DEF: Templeton Emerging Markets Fund Seeks Shareholder Votes

Templeton Emerging Markets Fund announces its 2026 Annual Meeting of Shareholders to vote on the election of four Trustees and the ratification of PricewaterhouseCoopers LLP as its independent auditor.

Summary

• The Annual Meeting of Shareholders is scheduled for March 9, 2026, at 12 Noon, Eastern time, at the Fund's offices in Fort Lauderdale, Florida.
• Shareholders will vote on two proposals: the election of four Trustees (Harris J. Ashton, Mary C. Choksi, Edith E. Holiday, and J. Michael Luttig) for three-year terms expiring at the 2029 Annual Meeting, and the ratification of PricewaterhouseCoopers LLP (PwC) as the independent registered public accounting firm for the fiscal year ending August 31, 2026.
• The Board of Trustees unanimously recommends voting FOR both the election of the four nominees for Trustee and the ratification of PwC.
• Shareholders of record at the close of business on December 15, 2025, are eligible to vote, with each share entitled to one vote.
• Voting instructions are provided for mail, Internet, or telephone, and shareholders may also attend and vote in person.
• The Fund's Board of Trustees is comprised of 75% or more Independent Trustees.
• Independent Trustees receive an annual retainer fee of $220,000, a $10,000 per meeting fee for regularly scheduled Board meetings, and additional retainers for the Lead Independent Trustee ($50,000 annually) and Audit Committee members/chair.
• Aggregate compensation from the Fund for Independent Trustees for the fiscal year ended August 31, 2025, ranged from $2,904 to $3,439, while total compensation from the Franklin Templeton Fund Complex for the calendar year ended December 31, 2024, ranged from $281,400 to $760,000.
• PwC's audit fees were $53,545 for fiscal year 2024 and $47,840 for fiscal year 2025. Tax fees were $0 for 2024 and $10,000 for 2025. Aggregate non-audit fees were $140,000 for 2024 and $200,966 for 2025.
• As of December 15, 2025, City of London Investment Group PLC held 27.91% of outstanding shares, Gates Foundation Trust held 7.83%, and State Of Wisconsin Investment Board held 6.73%.

Sentiment

Score: 7

Explanation: The filing outlines standard corporate governance procedures with a strong emphasis on independent oversight and shareholder alignment through trustee investment policies. While there's a minor procedural inefficiency with auditor pre-approval and a risk of meeting postponement, these are not material negative factors. The overall tone is routine and compliant, reflecting stable operations.

Positives

• The Board of Trustees unanimously recommends voting FOR the election of all nominees and the ratification of PwC, indicating internal alignment.
• The Board is comprised of 75% or more Independent Trustees, which aligns with strong corporate governance practices.
• Independent Trustees are required to invest a substantial portion of their fees in Franklin Templeton funds, aligning their financial interests with shareholders.
• The Audit Committee is composed entirely of Independent Trustees and includes at least one financial expert, enhancing financial oversight.
• PwC's reports on the Fund's financial statements for previous fiscal years did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified.
• The Board actively oversees various risk management areas, including investment, valuation, and compliance risks, demonstrating a proactive approach to governance.

Negatives

• No Trustees attended the Fund's last annual meeting held on March 10, 2025.
• The Audit Committee has not adopted written pre-approval policies and procedures for auditor services, requiring direct pre-approval for each service, which could be less efficient.

Risks

• There is a possibility that the Annual Meeting scheduled for March 9, 2026, may be postponed or its location or approach changed, including the possibility of holding a virtual meeting.
• Nominees for Trustee may be disqualified if they have engaged in disqualifying conduct outlined in the Fund's Declaration of Trust.
• Nominees associated with other investment vehicles and investment advisers may not be eligible for nomination if the Board finds that such associations create conflicts of interest, impede performance, or hinder the free flow of information from management.
• Nominees acting in concert with control persons of other investment companies in violation of Section 12(d)(1) of the 1940 Act shall be disqualified from nomination and service as a Trustee.
• Effective August 1, 2022, the Fund became subject to newly enacted control share acquisition provisions within the Delaware Statutory Trust Act, which limit the ability of holders of control beneficial interests to vote their shares above various threshold levels unless other shareholders vote to reinstate those rights.

Future Outlook

The Fund anticipates that its 2027 Annual Meeting of Shareholders will be held on or about March 8, 2027. Shareholder proposals for inclusion in the 2027 proxy statement must be received by September 8, 2026.

Management Comments

• We urge you to spend a few minutes reviewing the Proposals in the proxy statement. Then, please fill out and sign the proxy card and return it to us so that we know how you would like to vote.
• When shareholders return their proxies promptly, the Fund may be able to save money by not having to conduct additional mailings.
• We are urging all shareholders to take advantage of voting by mail, Internet or telephone.
• We welcome your comments. If you have any questions, call Fund Information at (800) DIAL BEN/342-5236.
• The Trustees unanimously recommend that you vote FOR the election of the four nominees for Trustee and FOR the ratification of the selection of PwC as the independent registered public accounting firm for the Fund for the fiscal year ending August 31, 2026.
• The Trustees and the Fund's management believe that having the same individuals serving on the boards of multiple funds in Franklin Templeton enhances the ability of each fund to obtain, at a relatively modest cost to each separate fund, the services of high caliber, experienced and knowledgeable Independent Trustees who can bring their experience and talents to, and effectively oversee the management of, several funds.

