Frederic A. Escherich

About Frederic A. Escherich

Frederic A. Escherich, 72, is an independent Class III Director of Adams Diversified Equity Fund (ADX) who has served on the Board since 2006; his current term expires at the 2027 annual meeting . A former Managing Director at J.P. Morgan & Co. (25-year tenure) and head of M&A Research/Financial Advisory, he has been a private investor since 2002 and is deemed an “audit committee financial expert” by the Board; he previously served as Chair of ADX’s Audit Committee .

Past Roles

External Roles

Board Governance

• Independence: Escherich is not an “interested person” under the Investment Company Act; ADX’s Board has an Independent Chair (Kenneth J. Dale) and a majority of independent directors .
• Attendance: Board held 7 regular and 3 special meetings in 2024; each incumbent director (including Escherich) had 100% attendance across Board and assigned committees .
• Committee memberships and roles (2024):
  • Audit Committee: Member; all members independent and designated “audit committee financial experts” (Chair: Mary Chris Jammet) .
  • Compensation Committee: Member .
  • Executive Committee: Member .
  • Nominating & Governance Committee: Chair .

Policy context: ADX highlights a mandatory retirement age (75), a 15-year director term limit, independent Chair, executive sessions at each regular meeting, and 100% Board/committee attendance in 2024 .

Fixed Compensation

• Structure (directors who are not “interested persons”):
  • Annual director retainer: $65,000; Committee Chair fee: $3,000; Board Chair fee: $20,000 .

• Escherich’s director pay:

Performance Compensation

• Equity awards to directors: The 2005 Equity Incentive Compensation Plan expired April 27, 2015; all grants vested prior to 2019; non-employee directors do not receive ongoing equity awards .
• Deferred units: As of Dec 31, 2024, Escherich held no deferred stock units; a footnote discloses outstanding deferred units only for Mr. Dale .
• Options/PSUs/TSR metrics: Not applicable for directors (none disclosed) .

Other Directorships & Interlocks

Expertise & Qualifications

• 25 years at J.P. Morgan with leadership of M&A research and financial advisory; deep expertise in valuation, transaction analysis, and shareholder value maximization .
• Private investor since 2002; designated “audit committee financial expert” .
• Extensive committee leadership at ADX, including current Chair of Nominating & Governance; prior service as Audit Committee Chair .

Equity Ownership

• Ownership requirement: Non-employee directors must own at least $100,000 (cost basis) of ADX common stock within 5 years of joining the Board .
• Dollar value range: Escherich’s holdings exceed $100,000 (as of Dec 31, 2024) .
• Beneficial ownership and composition:

Note: The proxy does not disclose any pledging or hedging by Escherich; no such practices are listed for him in the 2025 proxy .

Governance Assessment

• Strengths

  • Independent director with capital markets and transaction expertise; designated audit committee financial expert .
  • High engagement: 100% attendance in 2024 across Board and committee meetings; active roles on four committees, including Chair of Nominating & Governance .
  • Pay structure is simple and transparent (cash retainers, modest chair fees); no equity grants to directors; ownership guideline in place and met (> $100k) .
  • Board maintains Independent Chair; all key committees fully independent .

• Watch items / potential red flags

  • Tenure vs policy: Escherich has served since 2006 (≈19 years through 2025), while ADX states a 15-year director term limit; the proxy does not explain any exemptions (observation for investors to monitor) .
  • Upcoming succession: Mandatory retirement age is 75; Escherich is 72, suggesting potential turnover within a few years .
  • Complex interlock: Simultaneous service on ADX and PEO boards (same fund complex); expense sharing between funds is disclosed, with no director-specific related-party items involving Escherich identified in the proxy .

• 2024–2025 governance context

  • The 2024 annual meeting was contested by Saba Capital; ADX urged investors to vote its WHITE card. This indicates heightened governance scrutiny of board composition and effectiveness (no 8-K voting results were found in the document catalog) [ListDocuments: 8-K 5.07 = none].

Related-Party Transactions (Escherich-specific)

• The proxy details expense sharing between ADX and PEO, but does not disclose any transactions involving Escherich or his related parties .

Director Meeting Attendance Detail (2024)

Director Compensation (Detail)

Equity plan note: The 2005 plan expired in 2015; all awards vested before 2019; no ongoing director equity issuances . Footnotes confirm no deferred units for Escherich in 2024 .

Summary Signals for Investors

• Escherich is a long-tenured, independent director with deep transaction and valuation expertise, serving as Nominating & Governance Chair and designated as an audit committee financial expert; attendance and committee engagement are strong .
• Pay is cash-only and modest, with explicit ownership guidelines that he meets; alignment is supported by >$100k share ownership although lack of ongoing equity grants reduces at-risk exposure typical of operating companies (common for closed-end funds) .
• Monitor board refreshment/succession given ADX’s 15-year term limit policy vs. Escherich’s 2006 start and approaching mandatory retirement age; activism in 2024 underscores investor attention to director tenure and board composition .