gblproxy041409.htm
GAMCO
INVESTORS, INC.
One
Corporate Center
Rye,
New York 10580
________________
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
To
Be Held on May 5, 2009
________________
We
cordially invite you to attend the Annual Meeting of Shareholders of GAMCO
Investors, Inc. at the Greenwich Library, 101 West Putnam Avenue,
Greenwich, CT 06830, on Tuesday, May 5, 2009, at 8:30 a.m. At the
meeting, we will ask shareholders to:
1.
|
Elect
a Board of seven directors;
|
2.
|
To
ratify the appointment of Deloitte & Touche LLP as the Company’s
independent registered public accounting firm for the year ending December
31, 2009; and
|
3.
|
Vote
on any other business which properly comes before the
meeting.
|
At the
meeting, we will also review our 2008 financial results and outlook for the
future. We will be available to answer your questions.
Shareholders
of record at the close of business on March 31, 2009 are entitled to vote
at the meeting or any adjournments or postponements thereof. Please
read the attached proxy statement carefully and vote your shares promptly
whether or not you are able to attend the meeting.
We
encourage all shareholders to attend the meeting.
By Order
of the Board of Directors
JEFFREY
M. FARBER
Executive
Vice President-Finance/Corporate Development
and
Chief Financial Officer
April 13,
2009
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 5, 2009
This Proxy Statement, along with the
GAMCO 2008 Annual Report on Form 10-K for the year ended December 31, 2008 are
available free of charge on the following website: http://www.gabelli.com/corporate/latest_sec.html
GAMCO
INVESTORS, INC.
_______________
PROXY
STATEMENT
_______________
ANNUAL
MEETING OF SHAREHOLDERS
_______________
May 5,
2009
_______________
INTRODUCTION;
PROXY VOTING INFORMATION
Unless we
have indicated otherwise, or the context otherwise requires, references in this
report to “GAMCO Investors, Inc.,” “GAMCO,” “the Company,” “GBL,” “we,” “us” and
“our” or similar terms are to GAMCO Investors, Inc., its predecessors and its
subsidiaries.
We are
sending you this proxy statement and the accompanying proxy card in connection
with the solicitation of proxies by the Board of Directors of GAMCO Investors,
Inc. for use at our 2009 Annual Meeting of Shareholders (“the Annual Meeting”)
and at any adjournments or postponements thereof. The purpose of the meeting is
to elect directors, ratify the appointment of the Company’s independent
registered public accounting firm and act upon any other matters properly
brought to the meeting. We sent you this proxy statement, the proxy card, and
our annual report on Form 10-K (containing our financial statements and other
financial information for the year ended December 31, 2008) on or
about April 13, 2009. The annual report on Form 10-K, however, is not part of
the proxy solicitation materials.
Shareholders
of record at the close of business on March 31, 2009, the record date, are
entitled to notice of and to vote at the Annual Meeting. On this record date, we
had outstanding 7,381,283 shares of Class A Common Stock, par value
$.001 per share (“Class A Stock”), and 20,370,931 shares of
Class B Common Stock, par value $.001 per share (“Class B
Stock”).
The
presence, in person or by proxy, of a majority of the aggregate voting power of
the shares of Class A Stock and Class B Stock outstanding on
March 31, 2009 shall constitute a quorum for the transaction of business at
the Annual Meeting. The Class A Stock and Class B Stock vote together
as a single class on all matters. Each share of Class A Stock is entitled
to one vote per share and each share of Class B Stock is entitled to ten
votes per share. Directors who receive a plurality of the votes cast at the
Annual Meeting by the holders of Class A Stock and Class B Stock
outstanding on March 31, 2009, voting together as a single class, are
elected to serve until the 2010 Annual Meeting or until their successors are
duly elected and qualified. Any other matters will be determined by a majority
of the votes cast at the Annual Meeting. Abstentions and broker non-votes will
count for purposes of establishing a quorum, but will not count as votes cast or
on any matter. Accordingly, abstentions and broker non-votes will have no effect
on the proposal to ratify Deloitte & Touche LLP as GAMCO’s independent
registered public accounting firm.
We will
pay for the costs of soliciting proxies and preparing the meeting materials. We
ask securities brokers, custodians, nominees and fiduciaries to forward meeting
materials to our beneficial shareholders as of the record date, and will
reimburse them for the reasonable out-of-pocket expenses they incur. Our
directors, officers and staff members may solicit proxies personally or by
telephone, facsimile, e-mail or other means, but will not receive additional
compensation.
If you
are the beneficial owner, but not the record holder, of shares of our
Class A Stock, your broker, custodian or other nominee may only deliver one
copy of this proxy statement and our 2008 Annual Report to multiple shareholders
who share an address unless we have received contrary instructions from one or
more of the shareholders. We will deliver promptly, upon written or oral
request, a separate copy of this proxy statement and our 2008 Annual Report to a
shareholder at a shared address to which a single copy of the documents was
delivered. A shareholder who wishes to receive a separate copy of the proxy
statement and annual report, now or in the future, or who wishes to receive
directions to the meeting site, should submit this request by writing to our
Secretary at GAMCO Investors, Inc., One Corporate Center, Rye, NY 10580-1422 or
by calling him at (914) 921-5000. Beneficial owners sharing an address who
are receiving multiple copies of proxy materials and annual reports and who wish
to receive a single copy of such materials in the future will need to contact
their broker, custodian or other nominee to request that only a single copy of
each document be mailed to all shareholders at the shared address in the
future.
The Board
of Directors has selected each of Mario J. Gabelli, Douglas R. Jamieson and
Christopher J. Michailoff to act as proxies. When you sign and return your proxy
card, you appoint each of Messrs. Mario Gabelli, Jamieson and Michailoff as
your representatives at the meeting. You may revoke your proxy at any time
before the meeting by delivering a letter of revocation to our Secretary at
GAMCO Investors, Inc., One Corporate Center, Rye, NY 10580-1422, by properly
submitting another proxy bearing a later date or by voting in person at the
meeting. The last proxy properly submitted by you is the one that will be
counted.
Brokerage
firms have the authority under New York Stock Exchange rules to vote their
clients’ unvoted shares on certain routine matters, one of which is the election
of directors. If you do not vote your proxy, your brokerage firm may choose to
vote for you or leave your shares unvoted. We urge you to respond to your
brokerage firm to ensure that your proxy voting instructions are
followed.
CORPORATE
GOVERNANCE
GAMCO
continually strives to maintain the highest standards of ethical conduct:
reporting results with accuracy and transparency and maintaining full compliance
with the laws, rules and regulations that govern the Company’s
businesses. The Company is active in ensuring its governance
practices are at the leading edge of best practices.
ELECTION
OF DIRECTORS
Eight
directors currently serve on our Board of Directors with the addition of Ms.
Elisa M. Wilson on February 24, 2009. Our Nominating Committee recommended, and
the Board approved, the nomination of each of seven of the eight directors for
election to the Board to hold office until the next annual meeting of
shareholders and until their respective successors are duly elected and
qualified. Mr. John Gabelli, who has been a director since February
2004, has decided not to stand for reelection. Directors who receive
a plurality of the votes cast at the meeting shall be elected.
All
properly executed proxies received in time to be tabulated for the meeting will
be voted FOR the
election of the nominees named below, unless otherwise indicated on the proxy.
If any nominee becomes unable or unwilling to serve between now and the meeting,
your proxies may be voted FOR the election of a replacement designated by the
Board of Directors.
The
Nominees
The
following are brief biographical sketches of the seven nominees. All of the
nominees are currently directors. Unless otherwise noted, the
nominated directors have been officers of the organizations named below or of
affiliated organizations as their principal occupations for more than five
years. Ages are as of March 31, 2009.
The Board
of Directors recommends that you vote “FOR” all of the following
nominees:
Mario J. Gabelli, age 66,
has served as Chairman, Chief Executive Officer, Chief Investment Officer —
Value Portfolios and a director of the Company since November 1976. In
connection with those responsibilities, he serves as director or trustee of
registered investment companies managed by the Company and its affiliates
(“Gabelli Funds”). Mr. Gabelli serves as Chairman of LICT Corporation, a
public company engaged in multimedia and other services, director of CIBL, Inc.,
a holding company with operations in broadcasting and wireless
telecommunications, and Chairman and Chief Executive Officer of Morgan Group
Holdings, Inc., a public holding company. In addition,
Mr. Gabelli is the Chief Executive Officer, a director and the controlling
shareholder of GGCP, Inc., a private company which owns a majority of our
Class B Stock, and the Chairman of MJG Associates, Inc., which acts as a
investment manager of various investment funds and other accounts. Mr. Gabelli
is also the Chief Executive Officer of Greenwich PMV Acquisition Corp., a blank check company
formed for the purpose of acquiring one or more operating businesses or assets
for which GGCP, Inc. is the sponsor, and the Chairman of the Gabelli
Entertainment & Telecommunications Acquisition Corp., a blank
check company formed for the purpose of acquiring one or more operating
businesses or assets in the media, entertainment, telecommunications or
regulated utilities industries for which the Company is the sponsor. Mr. Gabelli serves as Overseer
of Columbia University Graduate School of Business and Trustee of Boston College
and Roger Williams University. He also serves as Director of The Winston
Churchill Foundation, The National Italian American Foundation, The
American-Italian Cancer Foundation, The Foundation for Italian Art &
Culture, the Mentor/National Mentoring Partnership and Patron’s Committee for
the Immaculate Conception School, and the Wiegand Foundation. He is
also Chairman of the Gabelli Foundation, Inc.
