Heather Brilliant
About Heather Brilliant
Heather E. Brilliant, CFA (age 48), has served as Chief Executive Officer and President of Diamond Hill Investment Group, Inc. and as a director since September 3, 2019. She previously served as CEO, Americas at First State Investments and spent ~14 years at Morningstar culminating as Global Head of Equity & Credit Research and CEO of Morningstar Australasia; earlier roles included Driehaus, Coghill, and Bank of America. She holds a BA in economics from Northwestern and an MBA from the University of Chicago; she is a CFA charterholder and past chair/member of the CFA Institute Board of Governors (2013–2020) . Under her tenure, DHIL reported GAAP net operating margin of 29% in 2024 (26% in 2023), adjusted operating margin of 32% (30% in 2023), and returned $168 million to shareholders over 2022–2024 via $103 million repurchases and $65 million dividends; cumulative share count has declined >20% since 2018 . The company-reported TSR metric shows a $100 investment valued at $151 as of 2024 (peer group $239); 2024 net income was $43.2 million and adjusted net operating income $48.7 million .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| First State Investments | CEO, Americas | 2017–2019 | Led Americas operations for a global asset manager . |
| Morningstar | Global Head of Equity & Credit Research; CEO, Morningstar Australasia | ~2003–2017 (approx. 14 years) | Built and led global research; led Australasian business . |
| Driehaus; Coghill; Bank of America | Analyst roles (equity and credit) | Not disclosed | Foundation in fundamental equity/credit analysis . |
External Roles
| Organization | Role | Years |
|---|---|---|
| Investment Company Institute (ICI) | Board of Governors | Current (as disclosed) |
| CFA Institute | Board of Governors (past chair, member) | 2013–2020 |
| Non-profit boards | Director (various) | Current (unspecified) |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $400,000 | $400,000 | $400,000 |
Additional fixed/benefit notes: Company 401(k) contributions in 2024 were $49,285 and HSA contributions $5,600 for Brilliant . No pension/SERP; broad-based benefits only .
Performance Compensation
- Structure and metrics: Annual discretionary cash Incentive Award plus time-based restricted stock LTI Award. Metrics considered include adjusted net operating income, adjusted operating margin, adjusted diluted EPS, and long-term investment performance; the Compensation Committee retains discretion and does not disclose metric weightings or formulaic targets .
| Incentive Type | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Annual Incentive (Cash) ($) | $1,900,000 | $1,500,000 | $1,550,000 |
| LTI Award (Restricted Stock, grant-date fair value) ($) | $750,000 | $1,000,000 | $1,250,000 (granted Feb 2025; vests 1/3 on Apr 1, 2026–2028) |
Performance metrics and payout disclosure:
- Metrics used: adjusted net operating income (company-selected measure), adjusted operating margin, adjusted diluted EPS, and long-term investment performance; TSR is disclosed in Pay vs Performance but not used formulaically for awards .
- Weightings/targets/actuals: Not disclosed (awards are discretionary within the employment agreement’s structure) .
Vesting and near-term supply:
| Vest date | Shares scheduled to vest (Brilliant) |
|---|---|
| Apr 1, 2025 | 4,909 (1,401 from 2022 LTI; 1,293 from 2023 LTI; 2,215 from 2024 LTI) |
| Apr 1, 2026 | 3,444 (1,293 from 2023 LTI; 2,151 from 2024 LTI) |
| Apr 1, 2027 | 2,150 (from 2024 LTI) |
Notes:
- LTI granted 2/16/2024: 6,516 shares (for 2023 performance) vest 1/3 annually beginning Apr 1, 2025 .
- The 2025 grant (for 2024 performance) equals $1,250,000 fair value with 1/3 vesting on Apr 1, 2026–2028 .
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Beneficial ownership | 44,495 shares; 1.6% of outstanding as of Mar 3, 2025 . |
| Shares in 401(k) | 473 shares included in beneficial ownership . |
| Unvested restricted stock outstanding (12/31/2024) | 10,503 shares (valued $1,629,015 at $155.10) . |
| Executive stock ownership guideline | 5x salary target; target 12,895 shares at $155.10 . |
| Shares counted toward guideline (12/31/2024) | 35,945; guideline met . |
| Pledging/hedging | No pledging by named insiders; hedging/shorting/derivatives prohibited under Insider Trading Policy . |
| Options | None outstanding; company has not granted options in >10 years . |
Ownership and sale constraints:
- Director stock sale restrictions apply to non‑employee directors only; executives are governed by ownership guidelines and the Insider Trading Policy (no director cash fees or director equity for Brilliant as an employee-director) .
Employment Terms
| Term | Key provisions |
|---|---|
| Agreement and term | Employment agreement dated Oct 26, 2021; amended Mar 31, 2023 and Nov 14, 2023; expires Dec 31, 2026 with auto one‑year renewals unless 120‑day notice . |
| Cash comp | Base salary $400,000 (may increase, not decrease) . |
| Annual Incentive | Target $1,750,000; minimum $600,000; paid in cash/stock (≥40% cash) at Committee discretion, based on performance . |
| LTI | Target $600,000 per year prior to full vest of initial five‑year cliff award (vested Oct 1, 2024); thereafter target $1,200,000, subject to Board discretion . |
| Covenants | Non‑compete, non‑solicit, confidentiality, non‑disparagement; post‑termination restrictions generally 1 year . |
| Clawbacks | Company-wide compensation recoupment policy and Nasdaq 5608 executive officer clawback policy . |
| Deferred comp | Variable Term Deferred Compensation Plan; Brilliant contributed $750,000 in 2024; year-end balance $1,923,290 . |
Severance economics (12/31/2024 illustrative amounts):
- Termination without Cause (or Good Reason): base salary ($400,000), prior-year Incentive Award ($1,500,000) prorated for year of termination, fair value of portion of LTI for year of termination ($522,222), plus any unpaid completed-year Incentive Award ($1,550,000) and vested-but-unpaid/awarded LTI ($1,629,015); standard accrued items; no plan-based termination benefits beyond these .
