Richard R. Hough III
About Richard R. Hough III
Richard R. Hough III, 55, is Chairman, Chief Executive Officer, and President of Silvercrest Asset Management Group Inc. He has served as Chairman since November 2015, CEO since November 2013, President of SAMG LLC since January 2012, and previously COO from July 2010 to November 2013; he joined Silvercrest in 2003 and has been on the Executive Committee since 2007 . He holds a degree in politics from Princeton University and has led corporate strategy and development for more than two decades . Pay-versus-performance disclosures show cumulative TSR of $182.25 for SAMG’s fixed $100 investment in 2024 vs $159.91 in 2023 and $144.93 in 2022; diluted adjusted EPS was $1.10 in 2024, $1.12 in 2023, and $1.35 in 2022, indicating shareholder returns improved in 2024 while adjusted earnings per share trended lower over time due to investment in growth and market impacts .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Silvercrest Asset Management Group Inc. | Chairman of the Board | Nov 2015–Present | Dual role leading Board and management; oversight of corporate strategy . |
| Silvercrest Asset Management Group LLC (Operating Sub) | Chief Executive Officer | Nov 2013–Present | Responsible for all operations incl. strategy and development . |
| Silvercrest Asset Management Group LLC | President | Jan 2012–Present | Executive leadership of operating subsidiary . |
| Silvercrest Asset Management Group LLC | Chief Operating Officer | Jul 2010–Nov 2013 | Built operational infrastructure supporting investment teams . |
| Silvercrest Asset Management Group Inc. | Executive Committee Member | 2007–Present | Firm-wide strategic direction and resource allocation . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Investment Adviser Association | Board of Governors; Executive Committee (recently served) | Recent service | Industry policy and advocacy; network in registered adviser community . |
| The New Criterion | Advisory Board Member | Current | Arts and intellectual life engagement . |
| Institute for Family Studies | Chairman of the Board | Current | Non-profit governance leadership . |
| The Tunison Foundation | Board Member | Current | Philanthropic governance . |
| National Civic Arts Society | Board Member | Current | Civic arts advocacy . |
| Christendom College | Board Member | Current | Academic governance . |
Fixed Compensation
| Year | Base Salary ($) | Bonus ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|---|
| 2022 | 741,667 | 1,650,000 | 134,582 | 4,026,249 |
| 2023 | 875,000 | 1,500,000 | 1,766,698 | 5,641,698 |
| 2024 | 900,000 | 1,400,000 | 188,958 | 4,088,958 |
Notes:
- 2024 “All Other Compensation” includes $183,952 cash distributed on account of vested/unvested RSUs, $1,500 car allowance, $1,565 insurance premiums, and $1,941 discounted advisory fee savings .
Performance Compensation
Equity Awards Granted (2024)
| Grant Date | RSUs (#) | Option Awards (#) | Vesting | Grant Date FV of RSUs ($) |
|---|---|---|---|---|
| 5/1/2024 | 34,130 | 279,529 | RSUs: 25% annually over 4 yrs; Options: 1/3 annually over 3 yrs | 1,500,000 |
Outstanding Equity and Vesting Detail (as of 12/31/2024)
| Instrument | Quantity | Exercise Price | Expiration | Next Vest Dates | Market Value of Unvested ($) |
|---|---|---|---|---|---|
| Stock Options | 279,529 unexercisable; 86,764 exercisable | $14.65 (new); $10.18 (older) | 5/1/2034 (new); 5/1/2030 (older) | Options vest 1/3 on 5/1/2025, 5/1/2026, 5/1/2027 | N/A |
| RSUs | 34,130 | — | — | 25% on 5/1/2025–2028 | 627,651 |
| RSUs | 61,881 | — | — | 4/3/2025–2027 | 1,137,992 |
| RSUs | 39,495 | — | — | 11/1/2025–2026 | 726,304 |
| RSUs | 21,567 | — | — | 5/3/2025 | 396,622 |
Notes:
- RSU market values reflect $18.39 per unit valuation as of 12/31/2024 .
- Each RSU entitles the holder to receive distributions from Silvercrest L.P. as if underlying Class B units were issued at grant, supporting cash flow during vesting .
Metrics Tied to Incentives
| Metric | Weighting | Target | Actual | Payout Linkage | Vesting Terms |
|---|---|---|---|---|---|
| Adjusted Diluted EPS | Not disclosed | Not disclosed | 2024: $1.10 | Discretionary determination by Compensation Committee | RSUs 25%/yr; options 1/3/yr |
| Revenue | Not disclosed | Not disclosed | Not disclosed | Discretionary determination | As above |
| Adjusted EBITDA and Adjusted EBITDA % | Not disclosed | Not disclosed | Not disclosed | Discretionary determination | As above |
| Discretionary AUM | Not disclosed | Not disclosed | Not disclosed | Qualitative factor | As above |
Compensation structure is primarily salary plus discretionary annual cash bonus, with equity grants (RSUs and options) to align with long-term value creation; the company does not use a formal peer group or fixed weights/targets, relying on committee judgment and multiple operating metrics .