Edwin L. Artzt, age 78,
has been a director of the Company since May 2004. Mr. Artzt has served as
a senior advisor to GGCP, Inc. since September 2003 through December 2008 and
was a senior advisor to Kohlberg, Kravis, Roberts & Co., a private
equity firm, from April 2001 to April 2008. He was the Chairman of the Board and
Chief Executive Officer of The Procter & Gamble Company, a global
manufacturer of consumer products, from 1990 until 1995. He also served as the
senior director of Barilla S.p.A. Italy from 1995 until 1998. Mr. Artzt is
a former director (retired) of American Express, Delta Airlines and
GTE.
Raymond C. Avansino, Jr., age 65, has been a
director since January 2008. Mr. Avansino has been the Chairman of the Board and
Chief Executive Officer of the E.L. Wiegand Foundation of Reno, Nevada, a Nevada
private charitable trust, since 1982. He is counsel to the Nevada law
firm of Avansino, Melarkey, Knobel, and Mulligan, a firm he founded in
1973. Mr. Avansino is the President of Miami Oil Producers, Inc., a
corporation with investments in oil and gas properties, real properties and
securities. He served as President and Chief Operating Officer of
Hilton Hotels Corporation from 1993 to 1996, and was a member of the Nevada
Gaming Commission from 1981 to 1984, Mr. Avansino serves as a
Commissioner of the Nevada State Athletic Commission. Mr. Avansino
was a director of the Company from 2000 to 2006.
Richard L. Bready,
age 64, has been a director of the Company since May 2006.
Mr. Bready has been Chairman and Chief Executive Officer of Nortek, Inc., a
manufacturer and distributor of building products for residential and commercial
applications, since
December 1990. He joined Nortek, Inc. in 1975 as Treasurer, was elected a
director in 1976 and was elected Executive Vice President and Chief Operating
Officer in 1979. Prior to joining Nortek, Inc., Mr. Bready was an
independent financial consultant and an audit manager with a major public
accounting firm. He serves on the Board of Directors/Trustees of Professional
Facilities Management, Inc.; Newport International Film Festival; Providence
Performing Arts Center; Rhode Island Public Expenditure Council (RIPEC); the
National Conference of Christians and Jews; the YMCA of Greater Providence;
Saint Anselm College; Chairman of Roger Williams University; and is a Trustee
Emeritus of Trinity Repertory Company. Mr. Bready also serves as a director
of the Bank RI and Bancorp Rhode Island on the Advisory Board of Sterling
Investment Partners. He is a Corporation Member and serves on the National
Council, Alumni Executive Forum and Audit Committee of Northeastern University.
Mr. Bready is a Corporation Member of Rhode Island Hospital,
Johnson & Wales University and Greenwich PMV Acquisition Corp., a blank
check company formed for the purpose of acquiring one or more operating
businesses or assets.
Eugene R. McGrath,
age 67, has been a director of the Company since January 2007.
Mr. McGrath served as Chairman, President and Chief Executive Officer of
Consolidated Edison, Inc. (“Con. Edison”), a public utility company, from
October 1997 until September 2005 and Chairman until February 2006. He has
served as Chairman and Chief Executive Officer of Con. Edison’s subsidiary,
Consolidated Edison Company of New York, Inc., since September 1990.
Mr. McGrath is on the Board of Directors of Con Edison, AEGIS Insurance
Services, Schering-Plough, and the Gabelli Entertainment &
Telecommunications Acquisition Corp., a blank check company formed for the
purpose of acquiring one or more operating businesses or assets in the media,
entertainment, telecommunications or regulated utilities industries.
Robert S. Prather, Jr.,
age 64, has been a director of the Company since May 2004 and serves as the
lead independent director. Mr. Prather has been the President and Chief
Operating Officer of Gray Television, Inc., a television broadcast company, since September 2002. He was
an Executive Vice President of Gray Television from 1996 until September 2002.
Mr. Prather is also a director of Gray Television, Inc. He has served as
Chairman of the Board at Triple Crown Media, Inc., a publishing and
communication company, since December 2005. He has also served as Chief
Executive Officer and director of Bull Run Corporation, a sports and affinity
marketing and management company from 1992 until its merger into Triple Crown
Media, Inc. in 2005. Mr. Prather is also on the Board of Directors of
Nioxin Research Laboratories, Inc., Georgia World Congress Center, Draper
Holdings Business Trust, Enterprise Bank, Swiss Army Brands, Inc. and Greenwich
PMV Acquisition Corp., a blank check company formed for the purpose of acquiring
one or more operating businesses or assets.
Elisa M. Wilson, age 36, has
been a director of the Company since February 2009. Ms. Wilson is
President and a trustee of the Gabelli Foundation, Inc., a Nevada private
charitable trust. She earned a BA from Boston College and a MA/EDM from Columbia
University. Ms. Wilson has been a professional staff member of GAMCO
since 1999 but has been on an unpaid leave for several years. Elisa
Wilson is the daughter of Mario Gabelli.
The Board
of Directors has established guidelines that it uses in determining director
independence that are based on the director independence standards of the New
York Stock Exchange. A copy of these guidelines can be found as Exhibit A.
These guidelines are also attached to the Board’s Corporate Governance
Guidelines, which are available on our web site at www.gabelli.com
(under Corporate Information, Corporate Governance). A copy of these guidelines
may also be obtained upon request from our Secretary. In making its
determination with respect to Mr. Prather, the Board considered that the
investment advisory subsidiaries of the Company collectively own on behalf of
their investment advisory clients as of March 31, 2009 approximately 3.65% of
the Class A Common Stock and 7.49% of the Common Stock of Gray Television,
Inc. and 10.75% of the Common Stock of Triple Crown Media, Inc. as of February
28, 2009. This ownership represents approximately 5.23% and 10.75% of the total
voting power of Gray Television, Inc. and Triple Crown Media, Inc.,
respectively. Mr. Prather serves as President and Chief Operating Officer
and a director of Gray Television, Inc. and Chairman of the Board of Triple
Crown Media, Inc. The Board further considered the difficulty the Company would
encounter in attempting to unilaterally affect the management of Gray
Television, Inc. or Triple Crown Media, Inc. through the use of its voting
power. In making its determination with respect to Mr. Avansino, the Board
considered that he has a daughter who works for the Company in a non-executive
role, as described under “Certain Relationships and Related
Transactions”. With respect to these relationships, the Board
considered Messrs. Avansino’s and Prather’s lack of economic dependence on
the Company and other personal attributes that need to be possessed by
independent-minded directors. Based on these guidelines and considerations, the
Board concluded that the following directors were independent and determined
that none of them had a material relationship with us which would impair his
ability to act as an independent director: Messrs. Avansino, Bready,
McGrath and Prather.
The table
below sets forth certain information regarding the nominees.
Name
|
|
Audit Committee
|
|
Governance Committee
|
|
Compensation
Committee
|
|
Nominating Committee
|
Mario
J. Gabelli
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
Edwin
L. Artzt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raymond
C. Avansino, Jr.
|
|
X
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard
L. Bready
|
|
X
|
|
X
(Chair)
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
Eugene
R. McGrath
|
|
X
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
S. Prather, Jr.
|
|
X
(Chair)
|
|
|
|
X
(Chair)
|
|
|
|
|
|
|
|
|
|
|
|
Elisa
M. Wilson
|
|
|
|
|
|
|
|
|
RATIFICATION
OF APPOINTMENT OF
INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS
On March
27, 2009, after a competitive proposal process, the Audit Committee of the
Company approved the engagement of Deloitte & Touche LLP as the Company's
independent registered public accounting firm for the fiscal year ending
December, 31, 2009 and dismissed Ernst & Young, LLP (“EY”) from that
role.
We are
asking our shareholders to ratify the selection of Deloitte & Touche
LLP. In accordance with our governance documents, the Board believes
that such submission is consistent with best practices in corporate governance
and is an opportunity for shareholders to provide direct feedback to the Board
of Directors on an important issue of corporate governance. In the
event that the shareholders do not approve the selection of Deloitte &
Touche LLP, the Audit Committee will reconsider the selection of Deloitte &
Touche LLP.
The Board
recommends that shareholders vote FOR ratification of Deloitte
& Touche LLP as the Company’s independent registered public accountants for
the year ended December 31, 2009.
