Karen H. Hogan

About Karen H. Hogan

Independent director and Audit Committee Chair for FFC and the Flaherty & Crumrine fund complex; age 63. She has served on the Boards since 2005 (class changes in 2016) and is currently a Class III director of FFC (since 2016). Prior roles include Senior Vice President, Preferred Stock Origination (and previously Vice President, New Product Development) at Lehman Brothers (1985–1997), and director/audit committee chair of New World Coffee, Inc. She also serves on multiple non-profit boards, including IKAR (former Chair). These credentials underpin her audit oversight and fixed income capital markets expertise .

Past Roles

External Roles

Board Governance

• Independence and structure: Three of four directors are independent; the Chair of the Boards is an “interested person.” David Gale serves as Lead Independent Director. Independent directors chair the Audit and Nominating Committees, aligning with NYSE listing standards for closed-end funds .
• Tenure and classes: Board divided into three classes with three-year terms; Hogan is nominated for re-election to FFC (unopposed) with plurality voting standard at the 2025 Annual Meeting .
• Attendance and engagement: In FY ended Nov 30, 2024, each Board held six meetings (four telephonic). All directors attended 100% of Board and relevant committee meetings; all directors attended the April 17, 2024 annual meetings .
• Audit oversight: Audit Committee composed entirely of independent directors under NYSE standards; met four times in FY 2024. Members: Hogan (Chair), Dalmaso, Gale. The committee recommends audited financials inclusion and oversees auditor independence .
• Nominating & Governance: Committee composed entirely of independent directors; met twice in FY 2024. Members: Hogan, Dalmaso (Chair), Gale. Committee charter available online; considers diverse qualifications and shareholder-recommended candidates .

Fixed Compensation

• Directors who are not affiliated with the adviser receive per-fund cash fees only; no pension/retirement benefits .
• Components (per fund): $9,000 annual director fee; per-meeting fees of $750 for in-person Board or Audit meetings, $500 for in-person Nominating meetings, and $250 per telephonic meeting; Audit Committee Chair receives an additional $3,000 per fund annually .

Performance Compensation

• Directors receive no equity grants, options, or performance-based compensation; directors and executive officers do not receive pension or retirement benefits from the funds .

Other Directorships & Interlocks

Expertise & Qualifications

• Audit and financial oversight: Current Audit Committee Chair; past audit committee chair experience at a public company; Audit Committee operates under NYSE independence standards and reviewed FY2024 audited financials with KPMG and management .
• Capital markets: 12 years at Lehman Brothers in preferred stock origination and product development, relevant to FFC’s preferred/income strategy .
• Governance and community leadership: Roles as board member and former chair in non-profit organizations (IKAR; YMSL chapter; library campaign) support board process and stakeholder engagement .

Equity Ownership

• Beneficial ownership (as of Dec 31, 2024): For FFC, dollar range “C” ($10,001–$50,000); aggregate across fund complex “D” ($50,001–$100,000). Directors and officers as a group owned less than 1% of each fund’s shares .
• Shares outstanding context: FFC had 48,177,896 shares outstanding as of Jan 16, 2025 .

Governance Assessment

• Positives

  • Strong independence posture: Audit and Nominating Committees composed entirely of independent directors; Hogan chairs the Audit Committee; Lead Independent Director in place .
  • Engagement: Documented 100% attendance at Board and committee meetings and attendance at the annual meetings in 2024, supporting active oversight .
  • Audit quality safeguards: KPMG selected as independent auditor for FY2025; Audit Committees pre-approved all audit and non-audit services; no non-audit services provided by KPMG to the adviser/affiliates in FY2023–FY2024, enhancing independence .
  • Low conflict signals: No beneficial or record ownership by non-interested directors or their immediate families in the adviser or its affiliates .

• Considerations/Watch items

  • Alignment: Ownership is disclosed only as dollar ranges; for FFC, Hogan’s range is $10,001–$50,000 and aggregate across the complex $50,001–$100,000; group ownership is <1%—typical for CEFs but provides limited “skin in the game” versus operating companies with equity-based director pay .
  • Board leadership: Board Chair is an “interested person.” Mitigants include majority-independent board, Lead Independent Director, and independent committee leadership .

• RED FLAGS

  • None disclosed regarding related-party transactions, pledging/hedging, legal proceedings, or option repricing. The proxy shows no non-audit services to the adviser by the auditor and no adviser-affiliate holdings by independent directors .

Appendix: Selected Process and Voting Context (for investors)

• Election mechanics: Hogan is an unopposed nominee for FFC in 2025; plurality voting standard applies .
• Advisory agreement continuity: Board (including all non-interested directors) unanimously recommended approval of a new investment advisory agreement in connection with an expected internal restructuring at the adviser; no changes to fees or strategies; vote thresholds defined per the 1940 Act .