Equity Ownership & Alignment
Beneficial Ownership (as of 4/4/2025)
| Class A Shares | % of Class A | Class B Shares | % of Class B | Total Voting Power |
|---|---|---|---|---|
| 639,229 | 6.3% | 629,643 | 15.4% | 4.7% |
- Principals collectively hold significant interests; employees collectively held ~30.2% of outstanding common stock as of the record date, aligning incentives broadly across the firm .
- Hough’s L.P. profits percentage: 1.09%; 2024 profit allocation: $162,152; combined vested/unvested RSU and option account balance payable on death/disability as of 12/31/2024: $8,029,106 .
- Ownership guidelines: principals must retain at least 25% of Class B units owned at IPO; no additional mandated ownership or retention guidelines disclosed .
- Hedging and short sales are prohibited for directors and officers; pledging was not disclosed .
Employment Terms
| Item | Term |
|---|---|
| Agreement | Employment agreement effective 2018; initial 3-year term; auto-renewals for successive one-year periods unless either party gives 180-days’ notice before term end . |
| Base Salary | Reviewed annually; cannot be decreased unless by mutual consent or equal decrease across senior executives . |
| Annual Bonus | Determined by Compensation Committee consistent with current practice . |
| Annual Equity | Annual grants under Amended 2012 Equity Incentive Plan at Compensation Committee discretion . |
| Non-Solicit | As limited partner, restricted for one year post-termination (without good reason): no client/vendor solicitation; no accepting business from firm clients; no hiring firm employees . |
| Clawback | Awards subject to company clawback policy . |
| Tax Gross-ups | Plan does not provide tax gross-ups . |
Severance and Change-of-Control Economics (as of 12/31/2024)
| Scenario | Cash Severance | Bonus for Year of Termination | Benefits | Equity Acceleration |
|---|---|---|---|---|
| Termination without Cause or for Good Reason | 2x salary ($1,800,000) + 2x average bonus ($3,033,333), paid over 24 months; potential acceleration if termination 180 days prior to or within 2 years post-Change in Control | Higher of annual bonus or average bonus ($1,516,667) | COBRA reimbursement ($53,452); Outplacement ($50,000) | Full vesting of time-based awards ($2,888,568); performance-based awards vest based on actual performance |
| Death or Disability | Average bonus ($1,516,667) | N/A | N/A | Full vesting of time-based awards ($2,888,568); performance awards based on actual performance |
| Change in Control (transaction closes) | N/A | N/A | N/A | All RSUs vest in full; value as of 12/31/2024: $2,888,568 |
Change-in-control treatment is single-trigger for RSU acceleration per unit award agreement; severance cash may accelerate based on proximity to change-in-control events, indicating mixed single/double-trigger features for cash components .
Board Governance
- Board leadership: Hough serves as both Chairman and CEO; the Board has no lead independent director, relying on active independent director involvement via committees .
- Board composition: five directors; majority independent under NASDAQ and SEC rules .
- Committees (all independent): Audit (Chair: Richard J. Burns, financial expert), Compensation (Chair: Brian D. Dunn), Nominating & Corporate Governance (Chair: Darla M. Romfo); Hough does not serve on Board committees .
- Meetings: In 2024, Board met six times; Audit four; Compensation once; Nominating & Governance six; all directors had 100% attendance and independents met in six executive sessions .
- Director compensation: employee directors (incl. Hough) receive no additional director compensation .
Compensation Structure Analysis
- Cash vs Equity mix: Hough’s cash compensation declined in 2024 vs 2023 as option awards fell to $0 from $1,000,000 in 2023 while RSU awards rose to $1,600,000, shifting toward full-value equity with time-based vesting .
- Equity award practices: RSUs typically granted in Q2; options are 10-year term; no repricing without shareholder approval; no discounted option/SAR grants; dividends not paid on unearned awards; awards subject to clawback .
- Performance linkage: Compensation determinations incorporate adjusted EPS, revenue, adjusted EBITDA, EBITDA margin, and discretionary AUM, with discretion by the Compensation Committee (no disclosed fixed weights/targets) .
- Pay vs performance: Company TSR increased in 2024 alongside higher CEO CAP largely due to changes in fair value of unvested equity awards; diluted adjusted EPS decreased due to higher cash compensation as a percentage of revenue to support growth hires and market impacts .
