Herve Francois

About Herve Francois

Herve Francois (age 56) is an independent director of The LGL Group, Inc. (director since 2023). He brings financial services and capital markets expertise from prior senior roles in equity research and institutional sales; he holds a BA in Economics from Boston College and an MBA from Georgetown University. The Board designates him independent under NYSE rules and identifies him as an “audit committee financial expert.” Notably, the 2025 proxy discloses that upon closing of LGL’s acquisition of Morgan Group Holding Co. (MGHL), Francois will be appointed an officer and director of MGHL, which could alter his independence profile post-close.

Past Roles

External Roles

Board Governance

• Independence: Board determined Francois is independent under NYSE rules; he is also deemed an “audit committee financial expert.”
• Board leadership: CEO/Chair roles currently combined under Marc Gabelli.
• Attendance: In 2024, six Board meetings were held and all directors attended at least 75% of Board and committee meetings; all directors standing for election attended the 2024 Annual Meeting.
• Committees and 2024 activity:
  • Audit Committee: Member; 6 meetings (Francois designated financial expert).
  • Compensation Committee: Member; no formal meetings in 2024 (met informally).
  • Nominating Committee: Member; 2 meetings.
  • Investment Committee: Member; 3 meetings; mandate includes reviewing exposures to investments managed by related parties.

Additional governance signal: 2025 director election support was strong; Francois received 2,137,369 For, 10,210 Withheld, and 1,141,115 broker non-votes.

Fixed Compensation

• Director fee structure (for FY2024 service; adopted for 2024 and carried forward in disclosures):
  • Annual cash retainer: $10,000 (paid quarterly in arrears).
  • Per-meeting fees: Board in-person $2,000; Board telephonic $750; Committee meetings $750.
  • Additional retainers: Chairman $2,500; Committee Chair—Audit $2,000, Compensation $1,000, Nominating $1,000.

• Actual FY2024 director compensation (cash):
  • Francois earned $21,500 in fees; no equity grant during FY2024.

Performance Compensation

• Equity retainer: Restricted stock awards of $15,000 granted on March 25, 2025 to non-employee directors, vesting over three years (time-based; no performance metrics disclosed). Number of shares not specified in the proxy.

No director-level options, PSUs, or performance metric ties were disclosed for non-employee directors; FY2024 included no equity grants to non-employee directors.

Other Directorships & Interlocks

Expertise & Qualifications

• Financial expertise and governance: LGL’s skills matrix assigns Francois “Financial Expertise” and “Governance,” consistent with his capital markets background and audit committee financial expert designation.
• Education: BA Economics (Boston College); MBA (Georgetown University).
• Sector background: Technology equity research coverage and institutional sales leadership experience.

Equity Ownership

• Beneficial ownership increased from 2,874 shares (as of 9/30/2024) to 5,182 shares (as of 4/25/2025). In both snapshots, ownership is less than 1% of shares outstanding. Hedging/pledging is discouraged but not prohibited by company policy.

Policy notes:

• Hedging/Pledging: No outright prohibition; practice discouraged for directors, officers, and employees.
• Clawback policy: Company maintains a Policy Relating to Recovery of Erroneously Awarded Compensation (Item 97.1 in 10-K exhibits).

Governance Assessment

Strengths

• Independent director with deep capital markets background; designated audit committee financial expert; active across Audit, Compensation, Nominating, and Investment committees, supporting board oversight breadth.
• Solid shareholder support in 2025 director election (2,137,369 For; 10,210 Withheld).
• Positive engagement signal: Board and committee attendance threshold met across all directors; formal committee meeting cadence reported for Audit, Nominating, and Investment.

Potential Risks and RED FLAGS

• Independence watch: Proxy flags that upon closing LGL’s MGHL acquisition, Francois will be appointed an officer and director of MGHL; if MGHL becomes an LGL subsidiary, this may affect his independence classification. Monitor post-close status and board’s independence determination.
• Related-party exposure: LGL invests assets with GAMCO affiliates (related to Gabelli); while the Investment Committee (incl. Francois) is tasked with overseeing related-party exposure, the magnitude ($32.6M managed as of year-end 2023) warrants continued scrutiny for conflicts and fee economics.
• Hedging/pledging not prohibited: Policy discourages but does not ban hedging/pledging by insiders—below best practice at many issuers and a potential alignment concern.
• Committee activity: Compensation Committee had no formal meetings in 2024 (informal meetings occurred), which could raise questions on rigor in a transition year; continued disclosure on processes advisable.

Signals for Investors

• Compensation mix for directors is modest with meeting-based cash plus a small, time-vested equity retainer ($15,000) starting March 2025—limited performance linkage at the director level, consistent with governance norms.
• Say-on-pay support in 2025 was favorable (2,129,220 For vs. 8,684 Against; 9,675 Abstain), implying general investor comfort with compensation practices amid leadership structure and related-party oversight.