R. Eric Chadwick

About R. Eric Chadwick

R. Eric Chadwick is Chair of the Board, Chief Executive Officer, and President of Flaherty & Crumrine Preferred and Income Securities Fund Inc. (FFC). He has served as a Director and Chair of the Board of each Flaherty & Crumrine fund since January 2016, President since April 2015, and previously served as Chief Financial Officer from 2004 to April 2015 . He also serves as President and a Director of the investment adviser, Flaherty & Crumrine Incorporated, and is one of its owners alongside other senior principals . Age disclosures list him at 44 (as of the 2020 proxy) and 46 (as of the 2022 proxy) . The Board’s 2025 advisory agreement review noted FFC’s long-term peer-relative performance at or above median over 10 years (with mixed shorter-term peer-relative results) and that advisory fees/expenses were below average versus peers; Flaherty & Crumrine reported approximately $4.07 billion in AUM as of January 31, 2025 .

Past Roles

External Roles

Board Governance (service history, committees, independence)

• Interested person under the 1940 Act due to affiliation with the adviser; serves as Chair of the Board and CEO/President, i.e., dual executive/board role .
• Audit Committees consist of all Independent Directors; Audit Committee Chair is Karen H. Hogan, indicating Chadwick does not sit on the Audit Committee .
• Nominating Committee Chair evolved from Morgan Gust historically to Nicholas Dalmaso in 2024; David Gale designated Lead Independent Director in January 2024, enhancing independent oversight under Chadwick’s dual role .
• Attendance: Each Director attended 100% of Board and applicable committee meetings for FY 2022–2024 across the fund complex .

Fixed Compensation

FFC and the related funds do not pay compensation to Chadwick for his executive/director role; independent directors receive set fees (see next section). The compensation tables show $0 paid to Chadwick from each fund and in total from the fund complex for the listed fiscal years.

Director fee schedule paid to Independent Directors (context for board comp; Chadwick receives $0 as an interested director):

• Annual fee: $9,000 per fund; per-meeting fees: $750 in-person Board/Audit, $500 in-person Nominating, $250 telephone; Audit Chair fee: $3,000 per fund .

Note: Proxies state “No executive officer or person affiliated with a Fund received compensation from a Fund… in excess of $60,000” and that directors/officers do not receive pension or retirement benefits from the Funds, reinforcing that executive compensation is paid by the Adviser, not the Funds .

Performance Compensation

• Fund-paid incentive compensation (cash/equity) for Chadwick: none disclosed; compensation is paid by the Adviser, and the funds disclose no fund-paid bonuses, options, RSUs/PSUs, vesting schedules, or performance-metric linkages for executives .
• The Board’s annual advisory agreement review discusses fund performance versus peers and fees/expenses but does not disclose adviser executive incentive metrics (e.g., TSR, EBITDA, etc.) .

Equity Ownership & Alignment

Beneficial ownership is disclosed as dollar ranges by fund; directors and executive officers as a group own less than 1% of each fund. Chadwick’s FFC holdings are consistently disclosed as over $100,000 in multiple years.

Additional alignment/context:

• Chadwick is an owner of the Adviser, aligning incentives with fund performance and AUM/fee outcomes; the Adviser is owned by a group including Chadwick .
• No Non-Interested Director or immediate family members own securities in Flaherty & Crumrine (the Adviser), underscoring independent director separation from the Adviser; Chadwick is “interested” due to affiliation and ownership .

Pledging/hedging/clawbacks: No pledging, hedging, clawback, or stock ownership guideline disclosures for executives appear in the fund proxies reviewed; if present, they were not identified in the documents cited above .

Employment Terms

• Employment contracts, severance, and change-of-control economics for Chadwick are not disclosed in FFC fund proxies (executive pay is at the Adviser, a private company). Proxies reviewed do not include employment agreement or parachute details for Chadwick .

Performance & Track Record

• Board review notes long-term results: each fund at or above median peer performance over 10 years; shorter-term relative performance mixed (below median for many funds over 3 years; near/above median for most 1- and 5-year periods) .
• Advisory fees and total expenses: below-average advisory and advisory/administration fees; FFC total expense ratio below average in the comparison group .
• Adviser AUM: approximately $4.07 billion as of January 31, 2025; adviser leadership includes Chadwick as Director and President .

Director Compensation (context; Chadwick receives $0)

• Independent directors receive per-fund cash retainers and meeting fees as detailed above; Chadwick’s compensation from the funds is $0 (interested director) across all reviewed years .
• Meeting attendance: 100% attendance for all directors and applicable committee meetings for FY 2022–2024 .

Risk Indicators & Governance Considerations

• Independence: Chadwick is an “interested person” under the 1940 Act due to affiliation/ownership of the Adviser, creating a dual role (CEO/Chair) governance consideration; the boards employ a Lead Independent Director and independent Audit Committees to mitigate concentration of power .
• Related party dynamics: Funds contract with the Adviser (owned in part by Chadwick); boards annually review advisory fees/services and determined fees are reasonable with high-quality services and continued compliance culture .

Investment Implications

• Pay alignment: Fund proxies show $0 fund-paid compensation to Chadwick; as an owner and President of the Adviser, his economics likely tie to advisory fees/AUM and investment results reviewed annually by the boards, suggesting alignment via adviser-level incentives rather than fund-paid metrics .
• Skin in the game: Repeated disclosure of over $100,000 owned in FFC (and substantial holdings across the complex) indicates meaningful personal exposure to fund outcomes, though aggregate insider ownership remains under 1% of shares outstanding, limiting control risk .
• Governance: Dual role (Chair/CEO and “interested” director) is balanced by a Lead Independent Director (David Gale since Jan 2024) and independent Audit Committees; investors should monitor continuity of independent oversight as a key governance safeguard .
• Performance context: Board’s 2025 review cited long-term at/above median performance and below-average fees/expenses, supportive of advisory agreement renewal; this underpins confidence in strategy execution but does not disclose Chadwick’s personal incentive plan terms at the Adviser .

Note: The funds’ proxies do not disclose adviser-level employment agreements, severance/change-in-control terms, performance metric linkages, vesting schedules, hedging/pledging policies, or Form 4 insider trading details for Chadwick. Investors seeking insight into potential selling pressure or specific incentive mechanics would need adviser disclosures or Form 4 filings not included in these fund proxies .