Thomas Kadlec
About Thomas R. Kadlec
Independent Trustee (Class I) of FCT since fund inception; born 1957. Former President of ADM Investor Services Inc. (ADMIS) from 2010–July 2022 with prior roles across accounting, finance, ops, and risk since 1990; served on ADM’s Integrated Risk Committee (2008–2018). Currently Vice Lead Independent Trustee (since March 12, 2024), Executive Committee member (since March 12, 2024), Dividend Committee member (since March 12, 2024), and Chair of the Nominating & Governance Committee (since January 1, 2023) across the First Trust Funds; designated Audit Committee Financial Expert. Trustee of the First Trust Funds since 2003; FCT Class I term runs until the Fund’s 2026 annual meeting.
Past Roles
| Organization | Role | Tenure/Dates | Committees/Impact |
|---|---|---|---|
| ADM Investor Services Inc. (ADMIS) | President | 2010–Jul 2022 | Led a futures commission merchant; oversight of risk and operations |
| ADMIS & affiliates | Accounting/Finance/Ops/Risk roles | Since 1990 | Various leadership capacities |
| Archer Daniels Midland (ADM) | Integrated Risk Committee member | 2008–2018 | Implemented enterprise-wide risk management |
| Futures Industry Association | Board member | 2014–2022 | Industry governance and standards |
| First Trust Funds | Executive Committee member | 2003–2005; 2014–2019 | Board-level actions between meetings |
| First Trust Funds | Lead Independent Trustee | 2005–2007; 2014–2016 | Board leadership for independents |
| First Trust Funds | Valuation Committee Chair | 2008–2009; 2017–2019 | Fair value oversight |
| First Trust Funds | Audit Committee Chair | 2010–2011; 2020–2022 | Financial reporting oversight |
| First Trust Funds | Nominating & Governance Chair | 2012–2013 | Board composition and governance |
External Roles
| Organization | Role | Tenure/Dates | Notes |
|---|---|---|---|
| National Futures Association | Director | Elected 2017 | Self-regulatory organization for U.S. derivatives industry |
| ADMIS International, ADMIS Hong Kong, ADMIS Singapore | Director | To Jul 2022 | Affiliates of ADMIS |
| Futures Industry Association | Director | 2014–2022 | Industry trade association |
Board Governance
- Independence: Classified as an Independent Trustee (not an “interested person” under the 1940 Act); also an “independent director” under exchange rules.
- Term and service: Class I Trustee since inception; term continues until the Fund’s 2026 annual meeting.
- Committee assignments:
- Audit Committee member; determined to be an Audit Committee Financial Expert.
- Nominating & Governance Committee member and Chair across First Trust Funds (since Jan 1, 2023).
- Valuation Committee member.
- Executive Committee member (since Mar 12, 2024).
- Dividend Committee member (since Mar 12, 2024).
- Vice Lead Independent Trustee (since Mar 12, 2024).
- Attendance: Each Trustee attended at least 75% of aggregate Board and committee meetings during the last fiscal year.
- Unitary Board: Trustees serve across the broad First Trust Fund Complex under a unitary structure (open-end funds, ETFs, and closed-end funds).
Meeting Cadence (FY ended May 31, 2025)
| Fund | Board Meetings | Audit | Dividend | Executive | Nominating & Governance | Valuation |
|---|---|---|---|---|---|---|
| FCT | 6 | 10 | 0 | 0 | 5 | 4 |
Fixed Compensation
Program Structure (effective Jan 1, 2024)
| Component | Amount | Notes |
|---|---|---|
| Annual retainer (Independent Trustees) | $285,000 | Allocated equally among First Trust Fund Complex funds |
| Per fund fee – closed-end funds | $7,500 per fund | Applies to FCT |
| Per fund fee – actively managed funds | $2,000 per fund | — |
| Per fund fee – target outcome funds | $750 per fund | — |
| Per fund fee – index funds | $500 per fund | — |
| Lead Independent Trustee | $30,000 | Rotates; not current for Kadlec |
| Vice Lead Independent Trustee | Up to $25,000 | Kadlec holds this role since 3/12/2024 |
| Audit Committee Chair | $25,000 | Not current for Kadlec |
| Valuation Committee Chair | $20,000 | Not current for Kadlec |
| Nominating & Governance Chair | $20,000 | Kadlec current Chair |
| Audit Committee Vice Chair | $15,000 | Not applicable |
| Expenses | Reimbursed | Travel and out-of-pocket |
Actual Compensation (most recent periods)
| Metric | Period | Amount |
|---|---|---|
| FCT Trustee Compensation – Kadlec | FY ended May 31, 2025 | $8,596 |
| FTHY Trustee Compensation – Kadlec | FY ended May 31, 2025 | $8,672 |
| Total Compensation for Serving the First Trust Fund Complex (calendar year basis) | CY ended Dec 31, 2024 | $666,676 |
The Funds have no retirement or pension plans; executive officers and the Interested Trustee receive no compensation from the Funds.