Related Party Transactions and Alignment Considerations
- Tax Receivable Agreement: Company pays principals (including Hough) 85% of cash tax savings realized from basis increases and related benefits; agreement includes automatic termination for certain breaches and competitive activity; Company retains 15% of benefits .
- Registration Rights: Principals (including Hough) hold resale/registration rights for Class A shares issuable upon exchange of Class B units; future Class B unit recipients obtain similar rights .
- Employee funds managed at discounted advisory fees; specific discount values disclosed for other executives in 2024; savings to Hough were $1,941 .
Say-on-Pay & Shareholder Engagement
- 2025 annual advisory vote on executive compensation proposed; Board recommends “FOR” .
- 2024 targeted engagement by CEO and CFO with significant institutional holders; no issues raised regarding compensation structure or amounts; employees collectively held ~30.2% of outstanding common stock, reinforcing internal alignment .
Risk Indicators & Red Flags
- Dual role concentration: Chairman + CEO without a lead independent director may elevate governance and independence scrutiny; Board relies on committee structures and regular executive sessions of independent directors .
- Single-trigger RSU vesting upon change in control can increase deal-related dilution and short-term selling pressure; combined with sizable scheduled vesting through 2028, potential supply overhang exists .
- TRAs with principals can be shareholder-sensitive in change-in-control or termination scenarios; offsets are disclosed but payments can be material .
- Hedging/short sales prohibited; pledging status not disclosed (monitor for future filings) .
Equity Vesting and Potential Insider Selling Pressure
- Near-term vesting schedule for Hough suggests multiple 2025 triggers: 5/1, 4/3, 11/1, and 5/3, plus one-third of the 279,529 options becoming exercisable on 5/1/2025; similar vesting dates recur in 2026–2028, implying periodic liquidity windows and potential trading pressure .
- RSU distributions mirror partnership distributions from grant date, supplying ongoing cash inflows which can mitigate forced selling but increase liquidity flexibility at vest .
Compensation Peer Group and Benchmarking
- The company does not use a specific peer group for executive benchmarking, relying on periodic consultant input and industry surveys (e.g., McLagan, Bower Group, Pershing/Moss Adams) and forums; performance comparisons in the proxy use the S&P U.S. BMI Asset Management & Custody Banks Index .
Performance & Track Record
| Year | CEO CAP ($) | Company TSR (Value of $100) | Peer Group TSR (Value of $100) | Net Income ($) | Diluted Adjusted EPS ($) |
|---|---|---|---|---|---|
| 2022 | 3,789,874 | 144.93 | 120.66 | 30,793 | 1.35 |
| 2023 | 3,173,747 | 159.91 | 211.89 | 15,183 | 1.12 |
| 2024 | 6,321,297 | 182.25 | 232.43 | 15,709 | 1.10 |
Narrative: CEO CAP rose materially in 2024 due to increases in fair value of unvested awards; TSR improved, while diluted adjusted EPS declined over time due to strategic investment and markets; peer TSR outpaced company TSR over the three-year period .
Director Compensation (for context)
Employee directors do not receive additional pay; non-employee directors receive $50,000 cash retainer, $50,000 equity retainer (RSUs vest on third anniversary), $5,000 per-committee, and chair premiums ($10,000 Audit, $5,000 Compensation, $5,000 Nominating & Governance). In 2024, all directors are reimbursed for reasonable expenses; fee discount for investment services available to directors .
Investment Implications
- Alignment: Hough’s substantial Class A and Class B ownership, L.P. profit percentage, and recurring equity grants reinforce alignment; absence of formal ownership guidelines beyond 25% Class B unit retention at IPO is a minor governance gap vs large-cap best practices .
- Retention and change-in-control: Robust severance (2x salary + 2x average bonus + bonus floor) and single-trigger RSU acceleration may reduce retention risk but could elevate cost in adverse scenarios and increase deal-related dilution/supply; cash severance may accelerate around change-in-control .
- Trading signals: Significant scheduled vesting across 2025–2028 plus option exercisability in 2025–2027 create potential periodic selling pressure; monitor Form 4s near vest dates and during blackout windows under the Insider Trading Policy .
- Governance: Dual Chairman/CEO structure without lead independent director warrants continued monitoring of independence and oversight quality; committee independence and 100% attendance mitigates risk .
- Pay-performance linkage: Discretionary approach using adjusted EPS, revenue, EBITDA, and AUM provides flexibility but reduces transparency on targets/weights; TSR improved in 2024 though diluted adjusted EPS trended lower, reflecting reinvestment burden—investors should watch compensation outcomes vs operating leverage recovery .