DEF 14A: Virtus Investment Partners Seeks Shareholder Approval for Amended Equity Incentive Plan, Director Elections and Executive Pay on the Agenda

Virtus Investment Partners is holding its annual shareholder meeting on May 15, 2024, to vote on director elections, executive compensation, ratification of the accounting firm, and an amendment to the equity incentive plan.

Summary

• Virtus Investment Partners is soliciting proxies for its 2024 Annual Meeting of Shareholders to be held on May 15, 2024.
• Shareholders will vote on the election of two directors, the ratification of Deloitte & Touche LLP as the independent registered public accounting firm, an advisory vote on executive compensation, and an amendment to the company's equity incentive plan to increase the number of shares available for issuance by 455,000.
• The Board of Directors recommends voting FOR the election of directors, FOR the ratification of the accounting firm, FOR the advisory vote on executive compensation, and FOR the approval of the amendment to the equity incentive plan.
• The company transferred its stock listing to the New York Stock Exchange (NYSE) from the NASDAQ on January 17, 2024.
• The company's three-year average burn rate was 2.3% as of December 31, 2023.
• The company has a share repurchase program in place to offset dilution related to shares issued under the Omnibus Plan.
• The company's Corporate Governance Guidelines, Code of Conduct, and committee charters are available on its website.
• The Board determined that each of Dr. Fleming, Ms. Jones, and Messrs. Bain, Greig, Holt, Morris and Zarrilli meets the criteria for independence as established by NYSE Rules.
• The Board has reduced its size to seven members effective upon the conclusion of Mr. Zarrillis term.

Sentiment

Score: 7

Explanation: The document is generally positive, highlighting growth in AUM and shareholder returns, but also acknowledges challenges in sales and net flows. The overall tone is professional and optimistic.

Positives

• The company has a share repurchase program in place to offset dilution related to shares issued under the Omnibus Plan.
• The company's Corporate Governance Guidelines, Code of Conduct, and committee charters are available on its website.
• The Board determined that each of Dr. Fleming, Ms. Jones, and Messrs. Bain, Greig, Holt, Morris and Zarrilli meets the criteria for independence as established by NYSE Rules.

Risks

• The document mentions the risk of dilution from equity compensation, although this is mitigated by a share repurchase program.

Future Outlook

The amendment to the Omnibus Plan, if approved by our shareholders, will become immediately effective as of the date of the Annual Meeting, and we estimate, based on historical grant information, that the proposed increase should provide a sufficient number of shares to allow us to continue to make awards for approximately four years.

Industry Context

The document provides context on how Virtus Investment Partners' performance compares to its financial peers in terms of growth in operating income, total shareholder return, and net flow rate.

Comparison to Industry Standards

• The document compares Virtus Investment Partners' performance to its financial peers in terms of growth in operating income, total shareholder return, and net flow rate.
• The document mentions that the company's 2023 diluted EPS represented a 10% five-year and 11% three-year CAGR, both ranking second among the companies that comprise the Financial Peer Group.
• The document mentions that one-year total shareholder return (TSR) of 30.9% significantly exceeded the 4.2% median return for the Financial Peers and exceeded the 26.3% TSR for the S&P 500.
• For the three-year period, the Company's TSR of 20.8% compared with the Financial Peers median of 14.9% and the S&P 500s TSR of 33.1%.

Related Party Transactions

• The Vanguard Group, Inc. filed a Schedule 13G/A in February 2024 indicating that it holds 12.7% of our Common Stock as of December 31, 2023.
• Certain affiliates of Vanguard provided distribution and other services to certain subsidiaries of the Company in connection with our sponsored open-end funds.
• During fiscal 2023, we paid affiliates of Vanguard approximately $0.4 million in distribution and service fees, almost all of which were reimbursed to the Company by its sponsored open-end funds.

Stakeholder Impact

• The proposals being voted on could impact shareholders through changes in corporate governance, executive compensation, and the potential for dilution from the equity incentive plan.
• Employees may be impacted by changes to the equity incentive plan, which could affect their compensation and ownership in the company.

Next Steps

• Shareholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will announce the preliminary voting results at the Annual Meeting and publish the results in a Form 8-K within four business days of the meeting.

Key Dates

Keywords

proxy statement, annual meeting, directors, executive compensation, equity incentive plan, shareholders, corporate governance, Deloitte & Touche LLP, stock options, restricted stock units, Virtus Investment Partners