DEF 14C: Federated Hermes Files Definitive Information Statement for 2025 Annual Meeting

Federated Hermes has filed an information statement regarding the upcoming Annual Meeting of Shareholders scheduled for April 24, 2025, covering the election of directors and other business matters.

Summary

• Federated Hermes has released an information statement for its shareholders regarding the Annual Meeting scheduled for April 24, 2025.
• The meeting will address the election of directors and other business matters.
• The entire voting power of Federated Hermes is vested in the holder of the Class A Common Stock, which is held by a Voting Trust.
• The trustees of the Voting Trust intend to vote in favor of all director nominees.
• The Board of Directors has nominated six individuals for election as directors: Joseph C. Bartolacci, J. Christopher Donahue, Thomas R. Donahue, John B. Fisher, Karen L. Hanlon, and Marie Milie Jones.
• The information statement includes details on corporate governance, executive compensation, related person transactions, and security ownership.
• The company's compensation programs are designed to attract, retain, and incentivize talented individuals.
• The Compensation Committee considers various factors, including Federated Hermes' operating profits, assets under management, and industry compensation trends, when determining executive compensation.
• The company has adopted an Incentive Compensation Recovery Policy as required by NYSE rules.
• The information statement also provides details on the compensation of directors and executive officers, including base salary, bonuses, and stock awards.
• The company's pay ratio for 2024 shows that the CEO's annual total compensation was approximately 58.84 times the median annual compensation of all employees.
• The document outlines the company's policies and procedures for related person transactions and conflicts of interest.
• The company's Code of Business Conduct and Ethics applies to all directors, officers, and employees.
• The information statement is available on Federated Hermes' website.

Sentiment

Score: 7

Explanation: The document is a standard information statement, providing necessary details for shareholders. The tone is professional and informative, with a neutral to slightly positive sentiment due to the focus on governance and compensation practices.

Positives

• The Board has nominated a slate of experienced directors for election.
• The company has established committees to oversee compliance, audit, and compensation matters.
• The company has adopted an Incentive Compensation Recovery Policy to ensure accountability.
• The company has a Code of Business Conduct and Ethics to address conflicts of interest.
• The company provides a range of benefits and development opportunities for its employees.
• The company supports cultural, educational, and human services organizations in the communities where it operates.

Risks

• The company is controlled by the Donahue family through the Voting Trust, which could limit the influence of other shareholders.
• The information statement does not explicitly address specific risks facing the company's business operations or financial performance.

Future Outlook

The goal at Federated Hermes is to deliver superior long-term risk-adjusted investment returns by endeavoring to set the standard for active investment management, including rigorous investment analysis and consideration of the long-term goals of our Shareholders and customers.

Management Comments

• The trustees of the Voting Trust have advised Federated Hermes that they intend to vote in favor of all the directors nominated by the Board.
• Federated Hermes endeavors to reward individual contribution, as demonstrated by the delivery of long-term continuing results.
• Federated Hermes compensation programs are also designed to align the interests of its officers and employees with its business strategy, values and objectives, including the interests of its Shareholders, customers and stakeholders, while affording the business the opportunity to grow.

Industry Context

The document highlights Federated Hermes' compensation practices in the context of the competitive investment management industry, referencing a peer group analysis conducted by McLagan Partners, Inc.

Comparison to Industry Standards

• Federated Hermes engaged McLagan Partners, Inc. to conduct a study of the compensation of executive officers at Federated Hermes and ten of Federated Hermes peers within the investment management industry.
• The peer group included Affiliated Managers Group, Inc.; AllianceBernstein Holding LP; Artisan Partners; BlackRock, Inc.; Franklin Templeton; Invesco Ltd.; Janus Henderson Group PLC; T. Rowe Price Group, Inc.; Victory Capital Management and Virtus Investment Partners.
• The peer group data used for purposes of McLagans study is generally gathered from both publicly disclosed documents of those companies and industry compensation survey results.

Related Party Transactions

• During 2024, Mr. Richard H. Donahue, son of Mr. Thomas R. Donahue, Chief Financial Officer of Federated Hermes, was employed by Federated Hermes as a Director Corporate Budgeting and FP&A Sales.
• Mr. Richard H. Donahue was provided compensation in the amount of approximately two hundred ten thousand dollars and received a Periodic Restricted Stock award with a grant date fair value of one hundred fifty-six thousand six hundred forty dollars, which equaled the closing price of $42.16 for Federated Hermes Class B Common Stock on the NYSE as of November 18, 2024 minus the $3.00 per share purchase price multiplied by 4,000 shares.

Stakeholder Impact

• The information statement provides shareholders with important information regarding the company's governance, compensation practices, and upcoming Annual Meeting.
• The company's compensation programs are designed to align the interests of officers and employees with those of shareholders, customers, and other stakeholders.
• The company's commitment to diversity and inclusion benefits employees and supports stronger long-term business performance.

Next Steps

• Shareholders can attend the Annual Meeting via teleconference on April 24, 2025.
• Shareholders can submit questions in advance by sending questions to Investors@FederatedHermes.com.

Key Dates

Keywords

Federated Hermes, Annual Meeting, Shareholders, Directors, Executive Compensation, Corporate Governance, Voting Trust, Class A Common Stock, Class B Common Stock, Incentive Compensation, Risk Management, Audit Committee, Compensation Committee, Compliance Committee