John Hollihan

About John P. Hollihan, III

John “Jack” P. Hollihan, III is 75, has served on ARMOUR’s Board since November 2009, and is currently Lead Independent Director and an Audit Committee member; he was Nominating & Corporate Governance Committee chair until April 2024 . He brings 40+ years of investment banking and investment experience, including senior roles at Morgan Stanley and Banc of America Securities; he holds B.S. (Wharton) and B.A. degrees from the University of Pennsylvania, and a J.D. from the University of Virginia School of Law .

Past Roles

External Roles

Board Governance

• Independence: Board affirmatively determined Hollihan is independent under NYSE rules .
• Lead Independent Director charter and responsibilities: presides in Chairman’s absence; sets agendas and presides at executive sessions; principal liaison; advises on information quality; assists governance compliance; can recommend retention of outside advisors .
• Committees and financial expertise:
  • Audit Committee member; Board determined Hollihan is financially literate and an “audit committee financial expert” under SEC rules .
  • Nominating & Corporate Governance Committee member; served as chair until April 2024 (co-chairs Behar and Downey thereafter) .
• Attendance: In 2024 the Board held 9 meetings; Audit 7; Compensation 2; Nominating & Governance 1; each director attended at least 75% of meetings of the Board and committees on which they served .
• Majority voting and resignation policy in bylaws for uncontested elections .
• Say-on-pay (2024 compensation) advisory vote passed: For 30,458,051; Against 1,831,404; Abstain 574,205; Broker non-votes 22,749,804 .
• 2025 director election support for Hollihan: For 30,912,463; Against 1,661,015; Abstain 290,182; Broker non-votes 22,749,804 .

Fixed Compensation

Performance Compensation

No director performance metrics (e.g., TSR or ESG goals) are tied to director equity; grants are time-based and may be partially paid in cash solely to cover estimated taxes .

Other Directorships & Interlocks

• Related-party governance: Audit Committee reviews and approves related party transactions . The Company is externally managed by ACM under a Management Agreement; ACM owned largely by Messrs. Ulm and Zimmer; non-executive directors Staton and Bell hold LP interests; termination without cause would require a fee equal to 4× prior 12 months’ base management fee .

Expertise & Qualifications

• 40+ years in investment banking and structured finance; managed ~$45B at Morgan Stanley and oversight of ~$8B loan book at Banc of America Securities .
• Education: B.S. (Wharton), B.A. (University of Pennsylvania), J.D. (University of Virginia School of Law) .
• Audit Committee financial expert and financially literate under NYSE/SEC standards .

Equity Ownership

• Stock ownership guidelines: Non-executive directors must beneficially own at least $198,000 (3× $66,000 base cash retainer) within 5 years; all directors, including Hollihan, are in compliance .
• Hedging/pledging policy: Hedging and pledging prohibited; no pledged securities by officers/directors .

Governance Assessment

• Strengths

  • Lead Independent Director role with a formal charter enhances independent oversight, executive session rigor, and information quality for independent directors .
  • Audit Committee financial expert designation and independence bolster financial reporting oversight; Audit Committee actively reviews auditor independence and internal controls .
  • Clear stock ownership guidelines with compliance and anti-hedging/anti-pledging policies align director and shareholder interests .
  • Attendance meets threshold; Board and committees conducted regular meetings with independent director sessions and auditor engagement .

• RED FLAGS / Risk Indicators

  • External manager (ACM) structure introduces potential conflicts: ACM receives significant management fees ($33.1M net in 2024) and is controlled by executives/directors (Ulm, Zimmer; Staton/Bell LP interests); termination fee risk (4× base fee) can entrench manager .
  • BUCKLER broker-dealer joint venture is majority owned by ACM (75.39%) with ARMOUR providing up to $250M subordinated capital commitment and having ~$4.9B repo balances and ~$249M interest expense through BUCKLER; while independent directors negotiated protections and must approve third-party business, the size of related-party financing exposure is material .
  • Mitigations: Audit Committee oversight of related-party transactions, LID leadership of independent directors, formal charters, and majority voting/resignation policy provide governance counterweights .

• Shareholder feedback signal

  • 2025 say-on-pay advisory vote approved (For 30.46M; Against 1.83M; Abstain 0.57M; Broker non-votes 22.75M), indicating acceptance of current compensation structure despite external management model .

Committee Assignments (2024)

Director Compensation Structure Notes

• Non-management directors receive an annual $132,000 retainer (50% base cash $66,000; 50% electable stock or cash mix), plus committee/LID cash retainers; directors may elect to receive retainers in stock or fully-vested RSUs under a deferral program with specified settlement timing and form .
• 2024 compensation for Hollihan totaled $199,056, shown entirely as cash in the director compensation table; no additional per-meeting fees and no pensions for directors .
• Clawback policy adopted Oct 2023 applies to executive incentive compensation in case of accounting restatement; directors’ equity grants are time-based .