FOR DIRECTOR INDEPENDENCE
For a director to be deemed “independent,” the Board shall affirmatively determine that the director has no material relationship with GAMCO Investors, Inc. (together with its consolidated subsidiaries, “GAMCO”) or its affiliates or any
member ofadjournments or postponements thereof. This proxy hereby revokes any proxies previously submitted by the
senior management of GAMCO or his or her affiliates. This determination shall be disclosedshareholder with respect to the shares represented by this proxy.IF NO OTHER INDICATION IS MADE ON AN EXECUTED PROXY CARD, THE PROXIES WILL VOTE FOR PROPOSAL 1. THE PROXIES ARE AUTHORIZED TO VOTE IN THEIR DISCRETION UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF.
Please sign, date and return promptly in the proxy statement for each annual meetingaccompanying envelope.
Change of GAMCO’s shareholders. In making this determination, the Board shall apply the following standards:
Address – Please print new address below. | Meeting Attendance Mark box t o the right if you plan to attend the Special Meeting. | ¨ |
· | A director who is an employee, or whose immediate family member is an executive officer, of GAMCO will not be deemed independent until three years after the end of such employment relationship. Employment as an interim Chairman or Chief Executive Officer will not disqualify a director from being considered independent following that employment.24 |
· | A director who received, or whose immediate family member received in any twelve month period over the last three years more than $120,000 in direct compensation from GAMCO will not be deemed independent. In calculating such compensation, the following will be excluded: |
o | director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service); |
o | compensation received by a director for former service as an interim Chairman or Chief Executive Officer; and |
o | compensation received by an immediate family member for service as a non-executive officer employee of GAMCO. |
· | A director will not be considered independent if: |
o | the director is a current partner or employee of a firm that is GAMCO’s internal or external auditor; |
o | the director has an immediate family member who is a current partner of GAMCO’s internal or external auditor; |
o | the director has an immediate family member who is a current employee of GAMCO’s internal or external auditor and personally works on GAMCO’s audit; or |
o | the director or an immediate family member was within in the last three years a partner or employee of GAMCO’s internal or external auditor and personally worked on GAMCO’s audit within that time. |
· | A director who is, or whose immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of GAMCO’s current executive officers serve on that company’s compensation committee will not be deemed independent. |
· | A director who is, a current employee, or whose immediate family member is an executive officer, of an entity that makes payments to, or receives payments from, GAMCO for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of such other entity’s consolidated gross revenues, will not be deemed independent. |
· | A director who serves as an executive officer of a tax-exempt entity that receives significant contributions (i.e., more than 2% of the annual contributions received by the entity or more than $1 million in a single fiscal year, whichever amount is greater) from GAMCO, any of its affiliates, any executive officer or any affiliate of an executive officer within the preceding twelve-month period may not be deemed independent, unless the contribution was approved by the Board and disclosed in GAMCO’s proxy statement. |
For purposes of these Guidelines, the terms:
· | “affiliate” means any consolidated subsidiary of GAMCO and any other company or entity that controls, is controlled by or is under common control with GAMCO, as evidenced by the power to elect a majority of the board of directors or comparable governing body of such entity; and |
· | “immediate family” means spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law and anyone (other than domestic employees) sharing a person’s home, but excluding any person who is no longer an immediate family member as a result of legal separation or divorce, or death or incapacitation. |
The Board shall undertake an annual review of the independence of all non-employee directors. In advance of the meeting at which this review occurs, each non-employee director shall be asked to provide the Board with full information regarding the director’s business and other relationships with GAMCO and its affiliates and with senior management and their affiliates to enable the Board to evaluate the director’s independence.
Directors have an affirmative obligation to inform the Board of any material changes in their circumstances or relationships that may impact their designation by the Board as “independent.” This obligation includes all business relationships between, on the one hand, directors or members of their immediate family, and, on the other hand, GAMCO and its affiliates or members of senior management and their affiliates, whether or not such business relationships are subject to the approval requirements set forth by the Board.