Karen H. Hogan
About Karen H. Hogan
Independent Director and Audit Committee Chair at Flaherty & Crumrine Total Return Fund (FLC). Age 63; director of FLC since 2016 with prior service on the Boards of FFC and FLC from 2005–2016 under different class designations. Background includes senior capital markets roles at Lehman Brothers (preferred stock origination) and prior audit committee chair experience at a public company, with current service on several non-profit boards. Committees she serves on are composed solely of Independent Directors under NYSE closed-end fund standards, and she is regarded as a non-interested (independent) director.
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Lehman Brothers Holdings Inc. | Senior Vice President, Preferred Stock Origination; previously Vice President, New Product Development | 1985–1997 | Senior origination leadership in pref. stock markets |
| New World Coffee, Inc. | Director; Audit Committee member and Chair | Not disclosed | Chaired audit committee; governance and financial oversight |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| IKAR (non-profit) | Board Member; formerly Board Chair | Current | Active leadership in non-profit governance |
| Young Men’s Service League (local chapter) | Board Member | Current | Community non-profit service |
| Local public library | Capital campaign committee member | Current | Fundraising/governance support |
| Additional non-profits (various) | Board and/or committee member | Current | Active community involvement |
Board Governance
- Board structure: 4 directors; 3 are Independent Directors; Board Chair is an “interested person.” Lead Independent Director is David Gale. Independent Directors chair the Audit and Nominating Committees. This leadership structure is deemed appropriate given the external adviser model.
- Committee memberships and roles (FLC and sister funds): Audit Committee (Hogan, Dalmaso, Gale) — Hogan serves as Chair; Nominating Committee (Hogan, Dalmaso, Gale). Both committees consist entirely of Independent Directors as defined by NYSE closed-end fund standards.
- Committee meetings and attendance (FY ended Nov 30, 2024): Audit Committee met 4 times; Nominating Committee met 2 times. The Board held 6 meetings (4 telephonic). Each Director attended 100% of Board and of any committee meetings of which they were a member.
- Independence and conflicts: Non-interested Directors (including Hogan) and their immediate family members owned no securities of the adviser (Flaherty & Crumrine) or its affiliates.
Fixed Compensation
Fee schedule (per fund; Independent Directors):
| Component | Amount/Terms |
|---|---|
| Annual Director fee (per fund) | $9,000 |
| Board or Audit Committee meeting fee (in-person) | $750 per meeting |
| Nominating Committee meeting fee (in-person) | $500 per meeting |
| Telephonic meeting fee | $250 per meeting |
| Audit Committee Chair additional fee (per fund) | $3,000 per year |
| Travel/out-of-pocket | Reimbursed |
Actual compensation earned (FY ended Nov 30, 2024):
| Director | Aggregate Compensation from FLC | Total Compensation from Fund Complex (PFD, PFO, FFC, FLC, DFP) |
|---|---|---|
| Karen H. Hogan (Audit Committee Chair) | $19,500 | $97,500 (5 funds) |
Notes:
- Directors and executive officers of the Funds do not receive pension or retirement benefits from the Funds.
Performance Compensation
| Element | Disclosure |
|---|---|
| Cash bonus/target bonus | Not applicable for directors; proxy discloses only cash fees/meeting fees for directors (no bonus program). |
| Equity awards (RSUs/PSUs/options) | No equity awards are listed for directors in the compensation table. |
| Performance metrics (TSR/EBITDA/ESG) | Not applicable for directors; no performance metrics disclosed for director pay. |
| Clawbacks/change-in-control/severance | Not disclosed for directors. |
Other Directorships & Interlocks
| Category | Detail |
|---|---|
| Current public company boards (last 5 years) | None |
| Potential interlocks with competitors/suppliers/customers | None identified in proxy disclosures |
| Adviser/affiliate relationships | Non-interested Director; neither she nor immediate family owned securities in the adviser or its affiliates. |
Expertise & Qualifications
- Capital markets expertise in preferred securities from senior roles at Lehman Brothers; prior audit committee chair service at New World Coffee.
- Long-tenured fund board service across the Flaherty & Crumrine complex since 2005 (continuous service; current FLC class noted “since 2016”).
- Audit Committee Chair across the Funds, indicating strong financial oversight orientation; committees are entirely independent under NYSE standards.
Equity Ownership
Dollar range of securities beneficially owned as of December 31, 2024 (valuation date) and aggregate across fund complex:
| Fund | Dollar Range (Code) | Code Key |
|---|---|---|
| PFD | $10,001 – $50,000 (C) | A=None; B=$1–$10,000; C=$10,001–$50,000; D=$50,001–$100,000; E=Over $100,000 |
| PFO | $10,001 – $50,000 (C) | A=None; B=$1–$10,000; C=$10,001–$50,000; D=$50,001–$100,000; E=Over $100,000 |
| FFC | $10,001 – $50,000 (C) | A=None; B=$1–$10,000; C=$10,001–$50,000; D=$50,001–$100,000; E=Over $100,000 |
| FLC | $10,001 – $50,000 (C) | A=None; B=$1–$10,000; C=$10,001–$50,000; D=$50,001–$100,000; E=Over $100,000 |
| DFP | $10,001 – $50,000 (C) | A=None; B=$1–$10,000; C=$10,001–$50,000; D=$50,001–$100,000; E=Over $100,000 |
| Aggregate (all funds) | $50,001 – $100,000 (D) | A=None; B=$1–$10,000; C=$10,001–$50,000; D=$50,001–$100,000; E=Over $100,000 |
Context:
- Directors, nominees and executive officers of each fund, as a group, owned less than 1% of the Shares of each Fund as of Dec 31, 2024.
- FLC shares outstanding were 10,456,821 as of Jan 16, 2025.
Governance Assessment
-
Strengths
- Independent leadership in key oversight roles: Hogan chairs the Audit Committee (all-independent), and also serves on the all-independent Nominating Committee; Board has a Lead Independent Director. Attendance was 100% across Board and committees in FY2024, indicating high engagement.
- Relevant financial expertise: Senior pref. stock origination background at Lehman and prior audit committee chair at a public company support audit oversight effectiveness.
- Independence safeguards: Non-interested director with no adviser/affiliate securities held by non-interested directors or their immediate families; audit and nominating committees comprised solely of independent directors under NYSE standards.
- Transparent cash-only fee structure with modest chair premium and no pension benefits, reducing complex pay-related risks.
-
Considerations / Watch items
- Board Chair is an “interested person” of the Funds; while mitigated by Lead Independent Director and independent committee chairs, investors may monitor balance and effectiveness of independent oversight.
- Ownership alignment relies on personal shareholdings; dollar-range ownership in each fund (C) and aggregate (D) signal meaningful but not large exposure; there are no disclosed director equity grants or ownership guidelines in the proxy.
- No public company board roles in the last five years; while reducing interlocks/conflict risk, this may limit public-company cross-pollination unless offset by her prior experience and non-profit governance.
-
Re-election status and tenure signal
- Hogan is nominated for a new three-year term at FLC (2025 proxy), with term expiring at the 2028 Annual Meeting if elected. Long continuous service across the fund complex since 2005 supports continuity of oversight.
-
Committee activity intensity
- Audit Committee met 4 times; Nominating Committee 2 times; Board 6 times (4 telephonic). As Audit Chair, Hogan is central to financial reporting, auditor oversight, and compliance—key for investor confidence in a levered, income-focused closed-end fund.