DEF: First Trust Funds Announce Joint Annual Meetings of Shareholders to Elect Trustees

First Trust Enhanced Equity Income Fund, First Trust Mortgage Income Fund, and First Trust Intermediate Duration Preferred & Income Fund are holding joint annual meetings on April 21, 2025, to elect three Class III Trustees.

Summary

• The First Trust Enhanced Equity Income Fund, First Trust Mortgage Income Fund, and First Trust Intermediate Duration Preferred & Income Fund will hold Joint Annual Meetings of Shareholders on April 21, 2025, at 11:30 a.m. Central Time in Wheaton, Illinois.
• Shareholders will vote to elect three Class III Trustees for each fund: James A. Bowen, Niel B. Nielson, and Bronwyn Wright.
• The record date for determining shareholders eligible to vote is February 19, 2025.
• The Board of Trustees recommends that shareholders vote FOR the election of each nominee.
• The proxy statement is available online, and shareholders can request copies of annual and semi-annual reports.
• Each fund has a staggered Board of Trustees, with Trustees divided into three classes (Class I, Class II, and Class III).
• The Board has five standing committees: Executive Committee, Dividend Committee, Nominating and Governance Committee, Valuation Committee, and Audit Committee.
• The Nominating and Governance Committee will not consider new trustee candidates who are 72 years of age or older or will turn 72 years old during the initial term.
• The fixed annual retainer paid to the Independent Trustees is $285,000 per year, and each Independent Trustee receives an annual per fund fee of $7,500 for each closed-end fund, $2,000 for each actively managed fund, $750 for each target outcome fund and $500 for each index fund.

Sentiment

Score: 7

Explanation: The document is a standard proxy statement, which is generally neutral in tone. The Board's recommendation to vote for the nominees adds a slightly positive element.

Positives

• The Board of Trustees has a unitary board leadership structure, which promotes efficiency and consistency in governance and oversight.
• The Board has established five standing committees to oversee various aspects of the Funds' activities.
• The Nominating and Governance Committee operates under a written charter, which is available on the Funds' website.
• The Audit Committee operates under a written charter, which is available on the Funds' website.
• The Board is actively involved in risk oversight and has adopted policies and procedures to address the Funds' risks.

Negatives

• Several late filings of Form 3 and Form 4 reports by officers of the Funds and sub-advisors were noted.
• The Funds and their service providers are susceptible to potential operational risks through breaches in cyber security.

Risks

• Cyber security breaches pose a potential operational risk to the Funds and their service providers.
• The Funds' ability to manage risk is subject to substantial limitations.
• Not all risks that may affect the Funds can be identified, nor can controls be developed to eliminate or mitigate their occurrence or effects.
• It may not be practical or cost-effective to eliminate or mitigate certain risks, and some risks are simply beyond the reasonable control of the Funds or the Advisor or other service providers.

Future Outlook

The document outlines the upcoming Joint Annual Meetings of Shareholders and the election of Trustees, indicating a focus on governance and shareholder participation.

Management Comments

• James A. Bowen, Chairman of the Boards, emphasizes the importance of shareholder participation and encourages shareholders to vote on the enclosed proxy card.
• The Board of Trustees of each Fund has determined that the use of this Joint Proxy Statement is in the best interests of the Fund in light of the same matter being considered and voted on by shareholders.

Industry Context

This announcement is typical for registered investment companies and reflects standard corporate governance practices, including the election of trustees and shareholder engagement.

Comparison to Industry Standards

• The structure of the Board of Trustees, with a mix of interested and independent trustees, is common in the investment management industry.
• The use of a unitary board structure is a recognized approach for managing multiple funds within a complex, aiming for efficiency and consistency.
• The establishment of standing committees such as the Audit Committee, Nominating and Governance Committee, and Valuation Committee aligns with best practices for corporate governance in the financial services sector.
• The compensation structure for independent trustees, including a fixed annual retainer and per-fund fees, is consistent with industry norms for closed-end funds.
• The disclosure of fees paid to the independent auditors and the pre-approval process for audit and non-audit services are standard requirements under securities regulations.

Stakeholder Impact

• Shareholders have the opportunity to participate in the governance of the Funds by voting on the election of Trustees.
• The election of qualified Trustees is important for the effective management and oversight of the Funds, which can impact shareholder value.
• The Board's risk oversight activities are intended to protect the Funds and their shareholders from potential risks.

Next Steps

• Shareholders should review the proxy statement and vote on the election of the Class III Trustees.
• Shareholders can attend the Joint Annual Meetings of Shareholders on April 21, 2025, to vote in person.
• The Board of Trustees will continue to oversee the Funds' activities and manage risks.
• The Nominating and Governance Committee will continue to evaluate candidates for positions on the Board of Trustees.

Key Dates