The
Board of Directors and Committees
During
2008, there were six meetings of the Board of Directors one of which was a
meeting of the independent directors. Our Board of Directors has an Audit
Committee, a Compensation Committee, a Governance Committee and a Nominating
Committee. We are deemed to be a “controlled company” as defined by the
corporate governance standards of the New York Stock Exchange by virtue of the
fact that GGCP, Inc. holds more than 50% of the voting power. As a result, we
are exempt from the corporate governance standards of the New York Stock
Exchange requiring that a majority of the Board of Directors be independent and
that all members of the Governance, Nominating and Compensation Committees be
independent.
Our
non-management directors meet, without any management directors or employees
present, immediately after our regular quarterly Board meetings. At least once
each year, our independent directors meet in a separate executive session.
Mr. Prather serves as lead independent director and chairs the meetings of
our non-management and independent directors.
The Audit
Committee regularly meets with our independent registered public accounting firm
to ensure that satisfactory accounting procedures are being followed and that
internal accounting controls are adequate, reviews fees charged by the
independent registered public accounting firm and selects our independent
registered public accounting firm. Messrs. Avansino, Bready, McGrath and
Prather, each of whom is an independent director as defined by the
corporate governance standards of the New York Stock Exchange and the Company’s
guidelines as set forth in Exhibit A, are members of the Audit Committee.
Mr. Prather meets the standards of an “audit committee financial expert,”
as defined by the applicable securities regulations. The Audit Committee met six
times during 2008. A copy of the Audit Committee’s charter is posted on our web
site at www.gabelli.com
(under Corporate Information, Corporate Governance). A shareholder may also
obtain a copy of the charter upon request from our Secretary.
As is
further described in the Report of the Compensation Committee, this committee
reviews the amounts paid to the chief executive officer for compliance with the
terms of his employment agreement and generally reviews benefits and
compensation for the other executive officers. It also administers our Stock
Award and Incentive Plan. Messrs. Bready and Prather, each of whom is an
independent director, are the members of the Compensation Committee. The
Compensation Committee met three times during 2008. A copy of the Compensation
Committee’s charter is posted on our web site at www.gabelli.com
(under Corporate Information, Corporate Governance). A shareholder may also
obtain a copy of the charter upon request from our Secretary.
The
Governance Committee advises the Board on governance policies and procedures.
Messrs. Avansino, Bready and McGrath, each of whom is an independent
director, are the members of the Governance Committee. The Governance
Committee met once in 2008. A copy of the Governance Committee’s
charter is posted on our web site at www.gabelli.com
(under Corporate Information, Corporate Governance). A shareholder may also
obtain a copy of the charter upon request from our Secretary.
The
Nominating Committee advises the Board of Directors on the selection and
nomination of individuals to serve as directors of GAMCO. Nominations for
director, including nominations for director submitted to the committee by
shareholders, are evaluated according to our needs and the nominee’s knowledge,
experience and background. Messrs. Mario Gabelli and John Gabelli are the
members of the Nominating Committee. John Gabelli has elected not to stand for
reelection. Messrs. Mario Gabelli and John Gabelli are not
independent directors as defined by the corporate governance standards of the
New York Stock Exchange. The Nominating Committee met once in 2008. A copy of
the Nominating Committee’s charter is posted on our web site at www.gabelli.com
(under Corporate Information, Corporate Governance). A shareholder may also
obtain a copy of the charter upon request from our Secretary. The
Company anticipates that the Board will appoint Ms. Elisa Wilson to the
Nominating Committee at the next regular Board meeting.
The
Nominating Committee does not have a formal policy by which shareholders may
recommend director candidates. The Board of Directors believes it is
appropriate not to have such a policy because GGCP, Inc. holds the majority of
the voting power. Nevertheless, the Nominating Committee will
consider appropriate candidates recommended by shareholders. A shareholder
wishing to submit such a recommendation should send a letter to our Secretary at
One Corporate Center, Rye, NY 10580 by December 31, 2009. The mailing envelope
must contain a clear notation that the enclosed letter is a “Director Nominee
Recommendation.” The letter must identify the author as a shareholder and
provide a brief summary of the candidate’s qualifications. At a minimum,
candidates recommended for election to the Board of Directors must meet the
independence standards of the New York Stock Exchange as well as any criteria
used by the Nominating Committee.
During
2008, each director attended at least 80% of the meetings of the Board and the
Board committees of which he was a member. We do not have a policy regarding
directors’ attendance at our annual meetings. A majority of our
directors attended our 2008 Annual Meeting of Shareholders.
Compensation
of Directors
Mr. Mario
Gabelli receives no compensation for serving as a director of the Company. All
non-executive directors other than Mr. Mario Gabelli receive annual cash
retainers and meeting fees as follows:
Board
Member..................................................................................
|
$50,000
|
Audit
and Compensation Committee
Chairman..........................
|
$10,000
|
Attendance
in person at Board or Committee Meeting.............
|
$2,500
|
Attendance
by telephone at Board or Committee Meeting......
|
$2,500
|
Our
directors are also eligible to receive stock options. In May 2004, Messrs. Artzt
and Prather were each granted options to purchase 10,000 shares of Class A Stock
at an exercise price of $39.65. In November 2005, Mr. John Gabelli was granted
options to purchase 10,000 shares of Class A Stock at an exercise price of
$44.90 per share. In May 2006, Mr. Bready was granted options to purchase 10,000
shares of Class A Stock at an exercise price of $39.55 per share. In February
2007, Mr. McGrath was granted options to purchase 10,000 shares of Class A stock
at an exercise price of $39.90 per share. In May 2008, Mr. Avansino
was granted options to purchase 6,000 shares of Class A stock at an exercise
price of $51.74. Ms.
Wilson, who was elected as a director in February 2009, has not received any
options for serving on the Board of Directors. She continues to hold
options to purchase 2,500 shares of Class A Stock at an exercise price of $16
per share which were granted in February 2000 and options to purchase 7,500
shares of Class A Stock at an exercise price of $31.62 per share which were
granted in February 2001. These options were granted to her in her
capacity as a professional staff member.
All
of the stock options held by our directors were granted at 100% of fair market
value on the date of grant and have a ten-year term. The options granted to our
directors become exercisable with respect to 75% of the shares after three years
from the date of grant and with respect to the remaining 25% of the shares after
four years from the date of grant. No existing option holders were
entitled to receive any adjustment to their rights under their option grants for
the March 2009 distribution of Teton Advisors, Inc. shares made to the Company’s
shareholders.
One of
our directors, Mr. John Gabelli, was also granted restricted stock awards during
2007 in connection with his role as a professional staff
member. Subject to Mr. John Gabelli’s continued employment, these
amounts become vested with respect to 30% of the shares after three years from
the date of grant and with respect to the remaining 0% of the shares after five
years from the date of the grant. No RSA holders, including this
director, were entitled to receive distribution of or value for the Teton
Advisors, Inc. shares that the Company made to its shareholders in March
2009.
The
following table sets forth fees, awards, and other compensation paid to or
earned by our non-executive directors in 2008.
Director
Compensation Table for 2008
Name
|
|
Fees
Earned
or
Paid
in
Cash
($)
|
|
Restricted
Stock
Awards
($)
|
|
|
Option
Awards
($)
|
|
|
All
Other
Compensation
($)
|
|
|
Total
($)
|
Edwin
L. Artzt
|
|
60,000
|
|
-0-
|
|
|
-0-
|
|
|
-0-
|
|
|
60,000
|
Raymond
C. Avansino, Jr.
|
|
80,000
|
|
-0-
|
|
|
16,938
|
(a) |
|
-0-
|
|
|
96,938
|
Richard
L. Bready
|
|
85,000
|
|
-0-
|
|
|
36,375
|
(b) |
|
-0-
|
|
|
121,375
|
John
D. Gabelli
|
|
62,500
|
|
30,480
|
(c) |
|
40,591
|
(d) |
|
462,037
|
(e) |
|
595,608
|
Eugene
McGrath..
|
|
77,500
|
|
-0-
|
|
|
34,375
|
(f) |
|
-0-
|
|
|
111,875
|
Robert
S. Prather, Jr.
|
|
105,000
|
|
-0-
|
|
|
-0-
|
|
|
-0-
|
|
|
105,000
|
Elisa
M. Wilson (g)
|
|
-0-
|
|
-0-
|
|
|
-0-
|
|
|
-0-
|
|
|
-0-
|
(a)
|
Mr.
Avansino was granted options to purchase 6,000 shares of Class A Stock on
May 22, 2008 with a grant date fair value of $13.55 per share and an
exercise price of $51.74 per share, equal to the closing price of Class A
Stock on May 21, 2008. This column reflects the dollar amount of
compensation expense recognized for financial statement reporting purposes
for fiscal year ended December 31, 2008 in accordance with FAS
123(R). See Note I to our 2008 Annual Report on Form
10-K for assumptions used in the valuation of these
awards. As of December 31, 2008, Mr. Avansino held options to
purchase 6,000 shares of Class A
Stock.
|
(b)
|
Mr.
