DEF 14A: Federated Hermes Funds to Hold Joint Special Meeting for Director Elections

Federated Hermes Funds are holding a joint special meeting on October 25, 2024, to elect Directors for various Registrants, effective January 1, 2025, and to address other business matters.

Summary

• A joint special meeting of shareholders of Federated Hermes Funds will take place on October 25, 2024, to elect Directors for each Registrant.
• The record date for determining shareholders eligible to vote is August 26, 2024.
• The purpose of the election is due to recent and anticipated retirements of Independent Directors and to comply with the Investment Company Act of 1940 and certain regulatory settlements.
• The goal is to ensure that at least 66.66% of the directors have been elected by shareholders and that at least 75% of the Board is comprised of Independent Directors.
• There are three existing Interested Directors, five existing Independent Directors, and three new candidates for Independent Director being nominated.
• If approved, the term of service for new Director Nominees will begin on January 1, 2025.
• Shareholders can vote by internet, telephone, mail, or in person at the Special Meeting.
• The Election of Directors requires the affirmative vote of a plurality of the votes cast at the Special Meeting provided that a quorum is present.
• The Boards are soliciting proxies, with Broadridge Financial Solutions, Inc. providing project management, tabulation, and voting services for an estimated $6.14 million.
• The cost of the proxy and the solicitation will be borne by the Funds pro rata based upon shareholder positions as of the Record Date.

Sentiment

Score: 7

Explanation: The document is primarily informational and procedural, with a neutral to slightly positive tone due to the focus on ensuring compliance and maintaining a strong Board. There are no significant negative aspects highlighted.

Positives

• The election of Directors aims to ensure compliance with regulatory requirements and maintain a strong, independent Board.
• Shareholders have multiple options for voting, making it convenient to participate in the election.
• The document provides detailed information about the Director Nominees, their qualifications, and their roles within the Federated Hermes Fund Complex.
• The document provides detailed information about the existing Directors, their qualifications, and their roles within the Federated Hermes Fund Complex.
• The document provides detailed information about the Executive Officers, their qualifications, and their roles within the Federated Hermes Fund Complex.

Negatives

• The document does not explicitly state any negative aspects, but the need for a Special Meeting suggests underlying issues such as director retirements and compliance gaps that require immediate attention.
• The FIS Funds will bear all applicable costs related to the Special Meeting, unlike other Funds for which the Advisers have determined to include such expense as subject to the waiver.

Risks

• Failure to achieve a quorum at the Special Meeting could delay the election of Directors and hinder compliance efforts.
• Potential conflicts of interest may arise due to Affiliated Funds and other investment advisory clients investing in the Funds; however, Federated Hermes intends to address this through echo voting.
• The unique voting process required for the FIS Funds may result in a relatively small number of Variable Contract Owners determining the outcome of the proposal.

Future Outlook

The document outlines the election of Directors to ensure compliance with regulatory requirements and maintain a strong, independent Board, which is crucial for the future governance and oversight of the Federated Hermes Funds.

Industry Context

The document reflects the ongoing trend in the investment management industry to emphasize independent board oversight and regulatory compliance, particularly in light of increased scrutiny from regulators and investors.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards, but the emphasis on independent directors and regulatory compliance aligns with best practices in the investment management industry.
• Comparable companies such as BlackRock, Vanguard, and State Street also prioritize independent board oversight and regulatory compliance.
• The document does not provide specific comparisons to industry standards, but the emphasis on independent directors and regulatory compliance aligns with best practices in the investment management industry.
• Comparable projects include proxy solicitations by other large fund complexes, which typically involve similar costs for printing, mailing, and tabulation services.

Corporate Governance

Stakeholder Impact

• Shareholders have the opportunity to influence the composition of the Board through their votes.
• The election of qualified Directors aims to enhance the governance and oversight of the Funds, potentially benefiting investors through improved performance and risk management.
• Employees may be indirectly affected by changes in Board leadership and strategic direction.

Next Steps

• Shareholders are requested to vote on the election of Directors by October 24, 2024.
• The Special Meeting will be held on October 25, 2024, to finalize the election and address other business matters.

Key Dates

Keywords

Directors, Election, Federated Hermes, Shareholders, Proxy Statement, Independent Directors, Special Meeting, Funds, Registrants, Voting