Nicholas Dalmaso
About Nicholas Dalmaso
Nicholas Dalmaso (age 59) is an Independent Director of Flaherty & Crumrine Dynamic Preferred and Income Fund (DFP) and serves as Chair of the Nominating & Governance Committee; he joined the DFP board in 2024 as a Class III director with a term currently up for election through 2028 if re‑elected . He is Founder/CEO of Sound Capital Holdings LLC and affiliates (broker/dealer and RIA), previously General Counsel of EquityBee, Inc. (2022–2023) and Founder/General Counsel of M1 Finance, Inc. (2014–2021), and he holds external fund governance roles as Independent Chair of the Destra Capital Investment Company Boards (3 funds) and Lead Independent Trustee of the Milliman Variable Insurance Trust (2 funds) .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| EquityBee, Inc. | General Counsel | 2022–2023 | Senior legal/compliance leadership |
| M1 Finance, Inc. | Founder and General Counsel | 2014–2021 | Built brokerage/legal infrastructure |
| Keno Kozie Associates | Independent Director | Not disclosed | Board oversight (prior service) |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Destra Capital Investment Company Boards (3 funds) | Independent Trustee and Chair | Current | External board chair; Destra is also servicing agent to DFP (see Interlocks) |
| Milliman Variable Insurance Trust (2 funds) | Lead Independent Trustee | Current | Lead independent governance role |
| Sound Capital Holdings/Distributors/Solutions LLC | Founder and CEO (and affiliates) | Since 2021 | Broker/dealer and RIA operations leadership |
Board Governance
- Independence and role: Non‑Interested (Independent) Director; Chair, Nominating & Governance Committee; member, Audit Committee .
- Board structure: 75% of directors are independent; Lead Independent Director is David Gale .
- Attendance and engagement: In FY ended Nov 30, 2024, the DFP Board held 6 meetings (4 telephonic); each director attended 100% of Board and committee meetings; all directors attended the April 17, 2024 annual meetings .
- Committee activity: Audit Committee met 4 times; Nominating Committee met 2 times in FY 2024; both committees comprised entirely of independent directors under NYSE standards .
| Governance Metric (DFP FY2024) | Value |
|---|---|
| Board meetings held | 6 |
| Director attendance (Board) | 100% |
| Audit Committee meetings | 4 |
| Nominating Committee meetings | 2 |
| Director attendance (Committees) | 100% |
Fixed Compensation
- Fee structure per fund (Independent Directors): $9,000 annual retainer; $750 per in‑person Board or Audit Committee meeting; $500 per in‑person Nominating Committee meeting; $250 per telephonic meeting; Audit Committee Chair receives an additional $3,000 per fund annually; travel/out‑of‑pocket reimbursed .
- Pensions/retirement: Directors do not receive pension or retirement benefits from the funds .
| Component | DFP (Director-level terms) |
|---|---|
| Annual cash retainer | $9,000 per fund |
| In‑person Board/Audit meeting fee | $750 per meeting |
| In‑person Nominating meeting fee | $500 per meeting |
| Telephonic meeting fee | $250 per meeting |
| Audit Chair premium | $3,000 per fund (not applicable to Dalmaso) |
| Travel/out‑of‑pocket | Reimbursed |
| Nicholas Dalmaso – Aggregate Compensation by Fund (FY2024) | Amount |
|---|---|
| DFP | $12,750 |
| PFD | $12,750 |
| PFO | $12,750 |
| FFC | $12,750 |
| FLC | $12,750 |
| Total across fund complex | $63,750 |
Performance Compensation
- No equity, option, or performance‑based compensation for directors is disclosed; director compensation is paid as cash retainers and meeting fees, with no pension/retirement benefits .
| Performance-Linked Element | Status |
|---|---|
| Equity awards (RSUs/PSUs) | None disclosed |
| Option awards | None disclosed |
| Performance metrics (TSR, EBITDA, ESG, etc.) | Not applicable to director pay; none disclosed |
| Clawbacks/COC for directors | Not disclosed |
Other Directorships & Interlocks
| Entity | Relationship | Potential Interlock/Conflict Note |
|---|---|---|
| Destra Capital Advisors LLC | Servicing agent to DFP, FFC, FLC | Dalmaso is Independent Chair of Destra Capital Investment Company Boards (3 funds). While not an affiliate of DFP’s adviser, this is an external relationship to monitor for perceived conflicts; no related‑party transactions disclosed in proxy . |
| Flaherty & Crumrine (Adviser) | Adviser to DFP | No Non‑Interested Director or immediate family owned any securities of Flaherty & Crumrine or its control affiliates, reducing direct adviser‑related conflicts . |
Expertise & Qualifications
- Legal/compliance and broker‑dealer/RIA leadership experience (Founder/CEO of Sound Capital entities; prior GC roles at EquityBee and M1 Finance) supports governance, regulatory oversight, and distribution/retail platform insight .
- Fund governance expertise as Independent Chair/Lead Independent Trustee across multiple registered funds; Chair of DFP’s Nominating & Governance Committee .
Equity Ownership
- As of December 31, 2024, Dalmaso reported “A” dollar range (None) in DFP and in each of the other Flaherty & Crumrine funds; aggregate in the fund complex also “A” (None) .
| Holding (12/31/2024) | Dollar Range |
|---|---|
| DFP | A = None |
| Aggregate across F&C fund complex | A = None |
Governance Assessment
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Positives
- Strong engagement: 100% attendance at Board and committee meetings; committees met regularly (Audit 4x; Nominating 2x) .
- Independent governance roles: Non‑Interested Director; Chair of Nominating & Governance; committees composed entirely of independent directors per NYSE standards; presence of a Lead Independent Director .
- Adviser conflict mitigation: No security ownership by Independent Directors or their immediate family in the adviser or its control affiliates .
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Concerns/Watch items
- RED FLAG: Zero personal share ownership in DFP and across the fund complex as of 12/31/2024 may be viewed as weak alignment with shareholders’ interests .
- RED FLAG: Interlock risk to monitor—Dalmaso chairs Destra Capital investment company boards while Destra Capital Advisors LLC is a servicing agent to DFP (and FFC, FLC). No related‑party transactions are disclosed in the proxy, but investors may scrutinize potential perceived conflicts; continued disclosure and recusal practices should be monitored .
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Overall implication for investor confidence: High meeting attendance and independent committee leadership support board effectiveness, but lack of any share ownership and the Destra servicing relationship increase scrutiny on alignment and conflict management; transparent recusal and sustained independence practices are key mitigants .