Performance Compensation
| Component | Status | Notes |
|---|---|---|
| Annual bonus | Not disclosed / none | No director bonus plan disclosed |
| Equity awards (RSUs/PSUs) | Not disclosed / none | No equity grants to Trustees disclosed |
| Options | Not disclosed / none | — |
| Performance metrics (TSR/EBITDA/ESG) | Not applicable | No performance-tied director pay disclosed |
| Clawbacks / gross-ups | Not disclosed | — |
Other Directorships & Interlocks
| Company/Entity | Relationship | Potential Interlock/Conflict Note |
|---|---|---|
| National Futures Association | Director | Industry SRO; no FCT-related transactions disclosed |
| Futures Industry Association | Director (2014–2022) | No FCT-related transactions disclosed |
| ADMIS affiliates | Director (to Jul 2022) | Former roles; no ongoing related-party exposure disclosed |
As of Dec 31, 2024, Independent Trustees and immediate family members did not own, beneficially or of record, any class of securities of First Trust Advisors, its sub-advisors or principal underwriters, or any controlling affiliates; and did not purchase or sell such securities since the beginning of the most recent fiscal year. No related-party transactions with directors were disclosed.
Expertise & Qualifications
- Derivatives, risk management, and financial controls expertise via ADMIS presidency and ADM Integrated Risk Committee.
- Governance leadership across First Trust Funds (Lead/Vice Lead Independent Trustee; committee chair roles).
- Audit Committee Financial Expert designation (Form N‑CSR definition).
Equity Ownership
| Holder | Fund | Dollar Range | Shares Owned |
|---|---|---|---|
| Thomas R. Kadlec | FCT | $0 | 0 |
| Trustees/Nominees/Officers (group) | FCT | n/a | 1,166 (less than 1% outstanding) |
| Thomas R. Kadlec | All First Trust Funds overseen | Over $100,000 | n/a |
- Stock ownership guideline: Within three years of becoming an Independent Trustee, expected to invest an aggregate amount across the First Trust Fund Complex equal to at least one year’s annual retainer, allocated based on personal investment needs. Compliance status for individual trustees is not disclosed.
Governance Assessment
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Strengths:
- Designated Audit Committee Financial Expert and seasoned risk/governance profile; currently chairs Nominating & Governance and serves as Vice Lead Independent Trustee—supports board effectiveness and succession processes.
- Independent status under the 1940 Act and exchange rules; each Trustee attended at least 75% of Board/committee meetings—indicates engagement.
- Audit Committee oversees auditor independence and pre-approves permitted services; recent audit committee report reflects active oversight and PCAOB-required communications.
-
Alignment and workload considerations:
- Unitary board structure covering a very large complex (312 portfolios) with broad cash fee streams; Kadlec’s total complex compensation is substantial ($666,676 for CY2024), which may create perception risk on workload/attention allocation across funds.
- Director compensation appears entirely cash-based with no fund-equity grants; alignment relies on personal investment policy rather than pay design.
-
RED FLAGS
- Lack of direct FCT share ownership: $0 (0 shares) as of Dec 31, 2024, which weakens fund-specific alignment despite aggregate holdings across the complex.
- Potential concentration of influence: simultaneous roles (Vice Lead Independent Trustee and N&G Chair) can be positive for governance but warrant monitoring for independence of processes (e.g., trustee nominations/rotations).
-
Conflicts/Related Party Exposure:
- No related-party transactions disclosed with trustees; Independent Trustees and immediate family members had no securities holdings in the advisor/sub-advisors/principal underwriters—reducing conflict risk.
-
Shareholder engagement:
- Formal process exists for shareholder communications to specific trustees; attendance policies for annual meetings are embedded in N&G Charter (available on website).
Overall, Kadlec’s deep risk and audit background and current governance leadership roles are positives for board oversight. The absence of FCT-specific share ownership and the cash-only fee structure across a large complex are alignment and workload perception risks that investors may monitor alongside meeting cadence and committee effectiveness.