Thomas J. Kelleher
BRC Group HoldingsAbout Thomas J. Kelleher
Thomas J. Kelleher is Co‑Chief Executive Officer of B. Riley Financial and a director, having served as Co‑CEO since July 2018 and on the board since October 2015; he is 58 and holds a B.S. in Mechanical Engineering from Lehigh University . He previously served as President of B. Riley Financial (2014–2018), CEO of B. Riley & Co. (2006–2014), and earlier as CFO and Chief Compliance Officer at B. Riley & Co. (1997–2006) . Company pay‑versus‑performance disclosures show cumulative TSR fell to $29.31 in 2024 from $129.10 in 2023, with Net Income (Loss) of ($764) million and Operating Adjusted EBITDA of $126 million in 2024, contextualizing the firm’s recent performance backdrop under his tenure .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| B. Riley Financial, Inc. | President | 2014–2018 | Led corporate operations across diversified financial services businesses during expansion pre‑merger integrations . |
| B. Riley & Co., LLC | Chief Executive Officer | 2006–2014 | Drove brokerage and investment banking growth, setting foundation for later platform consolidation . |
| B. Riley & Co., LLC | CFO; Chief Compliance Officer | 1997–2006 | Built finance and compliance infrastructure during firm’s formative years . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Special Diversified Opportunities Inc. | Director | Oct 2015–Jun 2017 | Provided capital markets oversight to a diversified holding company . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 700,000 | 700,000 | 700,000 |
| Bonus ($) | 2,800,000 | — | — |
| 401(k) Match ($) | 5,175 | 5,175 | 5,175 |
| All Other Compensation ($) | 548,758 | 2,974,063 | 386,843 |
Notes:
- All‑other compensation in 2024 comprised dividend rights paid upon RSU vesting ($381,668) and 401(k) match ($5,175) .
- Base salaries for NEOs remained unchanged in 2024 .
Performance Compensation
| Equity Award Detail | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Stock Awards Grant‑Date Fair Value ($) | 2,118,490 | 1,889,256 | 1,081,780 |
| RSU Grant Date | — | Feb 24, 2023 | Mar 4, 2024 |
| RSUs Granted (#) | — | — | 83,086 |
| Vesting Schedule | — | Mar 15, 2024 portion vested | 1/3 on Mar 15, 2025; 1/3 on Mar 15, 2026; 1/3 on Mar 15, 2027, subject to continued employment |
| Shares Vested in Year (#) | — | — | 44,414 (Mar 15 and May 31) |
| Value Realized on Vesting ($) | — | — | 982,946 |
| Annual Incentive Design | Weighting | Target | Actual | Payout Form |
|---|---|---|---|---|
| Discretionary annual bonus (Company and individual performance) | Discretionary; no fixed weights disclosed | Not disclosed | Committee evaluated qualitative/quantitative indicators incl. Operating Adjusted EBITDA and TSR | Cash; none paid to Kelleher in 2024 |
Key design elements:
- No specific target levels are set; Compensation Committee uses discretion considering Company and unit performance, with Operating Adjusted EBITDA, Total Adjusted EBITDA, and TSR identified as most important 2024 measures .
Equity Ownership & Alignment
| Ownership Metric (as of Oct 10, 2025) | Value |
|---|---|
| Total beneficial ownership (shares) | 973,409 |
| Ownership (%) | 3.2% |
| Ownership breakdown | 21,188 shares directly; 902,288 via Kelleher Family Trust; 34,118 via self‑directed IRA; 5,600 via spouse’s IRA; 3,405 for each of Lyndsey, Kaitlin, and Mackenna Kelleher with dispositive power . |
| Unvested RSUs at 12/31/2024 (#) | 129,932 |
| Unvested RSUs market value ($) | 596,388 (at $4.59 per share) |
| Scheduled RSU vesting | 44,109 vested Mar 15, 2025; 44,101 on Mar 15, 2026; 27,692 on Mar 15, 2027; plus 14,030 vested June 2, 2025 |
| Stock ownership guidelines | No formal executive ownership guidelines; executives encouraged to maintain meaningful ownership |
| Pledging/Hedging | Company policy prohibits pledging, hedging, short sales, and derivatives absent pre‑approval; covered persons may not pledge or hold in margin accounts . No pledging disclosed for Kelleher (contrast: Bryant Riley pledging disclosed separately) . |
Implications:
- Multi‑year RSU vesting creates recurring supply potential; however, anti‑pledging/hedging constraints limit leverage or monetization strategies .
Employment Terms
| Term | Detail |
|---|---|
| Agreement type | Amended and restated employment agreement dated Apr 11, 2023 |
| Initial term | Two years; auto‑renews for one‑year terms unless 90‑day non‑renewal notice |
| Base salary | $700,000; subject to annual review |
| Annual bonus | Discretionary; paid by Mar 15 following year, subject to continued employment |
| Long‑term incentives | Annual equity awards under 2021 Plan; vest annually over three years |
| Change‑of‑control (equity) | Single‑trigger full vesting of unvested stock options/RSUs/SARs upon Change of Control |
| Severance (termination w/o Cause, death/disability, or resignation for Good Reason) | Lump sum equal to 4x base salary; COBRA premium reimbursement up to 12 months |
| Notice | 20 days prior written notice by either party |
| Restrictive covenants | Non‑competition and client non‑solicitation while employed; employee non‑solicitation for one year post‑employment; perpetual confidentiality/non‑disparagement |
Estimated payments upon termination/change‑in‑control (as of 12/31/2024):
| Scenario | Cash ($) | Stock Awards ($) | All Other ($) | Benefits ($) | Total ($) |
|---|---|---|---|---|---|
| Termination w/o Cause, death/disability, or Good Reason | 2,800,000 | 596,388 | 262,290 (dividend rights) | 37,441 (COBRA) | 3,696,119 |
| Change in Control (equity acceleration only) | — | 596,388 | 262,290 (dividend rights) | — | 858,678 |
Board Governance
| Attribute | Detail |
|---|---|
| Board service | Director since Oct 2015 |
| Independence | Not independent due to employee status |
| Committees | None |
| Board leadership | Combined Chairman/Co‑CEO (Bryant R. Riley); no Lead Independent Director; independent directors meet in executive session without management |
| Meeting attendance | Each director attended ≥75% of Board and committee meetings in 2024 |
| Director compensation | Management directors (including Kelleher) receive no additional board fees |
Dual‑role implications:
- As Co‑CEO and director, Kelleher is non‑independent; combined Chair/Co‑CEO structure and absence of a Lead Independent Director elevate governance‑oversight reliance on committee independence and executive sessions .
