Michael Larson
About Michael Larson
Michael Larson (born 1959) is an Independent Director of Western Asset Investment Grade Income Fund Inc. (NYSE: PAI) and has served on the Board since 2004. He is Chief Investment Officer for William H. Gates III, overseeing non-Microsoft investments and all investments of the Bill & Melinda Gates Foundation Trust since 1994 . He oversees 49 portfolios in the Fund complex and beneficially owned no shares of PAI as of December 31, 2024 .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Office of William H. Gates III; Bill & Melinda Gates Foundation Trust | Chief Investment Officer | Since 1994 | Oversees investment portfolios; Western Asset has provided discretionary advice to Gates-related accounts since 1997 (value of those portfolios did not exceed 1.0% of Western Asset AUM since 12/31/2021) |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Ecolab Inc. | Director | Since 2012 | Not disclosed |
| Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA) | Director | Since 2011 | Not disclosed |
| Republic Services, Inc. | Director | Since 2009 | Not disclosed |
Board Governance
- Independence: Classified as an Independent Director; Independent Directors constitute over 75% of the Board .
- Committee memberships: Audit; Governance & Nominating; Executive & Contracts; Investment & Performance; not a committee chair .
- Committee independence: The Audit and Governance Committees are composed solely of Independent Directors and Audit members meet NYSE independence standards .
- Attendance and engagement: In FY 2024, the Board held 8 meetings; Audit 6; Governance 3; Performance 5; Contracts 2. Each Director attended at least 75% of the aggregate number of Board and committee meetings on which they served .
- Board leadership: Chair of the Board is Independent (William E. B. Siart), and each committee is chaired by an Independent Director; Independent Directors regularly meet outside management and are advised by independent counsel .
Fixed Compensation
| Compensation Element | Amount | Notes |
|---|---|---|
| Aggregate Compensation from PAI (FY 2024) | $1,047 | Annual retainer plus meeting fees; leadership premiums apply only to chairs (Larson is not a chair) |
| Pension or Retirement Benefits | $0 | None |
| Estimated Annual Benefits Upon Retirement | $0 | None |
| Total Compensation from Fund Complex | $350,000 | Pro rata across the Franklin Templeton/Western Asset fund complex |
The proxy describes Independent Director pay as an annual retainer plus per-meeting fees, with additional compensation for Board/committee chairs; exact retainer/meeting fee amounts are not itemized .
Performance Compensation
| Performance-Based Compensation Elements | Disclosure |
|---|---|
| Equity awards (RSUs/PSUs), options, performance metrics, clawbacks | Not disclosed in the proxy; director compensation is described as cash retainer and meeting fees, with chair premiums |
Other Directorships & Interlocks
| Company | Sector | Interlock/Conflict Consideration |
|---|---|---|
| Ecolab Inc. | Specialty chemicals | No direct Fund-related transaction disclosed |
| FEMSA | Consumer/retail | No direct Fund-related transaction disclosed |
| Republic Services, Inc. | Environmental services | No direct Fund-related transaction disclosed |
| Western Asset advisory relationship | Asset management | Western Asset (PAI’s adviser) has provided discretionary investment advice to Gates-related accounts overseen by Larson since 1997; value did not exceed 1.0% of Western Asset AUM since 12/31/2021 |
Expertise & Qualifications
- The Board cites Larson’s “portfolio management expertise and experience as a board member of various businesses and other organizations” among the qualifications supporting Board effectiveness .
- The Governance Committee requires relevant experience (investment management, economics, public accounting, business or law), education, independence, and limits outside directorships to no more than five public/reporting companies at nomination/election; Larson’s disclosed roles appear within this cap .
Equity Ownership
| Metric | Value |
|---|---|
| PAI beneficial ownership (dollar range) | None |
| Aggregate dollar range across Fund family | Over $100,000 |
| Group ownership by all directors/officers (PAI) | Less than 1% of outstanding shares as of record date |
| Shares outstanding (record date) | 9,510,962 |
Governance Assessment
- Positives:
- Independent status with broad committee participation (Audit, Governance, Contracts, Performance) supports oversight coverage and Board independence .
- Strong investment background as CIO for Gates entities and long Board tenure since 2004; Board cites portfolio management expertise explicitly .
- Audit Committee independence aligned with NYSE standards; Board and committees led by Independent chairs; Independent Directors meet in executive session with independent counsel .
- Attendance threshold met (≥75%) across Board/committee meetings in FY 2024, indicating engagement .
- Watch items / potential red flags:
- Related-party exposure: Western Asset advises Gates-related accounts overseen by Larson; while size is limited (<1% of AUM since 12/31/2021), the relationship warrants continued monitoring for conflicts (e.g., information flow, preferential access) .
- Ownership alignment: Larson reported no direct PAI share ownership; group ownership by directors/officers is <1% of outstanding, which may be viewed as lower “skin-in-the-game” for PAI specifically .
- Multiple external public boards (Ecolab, FEMSA, Republic Services) plus extensive Fund complex oversight (49 portfolios) can raise bandwidth questions; the Fund’s bylaws cap outside reporting-company directorships at five at nomination, which he appears to meet .
- Compensation structure signals:
- Cash-heavy director pay (retainer and meeting fees) without disclosed equity or performance components; chair premiums apply only to chairs, which Larson is not; PAI-specific compensation is modest ($1,047) relative to complex-wide pay ($350,000) .
Committee meeting cadence (8 Board; Audit 6; Governance 3; Performance 5; Contracts 2 in FY 2024) indicates active oversight cycles; Larson participates across all four committees, enhancing cross-functional governance visibility .