George R. Aylward
About George R. Aylward
George R. Aylward (age 60) is President, Chief Executive Officer, and Director of Virtus Investment Partners; he has been President since November 6, 2006 and CEO since January 1, 2009, and has served on the Board since 2008 . Under his leadership in 2024, diluted EPS was $16.89 and diluted EPS, as adjusted, rose 20% to $26.33; operating income increased 20.5% to $182.5 million with operating margin at 20.1% (32.6% as adjusted) . One-year TSR was -5.5% and three-year TSR was -17.8%, both below Financial Peers' medians, while investment performance improved with 52% of AUM in the top half on a three-year basis . He owns 265,667 shares (3.8% of outstanding), materially aligning his interests with shareholders .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Virtus Investment Partners (predecessor PXP/PNX) | President, Asset Management; Senior EVP | 2007–2008 | Led asset management through separation to independent public company . |
| Virtus Investment Partners (PXP) | Executive VP, Asset Management | Nov 2006–Feb 2007 | Transition leadership ahead of independence . |
| Virtus Investment Partners (PXP) | SVP & COO, Asset Management | 2004–2006 | Built operating capabilities pre-spin, supporting multi-manager model . |
| The Phoenix Companies (PNX) | Chief of Staff to Chairman/President/CEO | 2002–2004 | Enterprise coordination supporting asset management strategy . |
| Phoenix Investment Partners (PXP) | Senior finance roles | Pre-2002 | Developed financial discipline and governance foundation . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Virtus Mutual Funds | President & Trustee | Since 2006 (Trustee since 2012) | Governance and product stewardship across retail funds . |
| Virtus Variable Insurance Trust | President & Trustee | President since 2010; Trustee since 2012 | Oversight of variable insurance platforms . |
| Virtus Alternative Solutions Trust | Trustee & President | Since 2013 | Alternative strategy governance . |
| Virtus Global Funds, plc | Director | Since 2013 | International product and distribution expansion . |
| Virtus ETF Trust II | Chairman & Trustee | Since 2015 | ETF strategy and governance . |
| 12 affiliated closed-end funds | President, CEO, Director/Trustee | Ongoing | Multi-manager platform leadership . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 600,000 | 600,000 | 641,667 (reflecting March 15, 2024 increase to $650,000) |
| All Other Compensation ($) | 15,250 | 16,500 | 17,250 |
Notes:
- CEO base increased from $600,000 to $650,000 effective March 15, 2024, per Compensation Committee review .
Performance Compensation
Annual Incentive Structure and Outcomes
- Target annual incentive $3.2 million; range 0–200% of target .
- CEO actual payout $3.0 million for 2024 (6% below target; +7.1% vs 2023) .
- Executive officer pool funded at 26.8% of max (max defined as 7% of operating income, as adjusted, before variable incentives) .
| Metric | Category Weight | 2024 Target | 2024 Actual | Variance | Committee Assessment |
|---|---|---|---|---|---|
| Operating margin, as adjusted (%) | Financial (50%) | 35.0 | 32.6 | -2.4 pts | Below target |
| Diluted EPS, as adjusted ($) | Financial (50%) | 26.75 | 26.33 | -0.42 | Below target |
| Growth in operating income vs Financial Peers (percentile) | Financial (50%) | 45th | 58th | +13 pctiles | Mixed; aggregate below target |
| Gross sales rate (%) | Operational (30%) | 18.0 | 15.5 | -2.5 pts | Below target |
| Relative investment performance (% of AUM in top half, 3Y) | Operational (30%) | 55 | 52 | -3 pts | Below target |
| Total net flow rate (%) | Operational (30%) | 1.0 | -6.1 | -7.1 pts | Below target |
| Strategic objectives qualitative | Strategic (20%) | Defined priorities | Above expectations | N/A | Above expectations |
Long-Term Incentives (LTIP)
- Structure: 50% PSUs, 50% RSUs; PSUs measured over 3 years on Relative TSR and Relative Net Flow Rate vs Financial Peers; payout 0–200%, capped at target if absolute TSR negative .
- 2024 LTIP grant: PSUs $800,000 (TSR) + $800,000 (Net Flow) and RSUs $1,600,000; total $3,200,000 grant date fair value .
