DEF 14A: 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 a joint annual meeting on April 30, 2024, to elect two Class II Trustees for each fund.

Summary

• First Trust Enhanced Equity Income Fund, First Trust Mortgage Income Fund, and First Trust Intermediate Duration Preferred & Income Fund will hold a Joint Annual Meeting of Shareholders on April 30, 2024, at 12:00 noon Central Time in Wheaton, Illinois.
• Shareholders will vote to elect two Class II Trustees for each fund, with nominees Richard E. Erickson and Thomas R. Kadlec standing for election for a three-year term expiring at the 2027 annual meeting.
• The record dates for determining shareholders eligible to vote are March 4, 2024, for First Trust Enhanced Equity Income Fund and First Trust Intermediate Duration Preferred & Income Fund, and March 8, 2024, for First Trust Mortgage Income Fund.
• As of the record dates, First Trust Enhanced Equity Income Fund had 19,988,085 shares outstanding, First Trust Intermediate Duration Preferred & Income Fund had 60,847,827 shares outstanding, and First Trust Mortgage Income Fund had 4,213,115 shares outstanding.
• The proxy statement and related materials were first mailed to shareholders on or about March 28, 2024.
• The Board of Trustees recommends that shareholders vote FOR the election of each nominee.
• The Funds have a unitary board leadership structure with six Independent Trustees and one Interested Trustee.
• The Board has five standing committees: Executive Committee, Dividend Committee, Nominating and Governance Committee, Valuation Committee, and Audit Committee.
• The fixed annual retainer paid to the Independent Trustees is $285,000 per year and an annual per fund fee of $7,500 for each closed-end fund.
• Shareholder proposals for the 2025 annual meeting must be received by November 29, 2024.

Sentiment

Score: 7

Explanation: The document is neutral in tone, providing factual information about the upcoming shareholder meeting and trustee elections. It expresses a positive sentiment by encouraging shareholder participation and highlighting the Board's recommendations.

Positives

• The Board of Trustees unanimously recommends voting FOR the election of each nominee, suggesting confidence in their abilities.
• The Funds have 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' operations, indicating a strong commitment to governance.
• The Independent Trustees have adopted a policy that establishes the expectation that, within three years of becoming an Independent Trustee, the Independent Trustee will have invested an amount in the funds in the First Trust Fund Complex he or she oversees in the aggregate of at least one years annual retainer for Board service.

Negatives

• The document primarily focuses on procedural matters related to the annual meeting and trustee elections, lacking information on fund performance or financial health.
• The document mentions that the Funds and their service providers have become more susceptible to potential operational risks through breaches in cyber security.

Risks

• The document mentions potential operational risks through breaches in cyber security, which could lead to loss of proprietary information, data corruption, or loss of operational capacity.
• The document states that not all risks that may affect the Funds can be identified nor can controls be developed to eliminate or mitigate their occurrence or effects.
• The document states that it may not be practical or cost-effective to eliminate or mitigate certain risks, the processes and controls employed to address certain risks may be limited in their effectiveness, 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 process for the upcoming annual meeting and provides information for shareholders to participate in the election of trustees. It also includes information on how shareholders can submit proposals for the 2025 annual meeting.

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 document is a standard proxy statement for registered investment companies, outlining the process for electing trustees and other governance matters. It reflects the regulatory requirements and best practices for shareholder engagement in the investment management industry.

Comparison to Industry Standards

• The structure of the Board of Trustees, with a mix of Independent and Interested Trustees, is common in the investment management industry.
• The use of a unitary board structure, where trustees oversee multiple funds within the same complex, is a recognized approach for achieving efficiencies in governance and oversight.
• The establishment of standing committees, such as the Audit Committee and Nominating and Governance Committee, aligns with industry best practices for corporate governance.
• The compensation structure for Independent Trustees, including a fixed annual retainer and per-fund fees, is consistent with industry norms.
• The disclosure of beneficial ownership of shares by Trustees and executive officers is a standard practice to ensure transparency and accountability.

Corporate Governance

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 expected to benefit shareholders by ensuring effective oversight of the Funds' operations and investment strategies.
• The disclosure of information about the Funds' governance and operations promotes transparency and accountability to shareholders.

Next Steps

• Shareholders should review the proxy statement and vote on the election of trustees.
• Shareholders who wish to submit proposals for the 2025 annual meeting should do so by November 29, 2024.
• The Funds will hold the Joint Annual Meetings of Shareholders on April 30, 2024.

Key Dates

Keywords

Trustees, Shareholders, First Trust, Proxy Statement, Annual Meeting, Fund