Industry Context

This filing is a standard proxy statement for a U.S. registered investment company, specifically a closed-end fund focused on emerging markets. It details routine corporate governance matters such as the election of board members and the ratification of the independent auditor. The emphasis on a high percentage of independent trustees and robust risk oversight aligns with current best practices and regulatory expectations in the investment management industry, particularly for funds listed on major exchanges like the NYSE. The structure within the broader Franklin Templeton fund complex is typical for large asset managers, leveraging shared governance and service provider relationships.

Comparison to Industry Standards

• The Board's composition, with 75% or more Independent Trustees, exceeds the minimum independence requirements for audit committees and generally aligns with or surpasses best practices for overall board independence in the investment fund industry.
• Both the Nominating and Corporate Governance Committee and the Audit Committee are comprised entirely of Independent Trustees, which is a strong governance practice that enhances objectivity and oversight.
• The policy requiring Board members to invest a portion of their fees in Franklin Templeton funds until their holdings reach a multiple of their compensation is a robust practice designed to align trustee interests with shareholders, going beyond typical industry requirements.
• The Audit Committee's lack of written pre-approval policies for auditor services, necessitating direct pre-approval for each service, while compliant, is less efficient than a policy-based approach commonly adopted by larger, more mature organizations.

Management Changes

Corporate Governance

Related Party Transactions

• Interested Trustees (Gregory E. Johnson and Rupert H. Johnson, Jr.) hold director and/or officer positions with, or are principal stockholders of, Franklin Resources, Inc. (Resources) and its affiliates, which is the parent company of the Fund's investment manager.
• Rupert H. Johnson, Jr. beneficially owned approximately 20% of Resources' outstanding shares as of August 31, 2025, and is the uncle of Gregory E. Johnson.
• The Fund's Investment Manager (Templeton Asset Management Ltd.), Investment Sub-Adviser (Franklin Templeton Investment Management Limited), and Administrator (Franklin Templeton Services, LLC) are all indirect, wholly owned subsidiaries or affiliates of Resources.
• Interested Trustees and certain officers of the Fund who are shareholders of Resources are not compensated by the Fund for their services but may receive indirect remuneration due to their participation in management fees and other fees received by the Investment Manager and its affiliates from the funds in the Franklin Templeton fund complex.
• The Investment Manager or its affiliates pay the salaries and expenses of the officers and the Interested Trustees.

Stakeholder Impact

• Shareholders: Directly impacted by the election of Trustees and ratification of the auditor, which are fundamental to corporate governance and oversight. The Delaware Control Share Provisions could affect the voting power of significant shareholders.
• Management and Employees: Management changes for key roles (CCO, CEO-Finance, CFO) indicate ongoing organizational adjustments. The stability of the fund's governance indirectly affects employees of the investment manager and its affiliates.
• Customers (Fund Investors): The robust governance structure, including independent trustees and auditor oversight, aims to protect the interests of the Fund's investors by ensuring sound financial reporting and management.
• Service Providers: PricewaterhouseCoopers LLP (auditor) and other sub-administrative and transfer agent services (JPMorgan Chase & Co., Computershare Inc.) are directly impacted by their engagement and compensation, as detailed in the filing.
• Regulatory Bodies: The filing demonstrates compliance with SEC regulations (e.g., 1940 Act, 1934 Act, Regulation S-X) and PCAOB standards, which is crucial for maintaining regulatory good standing.

Next Steps

• Shareholders are urged to vote on the election of four Trustees and the ratification of PricewaterhouseCoopers LLP by returning their proxy cards or voting via Internet or telephone.
• Fund management will notify shareholders by press release and SEC filing if the Annual Meeting is postponed or its location/approach is changed.
• The Nominating Committee will continue to identify and evaluate qualified candidates for Trustees.
• The Audit Committee will continue to oversee the Fund's financial statements, accounting, and auditing processes.
• Shareholders wishing to submit a proposal for inclusion in the Fund's proxy statement for the 2027 Annual Meeting must do so by September 8, 2026.
• Shareholders wishing to present a proposal at the 2027 Annual Meeting (without proxy statement inclusion) must notify the Fund between October 9, 2026, and November 8, 2026.

Key Dates

Recommendation

This filing is a routine proxy statement for an annual meeting, focusing on corporate governance matters such as trustee elections and auditor ratification. It does not contain any new financial performance data, strategic shifts, or material events that would typically drive significant share price movement. The proposals are standard, and the board's recommendations are unanimous. The governance structure appears sound, with a majority of independent trustees and robust oversight mechanisms. Therefore, a 'hold' recommendation is appropriate as there's no new information to warrant a change in investment thesis based solely on this filing.

Keywords

Templeton Emerging Markets Fund, EMF, proxy statement, annual meeting, trustees, auditor, PricewaterhouseCoopers, corporate governance, investment fund, emerging markets, shareholder vote, Franklin Templeton