Say‑on‑Pay & Compensation Peer Group
- Say‑on‑Pay approval: 91.24% in 2022; triennial advisory vote preference and recommendation for 3‑year frequency maintained .
- Peer group used by Mercer (2023/2024 cycle) for benchmarking (not targeted to a percentile): BGC Group, Canaccord Genuity, Cowen, Greenhill, Houlihan Lokey, Lazard, Moelis, Oppenheimer, Perella Weinberg, Piper Sandler, PJT Partners .
Performance & Track Record
| Measure | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Cumulative TSR ($100 initial) | 186.22 | 448.30 | 186.36 | 129.10 | 29.31 |
| Net Income (Loss) ($mm) | 205 | 445 | (160) | (100) | (764) |
| Operating Adjusted EBITDA ($mm) | 324 | 440 | 394 | 363 | 126 |
Notes:
- Operating Adjusted EBITDA is the primary financial measure reviewed by the Board in connection with discretionary bonuses; definition excludes trading/investment fair‑value effects and related items .
Compensation Structure Analysis
- Cash vs equity mix shift: 2024 compensation for Kelleher emphasized time‑based RSUs ($1.08mm grant‑date FV) with no cash bonus, increasing retention‑based equity vs guaranteed cash beyond base salary .
- Options usage: Company granted no stock options or SARs to NEOs in 2024 (RSUs only), reducing leverage/risk in incentive design .
- Ownership alignment: Significant personal/family trust holdings (973,409 shares; 3.2%), plus scheduled RSU vesting; absence of pledging per policy supports alignment .
- Change‑of‑control: Single‑trigger equity acceleration combined with high severance multiple (4x salary) raises potential pay‑event sensitivity without requiring termination for equity vesting .
Risk Indicators & Red Flags
- Material weaknesses in internal control over financial reporting across ITGCs, related‑party disclosure precision, income tax provision review, goodwill impairment evaluation, and journal entry review/approval segregation; reliance challenges with certain SOC 1 reports and third‑party service organizations .
- Audit firm transition from Marcum to BDO; disclosed independence considerations related to prior non‑audit services by BDO member firms; concluded not impairing objectivity; Marcum audit‑related fees included SEC investigation matters ($1.28mm in 2024) .
- Anti‑pledging/hedging policies are strict; while Bryant Riley’s pledging is disclosed, no pledging is disclosed for Kelleher, mitigating collateral‑driven forced selling risks for him .
Director Compensation (for context; Kelleher receives none)
- Non‑employee directors receive $75,000 cash plus $75,000 RSUs annually (RSUs granted on a permissible date and vesting June 21, 2025); committee chair and membership retainers apply; Special Committee fees tied to review of a withdrawn take‑private proposal in 2024–2025 . Kelleher, as an employee, receives no additional director compensation .
Equity Vesting & Potential Insider Selling Pressure
| Upcoming RSU Vests (Unvested at 12/31/2024) | Date | Shares |
|---|---|---|
| Tranche 1 | Mar 15, 2025 | 44,109 |
| Tranche 2 | Mar 15, 2026 | 44,101 |
| Tranche 3 | Mar 15, 2027 | 27,692 |
| Additional vest | Jun 2, 2025 | 14,030 |
- The cadence of March vest dates may create periodic supply; value realized on 2024 vesting was $982,946 on 44,414 shares, indicating meaningful liquidity events absent explicit selling disclosures; note that trading must be pre‑cleared and is subject to anti‑hedging/pledging rules .
Employment & Contracts — Additional Mechanics
- Termination with Cause/resignation without Good Reason: only base salary through termination date; no severance .
- COBRA reimbursement applies for qualifying terminations up to 12 months .
- Change‑in‑control table confirms equity acceleration triggers dividend right payments on vest .
Investment Implications
- High alignment via substantial common‑share ownership (3.2%) and multi‑year RSU vesting supports retention and long‑term focus; anti‑pledging/hedging reduces leverage‑related forced sales risk .
- Incentive structure is predominantly discretionary with RSUs; absence of explicit, formulaic performance targets and the presence of single‑trigger equity acceleration and 4x salary severance can weaken pay‑for‑performance sensitivity in downside scenarios .
- Company‑level control weaknesses and audit transition elevate operational and reporting risk; these may constrain bonus outcomes and increase execution risk while Kelleher remains a non‑independent director within a combined Chair/Co‑CEO leadership structure lacking a Lead Independent Director .
- Regular March vest schedules are potential near‑term trading supply catalysts; monitoring Form 4 filings around vest dates is prudent for assessing incremental selling pressure, subject to pre‑clearance protocols .