- Change in Control: all employees’ unvested restricted stock vests at CIC; for Brilliant, immediate vest value $1,629,015 at 12/31/2024 . If terminated without Cause or resigns for Good Reason within 6 months before or 24 months after CIC, additional cash severance equals base salary ($400,000) + prior-year Incentive Award ($1,500,000) + prorated target Incentive Award ($1,750,000) plus full vesting of any remaining LTI (10,503 shares valued at $1,629,015 at 12/31/2024) .
- No tax gross‑ups disclosed .
Board Service & Governance Notes
- Board service: Director since Sept 3, 2019; not independent due to executive role; not a member of Board committees .
- Board leadership: Chair and CEO roles are separated by policy; current Board Chair is independent director Richard S. Cooley (since 2024); 5 of 6 nominees independent .
- Committee structure: All Audit, Compensation, and Nominating/Governance members are independent; Audit and Compensation have financial experts identified .
- Meetings and oversight: Board met 5 times in 2024; all directors attended ≥75% of applicable meetings; executive sessions held at each regular meeting .
- Director compensation: Employee-directors (incl. Brilliant) receive no director compensation .
Pay-for-Performance, Say-on-Pay, and Committee Process
- Pay mix and discretion: Majority of CEO total compensation is at risk via annual incentive and LTI; awards are discretionary within an agreement-defined range, informed by company financials and multi‑year investment outcomes .
- Say-on-pay support: 96% approval at the 2024 annual meeting for 2023 NEO compensation .
- Committee independence/consultants: Compensation Committee is fully independent; periodically uses McLagan/Aon industry pay data; no fixed peer percentile targeting and no specific compensation peer group is defined .
Performance & Track Record (selected company metrics for context)
| Measure | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Total Shareholder Return (value of $100) | $115 | $167 | $168 | $156 | $151 |
| Net Income ($) | $38,165,138 | $75,589,539 | $36,870,762 | $43,085,548 | $43,177,918 |
| Adjusted Net Operating Income ($) | $47,974,867 | $83,680,496 | $60,352,296 | $41,434,000 | $48,696,000 |
Additional 2024 highlights:
- GAAP net operating margin 29% (26% in 2023); adjusted net operating margin 32% (30% in 2023) .
- Capital returns: $168 million over 2022–2024 (repurchases $103m; dividends $65m); share count reduced >20% since 2018 .
- Business mix: Fixed income AUM surpassed $6B after $2.3B net inflows in 2024; equity strategies saw $2.6B outflows offset by market returns .
Risk Indicators & Red Flags
- Clawbacks: Robust company-wide and executive officer (Nasdaq 5608) recoupment policies in place .
- Hedging/derivatives: Prohibited for all employees, officers, and directors; short selling and speculative activities barred .
- Pledging: None reported for named insiders .
- Option repricing/option risk: No stock options granted in >10 years; explicit anti-repricing language in 2025 plan .
- Related party transactions: None requiring Item 404(a) disclosure since start of 2024; Audit Committee oversees any that arise .
Compensation Committee Analysis (governance quality)
- Members: All independent; chair Nicole R. St. Pierre; active oversight of NEO/director comp, plan administration, consultants, and succession .
- No executive participation in decisions on their own pay; CEO provides recommendations for other NEOs .
- Uses industry survey data, not a fixed comparator peer group; avoids ratcheting to percentile targets .
Director Compensation (for completeness)
- Employee-director (Brilliant): $0 cash and $0 equity for board service (compensated as an executive) .
Equity Plan Refresh
- 2025 Equity and Cash Incentive Plan proposes 225,000 shares; replaces 2022 plan (290,702 RS outstanding; 25,877 shares remaining at 3/3/2025); minimum one-year vesting standard with limited exceptions; explicit anti-repricing; CIC acceleration provisions .
Investment Implications
- Alignment: High insider ownership and rigorous executive ownership guideline compliance (5x salary; Brilliant at 35,945 shares vs 12,895 target) support alignment; no pledging/hedging and strong clawbacks mitigate governance risk .
- Retention vs liquidity: Material time-based vesting through 2027 (4,909 shares on 4/1/2025; 3,444 on 4/1/2026; 2,150 on 4/1/2027) promotes retention but can create mechanical sell-to-cover activity around vest dates; awards are discretionary rather than formulaic, offering flexibility but less transparency for investors .
- Risk and downside protection: Double-trigger CIC cash plus single-trigger equity acceleration is shareholder-typical; no tax gross-ups disclosed; no options or repricing risk; robust say‑on‑pay support (96%) suggests low external pay risk .
- Performance lens: Compensation inputs include adjusted NOI, margins, EPS, and multi‑year investment results; 2024 adjusted NOI improved to $48.7m, while TSR lagged the small-cap asset manager peer index—supporting a focus on business fundamentals and capital return over near-term stock moves .