Our Chief Executive Officer participates in structuring Company-wide compensation programs and in establishing appropriate bonus and equity pools. In early 2025, Mr. Sarsfield met with the Committee and reviewed projections for aggregate 2025 compensation, including salary levels, target bonus levels and target equity and carried interest award values. In late 2025 and early 2026, Mr. Sarsfield met with the Committee and discussed his views of corporate and individual executive officer performance for 2025 for Mses. Coussens and Jairath and Messrs. Hood and Jensen, and his recommendations for annual bonuses and equity and carried interest awards for those NEOs. Following these discussions, the Committee met in executive session to discuss their views of corporate and individual performance for 2025 for Mr. Sarsfield and Mr. Sarsfield’s recommendations for the other NEOs. After consideration of the recommendations and their own evaluations, the Committee ultimately approved annual bonus and equity and carried interest award amounts for each NEO.
In establishing a given executive officer’s compensation package, each individual component is evaluated independently and in relation to the package as a whole. Prior earning histories, outstanding carried interest holdings and applicable executive employment agreement terms are also reviewed and taken into account. Each individual executive’s situation is evaluated on a case-by-case basis each year, considering a variety of relevant factors at that time.
In addition, in 2025, the Committee engaged Johnson Associates, Inc. (“JA”) to provide comparative market data in connection with the Committee’s own analysis of its compensation practices, but neither JA nor any other compensation consultant had any material role in determining or recommending the amount or form of executive compensation for 2025.
Compensation Elements
The compensation packages for our NEOs have primarily consisted of an annual base salary, annual bonuses, and long-term incentives in the form of equity and carried interest awards. We believe this structure provides an appropriate balance between fixed and variable (at-risk) compensation and between short-term and long-term incentives, with a strong emphasis on sustained growth and enhanced stockholder value.
Base Salary
Base salary is a fixed component of compensation for each of our NEOs and has as its purpose to provide competitive compensation to attract and retain executive talent and to serve as a secure base of guaranteed cash for services rendered. We typically negotiate a new executive officer’s starting salary based on prior compensation levels for the particular position within the Company, the location of the executive, salary levels of other executives within the Company, salary levels available to the individual in alternative opportunities, reference to select compensation survey information and the extent to which the Company desires to secure the executive’s services. Once established, salaries can increase based on a number of factors, including the assumption of additional responsibilities, internal equity, periodic market checks and other factors that demonstrate a NEO’s increased value to the Company. None of the base salaries of our NEOs were adjusted during 2025.
Annual Incentive Bonus
Our annual incentive bonus program provides an important incentive tool to achieve the Company’s annual objectives. We generally pay bonuses shortly after year-end following finalization of the financial results for the year in question. The target annual bonus payable to each of our NEOs is set forth in their respective employment agreements. The determination of actual bonus amounts is based on an assessment of factors that vary from year to year, including a discretionary assessment of Company and individual performance. In determining individual annual bonus amounts, the Committee considers a variety of factors regarding the Company’s overall performance, such as growth in revenue, earnings and profitability over the prior year, performance against the Company’s plan, and achievement of strategic objectives by the Company, as well as an individual’s performance and contribution to the Company. The Committee does not quantify the weight given to any specific element or otherwise follow a formulaic calculation; however, Company performance tends to be the dominant driver of the ultimate bonus amount.
For 2025 bonuses specifically, the Committee considered a variety of factors, including, among others, successful business plan execution and year-over-year growth in, and performance against the Company’s plan with respect to, fee-related earnings, fee-paying assets under management, fee-related revenue, and adjusted net income per share; successful completion of enhanced audit procedures and development of and execution on our risk management plan; execution of strategic initiatives, including further development of the Company’s business development function and client relationships, increased cross-platform collaboration and leveraging of technology and data, ongoing product innovation across geographies and asset classes, realization of operational efficiencies, and improved M&A origination, tracking and execution, including the closing of our acquisition of Qualitas Funds and the integration of Qualitas with the Company’s business; and corporate governance and control improvements. While these were the primary factors considered in setting bonus award amounts, the Committee also considered each NEO’s role and responsibilities, the relative contributions made by each NEO during the year, and the relative size of the bonuses paid to the other NEOs. Based on a holistic assessment of these factors, the Committee awarded annual incentive bonuses for 2025 as set forth below.
Annual incentive bonuses are paid in cash, although in the first quarter of each year, we offer our NEOs and certain other employees the right to elect to receive restricted stock units (“RSUs”) in lieu of a portion of their cash bonus for that year, with the total aggregate value of