Paul A. Froning
About Paul A. Froning
Independent director since April 2013; age 53 as of the April 26, 2024 record date. Froning chairs the Audit Committee and is designated an “audit committee financial expert” by the Board. He has 20+ years in private equity and healthcare services investing; B.A. from the University of Notre Dame. The Board has determined he is independent under NYSE American rules.
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Focus Healthcare Partners LLC | Co‑founder | 2009–present | Senior housing/healthcare private equity; investment, advisory, asset management |
| Fortress Investment Group LLC (public) | Managing Director, Private Equity | Feb 2008–Oct 2009 | Private investment firm experience |
| Brookdale Senior Living Inc. (public affiliate of Fortress) | Chief Investment Officer and EVP | 2005–2008 | Senior living operating and investment leadership |
| Lazard Group LLC; Security Capital Group (acquired by GE Capital) | Senior investment roles | Prior to 2005 | Institutional private equity investing |
| Salomon Brothers; Principal Financial Group securities subsidiary | Investment banking | Early career | Capital markets training |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Focus Healthcare Partners LLC | Co‑founder | 2009–present | Private firm (Chicago) focused on senior housing/healthcare |
No other current public-company directorships disclosed.
Board Governance
- Independence: Board determined all directors except the CEO/Chair are independent; Froning is independent.
- Committee leadership: Audit Committee Chair; designated Audit Committee Financial Expert (SEC definition).
- Committee workload: Audit Committee met 4 times in 2023; Compensation Committee met 1 time; Nominating & Corporate Governance met 1 time.
- Attendance: Board met 4 times in 2023; each incumbent director attended ≥75% of board and committee meetings held during their service.
- Leadership structure: CEO also serves as Chair; proxy does not reference a Lead Independent Director.
- Audit Committee remit includes oversight of financial reporting, internal controls, hedging transactions, profit allocation to allocation share holders, conflicts between the Company and the Manager, and approval of related-party transactions.
Fixed Compensation
| Component | Amount | Notes |
|---|---|---|
| Annual cash retainer (independent directors) | $35,000 | Payable monthly; reimbursement of reasonable pre‑approved expenses |
| Committee chair fee | Not disclosed | — |
| Meeting fees | Not disclosed | — |
Performance Compensation
| Component | Grant Detail | Vesting/Performance Metrics |
|---|---|---|
| Equity (restricted shares/RSUs/options) | Target ~$35,000 per year, subject to Compensation Committee approval | No director‑specific performance metrics disclosed; the 2023 Equity Incentive Plan permits performance criteria generally (absolute/relative, indices), but awards/metrics to directors are not specified. |
No bonus, options repricing, clawbacks, tax gross‑ups, severance, or change‑of‑control terms disclosed for directors.
Other Directorships & Interlocks
| Company | Role | Committee Roles | Interlock/Conflict Notes |
|---|---|---|---|
| None disclosed | — | — | No shared directorships with EFSH competitors/suppliers/customers disclosed. |
Expertise & Qualifications
- Audit and financial oversight: Audit Committee Chair; audit committee financial expert designation; broad financial sophistication.
- Private equity/healthcare services investing and operations expertise; senior leadership in public companies (Brookdale, Fortress).
- Education: B.A., University of Notre Dame.
- Board governance experience within EFSH’s committee framework (audit conflicts/related-party oversight).
Equity Ownership
| Metric | Apr 26, 2024 (Annual Meeting Record Date) | Jan 22, 2025 (Special Meeting Record Date) |
|---|---|---|
| Beneficially owned shares | 370 | 29 |
| Percent of class | <1% (asterisk indicated) | <1% (asterisk indicated) |
- Shares pledged/hedged: Company insider trading policy prohibits hedging and pledging without prior approval; no pledging by Froning disclosed.
- Ownership guidelines: No director stock ownership guidelines disclosed.
Governance Assessment
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Strengths
- Independence and deep financial expertise; chairs the Audit Committee with “financial expert” designation—a positive for control environment and investor confidence.
- Audit Committee oversight explicitly covers conflicts with the Manager and related-party transactions, aligning with governance risk control needs at EFSH.
- Attendance met Board’s threshold (≥75%); signals engagement.
-
Concerns / RED FLAGS (environmental to the Board; important for investor confidence)
- Extremely low director share ownership (Froning’s holdings <1%); limited “skin‑in‑the‑game” alignment.
- Use of super‑voting preferred shares (Series E with 1,000,000 votes per share) to facilitate approval of capital actions, albeit auto‑redeemed—can be perceived as shareholder‑unfriendly.
- Significant dilution risk from proposals: authorized common shares increase to 2,000,000,000; 2023 Equity Plan share reserve lifted to 5,000,000 with evergreen 5% annual increase; warrant price resets and share count increases—heavy use of equity could pressure minority holders.
- CEO also serves as Chair; no Lead Independent Director disclosed—potential concentration of power.
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Implications: Froning’s audit leadership and independence help mitigate control/related‑party risks, but low ownership and aggressive equity capital actions elevate governance and dilution concerns. Continuous scrutiny of conflicts with the Manager, equity issuance discipline, and transparent investor engagement are advisable.