- 2022–2024 PSU results: Both metrics below threshold; payout 0%; time-vested RSUs (from 2022 LTIP) vested 100% ratably .
| LTIP Component | FY 2022 Grant Result | FY 2023 In-Cycle | FY 2024 Grant |
|---|---|---|---|
| PSUs – 3Y Relative TSR | Below Threshold; 0% payout | Target/threshold counts reported (to vest Mar 15, 2026) | Target 6,916 units (max 13,832) |
| PSUs – 3Y Relative Net Flow | Below Threshold; 0% payout | Target/threshold counts reported (to vest Mar 15, 2026) | Target 6,916 units (max 13,832) |
| Time-vested RSUs | Vests ratably Mar 15, 2023–2025 | 33% tranches Mar 15, 2025–2026 | Vests ratably Mar 15, 2025–2027; 6,917 units |
Equity Ownership & Alignment
| Item | Data |
|---|---|
| Beneficial ownership | 265,667 shares; 3.8% of outstanding . |
| Ownership guidelines | CEO minimum 5x salary; all NEOs in compliance; CEO well above guideline . |
| Anti-hedging | Hedging prohibited for directors and executive officers . |
| Pledging | No explicit pledging disclosure; not specified in proxy . |
| Options | Company practice is RSUs/PSUs only; no stock options/SARs granted . |
| Vested vs unvested (as of 12/31/2024) | Unvested RSUs: 2,445 (2022), 6,235 (2023), 6,917 (2024) . Unearned PSUs reported: 9,352 (2023 target), 4,676 (2023 threshold), 3,458 + 3,458 (2024 reporting placeholders) . |
| 2024 stock vested | 10,767 shares; $2,490,730 value realized on vesting . |
Insider selling pressure:
- RSU vesting concentrates around March 15 annually (2025–2027 for 2024 grants), which can trigger tax withholding transactions; value realized in 2024 was $2.49 million, indicating potential near-date supply from withholdings though actual open-market sales are not disclosed here .
Employment Terms
| Provision | Terms |
|---|---|
| Severance Plan (non-CIC) | CEO: 18 months base salary; 1.5x average of prior two years annual incentive; pro-rata current year incentive; 12 months subsidized medical/dental; 6 months outplacement; equity acceleration rules per award agreements . |
| Change-in-Control (CIC) Agreement | Double trigger within 2 years post-CIC; 2.5x base salary + target annual cash incentive; 2.5 years benefits; full vesting of equity; pro-rata current annual incentive (or target if greater) and pro-rata long-term awards at target; 401(k)/Excess Plan contribution equivalent for 2.5 years; outplacement; excise tax gross-up subject to 10% threshold; auto-renews annually unless notice 60 days prior . |
| Non-solicit under CIC | 2.5 years post-termination; confidentiality obligations continue . |
| Clawback | Mandatory recoupment for restatements per NYSE/Dodd-Frank; applies to incentive-based comp; 3-year look-back . |
| Deferred compensation | Excess Investment Plan participation; 2024 earnings in account $41,135; aggregate balance $238,372 (no 2024 deferrals or company contributions) . |
CIC economics illustrated:
- If terminated in connection with a CIC as of 12/29/2024, total value of severance, accelerated equity, and benefits estimated at $21,548,355 (includes $1,625,000 base, $8,000,000 annual incentive component, $3,200,000 target annual incentive, $8,646,074 accelerated equity, benefits/outplacement, etc.) .
Board Governance
- Dual role: Aylward is CEO and a Director; the Board has an independent Chairman (Timothy A. Holt), and independent directors meet in regular executive sessions, which mitigates CEO/director dual-role concerns .
- Committees: Audit, Compensation, Governance are fully independent; CEO is not a committee member .
- Attendance: In 2024, each director attended at least 75% of Board and committee meetings; the Board held 11 meetings .
- Director compensation: CEO does not receive director compensation; non-employee directors receive retainers paid 50% cash/50% equity, with committee chair/member fees; share ownership guideline is 4x cash retainer for directors .
Director Compensation (for context; CEO as director)
- CEO receives no separate director pay .
Compensation Peer Group and Say-on-Pay
- Executive compensation peer group (2024): Acadian Asset Management (formerly BrightSphere), Affiliated Managers Group, AllianceBernstein, Artisan Partners, Cohen & Steers, Federated Hermes, Janus Henderson Investors, Victory Capital, WisdomTree .
- Say-on-Pay: 93% approval in 2024; committee maintained program structure given strong support; ongoing shareholder engagement through 2024–2025 covered ~58% of shares outstanding .
