DEF 14A: Oppenheimer Holdings Inc. Sets Date for Virtual Annual Stockholders Meeting, Proposes Director Elections and Incentive Plan Ratification

Oppenheimer Holdings Inc. will hold its annual stockholders meeting virtually on May 6, 2024, to vote on director elections, auditor ratification, and the adoption of a new incentive plan.

Summary

• Oppenheimer Holdings Inc. will hold its Annual Meeting of Stockholders virtually on May 6, 2024, at 4:30 P.M. (New York time).
• Class B stockholders will vote to elect nine directors, ratify the appointment of Deloitte & Touche LLP as auditors for 2024, and ratify the adoption of the Oppenheimer Holdings Inc. 2024 Incentive Plan.
• Holders of Class A non-voting common stock can listen to and view the meeting and submit questions via email.
• The Board of Directors recommends voting FOR the election of the nominated directors, FOR the ratification of Deloitte & Touche LLP as auditors, and FOR the adoption of the Oppenheimer Holdings Inc. 2024 Incentive Plan.
• The company's Annual Report on Form 10-K for the year ended December 31, 2023, is available on the company's website and upon request.
• The company estimates the cost of soliciting proxies to be approximately $5,000.
• The Nominating and Corporate Governance Committee has recommended nine director nominees for election at the meeting.
• Two current directors, Mr. William J. Ehrhardt and Mr. A. Winn Oughtred, are retiring and will not stand for re-election.
• The Board of Directors has adopted the Oppenheimer Holdings Inc. 2024 Incentive Plan, subject to stockholder ratification, which replaces the 2014 Incentive Plan.
• The 2024 Plan permits the company to issue up to 1,000,000 shares of Class A Stock to employees and non-employee directors.
• The company's executive compensation policies aim to align executive pay with corporate objectives and performance, while mitigating excessive risk-taking.
• The company's Compensation Committee approved and recommended that the Board of Directors include the Compensation Discussion and Analysis in the proxy statement.
• The company's Audit Committee recommended to the Board of Directors that the audited financial statements for the year ended December 31, 2023, be included in the Annual Report on Form 10-K.
• The company's Nominating and Corporate Governance Committee has assessed the composition, effectiveness, and size of the Board of Directors and determined that the incumbent directors are performing effectively and that a board of nine directors is appropriate for the Company.
• The company's Compliance Committee has been charged with assisting the Board of Directors with oversight of the Company's compliance function, including the Company's compliance management system and the Company's compliance with applicable laws, rules and regulations.

Sentiment

Score: 6

Explanation: The document presents a balanced view, acknowledging both positive and negative aspects of the company's performance and governance. While there are challenges, the overall tone is cautiously optimistic.

Positives

• The Board of Directors is actively engaged in overseeing the management of the company's strategic, operational, financial, and compliance risks.
• The company has a compensation recovery (clawback) policy in place to recover certain incentive-based compensation in specified circumstances.
• The company is committed to internal pay equity and monitors the relationship between executive pay and the pay of non-executive employees.
• The company has a stock buy-back program in place to repurchase shares of its Class A Stock.
• The company's Nominating and Corporate Governance Committee has assessed the composition, effectiveness, and size of the Board of Directors and determined that the incumbent directors are performing effectively and that a board of nine directors is appropriate for the Company.
• The company's Compliance Committee has been charged with assisting the Board of Directors with oversight of the Company's compliance function, including the Company's compliance management system and the Company's compliance with applicable laws, rules and regulations.

Negatives

• The company's financial performance in 2023 was weaker than in 2022, resulting in lower bonus allocations.
• The company incurred approximately $70 million in pre-tax costs related to settlements of arbitrations and with the SEC.
• Capital Markets results were disappointing due to the continued downturn in corporate issuances.

Risks

• The company operates in a challenging marketplace and its success depends on attracting and retaining non-employee directors of the highest caliber.
• The company's ability to avoid significant business disruptions is reliant on the continued ability to support employees that continue to work remotely.
• The company is subject to the corporate governance policies and requirements of the NYSE, the applicable rules of the SEC, the provisions of the Sarbanes-Oxley Act of 2002 and the applicable rules of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).
• The company is necessarily in the business of taking risks to facilitate its customer-oriented businesses and certain proprietary trading activities.
• The company's deferred compensation arrangements are subject to the risks of the business.

Future Outlook

The company is looking forward to improved levels of activity in the Capital Markets business and remains focused on managing costs and maintaining discipline on overall expense levels.

Management Comments

• The company is committed to empowering clients through exceptional investment insight and collaborative effort.
• The company is focused on helping advisors succeed and assisting them in harnessing the company's resources to see that their clients investment portfolios can stand the rigors of a challenging market.
• The company is investing in methods that support hybrid work expectations driven by digital technology and remote capabilities.
• The company is working on Board refreshment and aligning Board skills and experiences with our strategic priorities.

Industry Context

The document notes the impact of higher interest rates and the collapse of regional banks on the financial industry, as well as the volatility and eventual recovery of equity markets in 2023.

Comparison to Industry Standards

• The document references a peer group of public companies including Piper Sandler & Co., Stifel Financial Corp., Raymond James Financial, Inc., Evercore Inc. and Houlihan Lokey to guide its decision making process with respect to compensation.
• The document also reviewed compensation practices at Bank of America Corporation, Barclays PLC, Citigroup Inc., Credit Suisse Group AG, Deutsche Bank, Goldman Sachs Group, Inc., JP Morgan Chase & Co., Morgan Stanley, and UBS Group AG to further understand the compensation practices of large financial services institutions.

Management Changes

Corporate Governance

Related Party Transactions

• Mr. R.S. Lowenthal, the son of Mr. A.G. Lowenthal, is President of the Company and Head of Oppenheimer & Co. Inc.'s Investment Banking business and is compensated with a base salary and a Performance-Based Cash Award for each fiscal year determined by the application of a framework containing specific financial metrics established by the Compensation Committee annually based upon the performance of the Investment Banking business for the fiscal year and certain other performance criteria established by the Compensation Committee.

Stakeholder Impact

• Shareholders: The proposals aim to enhance shareholder value through effective governance, compensation practices, and financial oversight.
• Employees: The 2024 Incentive Plan provides additional compensation incentives for high levels of performance and productivity.
• Customers: The company is focused on helping advisors succeed and assisting them in harnessing the company's resources to see that their clients investment portfolios can stand the rigors of a challenging market.
• Directors: The company is committed to attracting and retaining non-employee directors of the highest caliber.

Next Steps

• Class B stockholders will vote on the election of directors, ratification of auditors, and adoption of the 2024 Incentive Plan at the Annual Meeting on May 6, 2024.

Key Dates

Keywords

Annual Meeting, Stockholders, Directors, Auditors, Incentive Plan, Compensation, Governance, Oppenheimer Holdings