John Hardy
About John Hardy
John A. Hardy is the Chief Executive Officer and a Director of Equus Total Return, Inc. (NYSE: EQS). He has served as CEO since June 2011, was Executive Chairman from June 2010 to June 2011, and has been a Director since May 2010; he is 73 years old . Hardy’s background spans insurance, finance, banking, mergers and acquisitions, and complex litigation; he practiced as a Barrister from 1978-2002 and was an adjunct Professor lecturing in insurance law at the University of British Columbia from 1984-2000 . Pay-versus-performance disclosures show compensation actually paid to the PEO versus Company performance: a $100 investment in EQS was valued at $60.08 (2022), $60.92 (2023), and $46.22 (2024), while Net Investment Income was ($3.629M), ($4.035M), and ($3.315M) and Change in NAV was ($1.128M), $12.949M, and ($18.777M) respectively . The CEO pay ratio was 1.74x in 2024 (CEO total $534,667 vs. median employee $306,651) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Equus Total Return, Inc. | Executive Chairman | 2010–2011 | Board assessed Hardy’s leadership as critical to Company growth prospects and strategic direction . |
| Equus Total Return, Inc. | Chief Executive Officer | 2011–present | Leadership central to strategy; sets Board agenda and information flow . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| University of British Columbia | Adjunct Professor (Insurance Law) | 1984–2000 | Academic expertise in insurance law; adds sector knowledge . |
| Legal Practice | Barrister | 1978–2002 | Litigation/M&A, multi-jurisdiction disputes; enhances transaction and dispute resolution skills . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $481,478 | $508,255 | $534,667 |
| Cash Bonus ($) | $472,500 | $298,796 | $0 |
| Stock Awards ($) | $0 | $0 | $0 |
| All Other Compensation ($) | $0 | $165,235 | $0 |
| Total Compensation ($) | $953,978 | $972,286 | $534,667 |
Notes:
- “All Other Compensation” reflects Company contributions to defined contribution plans where applicable; the table lists amounts as disclosed .
- Benefits/perquisites include life and health insurance and reimbursement for certain medical expenses; no nonqualified deferred-comp plans beyond a 401(k) match for certain employees .
Performance Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Annual Cash Bonus linked to acquisitions/dispositions (capped at base salary per agreement) — Actual payout ($) | $472,500 | $298,796 | $0 |
| Weighting | Not disclosed | Not disclosed | Not disclosed |
| Targets | Not disclosed | Not disclosed | Not disclosed |
| Vesting | N/A (cash) | N/A (cash) | N/A (cash) |
Equity awards:
- Restricted stock awards under the 2016 Equity Incentive Plan were granted March 17, 2017; all such awards fully vested long ago, with no awards outstanding as of Dec 31, 2024 and no equity grants to NEOs in 2018–2024 . The Incentive Plan permits RS and options; Company has favored restricted stock and the plan expires June 13, 2026 .
Pay versus performance:
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| PEO Compensation Actually Paid ($) | $953,978 | $972,286 | $534,667 |
| EQS TSR — $100 initial value | $60.08 | $60.92 | $46.22 |
| NYSE Composite TSR — $100 initial value | $88.47 | $98.19 | $111.26 |
| Net Investment Income ($) | ($3,629,000) | ($4,035,000) | ($3,315,000) |
| Change in Net Asset Value ($) | ($1,128,000) | $12,949,000 | ($18,777,000) |
Say-on-pay outcomes:
- Approval rates: 2022 (for 2021 pay) ~87.0% ; 2023 (for 2022 pay) ~69.0% ; 2024 (for 2023 pay) ~88.5% .
Equity Ownership & Alignment
| Metric | Value |
|---|---|
| Total Beneficial Ownership (shares) | 3,728,024 |
| Sole Voting and Investment Power (shares) | 500,000 |
| Other Beneficial Ownership (shares) | 3,228,024 |
| Percent of Shares Outstanding | 27.44% |
| Unvested Equity Awards Outstanding | 0 (all prior awards fully vested) |
| Options — Exercisable / Unexercisable | None disclosed; no outstanding options |
| Shares Pledged/Hedged | Not disclosed in proxy |
| Ownership Guidelines (Multiple of Salary) | Not disclosed in proxy |
| Compliance with Ownership Guidelines | Not disclosed in proxy |
Security ownership of directors and officers confirms Hardy as a >5% holder; three holders exceed 5% (Hardy, Horberg, Tokarz) .