Performance & Track Record
- Financial/operational highlights 2024: AUM $175.0B (+2% YoY); total sales $26.8B (+3.5% YoY) with strong ETF (+243%), retail separate accounts (+29%), global funds (+32%); net flows -$10.4B reflecting industry mix headwinds; operating income $182.5M (+20.5% YoY); diluted EPS $16.89; diluted EPS, as adjusted $26.33 (+20% YoY); 1-year TSR -5.5% vs S&P 500 +23.3%; 3-year TSR -17.8% vs Financial Peers +10.0% .
- Strategic execution under Aylward: product diversification (new ETFs ASMF, KMID, PCLO; UCITS launches; retail separate accounts), distribution optimization (RIA coverage, institutional team expansion), operating platform enhancements (onboarding managers; data/reporting), disciplined capital return (dividend +18% to $2.25; $45M buybacks) .
Compensation Structure Analysis
- Mix and risk: 90.8% of 2024 CEO target pay is variable (at-risk); long/short incentive mix target 50%/50% maintained; LTIs 100% stock-based with 50% performance-conditioned PSUs .
- Metric rigor: 2024 targets raised vs 2023 (e.g., EPS, as adjusted +22%; gross sales rate +130 bps); relative metrics require above-median performance for target payout (45th percentile) .
- Pay-for-performance evidence: 2022–2024 PSUs paid 0% on both metrics; CEO annual incentive reduced vs target despite sequential improvements, reflecting below-target aggregate performance .
Fixed and Variable Pay Tables
| Component | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Stock Awards ($) | 3,200,000 | 3,200,000 | 3,200,000 |
| Non-Equity Incentive ($) | 2,700,000 | 2,800,000 | 3,000,000 |
| Total Compensation ($) | 6,515,250 | 6,616,500 | 6,858,917 |
Equity Grant and Vesting Detail (2024 cycle)
| Grant Type | Grant Date | Units/Value | Vesting |
|---|---|---|---|
| PSUs – Relative TSR | Mar 15, 2024 | Target 6,916; Max 13,832; $800,000 fair value | 3-year performance through 12/31/2026; converts to RSUs for vesting per plan . |
| PSUs – Relative Net Flow | Mar 15, 2024 | Target 6,916; Max 13,832; $800,000 fair value | 3-year performance through 12/31/2026; converts to RSUs for vesting per plan . |
| RSUs – Time-Vested | Mar 15, 2024 | 6,917 units; $1,600,000 fair value | Ratable vesting Mar 15, 2025, 2026, 2027 . |
Board Service History, Committees, Dual-Role Implications
- Board tenure: Director since 2008 .
- Committees: CEO is not on Audit, Compensation, or Governance committees, which are fully independent .
- Leadership structure: Independent Chairman (Holt) with regular independent director executive sessions; Board reviews leadership structure annually with third-party evaluations—mitigating CEO/director independence concerns .
Risk Indicators & Red Flags
- CIC gross-up: Legacy agreement includes excise tax gross-up subject to 10% threshold; shareholder-unfriendly in many frameworks but bounded by threshold mechanism .
- Clawback: NYSE/Dodd-Frank-compliant clawback policy implemented—reduces risk of windfall pay upon restatements .
- Hedging: Prohibited for executives/directors; pledging not explicitly addressed in this proxy .
- Say-on-Pay: Strong support at 93%—low risk of investor backlash on pay design .
Investment Implications
- Alignment: High direct ownership (3.8%) and stringent stock ownership guidelines plus 100% equity-based LTIs align Aylward with long-term shareholder value; multiple zero-pay PSU outcomes demonstrate genuine pay-for-performance discipline .
- Retention and transaction risk: CIC protection is robust (2.5x cash components, full equity vesting, benefits), potentially increasing retention under uncertainty but raising transaction costs in a sale; presence of excise tax gross-up is a governance headwind to some investors .
- Near-term flow dynamics: RSU vest schedules around March 15 can cause mechanical share withholdings for taxes; 2024 vesting realized $2.49M value, which may translate to modest technical supply near vest dates absent offsetting buybacks .
- Performance sensitivity: Annual incentives are tightly linked to sales/net flows, margins and EPS, while PSUs require above-median TSR/net flows; given peer-lagging TSR and net flows, variable compensation will remain constrained unless distribution/product initiatives sustain mix improvement (ETFs, global funds, separate accounts) .