Ethan Powell
About Ethan Powell
Ethan Powell (born 6/20/1975) serves as an Independent Trustee of Highland Income Fund (HFRO) and has been Chairman of the Board since August 2017; he is designated as a Class I Trustee whose term (last elected June 14, 2022) comes up for re‑election at the 2025 annual meeting, with re‑elected terms running to 2028; under HFRO’s governing documents, Mr. Powell’s election is decided solely by holders of the Fund’s Preferred Shares voting as a separate class . He is independent for purposes of the Investment Company Act of 1940, sits on multiple board committees, and the Board notes his previous positions with the Adviser/historical affiliates enhance the Board’s understanding of operations; the Board consisted of five Trustees in FY2024, four of whom were independent, and convened eight times with each Trustee attending at least 75% of Board and committee meetings .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| HFRO (Fund Complex) | Trustee; Chairman of the Board | Trustee since Aug 2017; Chairman since Aug 2017 | Serves on Audit; Governance & Compliance; Administration & Operations; designated trustee elected by Preferred holders |
| HFRO/NexPoint Fund Complex | Trustee/Director of the Fund Complex | June 2012–July 2013; since Dec 2013 | Continuity of oversight across complex, executive experience cited for board membership |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Brookmont Capital Management, LLC | Principal and CIO | Since May 2020 | Executive investment leadership |
| Impact Shares LLC | CEO, Chairman, Founder | Since Dec 2015 | Social impact ETF sponsor leadership |
| Strategic Trust | Trustee | Since Aug 2021 | Trustee role at affiliated trust |
| Tidal Trust III (formerly Impact Shares Trust I) | Trustee | Not dated (disclosed as current) | Trust oversight role |
| Kelly Strategic Management | Director | Since Aug 2021 | External directorship |
| Impact Shares Funds I Trust | Trustee | Not dated (disclosed prior year) | Trustee role referenced in 2024 proxy |
Board Governance
| Committee | Powell’s Role | Chair | FY2024 Meetings | FY2023 Meetings | Independence/Notes |
|---|---|---|---|---|---|
| Audit & Qualified Legal Compliance Committee | Member | Bryan A. Ward (Audit Chair; financial expert) | 5 | 4 | All members independent under 1940 Act and Exchange Act Rule 10A‑3; oversees auditor, controls, and valuations under Rule 2a‑5 |
| Governance & Compliance Committee | Member | Dr. Bob Froehlich | 5 | 6 | All members independent; oversees trustee selection, compensation, compliance, and conflicts involving NexPoint |
| Administration & Operations Committee | Member | John Honis | 5 | 5 | Reviews administrative operations and intermediary arrangements; committee formerly “Distribution & Alternatives Oversight” (name change noted in 2024) |
- Board structure: five Trustees; four independent under 1940 Act; Mr. Powell serves as Chairman; Board met 8 times in FY2024; each Trustee attended at least 75% of Board and committee meetings; attendance at annual meeting encouraged but not required .
- Election mechanics: Powell is designated (with Froehlich) as a Trustee representing holders of Preferred Shares; his re‑election is voted solely by Preferred holders at the 2025 annual meeting; no Preferred dividend arrearages existed at the time of the proxy .
Fixed Compensation
| Component | Amount | Terms |
|---|---|---|
| Annual Trustee Retainer (Fund Complex) | $150,000 | Payable quarterly; allocated among portfolios by relative net assets |
| Chairman of the Board Additional Payment | $20,000 | Payable quarterly; allocated by relative net assets |
| Committee Chair Additional Payment | $10,000 | Payable quarterly; allocated by relative net assets |
| Meeting Fees | None | No separate compensation for committee or board meeting attendance |
| Expense Reimbursement | Actual out‑of‑pocket | Reimbursed for attendance at meetings |
| Pension/Retirement Plan | None | Trustees do not have any pension or retirement plan |
| Year | Aggregate Compensation From HFRO (Powell) | Aggregate Compensation From Fund Complex (Powell) |
|---|---|---|
| FY2023 | $55,753 | $160,000 |
| FY2024 | $72,557 | $170,000 |
Performance Compensation
| Item | Details |
|---|---|
| Equity Compensation (RSUs/PSUs/Options) | Not disclosed for Trustees; proxy describes cash retainers and chair adders only |
| Performance Metrics (TSR, EBITDA, ESG) | Not disclosed/applicable for Trustee compensation |
| Clawback/COC/Severance | Not disclosed for Trustees |
Other Directorships & Interlocks
| Company/Entity | Role | Potential Interlock/Overlap |
|---|---|---|
| Brookmont Capital Management, LLC | Principal & CIO | External investment role; no specific HFRO transaction link disclosed |
| Impact Shares LLC | CEO/Chairman/Founder | External ETF sponsor; trustee roles at Impact Shares‑related trusts noted |
| Strategic Trust | Trustee | Fund/Trust governance; no specific HFRO transaction link disclosed |
| Tidal Trust III (formerly Impact Shares Trust I) | Trustee | Trust governance; no specific HFRO transaction link disclosed |
| Kelly Strategic Management | Director | External directorship; no HFRO linkage disclosed |
Certain Related Parties: HFRO discloses that executives and trustees may serve as officers/directors of affiliates (including entities operating in similar lines of business), and affiliated advisers may manage funds with similar objectives—highlighting general related‑party exposure common to fund complexes .
Expertise & Qualifications
- The Board cites Mr. Powell’s significant experience in the financial industry, executive experience including past service as an officer of funds in the complex, and significant administrative/managerial experience as qualifications for Board membership .
- Board rationale for nominations includes integrity, judgment, time availability, independence, and absence of conflicting relationships; Powell meets independence criteria and is designated to represent Preferred shareholders given the Fund’s governance structure .
Equity Ownership
| Holder | HFRO Share Ownership (Dollar Range) | Aggregate Dollar Range Across Fund Complex |
|---|---|---|
| Ethan Powell | $10,001–$50,000 (as of 2/28/2025) | $50,001–$100,000 (as of 2/28/2025) |
- As of 2/28/2025, Trustees and officers of the Fund as a group owned less than 0.01% of outstanding shares .
- As of 2/28/2025, none of the Independent Trustees or their immediate family members owned securities of the Adviser, principal underwriter, or entities controlling/controlled by/under common control with them .
- No disclosure of pledging or hedging of HFRO shares by Mr. Powell .
Governance Assessment
-
Positives:
- Independent Trustee with multi‑committee service (Audit; Governance & Compliance; Administration & Operations), providing broad oversight including valuation governance under Rule 2a‑5 .
- Consistent attendance (≥75%) and active Board schedule (8 meetings in FY2024; 9 in FY2023) support engagement .
- Clear, cash‑based compensation structure; no meeting fees and modest chair adders; no pension benefits—aligned with typical registered fund governance .
-
Potential Concerns / Watch‑Items:
- Personal ownership is modest (HFRO $10,001–$50,000; complex $50,001–$100,000), and group ownership is <0.01%, limiting direct economic alignment; there are no equity‑based director awards to strengthen “skin‑in‑the‑game” .
- Election by Preferred shareholders voting as a separate class may create a perceived constituency focus; investors should monitor Board responsiveness across common and preferred holders .
- The proxy notes prior positions with the Adviser/historical affiliates and general related‑party exposure across the complex (affiliated advisers, overlapping roles); while Powell is independent under 1940 Act, this environment warrants ongoing scrutiny of conflicts and litigation‑related matters (e.g., HCMLP context affecting an Interested Trustee, Honis) .