R. Eric Chadwick
About R. Eric Chadwick
R. Eric Chadwick is the Director, Chairman of the Board, Chief Executive Officer, and President of Flaherty & Crumrine Total Return Fund Incorporated (FLC); he is 50 years old as of the 2025 proxy . He has served as 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 until April 2015; he is also President of Flaherty & Crumrine Incorporated (the Adviser) and has been a portfolio manager of PFD and PFO since 1999 and of FFC, FLC, and DFP since each fund’s inception . The Adviser had approximately $4.07 billion of assets under management as of January 31, 2025 . The Board reviewed NAV total return performance versus peer funds; for the 10‑year period, each fund had performance equal or greater than the peer median, and for FLC the 1‑year and 5‑year periods were equal or greater than the peer median, while the 3‑year was below the peer median .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Flaherty & Crumrine Funds (PFD/PFO/FFC/FLC/DFP) | Chair of the Board | Jan 2016–present | Board leadership across fund complex; oversight of Adviser relationship |
| Flaherty & Crumrine Funds | President | Apr 2015–present | Executive leadership; interface with Adviser and Board oversight processes |
| Flaherty & Crumrine Funds | Chief Financial Officer | 2004–Apr 2015 | Built finance/reporting capabilities for funds before transitioning to President |
| PFD & PFO | Portfolio Manager | 1999–present | Long-tenured PM driving preferreds strategy and execution |
| FFC & FLC | Portfolio Manager | 2003–present (since inception) | Foundational PM role since fund inception; strategy continuity |
| DFP | Portfolio Manager | 2013–present (since inception) | Core PM for dynamic preferreds strategy since inception |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Flaherty & Crumrine Incorporated (Adviser) | President; Director; Management Shareholder | >10 years | Owner-operator alignment; controls portfolio management and compliance; Adviser AUM ≈$4.07B |
Fixed Compensation
| Component | FY 2024 | Notes |
|---|---|---|
| Aggregate compensation from FLC to R. Eric Chadwick | $0 | Interested Director; receives no director fees from the funds |
| Pension/retirement benefits from the Funds | $0 | Funds do not provide pension/retirement benefits to directors or officers |
No executive officer or person affiliated with a Fund received compensation from a Fund during FY 2024 in excess of $60,000 .
Performance Compensation
- No performance-based compensation (bonus, RSUs/PSUs/options) is disclosed at the fund level for Mr. Chadwick; compensation is borne by the Adviser and not disclosed in the Funds’ proxy materials .
- The proxy does not disclose fund-level performance pay metrics (e.g., TSR targets, revenue/EBITDA goals) tied to Mr. Chadwick’s compensation; the Board reviews fund NAV total return and peer-relative data for advisory contract oversight, not for executive pay purposes .
Equity Ownership & Alignment
| Fund | Dollar Range of Equity Beneficially Owned (as of Dec 31, 2023) | Dollar Range of Equity Beneficially Owned (as of Dec 31, 2024) | Aggregate Dollar Range Across Fund Complex |
|---|---|---|---|
| PFD | C ($10,001–$50,000) | C ($10,001–$50,000) | E (> $100,000) |
| PFO | D ($50,001–$100,000) | E (> $100,000) | E (> $100,000) |
| FFC | E (> $100,000) | E (> $100,000) | E (> $100,000) |
| FLC | C ($10,001–$50,000) | C ($10,001–$50,000) | E (> $100,000) |
| DFP | E (> $100,000) | E (> $100,000) | E (> $100,000) |
- Dollar range key: A None; B $1–$10,000; C $10,001–$50,000; D $50,001–$100,000; E >$100,000 .
- As of December 31, 2024, directors, nominees and executive officers of each Fund, as a group, owned less than 1% of the shares of each Fund .
- Chadwick is an owner of the Adviser (one of six shareholders), creating economic alignment via advisory fee revenues rather than fund director fees; an internal restructuring in 2025 will repurchase retired shareholders’ Adviser shares and reallocate to management shareholders, potentially increasing his stake .
Employment Terms
| Topic | Disclosure |
|---|---|
| Employment agreement with Funds | None; Mr. Chadwick’s employment and compensation are with the Adviser, not the Funds . |
| Adviser Change-in-Control mechanics | 2025 internal restructuring of Adviser shares (repurchase/reallocate) could be deemed a change-in-control, automatically terminating current advisory agreements; Boards and shareholders consider identical New Investment Advisory Agreements to avoid service disruption . |
| Day-to-day management continuity | No change in day-to-day management of Adviser or Funds’ objectives/strategies due to the Transaction . |
| Clawbacks/non-compete/severance | Not disclosed in Fund proxy for Adviser executives . |
Advisory economics tied to the Adviser:
- FLC paid the Adviser $1,668,584 in advisory fees for FY ended Nov 30, 2024 .
- FLC advisory fee schedule: 0.575% on first $200mm average weekly total managed assets, 0.50% on next $300mm, 0.45% above $500mm .
Board Governance
- Independence and structure: 75% of directors are Independent Directors; the Chair (Mr. Chadwick) is an “interested person” due to his affiliation with the Adviser; the Board has a Lead Independent Director (David Gale) .
- Committees: Audit Committee and Nominating & Governance Committee comprise only Independent Directors; Audit Committee members are Karen H. Hogan (Chair), Nicholas Dalmaso, and David Gale; the Nominating Committee members are the same, with Mr. Dalmaso as Chair .
- Attendance: In FY 2024, the Board held six meetings (four telephonic); each Director attended 100% of Board and applicable committee meetings .
- Current term and elections: Mr. Chadwick is a nominee to serve through the 2028 Annual Meeting for FLC; elections are by plurality vote, unopposed .
- Other public company boards: None for Mr. Chadwick in the past five years .
Director Compensation
| Item | Amount | Notes |
|---|---|---|
| Annual director fee (Independent Directors; per fund) | $9,000 | Interested Directors (incl. Mr. Chadwick) do not receive director fees . |
| Meeting fees (in-person Board/Audit; per meeting; per fund) | $750 | Telephone meeting: $250; Nominating Committee in-person: $500 . |
| Audit Committee Chair (per fund) | $3,000 | Paid to Ms. Hogan . |
| Aggregate compensation to Mr. Chadwick (per fund, FY 2024) | $0 | Total across fund complex also $0 . |
Investment Implications
- Alignment: Mr. Chadwick draws no compensation from the Funds and is an owner of the Adviser; his incentives are primarily tied to advisory fee growth and continued mandates, not to per‑meeting fees—alignment comes via Adviser equity and long‑tenured PM leadership .
- Governance risk mitigants: Dual role as Chair/CEO and “interested person” raises independence concerns; however, the Board structure includes a Lead Independent Director and fully independent Audit and Nominating Committees, with perfect attendance and frequent interactions with Adviser personnel, partially mitigating oversight risk .
- Contract stability: 2025 Adviser restructuring introduces technical change‑of‑control risk; identical New Investment Advisory Agreements and explicit Board/Shareholder approvals aim to ensure continuity of fees and services—watch shareholder votes and any changes in Adviser ownership allocations to management shareholders (including Chadwick) .
- Ownership and trading signals: Beneficial ownership in the Funds is modest by dollar range, and group ownership is <1%—signals from Form 4 insider transactions are not disclosed in the proxy; monitor Form 4s for Chadwick to assess vesting‑related selling pressure, but fund‑level director equity/option programs are not present .
- Performance context: Board’s review shows FLC’s long‑term NAV total returns at/above peer median over 10 years; recent 3‑year lag vs peers underscores execution risk in a volatile preferreds market—focus on Adviser’s investment discipline continuity and fee competitiveness .