Chad Conwell
About Chad Conwell
Chad Conwell serves as Executive Vice President, Chief Legal Officer, and Chief Compliance Officer of Flaherty & Crumrine Incorporated (the Adviser), and is a Director of the Adviser; he is also the Funds’ Chief Compliance Officer, Vice President and Secretary, roles he has held since 2005 across PFD, PFO, FFC, FLC and since inception at DFP . He is 52 years old as of the 2025 proxy and signs FLC’s joint proxy materials as Secretary, evidencing his long-tenured governance role within the fund complex . The Adviser underwent an internal restructuring for 2025 to repurchase retired shareholders’ equity and reallocate shares to current management (including Conwell), necessitating approval of new advisory agreements but with identical fees and unchanged day‑to‑day investment management . The Boards’ performance review shows the funds had equal or greater than median peer NAV performance over 10-year, 5-year, and 1-year horizons, while all funds were below median over 3 years, providing context for the Adviser’s multi-year execution under Conwell’s compliance/legal leadership .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Flaherty & Crumrine Incorporated (Adviser) | Executive Vice President, Chief Compliance Officer, Chief Legal Officer; Director | Past five years (continuous) | Executive oversight of legal and compliance across the Adviser and fund complex |
| FLC (and PFD, PFO, FFC, DFP) | Chief Compliance Officer, Vice President, and Secretary | Since 2005 (DFP since inception) | Fund-level compliance, governance administration, and documentation for board and shareholder processes |
External Roles
No external directorships or committee roles were disclosed for Conwell in the FLC (and complex) proxies .
Fixed Compensation
Officer compensation is not detailed at the fund level; proxies provide director fee schedules and note that no executive officer or affiliated person received compensation from any Fund over $60,000 in FY2024. The Adviser employs Conwell; compensation at the Adviser is not disclosed in fund proxies .
| Item | FLC FY2024 Amount | Notes |
|---|---|---|
| Annual Directors Fees | $27,000 | Per fund; applies to each fund in complex |
| Board & Committee Meeting Fees | $25,500 | Per fund; in-person/telephonic fees aggregated |
| Travel & Out-of-Pocket | $1,789.90 | Reimbursed for “interested” and Independent Directors |
| Fund Officer Compensation Disclosure | Not disclosed | No officer comp details; statement that no fund exec received >$60k |
Performance Compensation
No disclosure of officer bonus, RSU/PSU grants, option awards, or performance metric weightings for fund officers; the proxies do not include an executive compensation program for fund officers .
Equity Ownership & Alignment
| Metric | FLC | Notes |
|---|---|---|
| Shares Outstanding (Record Date Jan 16, 2025) | 10,456,821 | One share, one vote |
| Officers and Directors (incl. nominees) – Group Ownership | <1% of shares | As of Dec 31, 2024 |
| Conwell – Fund Share Ownership Disclosure | Not disclosed | Dollar-range table covers Directors; officer holdings not itemized |
| Adviser Ownership (private) | Conwell is one of six shareholders of the Adviser | Adviser owned by R. E. Chadwick, B. S. Stone, C. C. Conwell, D. F. Crumrine, R. M. Ettinger, R. T. Flaherty |
| Pledging/Hedging | Not disclosed at fund level | No pledging statements for officers |
Employment Terms
| Topic | Disclosure | Notes |
|---|---|---|
| Officer Term | Serves until successor elected/qualifies or earlier resignation/removal | Applies across PFD, PFO, FFC, FLC, DFP |
| Employment Agreement, Non‑compete/Non‑solicit | Not disclosed | Fund proxies do not include employment contracts for officers |
| Severance / Change‑of‑Control | Not disclosed for officers | Advisory agreement “assignment” triggers termination; new agreements identical fees post Adviser restructuring |
| Clawback / Ownership Guidelines | Not disclosed | No officer clawback or ownership guidelines in fund proxies |
Advisory Economics Context (Alignment Levers)
| Item | FLC | Notes |
|---|---|---|
| Advisory Fee Paid to Adviser (FY2024) | $1,668,584 | Paid by FLC to Flaherty & Crumrine Inc. |
| Advisory Fee Schedule (FLC) | 0.575% on first $200mm avg weekly total managed assets; 0.50% on next $300mm; 0.45% >$500mm | Fees based on managed assets (includes leverage) |
| Adviser Restructuring | Repurchase of retired shareholders’ equity; reallocation to current management shareholders | Triggered new advisory agreements; terms and fees unchanged |
Performance & Track Record
Peer-relative NAV performance assessment by the Boards:
| Period | Peer-relative NAV performance | Notes |
|---|---|---|
| 10-year | Equal or greater than median | Funds equal/greater than peer median for 10-year |
| 5-year | Equal or greater than median | PFD, FFC, FLC, DFP equal/greater; PFO slightly under median |
| 3-year | Below median | All funds below median |
| 1-year | Equal or greater than median | PFO, FFC, FLC, DFP equal/greater; PFD slightly under |
Major governance responsibility and execution context:
- Conwell’s roles as CCO/Secretary underpin fund compliance culture and governance processes across the complex .
- The Boards noted Adviser adherence to investment discipline, below-average advisory fees versus peers, and breakpoints to share economies of scale with shareholders .
Investment Implications
- Alignment: Conwell’s equity is in the private Adviser, not in the Funds; advisory fees are asset-based with leverage included, suggesting incentive alignment around managed assets and Adviser profitability rather than fund TSR; officers/directors as a group hold <1% of fund shares, limiting direct fund equity alignment .
- Retention: Long tenure since 2005 and inclusion among current management shareholders in the Adviser restructuring signal continuity; no fund-level severance or change‑of‑control benefits for officers are disclosed .
- Trading signals: Fund proxies do not provide officer Form 4 activity; no insider selling pressure or vesting schedules are disclosed at the fund level .
- Governance and performance context: Boards’ review shows multi‑period competitive performance and unchanged advisory economics post restructuring; advisory fees and breakpoints remain in place, with equal/greater peer performance in 10-, 5-, and 1‑year horizons and underperformance over 3 years .