Employment Terms
| Provision | Key Terms |
|---|---|
| Agreement Effective Date | September 1, 2020 |
| Base Compensation | $450,000 per annum at inception, increased annually by the greater of 5% or Canadian CPI |
| Bonus Structure | Annual/periodic cash bonuses based on criteria including acquisitions and percentages of proceeds from dispositions of existing and future portfolio investments; annual cap equals base salary; excess carries over to subsequent years |
| Equity Entitlement | Restricted stock awards equal to 5% of issued and outstanding shares as of agreement date |
| Severance (No Cause) | Two years’ base compensation plus all bonuses earned during the two-year period up to termination |
| Change-of-Control | Same formula as termination without cause |
| Potential Severance Payment (Scenario) | $1,368,130 assuming termination on Dec 31, 2024 ; prior year scenario $1,787,808 assuming termination on Dec 31, 2023 |
| Clawback (Recoupment) | Adopted Dec 1, 2023; Board may recover incentive-based comp up to 3 years for misconduct, failure to supervise causing material damage, fraud, or restatements due to material noncompliance |
| Deferred Compensation / Pension | No nonqualified deferrals beyond 401(k) match; no pension/SERP |
| Non-Compete / Non-Solicit / Garden Leave | Not disclosed in proxy |
Hardy has voluntarily waived ~$2.2 million of earned but unpaid bonuses since 2010 .
Board Governance
- Board composition: 5 directors (3 independent), with four standing committees: Audit; Compensation; Governance & Nominating; Committee of Independent Directors .
- Committee membership and chairs: Audit (Chair: Fraser Atkinson); Compensation (Chair: Henry W. Hankinson); Governance & Nominating (Chair: John J. May); Hardy serves as CEO and Director but is not listed on committees; Hardy and Denos are “interested” directors (non-independent) .
- Chairman: Fraser Atkinson (independent) ; CEO sets Board agenda and information flow .
- Meetings and attendance: Board met 8 times in 2024; each director attended all Board/committee meetings; audit met 5 times; governance met 3 times; compensation committee did not meet in 2024 .
- Independence: Board annually reviews independence; Hardy and Denos deemed interested due to officer roles .
Director compensation (2024):
| Name | Fees Earned/Paid in Cash ($) |
|---|---|
| John A. Hardy (Interested Director) | $10,000 |
Independent director compensation framework: $40,000 annual retainer; $2,000 per in-person meeting; $1,000 per telephonic meeting; committee chairs receive $50,000 annual fee; $300/hour for services not in director capacity .
Other directorships:
- Hardy: None listed under public-company/SEC-reporting or 1940 Act investment company roles .
Investment Implications
- Alignment and control: Hardy’s ~27.44% stake indicates high alignment and influence; insider concentration can be supportive of long-term orientation but may reduce board independence; Hardy is an “interested” director, mitigated by an independent Chairman and majority-independent board .
- Cash-heavy comp with capped performance bonuses: CEO pay is predominantly cash; bonuses are transaction-linked (acquisitions/dispositions) with a cap at base salary, potentially aligning pay with realized value creation but risking timing incentives; no equity grants to NEOs since 2017 and no outstanding unvested equity may reduce near-term insider selling pressure from vesting events .
- Severance/change-of-control economics: Two years’ base plus earned bonuses during the preceding two years creates meaningful termination/CIC costs; the 2024 scenario estimate was ~$1.37M; investors should factor potential payouts in strategic transaction scenarios .
- Pay-versus-performance trend: EQS TSR underperformed the NYSE Composite across 2022–2024, with negative NII and volatile NAV changes; say-on-pay support rebounded to ~88.5% in 2024 after ~69.0% in 2023, suggesting improved shareholder acceptance but performance headwinds remain a monitoring point .
- Governance/process: Compensation Committee did not meet in 2024, which warrants monitoring of oversight cadence; however, independent chairs and committee charters are established, and a clawback policy was adopted in Dec 2023, strengthening governance discipline .