Bready was granted options to purchase 10,000 shares of Class A Stock on
May 8, 2006 with a grant date fair value of $11.64 per share and an
exercise price of $39.55 per share, equal to the closing price
of Class A Stock on that day. This column reflects the dollar amount of
compensation expense recognized for financial statement reporting purposes
for fiscal year ended December 31, 2008 in accordance with FAS
123(R). See Note I to our 2008 Annual Report on Form
10-K for assumptions used in the valuation of these
awards. As of December 31, 2008, Mr. Bready held options to
purchase 10,000 shares of Class A
Stock.
|
(c)
|
Mr.
John Gabelli was granted 2,000 shares of restricted stock with an
effective grant date, under FAS 123(R) and FSP 123(R)-2, of December 20,
2007 and with a grant date fair value of $63.50 per share, equal to the
closing price of Class A Stock on that day. This column
reflects the dollar amount of compensation expense recognized for
financial statement reporting purposes for fiscal year ended December 31,
2008 in accordance with FAS 123(R). See Note I to our 2008
Annual Report on Form 10-K for assumptions used in the valuation of these
awards. As of December 31, 2008, Mr. John Gabelli held 2,000
shares of restricted stock.
|
(d)
|
Mr.
John Gabelli was granted options to purchase 10,000 shares of Class A
Stock on November 15, 2005 with a grant date fair value of $11.99 per
share and an exercise price of $44.90 per share, equal to the closing
price of Class A Stock on that day. This column reflects the
dollar amount of compensation expense recognized for financial statement
reporting purposes for fiscal year ended December 31, 2008 in accordance
with FAS 123(R). See Note I to our 2008 Annual Report on Form
10-K for assumptions used in the valuation of these awards. As
of December 31, 2008, Mr. John Gabelli held options to purchase 10,000
shares of Class A Stock.
|
(e)
|
Mr.
John Gabelli, who is employed as a non-executive professional staff member
by one of our subsidiaries in a sales and marketing role, received
$462,037 in incentive-based variable compensation based on the revenues
generated by certain investment advisory clients for which he serves as
relationship manager. His total compensation may be summarized as
follows:
|
Director Fees ($)
|
|
Director
Option Award ($)
|
|
Total
Director
Compensation ($)
|
|
Relationship
Manager
Compensation ($)
|
|
Employee Restricted
Stock
Award ($)
|
|
Total ($)
|
62,500
|
|
40,591
|
|
103,091
|
|
462,037
|
|
30,480
|
|
595,608
|
(f)
|
Mr.
McGrath was granted options to purchase 10,000 shares of Class A Stock on
February 6, 2007 with a grant date fair value of $11.00 per share and an
exercise price of $39.90 per share, equal to the closing price of Class A
Stock on that day. This column reflects the dollar amount of compensation
expense recognized for financial statement reporting purposes for the
fiscal year ended December 31, 2008 in accordance with FAS
123(R). See Note I to our 2008 Annual Report on Form 10-K for
assumptions used in the valuation of these awards. As of December 31,
2008, Mr. McGrath held options to purchase 10,000 shares
of Class A Stock.
|
(g)
|
Ms.
Wilson, who was elected to serve as a director by the Board of Directors
in February 2009, earned no compensation from the Company during
2008.
|
Communications
with the Board of Directors
Our Board
of Directors has established a process for shareholders and other interested
parties to send communications to the Board of
Directors. Shareholders or other interested parties who wish to
communicate with the Board of Directors, the non-management or independent
directors, or a particular director may send a letter to our Secretary at GAMCO
Investors, Inc. One Corporate Center, Rye, NY 10580. The mailing envelope must
contain a clear notation indicating that the enclosed letter is a “Board
Communication” or “Director Communication.” All such letters must identify the
author and clearly state whether the intended recipients are all members of the
Board or just certain specified individual directors. The Secretary will make
copies of all such letters and circulate them to the appropriate director or
directors.
Code
of Business Conduct
We have
adopted a Code of Business Conduct (the “Code of Conduct”) that applies to all
of our officers, directors and staff members with additional requirements for
our principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions. The
Code of Conduct is posted on our web site at www.gabelli.com
(under Corporate Information, Corporate Governance). Any shareholder
may also obtain a copy of the Code of Conduct upon request. Our Code of Conduct
was revised on November 7, 2008. Shareholders may address a written
request for a printed copy of the Code of Conduct to our Secretary at GAMCO
Investors, Inc., One Corporate Center, Rye, New York 10580-1422. We intend to
satisfy the disclosure requirement regarding any amendment to, or a waiver of, a
provision of the Code of Conduct by posting such information on our web
site.
Transactions
with Related Persons
Our Board
has adopted written procedures governing the review, approval or ratification of
any transactions with related persons required to be reported in this proxy
statement. The procedures require that all related party transactions, other
than certain pre-approved categories of transactions, be reviewed and approved
by our Governance Committee or the Board of Directors. Under the procedures,
directors may not participate in any discussion or approval of related party
transactions in which they or a member of their immediate family is a related
person, except that they shall provide information concerning the transaction.
Only transactions that are found to be in the best interests of the Company will
be approved.
Currently,
we have a number of policies and procedures addressing conflicts of interest.
Our Code of Conduct addresses the responsibilities of our officers, directors
and staff to disclose conflicts of interest to our Legal/Compliance Department,
which determines whether the matter constitutes a related party transaction that
should be reviewed by our Governance Committee or Board of Directors. Generally,
matters involving employer-employee relationships including compensation and
benefits, ongoing arrangements that existed prior to our initial public offering
and financial service relationships including investments in our funds are not
presented for review, approval or ratification by our Governance Committee or
Board of Directors.
Furthermore,
our Certificate of Incorporation provides that no contract, agreement,
arrangement or transaction, or any amendment, modification or termination
thereof, or any waiver of any right thereunder, (each, a “Transaction”) between
GAMCO and:
(i) Mr. Mario
Gabelli, any member of his immediate family who is at the time an officer or
director of GAMCO and any entity in which one or more of the foregoing
beneficially own a controlling interest of the outstanding voting securities or
comparable interests (a “Gabelli”),
(ii) any
customer or supplier,
(iii) any
entity in which a director of GAMCO has a financial interest (a “Related
Entity”), or
(iv) one
or more of the directors or officers of GAMCO or any Related
Entity;
will be
voidable solely because any of the persons or entities listed in
(i) through (iv) above are parties thereto, if the standard specified below
is satisfied.
Further,
no Transaction will be voidable solely because any such directors or officers
are present at or participate in the meeting of the Board of Directors or
committee thereof that authorizes the Transaction or because their votes are
counted for such purpose, if the standard specified is satisfied. That standard
will be satisfied, and such Gabelli, the Related Entity, and the directors and
officers of GAMCO, or the Related Entity (as applicable) will be deemed to have
acted reasonably and in good faith (to the extent such standard is applicable to
such person’s conduct) and fully to have satisfied any duties of loyalty and
fiduciary duties they may have to GAMCO and its shareholders with respect to
such Transaction if any of the following four requirements are met:
(i) the
material facts as to the relationship or interest and as to the Transaction are
disclosed or known to the Board of Directors or the committee thereof that
authorizes the Transaction, and the Board of Directors or such committee in good
faith approves the Transaction by the affirmative vote of a majority of the
disinterested directors on the Board of Directors or such committee, even if the
disinterested directors are less than a quorum;
(ii) the
material facts as to the relationship or interest and as to the Transaction are
disclosed or known to the holders of Voting Stock entitled to vote thereon, and
the Transaction is specifically approved by vote of the holders of a majority of
the voting power of the then outstanding Voting Stock not owned by such Gabelli
or such Related Entity, voting together as a single class;
(iii) the
Transaction is effected pursuant to guidelines that are in good faith approved
by a majority of the disinterested directors on the Board of Directors or the
applicable committee thereof or by vote of the holders of a majority of the then
outstanding voting Stock not owned by such Gabelli or such Related Entity,
voting together as a single class; or
(iv) the
Transaction is fair to GAMCO as of the time it is approved by the Board of
Directors, a committee thereof or the shareholders of GAMCO.
The
Certificate of Incorporation also provides that any such Transaction authorized,
approved, or effected, and each of such guidelines so authorized or approved, as
described in (i), (ii) or (iii) above, will be deemed to be entirely
fair to GAMCO and its shareholders, except that, if such authorization or
approval is not obtained, or such Transaction is not so effected, no presumption
will arise that such Transaction or guideline is not fair to GAMCO and its
shareholders. In addition, the Certificate of Incorporation provides that a
Gabelli will not be liable to GAMCO or its shareholders for breach of any
fiduciary duty that a Gabelli may have as a shareholder of GAMCO by reason of
the fact that a Gabelli takes any action in connection with any transaction
between such Gabelli and GAMCO. For purposes of these provisions, interests in
an entity that are not equity or ownership interests or that constitute less
than 10% of the equity or ownership interests of such entity will not be
considered to confer a financial interest on any person who beneficially owns
such interests.
