Frank Waterhouse

About Frank Waterhouse

Frank Waterhouse serves as Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer, and Treasurer of Highland Opportunities and Income Fund (HFRO) and has held officer roles across the Fund Complex since 2015; his date of birth is April 14, 1971 . He is concurrently Chief Financial Officer of Skyview Group (since February 2021) and previously served as Chief Financial Officer and Partner of Highland Capital Management, L.P. (HCMLP) through February 2021, as well as Principal Executive Officer and Principal Financial Officer of HCMLP prior to joining Skyview . HFRO’s executive officers receive no direct remuneration from the Fund, and trustees/officers as a group held less than 0.01% of outstanding HFRO shares as of the most recent reporting dates, indicating minimal fund-level equity exposure . HFRO is a closed-end fund advised and administered by NexPoint; officers report to the Board on financial reporting and fund operations rather than pursuing corporate revenue/EBITDA objectives, and the proxy materials do not disclose TSR or operating performance metrics tied to executive pay .

Past Roles

External Roles

Fixed Compensation

• Executive officers of HFRO “receive no direct remuneration from the Fund,” with trustee compensation disclosed but no fund-paid officer salary/bonus/perquisites; compensation is borne by the adviser/service providers (NexPoint/Skyview) .
• No disclosure of base salary, target bonus %, or perquisites for Frank Waterhouse at the Fund level in HFRO proxy materials .

Performance Compensation

• No disclosure of stock awards (RSUs/PSUs), options, performance metrics, vesting schedules, retention or sign-on bonuses for HFRO executive officers in proxy materials .
• HFRO’s governance emphasizes oversight by an independent Board; operating performance commentary and target metrics for executive incentives are not provided in DEF 14A filings .

Equity Ownership & Alignment

• Trustees and officers of the Fund as a group owned less than 0.01% of outstanding shares in each of the last three reporting years, implying limited fund-level “skin in the game” for executives.

• Trustee individual dollar ranges are disclosed; officer-level ownership breakdowns (including Frank Waterhouse’s individual holdings, pledged shares, hedging) are not disclosed in proxies .
• Stock ownership guidelines, compliance status, and pledging/hedging policies for HFRO officers are not disclosed in proxy statements .

Employment Terms

• Officer tenure: HFRO officers serve at the pleasure of the Trustees with indefinite terms; their tenure automatically terminates when employment with the adviser/administrator or affiliates ends .
• Indemnification: Officers are “Covered Persons” entitled to indemnification for liabilities/expenses incurred in proceedings, except in cases of Disabling Conduct; advancement of expenses requires a written Indemnification Agreement approved by a majority of Trustees .
• Governance: Officers are appointed from service providers (e.g., NexPoint/Skyview) and provide financial/compliance reports to the Board; Board met eight times in FY 2024 and received regular reporting from the Treasurer .
• Severance and change-of-control: No disclosure of severance multiples, change-of-control triggers, accelerated vesting, clawbacks, or tax gross-ups for executive officers in HFRO proxy materials .

Additional Governance and Related Party Context

• Related party/affiliates: HFRO’s officers and trustees may serve as officers/directors of entities affiliated with the Adviser; investment opportunities are allocated per NexPoint’s policies, including pro rata allocation when co-investing is constrained by the 1940 Act—Board reviews potential related party transactions .
• Services Agreements: NexPoint is adviser/administrator (advisory fee tiers at 0.65%, 0.60%, 0.55% by asset level) and receives 0.20% administration fee; Skyview provides administrative support; certain Skyview personnel are dual employees of NexPoint Services .
• Section 16 compliance: The Fund states officers/trustees and >10% holders complied with Section 16 reporting in recent years .

Investment Implications

• Compensation alignment: Lack of fund-paid remuneration and absence of disclosed incentive metrics/vesting schedules suggest Waterhouse’s compensation is driven by adviser-side structures, not fund-level TSR/EBITDA targets—reducing direct pay-for-performance transparency for HFRO shareholders .
• Ownership alignment: Minimal disclosed ownership at the group level (<0.01%) indicates limited personal capital exposure to HFRO’s share performance by officers, potentially weakening alignment; no officer-level ownership detail is provided .
• Retention risk: Officer roles are contingent on employment with NexPoint/Skyview; automatic termination upon end of service provider employment creates dependency on adviser stability and could elevate transition risk if the service provider’s staffing changes .
• Governance/legal protections: Robust indemnification with advance provisions subject to Trustee approval supports continuity of officer service; however, related-party affiliations and allocation policies necessitate continued Board oversight to mitigate conflict risks .
• Trading signals: With no fund-level equity compensation or disclosed insider Form 4 activity in proxies, there is limited signal from executive selling/vesting pressure; Section 16 compliance is noted but without transaction details in proxy materials .