DEFA14A: Tortoise Funds Correct Proxy Statement, Appoint New Independent Director

Tortoise Energy Infrastructure Corporation and Tortoise Sustainable and Social Impact Term Fund filed a proxy statement supplement to correct broker voting rules for director elections and announce the appointment of Carrie R. Schoffman as a new independent director following Rand C. Berney's resignation.

Summary

• The filing is a supplement to the definitive proxy statement for the combined 2025 annual meeting of stockholders of Tortoise Energy Infrastructure Corporation (TYG) and Tortoise Sustainable and Social Impact Term Fund (TEAF).
• It corrects previous disclosure regarding broker discretionary voting for Proposal No. 1, the election of three directors. Under New York Stock Exchange (NYSE) rules for Investment Company Act of 1940 registered issuers, this proposal is a routine matter, meaning brokers have discretion to vote if no specific instructions are given.
• The correction also applies to Proposal No. 2, ratification of Tait, Weller & Baker LLP as the independent registered public accounting firm for the fiscal year ending November 30, 2025, which also qualifies as a routine matter.
• Broker non-votes are not expected to occur with respect to either Proposal 1 or Proposal 2 due to their routine nature.
• Rand C. Berney resigned as a director of both Companies, effective July 15, 2025.
• Carrie R. Schoffman, age 52, was appointed to succeed Mr. Berney as a director of each Company, effective July 15, 2025.
• Ms. Schoffman will also serve as a member and the Chair of the Audit and Valuation Committee for both Companies.
• Ms. Schoffman's professional background includes operating CPA Concierge Services, LLC since 2020, serving as Tax Accountant at Bree Beers & Associates, PC (2017-2020), and holding Chief Compliance Officer, Principal Financial Officer, and Treasurer roles at ICON Funds and ICON Advisers, Inc. (2004-2017). She was also a Staff Accountant at the U.S. Securities and Exchange Commission (2003-2004) and an Experienced Manager/Senior Associate at PricewaterhouseCoopers LLP (1996-2003).
• She is a Certified Public Accountant (CPA) since 1997 and a member of the Colorado Society of Public Accountants and the American Institute of Certified Public Accountants.
• Ms. Schoffman currently serves as an independent trustee and Chair of the Audit Committee for Tortoise Capital Series Trust and as an independent trustee for 83 Investment Group Income Fund, Beacon Pointe Multi-Alternative Fund, Booster Income Opportunities Fund, and Private Debt & Income Fund.
• She will serve for the remainder of the Class II directors' term, which is expected to run through the end of the 2027 annual shareholder meeting for TYG and TEAF.
• Ms. Schoffman will be compensated for her service on the Board of Directors in accordance with the 2025 director compensation elements.
• The document updates the list of remaining independent directors and director compensation tables to reflect Ms. Schoffman's appointment and Mr. Berney's departure.
• It also updates the security ownership tables to include Ms. Schoffman and remove Mr. Berney, noting Ms. Schoffman holds no shares in TYG or TEAF as of May 31, 2025.

Sentiment

Score: 7

Explanation: The document reflects positive corporate governance actions, including correcting a disclosure error and appointing a highly qualified independent director to a key committee role. While the initial error is a minor negative, its prompt correction and the quality of the new appointment are positive for investor confidence and operational transparency.

Positives

• Appointment of an experienced independent director, Carrie R. Schoffman, with a strong background in accounting, compliance, and SEC experience, enhancing corporate governance.
• Ms. Schoffman's appointment as Chair of the Audit and Valuation Committee suggests a focus on financial oversight and valuation accuracy.
• The correction regarding broker discretionary voting for routine matters simplifies the voting process for brokers and potentially increases participation in director elections and auditor ratification.

Negatives

• The initial proxy statement contained incorrect information regarding broker voting discretion, requiring a public correction, which could indicate an oversight in the initial drafting or review process.
• Resignation of an incumbent director, Rand C. Berney, though a replacement was promptly found.

Future Outlook

The document primarily provides corrections and updates to current governance and voting procedures for the upcoming Annual Meeting. Carrie R. Schoffman is expected to serve for the remainder of the full term for Class II directors, which is anticipated to run through the end of the 2027 annual shareholder meeting. The appointment of the independent registered public accounting firm for the fiscal year ending November 30, 2025, is also noted.

Management Comments

• We do not expect any broker non-votes to occur with respect to either Proposal 1 or Proposal 2.

Industry Context

This filing is typical for closed-end funds or investment companies registered under the Investment Company Act of 1940, as it specifically references NYSE rules applicable to such entities regarding routine matters in proxy voting. The appointment of an independent director with a strong background in financial compliance and accounting is a common practice to ensure robust corporate governance in the financial services industry.

Comparison to Industry Standards

• The correction regarding broker discretionary voting aligns the Companies' proxy disclosures with standard NYSE rules for Investment Company Act of 1940 registered issuers, which is a common industry practice for routine matters like director elections and auditor ratification.
• The appointment of an independent director with extensive experience in accounting, compliance, and prior SEC roles, such as Carrie R. Schoffman, is consistent with best practices for corporate governance in the investment management industry, particularly for audit committee leadership. Her service on multiple other fund boards within the Tortoise Capital Series Trust and other publicly traded investment companies demonstrates a breadth of experience comparable to highly qualified independent directors across the fund industry.

Management Changes

Corporate Governance

Related Party Transactions

• Carrie R. Schoffman currently serves as an independent trustee and Chair of the Audit Committee for Tortoise Capital Series Trust, which is another member of the fund complex advised by the Companies' investment adviser, Tortoise Capital Advisors, L.L.C.
• Ms. Schoffman has no other relationship with TYG or TEAF or their investment adviser, and she does not have a direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of SEC Regulation S-K, apart from her appointment as director and current services as an independent trustee of Tortoise Capital Series Trust.

Stakeholder Impact

• Shareholders: Benefit from clearer proxy voting instructions and enhanced corporate governance through the appointment of a highly qualified independent director to a key oversight role. The correction ensures that broker non-votes are not expected for routine matters, potentially leading to more effective voting.
• Management/Board: The Board gains a director with significant financial and regulatory expertise. The correction of the proxy statement ensures compliance and clarity for the upcoming annual meeting.

Next Steps

• The Annual Meeting of Stockholders is scheduled for August 14, 2025.
• Stockholders who have already voted do not need to take further action unless they wish to change their vote.
• Carrie R. Schoffman will serve for the remainder of the Class II directors' term, expected to run through the end of the 2027 annual shareholder meeting.

Key Dates

Recommendation

Keywords

SEC filing, proxy statement, corporate governance, director appointment, director resignation, broker voting, NYSE rules, Investment Company Act of 1940, audit committee, financial reporting, Tortoise Energy Infrastructure Corporation, Tortoise Sustainable and Social Impact Term Fund, TYG, TEAF