Compensation
Committee Interlocks and Insider Participation
Our
Compensation Committee consists of Messrs. Bready and Prather. Neither of
these individuals has ever been an officer or employee of the
Company. During 2008, none of our executive officers served on the
board of directors or compensation committee of any entity that employed any
member of our Compensation Committee or served on the compensation committee of
any entity that employed any member of our Board of Directors.
INFORMATION
REGARDING EXECUTIVE OFFICERS
The
Company's executive officers are as follows:
Name
|
Position
|
|
|
Mario
J. Gabelli
|
Chairman,
Chief Executive Officer, Chief Investment Officer – Value Portfolios,
Director
|
|
|
Douglas
R. Jamieson
|
President,
Chief Operating Officer
|
|
|
Jeffrey
M. Farber
|
Executive
Vice President – Finance/Corporate Development, Chief Financial
Officer
|
|
|
Bruce
N. Alpert
|
Senior
Vice President
|
|
|
Henry
G. Van der Eb
|
Senior
Vice President
|
|
|
Kieran
Caterina
|
Vice
President, Finance Director, Co-Principal Accounting
Officer
|
|
|
Diane
M. LaPointe
|
Vice
President, Controller, Co-Principal Accounting
Officer
|
Biographical
information for Mr. Mario Gabelli appears above under “Election of
Directors – The Nominees”. Brief biographical sketches of our other executive
officers are set forth below. Ages are as of March 31,
2009.
Douglas R. Jamieson,
age 54, has served as President and Chief Operating Officer of the
Company since August 2004. He has served as President or Chief Operating Officer
of GAMCO Asset Management Inc. (a wholly-owned subsidiary of the Company) since
1986 and as a director of GAMCO Asset Management Inc. since 1991.
Mr. Jamieson also serves as President and a director of Gabelli Securities,
Inc. (a majority-owned subsidiary of the Company) and a director of Teton
Advisors, Inc., GAMCO Asset Management (UK) Ltd. (a wholly-owned subsidiary of
the Company) and GAMCO Asset Management (Singapore) Pte. Ltd. (a wholly-owned
subsidiary of the Company). Teton Advisors, Inc. is a former
42%-owned subsidiary of the Company, the shares of which were distributed to the
Company’s shareholders in March 2009. Mr. Jamieson also serves as a
director of several Investment Partnerships that are managed by Gabelli
Securities, Inc. Mr. Jamieson was a securities analyst with
Gabelli & Company, Inc. from 1981 to 1986. He has been a director of
GGCP, Inc. since December 2005.
Jeffrey M.
Farber, age 44, has served as Executive Vice
President-Finance/Corporate Development and Chief Financial Officer for the
Company since he joined the Company in July 2008. Mr. Farber
also serves as the Chief Financial Officer for GAMCO Asset Management Inc. and
Gabelli Securities, Inc. and is a director of GAMCO Asset Management (Singapore)
PTE LTD. Mr. Farber also serves as Chief Financial Officer of Teton
Advisors, Inc. Mr. Farber was employed by The Bear Stearns
Companies, Inc. ("Bear Stearns") continuously from May 2000 through July
2008. From March 2007 through July 2008, he served as its Senior Vice
President – Finance and Senior Managing Director, and from January 2004 until
March 2007, he served as its Controller and Principal Accounting
Officer. He joined Bear Stearns as Assistant Controller. Prior to
Bear Stearns, Mr. Farber was an audit partner with Deloitte & Touche LLP,
where he was employed for fourteen years. Mr. Farber is a
Certified Public Accountant.
Bruce N. Alpert, age 57,
has served as Senior Vice President of the Company since May 2008 and as
Executive Vice President and Chief Operating Officer of Gabelli Funds, LLC or
its predecessor since June 1988. Mr. Alpert is an officer of all of the
Gabelli/GAMCO Funds. Mr. Alpert is also Chairman of Teton Advisors, Inc.
since July 2008 and President prior to that date, and is President of Gabelli
Fixed Income, Inc. From 1986 until June 1988, he worked at the InterCapital
Division of Dean Witter as Vice President and Treasurer of the mutual funds
sponsored by Dean Witter. From 1983 through 1986, he worked at Smith Barney
Harris Upham & Co. as Vice President in the Financial Services Division
and as Vice President and Treasurer of the mutual funds sponsored by Smith
Barney. Mr. Alpert also was an Audit Manager and Specialist at Price
Waterhouse in the Investment Company Industry Services Group for three years at
which he served from 1975 through 1983. Mr. Alpert is a
Certified Public Accountant.
Henry G. Van der Eb,
age 63, has served as Senior Vice President of the Company since
August 2004 and is a senior advisor to management in all aspects of our
business. He has served as a Senior Vice President with Gabelli Funds, LLC and
GAMCO Asset Management Inc. since October 1999, when he joined the Company after
managing his privately held investment advisory firm (Mathers and Company,
Inc.), which was acquired by the Company in October 1999. Mr. Van der Eb is
a portfolio manager for the Company and is a Chartered Financial
Analyst.
Kieran Caterina, age 35, has
served as Finance Director and Co-Principal Accounting Officer of the Company
since July 2008 and as Vice President since January 2007. He served
as Acting Co-Chief Financial Officer of the Company from July 2007 to July 2008,
as Chief Accounting Officer of the Company from January 2007 to July 2008,
and as Controller from January 2002 to July 2008. Mr. Caterina
also served as the Chief Financial Officer of Gabelli Securities, Inc. from
October 2006 to December 2008. He joined the Company in March 1998 as
a staff accountant. Mr. Caterina also serves as Chief Financial
Officer of the Gabelli Entertainment and Acquisition Corp.
Diane M. LaPointe, age 51, has
served as Controller and Co-Principal Accounting Officer of the Company since
July 2008 and as Vice President since July 2007. She served as Acting
Co-Chief Financial Officer of the Company from July 2007 to July
2008. Ms. LaPointe joined the Company in 2004 and has served as Vice
President and Controller of Gabelli Securities, Inc. since that time. Ms.
LaPointe has also served as the Financial and Operations Principal of Gabelli
& Company, Inc. since March 2008. Prior to joining the Company,
Ms. LaPointe was the Chief Financial Officer and Treasurer of Security Capital
Corporation from 2003 to 2004 and its Controller and Assistant Treasurer from
2001 to 2003. From 1992 to 2001, she was on a career sabbatical
raising her children while concurrently serving on several private non-profit
boards and as a financial consultant. From 1985 to 1992, Ms. LaPointe
held several senior financial positions at Ultramar PLC, including 4 years as
their Director of Worldwide Financial Reporting. From 1983 to 1985,
she served as the Manager of Financial Reporting for North American Operations
for Plessey PLC. From 1979 to 1983, she was on the audit staff of
Peat, Marwick, Mitchell, & Co., a predecessor firm of KPMG. Ms.
LaPointe is a Certified Public Accountant.
COMPENSATION
OF EXECUTIVE OFFICERS
Compensation
Discussion and Analysis
The
investment management and securities industries are highly competitive, and
experienced professionals have significant career mobility. We believe that the
ability to attract, retain and provide appropriate incentives for the highest
quality professional personnel is important for maintaining our competitive
position in the investment management and securities industries, as well as for
providing for the long-term success of GAMCO.
Most of
GAMCO’s compensation expense is incentive-based variable compensation that will
increase or decrease based on the revenues from our assets under management.
Since 1977, we have paid out up to 40% of the revenues or net operating
contribution to the marketing staff and portfolio managers who introduce,
service or generate our separate account and mutual fund business, with payments
involving the separate accounts being typically based on revenues, and payments
involving the mutual funds being typically based on net operating contribution.
We believe that the variable compensation formulas in place for our marketing
staff and portfolio managers provide significant incentives for the growth of
our business.
Our
administrative, operations, legal and finance personnel generally receive the
majority of their compensation in the form of base salaries and annual bonuses.
We will often defer a portion of the annual bonuses for one to two years as a
retention device or for other reasons. We believe that GAMCO must pay
competitive levels of cash compensation. We also believe that appropriate equity
incentive programs may motivate and retain our professional personnel but that
these programs must always be consistent with stockholder
interests.
Compensation
of Named Executives
The
compensation for our named executives (other than for Mr. Gabelli, whose
compensation is described separately below, and Mr. Farber, whose compensation
is pursuant to his employment agreement and is described earlier under
Employment Agreements) is composed of base salary, annual bonus compensation,
equity compensation, incentive-based variable compensation and employee
benefits.
Mr.
