Henry A. Butler
About Henry A. Butler
Henry A. Butler, age 75, is an independent director and Chairman of the Board of Transcontinental Realty Investors, Inc. (TCI). He has served as a director of TCI since November 2005 and Chairman since May 28, 2009; he retired from his operating role on April 30, 2019 . The Board’s March 2025 independence review affirmed Butler’s independence under the Company’s Corporate Governance Guidelines .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Pillar Income Asset Management, Inc. | Broker – Land Sales | Apr 30, 2011 – Apr 30, 2019 | Transactions in land sales for advisor to TCI/ARL/IOR |
| Prime Income Asset Management, LLC | Broker – Land Sales | Jul 2003 – Apr 2011 | Land brokerage for affiliated advisor entity |
| Basic Capital Management, Inc. | Broker – Land Sales | 1992 – Jun 2003 | Land brokerage for affiliated advisor entity |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| American Realty Investors, Inc. (ARL) | Director; Chairman of the Board | Director since Jul 2003; Chairman since May 28, 2009 | Shared governance with TCI; ARL is majority owner of TCI |
| Income Opportunity Realty Investors, Inc. (IOR) | Director; Chairman of the Board | Director since Feb 8, 2011; Chairman since May 12, 2011 | TCI owns >84% of IOR; overlapping directors |
Board Governance
- Chairman of the Board (TCI); not listed as serving on the Audit, Compensation, or Governance & Nominating Committees in the current committee matrix .
- Independence affirmed by the Board’s annual review in March 2025 under Company guidelines .
- Board met five times in fiscal 2024; no incumbent director attended fewer than 75% of Board/committee meetings; independent directors held four executive sessions in 2024 .
- Presiding (Lead Independent) Director role is held by Ted R. Munselle, who presides over executive sessions and advises on agendas and chair selections .
- Committee activity: Audit Committee met five times in 2024; Compensation Committee met two times; Governance & Nominating met two times .
Fixed Compensation
| Component | Amount | Notes |
|---|---|---|
| Non-employee director annual retainer | $12,000 | Applies to independent directors; reduced from $30,000 pre-2010 |
| Chairman of the Board | Fee per meeting attended | No additional annual fee |
| Audit Committee Chair fee | $500 per year | Paid to committee chair |
| Special services fee (independent directors) | $1,000 per day | For services outside ordinary director duties; plus expenses |
| 2024 total fees paid to non-employee directors (aggregate) | $54,332 | Includes annual retainers and special service fees |
| 2024 fees paid to Henry A. Butler | $5,832 | Reflects meeting-based compensation as Chairman |
Performance Compensation
- No equity-based compensation (RSUs, PSUs, options) for directors is disclosed; compensation is cash-based (retainers, meeting fees, and special service fees) .
- No performance metrics tied to director compensation are disclosed (e.g., revenue growth, EBITDA, TSR), and no vesting schedules or change-in-control provisions are presented for directors .
Other Directorships & Interlocks
| Company | Relationship to TCI | Butler’s Role | Interlock/Conflict Notes |
|---|---|---|---|
| ARL (American Realty Investors, Inc.) | Owns ~78.38% of TCI; ARL and its subsidiary TRAC collectively own significant stakes | Director; Chairman | TCI directors are also ARL directors; beneficial ownership may be attributed but is disclaimed by directors |
| IOR (Income Opportunity Realty Investors, Inc.) | TCI owns >84% of IOR | Director; Chairman | Shared directors (Butler, Jakuszewski, Munselle, Celis); tight group governance |
Expertise & Qualifications
- Decades of real estate brokerage and land transactions across affiliated advisory entities (BCM, Prime, Pillar), aligning with TCI’s real estate focus .
- Long-tenured board leadership (Chairman since 2009 at TCI and ARL; Chairman of IOR since 2011), indicating deep familiarity with group strategy and advisor oversight .
- No formal “audit committee financial expert” designation is attributed to Butler; Audit Committee chair Munselle holds that qualification .
Equity Ownership
| Holder | Shares Beneficially Owned | % of Class | Notes |
|---|---|---|---|
| Henry A. Butler | (1) | —% | Directors of ARL may be deemed beneficial owners of ARL’s TCI holdings but each disclaims beneficial ownership; 8,639,316 shares outstanding as of Oct 29, 2025 |
| ARL | 6,771,718 (incl. TRAC) | 78.38% | Directors of ARL may be attributed beneficial ownership but disclaim |
| TRAC (ARL subsidiary) | 1,383,226 | 16.01% | Attributed within ARL’s total; director of TRAC disclaims |
(1) Footnote indicates attribution via ARL and TRAC roles but explicit disclaimer of beneficial ownership by directors .
Related Party Transactions & Conflicts (Group Structure and Advisor Model)
| Item | 2024 Amount | Counterparty | Notes |
|---|---|---|---|
| Advisory fees | $8.1 million | Pillar Income Asset Management | Advisor to TCI since 2011; revised fee schedule effective Jan 1, 2024 |
| Cost reimbursements | $3.7 million | Pillar | Reimbursements for service employees and expenses |
| Development fees | $2.9 million | Pillar | Ongoing development projects |
| Land purchases at appraised value | $6.2 million | Pillar | Land parcels acquired in connection with development |
| Property mgmt fees + leasing commissions | $0.3 million | Regis Property Management (affiliate) | 3% or less mgmt fee; sliding-scale brokerage commissions |
| Rent received from advisor and affiliates | $0.9 million | Pillar and affiliates | Rents on company-owned properties |
| Year-end receivable from advisor | $62.8 million | Pillar | SOFR-based interest; cash management agreement governs flows |
Structural context and risks:
- Pillar is controlled through a chain (RALLC → RAI → MRHI → May Trust); Pillar’s officers include Erik L. Johnson (TCI CEO) and Louis J. Corna (TCI General Counsel), creating multiple overlapping fiduciary duties across TCI, ARL, IOR, and Pillar .
- Advisory Agreement revised in 2024: Gross Asset Fee up to 0.75% per annum of gross asset value; Net Income Fee 7.5% of adjusted net income; plus separate compensation for additional services; automatic renewal unless terminated .
Governance Assessment
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Positives:
- Independence affirmed in March 2025; Butler serves as an independent Chairman with lengthy governance experience in the group .
- Board and committee cadence appears active (Board: 5x; Audit: 5x; Compensation: 2x; Governance: 2x in 2024); executive sessions held four times; minimum attendance threshold met across incumbents .
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Concerns and RED FLAGS:
- Extensive related-party transactions and reliance on an affiliated advisor (Pillar) for core operations, fees, reimbursements, development services, and cash management; large receivable ($62.8 million) from Pillar raises counterparty dependence risk .
- Cross-directorships across TCI, ARL, and IOR (with ARL owning ~78% of TCI) concentrate control and may dilute independent challenge, despite formal independence determinations .
- Director compensation lacks equity alignment (cash-only structure; no disclosed RSUs/options), limiting “skin-in-the-game” for independent directors, including the Chairman .
- Advisor compensation (up to 0.75% of gross asset value plus 7.5% of adjusted net income) may incentivize asset growth and short-term income over long-term shareholder value if not tightly overseen by independent directors .
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Implications for investors:
- Butler’s long tenure and independent status provide continuity; however, the group structure and advisor model create persistent conflicts that require robust committee oversight and transparent monitoring of fee arrangements and receivables .
- The absence of director equity grants reduces alignment, placing greater importance on independence, attendance, and committee rigor—especially in Audit and Governance oversight of the advisor .