Gabelli recommends to the Compensation Committee the amounts of the base
salaries for our named executives, which amounts are subject to the Committee’s
review and approval. The maximum base salary for our named executives is
$300,000, as it has been since prior to our initial public offering in 1999. The
base salaries for Messrs. Jamieson, Alpert and Van der Eb have been set at
$300,000 for 2008, as they were in 2007. The base salaries for Mr. Caterina and
Ms. LaPointe were $250,000 and $200,000, respectively, for 2008. The
amounts of base salary for our named executives are recommended by Mr. Gabelli
to the Compensation Committee, which amounts are subject to the Committee’s
review and approval, and are not at the discretion of the executive
officers. Messrs. Gabelli and Farber receive no base
salary.
Mr.
Gabelli recommends to the Compensation Committee the amounts of the annual
bonuses for our named executives, which amounts are subject to the Committee’s
review and approval. The factors considered by Mr. Gabelli in making annual
bonus recommendations are typically subjective, such as perceptions of
experience, performance and responsibilities. His recommendations may be but are
not specifically tied to the performance of client assets, objectives set for
each executive, the firm as a whole or the market value of our
stock.
A portion
of the annual bonuses for our named executives is often deferred for
approximately 15 to 18 months. The terms of the deferrals are recommended by Mr.
Gabelli to the Compensation Committee, which terms are subject to the
Committee’s review and approval, and are not at the discretion of the named
executives. The deferrals typically earn a return equal to greater of the return
on our U.S. Treasury money market fund or the return of one of our
investment partnerships after payment of the management fee but before payment
of any incentive fee. In order to receive the deferred bonus payment,
the named executive must be employed by the Company at the time of
payment.
Our
executive compensation program may also include stock option or restricted stock
awards, which may provide additional incentives to increase shareholder value
and retain qualified individuals. No stock option awards have been granted to
any of the named executives since 2003. In December 2007, a
restricted stock award plan was implemented, and grants were made to each of the
executive officers employed by the Company at that time, except Mr. Gabelli, who
did not receive any such awards. Individual restricted stock awards
granted to the these executive officers during 2007 were recommended by Mr.
Gabelli to the Compensation Committee and were subject to the Committee’s review
and approval. Individual stock option award levels in past years and individual
restricted stock award levels in 2007 were based upon a subjective evaluation of
each individual’s overall past and expected future contribution. There was no
formula used to determine either option awards or restricted stock awards for
any individual. No grants were made to the named executives, other
than Mr. Farber, during 2008. Mr. Farber’s restricted stock award
grant in July 2008 was pursuant to the terms of his employment agreement, which
was subject to the Compensation Committee’s review and approval.
To the
extent that they have the proper regulatory registrations, all of our staff,
including the named executives, is eligible to receive incentive-based variable
compensation for attracting or providing client service to separate accounts,
shareholders of the Gabelli or GAMCO Funds or investors in our other products.
Mr. Jamieson, who provides client service to a significant number of separate
accounts, received the majority of his total 2008 compensation from variable
compensation payments, as described above in note (g) to the Summary
Compensation Table.
In the
course of fulfilling Mr. Gabelli’s duties, the Company at times brings on
certain individuals to aid him. When this occurs, the Company offsets those
costs by a reduction in compensation payable to Mr. Gabelli. In 2008,
this amounted to $3,572,801. Of this amount, $410,301 was allocated
to Mr. Jamieson for his service as President and Chief Operating Officer, and
$1,250,000 was allocated to Mr. Farber for his service as Executive Vice
President and Chief Financial Officer from July 2008 to December
2008.
Because
these compensation arrangements with respect to covered employees involve
variable incentive-based fees, the $1 million deductibility limit of Section
162(m) of the Internal Revenue Code is generally not expected to apply to the
payments.
Chief
Executive Officer Compensation
Mr.
Gabelli received no base salary, no bonus, no stock options and no restricted
stock awards in 2008, as has been the case for each year since our initial
public offering in 1999. All of the compensation paid to Mr. Gabelli in 2008 was
incentive-based variable compensation that was paid in accordance with Mr.
Gabelli’s 2008 Employment Agreement as described under the heading Employment
Agreements.
REPORT
OF THE COMPENSATION COMMITTEE
The
Compensation Committee reviewed and discussed with management the Compensation
Discussion and Analysis appearing above. Based on this review and discussion,
the Compensation Committee recommended to the Board of Directors that the
Compensation Discussion and Analysis section be included in this proxy
statement, which section is also incorporated by reference in GAMCO’s Annual
Report on Form 10-K.
COMPENSATION
COMMITTEE
Robert S.
Prather, Jr. (Chairman)
Richard
L. Bready
Summary
Compensation Table. The following table sets forth the cash
and non-cash compensation for the fiscal years ended December 31, 2008, December
31, 2007 and December 31, 2006, respectively, paid to or earned by (i) our
principal executive officer (ii) each individual serving as our principal
financial officer during any part of 2008, and (iii) the other three most highly
compensated executive officers of the Company. As used herein, the
term “named executives” means all persons listed in the Summary Compensation
Table.
Summary
Compensation Table for 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards
(k)
($)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
Change
in
Pension
Value
and
Nonquailified
Deferred
Compensation
Earnings
(f)
($)
|
|
All
Other
Compensation
($)
|
|
Total
($)
|
Mario
J. Gabelli
|
|
2008
|
|
-0-
|
(a) |
-0-
|
(b) |
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
45,927,900
|
(c)
|
45,927,900
|
Chairman
of the Board,
|
|
2007
|
|
-0-
|
(a) |
-0-
|
(b) |
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
70,931,633
|
(c)
|
70,931,633
|
Chief
Executive Officer
|
|
2006
|
|
-0-
|
(a) |
-0-
|
(b) |
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
57,874,776
|
(c)
|
57,874,776
|
and Chief Investment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer-Value
Portfolios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas
R. Jamieson
|
|
2008
|
|
300,000
|
|
-0-
|
|
243,840
|
|
-0-
|
|
-0-
|
|
-0-
|
|
3,213,804
|
(g)
|
3,757,644
|
President
and
|
|
2007
|
|
300,000
|
|
300,000
|
(d) |
20,320
|
|
-0-
|
|
-0-
|
|
1,680
|
|
4,259,465
|
(g)
|
4,881,465
|
Chief
Operating Officer
|
|
2006
|
|
300,000
|
|
300,000
|
(d) |
-0-
|
|
-0-
|
|
-0-
|
|
25,447
|
|
3,726,942
|
(g)
|
4,352,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey
M. Farber
|
|
2008
|
|
-0-
|
|
-0-
|
|
112,850
|
|
-0-
|
|
-0-
|
|
-0-
|
|
1,250,000
|
(e)
|
1,362,850
|
Executive Vice President and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief
Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bruce
N. Alpert
|
|
2008
|
|
300,000
|
|
100,000
|
|
76,200
|
|
-0-
|
|
-0-
|
|
-0-
|
|
13,253
|
(h)
|
489,453
|
Senior
Vice President,
|
|
2007
|
|
300,000
|
|
300,000
|
(d) |
6,350
|
|
-0-
|
|
-0-
|
|
1,680
|
|
15,778
|
(h)
|
623,808
|
Executive
Vice President
|
|
2006
|
|
300,000
|
|
300,000
|
(d) |
-0-
|
|
-0-
|
|
-0-
|
|
16,803
|
|
13,972
|
(h)
|
630,775
|
and
Chief Operating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer
of Gabelli Funds, LLC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kieran
Caterina (i)
|
|
2008
|
|
250,000
|
|
100,000
|
(j) |
76,200
|
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
426,200
|
Vice President,
|
|
2007
|
|
225,000
|
|
150,000
|
(j) |
6,350
|
|
-0-
|
|
-0-
|
|
198
|
|
-0-
|
|
381,548
|
Finance Director and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-Principal Accounting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer;
Former Acting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-Chief
Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diane
M. LaPointe (i)
|
|
2008
|
|
200,000
|
|
100,000
|
(j) |
76,200
|
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
376,200
|
Vice President,
|
|
2007
|
|
157,500
|
|
150,000
|
(j) |
6,350
|
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
313,850
|
Controller
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-Principal
Accounting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer;
Former Acting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-Chief
Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henry
G. Van der Eb |
|
2008
|
|
300,000
|
|
50,000
|
|
76,200
|
|
-0-
|
|
-0-
|
|
-0-
|
|
134,404
|
(h)
|
560,604
|
Senior
Vice President
|
|
2007
|
|
300,000
|
|
100,000
|
|
6,350
|
|
-0-
|
|
-0-
|
|
-0-
|
|
158,855
|
(h)
|
565,205
|
|
|
2006
|
|
300,000
|
|
100,000
|
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
136,887
|
(h)
|
536,887
|
____________
(a)
|
Mr.
Gabelli received no fixed salary. Refer to footnote
(c).
|
(b)
|
Mr.
Gabelli received no bonus. Refer to footnote
(c).
|
(c)
|
Mr.
Gabelli’s remuneration for the 2008, 2007 and 2006 fiscal years was
comprised of the following:
|
|
|
Incentive
Management
Fee
as CEO and Other of
GAMCO*
($)
|
|
Portfolio
Manager
and
Other Variable
Remuneration
($)
|
|
Perquisites
($)
|
|
Total
Remuneration
($)
|
2008
|
|
2,425,538
|
|
43,502,362
|
|
-0-
|
|
45,927,900
|
2007
|
|
13,010,900
|
|
57,920,733
|
|
-0-
|
|
70,931,633
|
2006
|
|
13,225,390
|
|
44,622,398
|
|
26,988
|
|
57,874,776
|
* As
described in the Compensation Discussion and Analysis herein.
|
The
amounts set forth under the heading “Incentive Management Fee as CEO and
Other of GAMCO” consists of: $2,425,538 (after the reallocations to
Messrs. Farber and Jamieson of $1,250,000 and $410,301, respectively),
$13,010,900 (after the $1,451,827 reallocation to Mr. Jamieson) and
$13,225,390 for 2008, 2007 and 2006, respectively, representing the
incentive-based management fee (10% of GAMCO’s pre-tax
profits); the amounts set forth under the heading “Portfolio
Manager and Other Variable Remuneration” consist of (i) $14,413,681,
$19,391,109 and $14,762,702 for 2008, 2007 and 2006, respectively, for
acting as portfolio manager and/or attracting and providing client service
to a large number of GAMCO’s separate accounts, (ii) $20,522,826,
$20,500,738 and $18,111,900 for 2008, 2007 and 2006, respectively, for
creating and acting as portfolio manager of several open-end Gabelli
Funds, (iii) $8,500,770, $16,722,983 and $9,997,477 for 2008, 2007 and
2006, respectively, for creating and acting as portfolio manager of the
closed-end Gabelli Funds, and (iv) $65,085, $1,305,903 and $1,750,319 for
2008, 2007 and 2006, respectively, for providing other services, including
acting as portfolio and relationship manager of investment partnerships;
and the amounts set forth under the heading “Perquisites” consist of $0,
$0 and $26,988 for 2008, 2007 and 2006, respectively, for perquisites or
personal benefits provided by the Company to Mr.
Gabelli.
|
(d)
|
For
each of Messrs. Jamieson and Alpert, $150,000 of the 2007 amount vested
based on the individual’s continued employment on March 31, 2009 and was
paid on April 6, 2009 along with $3,242 to each of earnings based on the
return of a U.S. Treasury money market fund managed by
us. Messrs. Jamieson and Alpert, $150,000 each of the 2006
amount vested on March 31, 2008 and was paid on April 4, 2008 along with
$8,402 to each of earnings based on the return of a U.S. Treasury money
market fund managed by us. See the Nonqualified Deferred
Compensation Table for 2008 below for more
details.
|
(e)
|
Mr.
Farber was named Executive Vice President and Chief Financial Officer in
July 2008. Pursuant to his employment agreement, Mr. Farber does not
receive a base salary or annual cash bonus, but receives 20% of the
incentive-based management fee earned by Mr. Gabelli, which was subject to
a minimum cash guaranteed compensation of $1,250,000 for the 2008
period. In addition, pursuant to Mr. Farber’s employment
agreement, Mr. Farber was granted an award of 25,000 shares of restricted
stock under the Company’s Stock Award and Incentive
Plan.
|
(f)
|
Represents
the amount earned on nonqualified deferred compensation in excess of 120%
of the applicable federal long-term rate. See the Nonqualified Deferred
Compensation Table for 2008 below for more
details.
|
(g)
|
Represents
incentive-based variable compensation in the amount of $2,803,503,
$2,807,638 and $3,726,942 for 2008, 2007 and 2006, respectively, for
attracting and/or providing client service to separate accounts,
shareholders of the Gabelli or GAMCO Funds or investors in other products
sponsored by GAMCO (“Variable Compensation”) and $410,301, $1,451,827 and
$0 for 2008, 2007 and 2006, respectively, allocations of the
incentive-based management fee (10% of GAMCO pre-tax profits) by Mr.
Gabelli as described in the Compensation and Discussion Analysis
section.
|
(h)
|
Represents
Variable Compensation (as defined in note
(g)).
|
(i)
|
Mr.
Caterina and Ms. LaPointe served as Acting Co-Chief Financial Officers
from July 2007 to July 2008. They relinquished these positions
in July 2008 at the time that Mr. Farber was named Chief Financial
Officer. Mr. Caterina and Ms. LaPointe continue to serve as Co-Principal
Accounting Officers.
|
(j)
|
For
each of Mr. Caterina and Ms. LaPointe, $50,000 of the 2008 amount vests
and is payable on May 31, 2010, and $75,000 of the 2007 amount vested
based on the individual’s continued employment on March 31, 2009 and was
paid on April 6, 2009 along with $1,621 to each of earnings based on the
return of a U.S. Treasury money market fund managed by us. See the
Nonqualified Deferred Compensation Table herein for 2008 below for more
details.
|
(k)
|
These
amounts represent restricted stock awards granted in December 2007 to
Messrs. Jamieson, Alpert, Caterina, and Van der Eb and Ms.
LaPointe, who were granted 16,000, 5,000, 5,000, 5,000 and 5,000 shares of
restricted stock, respectively, with an effective grant date, under FAS
123(R) and FSP 123(R)-2, of December 20, 2007 and with a grant date fair
value of $63.50 per share, equal to the closing price of Class A Stock on
that day. For Mr. Farber, this amount represents 25,000 shares
of restricted stock granted in July 2008, with an effective grant date,
under FAS 123(R) and FSP 123(R)-2, of July 30, 2008 and with a grant date
fair value of $45.14 per share, equal to the closing price of Class A
Stock on that day. This column reflects the dollar amount of compensation
expense recognized for financial statement reporting purposes for fiscal
years ended December 31, 2008 and December 31, 2007 in accordance with FAS
123(R), calculated using the grant date fair values indicated above and
the vesting periods of three years from date of grant as to 30% of each
award and five years from date of grant as to the remaining 70% of each
award.
|
2008 Grants of
Plan-Based Awards Table. The following table sets forth
information concerning cash incentive opportunities and grants of restricted
stock made to the named executives during 2008.
Grants
of Plan-Based Awards for 2008
|
|
|
|
Estimated
|
|
All
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under
Equity
|
|
Number of
Shares
|
|
Grant Date
Fair
|
|
|
|
|
Incentive Plan
|
|
of
Stock
|
|
Value
of
|
Name
|
|
Grant
Date
|
|
Awards
(Target)
|
|
Or
Units
|
|
Stock
Awards ($)
|
Mario
J. Gabelli (a)
|
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
Douglas
R. Jamieson
|
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
Jeffrey
M. Farber (b)
|
|
7/30/08
|
|
25,000
|
|
25,000
|
|
1,128,500
|
Bruce
N. Alpert
|
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
Kieran
Caterina
|
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
Diane
M. LaPointe
|
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
Henry
Van der Eb
|
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
(a)
|
Mr.
Gabelli has never received either options or restricted stock awards from
the Company. He recommends the grant of stock awards
for corporate team members to the Compensation Committee of the Board of
Directors, as described in the Compensation Discussion and Analysis
herein.
|
(b)
|
The
actual and effective grant date, under FAS 123(R) and FSP 123(R)-2, was
July 30, 2008, which is the date that the final actions were taken by the
Compensation Committee to approve and grant the award of 25,000 restricted
shares to Mr. Farber under the Stock Award and Incentive
Plan. The estimated future payouts related to Mr. Farber
reflects the compensation expense which will be recognized over the full
vesting period should he fulfill the vesting requirements and is
calculated using the grant date fair value of $45.14 per share, equal to
the closing price of Class A Stock on that day. The award vests
and the restrictions on Mr. Farber’s ability to sell the shares lapse on
July 30, 2011 as to 30% and on July 30, 2013 as to the remaining 70% of
the award.
|
Employment
Agreements. Messrs. Gabelli and Farber are the only named
executives who have employment agreements with the Company.
Mario J. Gabelli. On February
6, 2008, Mr. Gabelli entered into an amended and restated employment agreement
(the
“2008 Employment Agreement”) with the Company, which was approved by the
Company’s shareholders on November 30, 2007 and which limits his activities
outside of the Company. The 2008 Employment Agreement modified Mr. Gabelli’s
previous employment agreement primarily by (i) eliminating outdated provisions,
clarifying certain language and reflecting our name change; (ii) revising the
term of the Employment Agreement from an indefinite term to automatically
renewed one-year periods in perpetuity following the initial three-year term
unless either party gives 90 days written notice prior to the expiration of the
annual term following the initial three-year term; (iii) allowing for services
to be performed for former subsidiaries that are spun off to shareholders or
otherwise cease to be subsidiaries in similar transactions; (iv) allowing new
investors in the permitted outside accounts if all of the performance fees, less
expenses, generated by assets attributable to such investors are paid to us; (v)
allowing for the management fee to be paid directly to Mr. Gabelli or to an
entity designated by him; and (vi) adding certain language to ensure that the
2008 Employment Agreement complies with Section 409A of the Internal Revenue
Code.
Mr.
Gabelli (or, at his option, his designee) receives an incentive-based management
fee in the amount of 10% of our aggregate annual pre-tax profits, if any, as
computed for financial reporting purposes in accordance with U.S. generally
accepted accounting principles (before consideration of this fee) so long as he
is an executive of the Company and devotes the substantial majority of his
working time to our business. This incentive-based management fee is subject to
the Compensation Committee’s review at least annually for compliance with its
terms. The 2008 Employment Agreement may not be amended without the
approval of the Compensation Committee.
In
accordance with the 2008 Employment Agreement, Mr. Gabelli chose to allocate
$1,660,301 and $1,451,827 of his management fee to certain other professional
staff members of the Company in 2008 and 2007, respectively. Mr.
Gabelli received the following
incentive-based management fees during the past five years:
|
2004
|
2005
|
2006
|
2007
|
2008
|
Management
Fee ($ in millions)
|
11.0
|
11.4
|
13.2
|
13.0
|
2.4
|
Consistent
with the Company’s practice since its inception in 1977, Mr. Gabelli will also
continue receiving a percentage of revenues or net operating contribution, which
are substantially derived from assets under management, as compensation relating
to or generated by the following activities: (i) managing or overseeing the
management of various investment companies and partnerships, (ii) attracting
mutual fund shareholders, (iii) attracting and managing separate accounts, and
(iv) otherwise generating revenues for the Company. Such payments are made in a
manner and at rates as agreed to from time to time by GAMCO, which rates have
been and generally will be the same as those received by other professionals at
GAMCO performing similar services. With respect to our institutional and high
net worth asset management and mutual fund advisory business, we pay out up to
40% of the revenues or net operating contribution to the portfolio managers and
marketing staff who introduce, service or generate such business, with (i)
payments involving the separate accounts being typically based on revenues and
(ii) payments involving the mutual funds being typically based on net operating
contribution.
Mr.
Gabelli has agreed that while he is employed by us he will not provide
investment management services outside of GAMCO, except for certain permitted
accounts.
Jeffrey M.
Farber. On July 3, 2008, Mr. Farber entered into an employment
agreement (the “Farber Agreement”) with the Company. The term of the
Farber Agreement expires on December 31, 2009, unless the parties agree in
writing to extend the term thereafter. Under the Farber Agreement, Mr. Farber’s
oversight responsibilities include finance, business development, compliance,
legal, information technology, human resources and facilities. The
Farber Agreement provides that Mr. Farber receives 20% of the incentive-based
management fee earned annually by Mr. Gabelli (or any entity designated by Mr.
Gabelli) subject to a guaranteed minimum cash amount of $1,250,000 for 2008,
payable in six equal monthly installments of $208,333 and a guaranteed minimum
cash amount of $3,000,000 in 2009 payable in twelve equal monthly installments
of $250,000. The Farber Agreement also provides that Mr. Farber,
under this allocation, is entitled to receive additional compensation above the
$1,250,000 and $3,000,000 minimum amounts for 2008 and 2009, respectively, to
the extent that the 20% of Mr. Gabelli’s incentive based management fees that
were earned in 2008 and 2009 exceeds the respective minimum cash guaranteed
amounts for 2008 and 2009, provided that Mr. Farber must be employed for the
entire 2009 calendar year to receive the amount for 2009. In
addition, Mr. Farber is also eligible for additional compensation on new
accounts or investors he brings in to the Company or on other revenue-generating
activities as may apply under the Company’s policies from time to time, on a
basis no less favorable than as generally applicable to other senior
executives. Furthermore, pursuant to the Farber Agreement, on July
30, 2008, Mr. Farber was granted an award of 25,000 shares of restricted stock
under the Company’s Stock Award and Incentive Plan.
Pursuant
to the Farber Agreement, Mr. Farber is also eligible to receive discretionary
annual long-term restricted stock awards in December of each year of his
employment. Mr. Farber is also entitled to receive usual and
customary benefits on terms no less favorable than as made available to other
senior executives.
The
Farber Agreement further provides that if his employment is terminated as a
result of his death, resignation for good reason, or termination by the Company
other than for cause or as a result of his disability, he or his estate shall be
entitled to receive his minimum 2009 cash compensation for the balance of the
period ending December 31, 2009. The Farber Agreement also contains certain
change-of-control provisions which state that in the event of a sale by GGCP,
Inc. of over one-half of its ownership of the Company’s Class B Common Stock to
a third party, Mr. Farber will be paid an amount representing the capitalization
of the incentive-based management fee, calculated based upon Mr. Farber’s
applicable percentage share of the incentive based management fee at the time
the proceeds are received. Finally, the Farber Agreement further
provides that if the Company were to terminate his employment for cause, he
would only be entitled to receive his 2009 cash compensation through the date of
such termination.
Upon a
change-of-control of the Company, all restricted stock awards (the
“RSAs”) held by Mr. Farber (if still employed by the Company at such
time) automatically vest, and the accumulated but unpaid dividends associated
with these RSAs would become immediately payable. Additionally, upon
a termination of Mr. Farber’s employment due to his death or permanent
disability, all of his RSAs would automatically vest and the accumulated but
unpaid dividends associated with these RSAs would become immediately
payable.
Outstanding
Equity Awards at Fiscal Year-End Table. The following table
summarizes the number of securities underlying outstanding equity awards for the
named executives as of December 31, 2008.
Outstanding
Equity Awards At December 31, 2008
|
|
Number
of
|
|
|
|
|
|
Number
of
|
|
Market
|
|
|
Securities
Underlying
|
|
|
|
|
|
Unvested
|
|
Value
of
|
|
|
Unexercised
Options at
|
|
Option
|
|
Option
|
|
Restricted
|
|
Unvested
|
|
|
December 31,
2008
|
|
Exercise
|
|
Expiration
|
|
Stock
|
|
Restricted
|
Name
|
|
Exercisable (#)
|
|
Unexercisable (#)
|
|
Price
|
|
Date
|
|
Awards
|
|
Stock Awards ($)
(a)
|
Mario
J. Gabelli
|
|
-0-
|
|
-0-
|
|
N/A
|
|
N/A
|
|
-0-
|
|
-0-
|
Douglas
R. Jamieson
|
|
20,000
|
(b) |
-0-
|
|
$29.00
|
|
5/13/13
|
|
16,000
|
(c) |
437,120
|
Jeffrey
M Farber
|
|
-0-
|
|
-0-
|
|
N/A
|
|
N/A
|
|
25,000
|
(d) |
683,000
|
Bruce
N. Alpert
|
|
2,000
|
(b) |
-0-
|
|
$29.00
|
|
5/13/13
|
|
5,000
|
(c) |
136,600
|
Kieran
Caterina
|
|
-0-
|
|
-0-
|
|
N/A
|
|
N/A
|
|
5,000
|
(c) |
136,600
|
Diane
M. LaPointe
|
|
-0-
|
|
-0-
|
|
N/A
|
|
N/A
|
|
5,000
|
(c) |
136,600
|
Henry
Van der Eb
|
|
-0-
|
|
-0-
|
|
N/A
|
|
N/A
|
|
5,000
|
(c) |
136,600
|
(a)
|
Determined
with reference to $27.32 per share, the closing price of Class A Stock on
December 31, 2008.
|
(b)
|
Messrs.
Jamieson and Alpert’s options became fully vested on October 4,
2005.
|
(c)
|
Messrs.
Jamieson, Alpert, Caterina, and Van der Eb’s and Ms. LaPointe’s restricted
stock awards will vest on December 7, 2010 as to 30% of each award and on
December 7, 2012 as to the remaining 70% of each award, provided that each
individual is still employed by the Company on those
dates.
|
(d)
|
Mr.
Farber’s restricted stock award will vest on July 30, 2011 as to 30% of
his award and on July 30, 2013 as to the remaining 70% of his award,
provided that he is still employed by the Company on those
dates.
|
2008 Options
Exercises and Restricted Stock Vested Table. In 2008, there
were no stock options exercised by and no restricted stock awards which vested
for the named executives.
2008 Nonqualified
Deferred Compensation Table. The following table shows
nonqualified deferred compensation payable to the executive officers named in
the Summary Compensation Table.
Nonqualified Deferred Compensation
Table for 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
Registrant
|
|
Aggregate
|
|
Aggregate
|
|
Aggregate
|
|
|
|
Contributions
|
|
Contributions
|
|
Earnings
|
|
Withdrawals
/
|
|
Balances
at
|
|
|
|
In
Last FY
|
|
in
Last FY
|
|
in
Last FY
|
|
Distributions
|
|
December
31, 2008
|
|
Name
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Mario
J. Gabelli
|
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
Douglas
R. Jamieson
|
|
-0-
|
|
-0-
|
|
3,534
|
(b) |
(158,402)
|
|
153,120
|
(c) |
Jeffrey
M. Farber
|
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
Bruce
N. Alpert
|
|
-0-
|
|
-0-
|
|
3,534
|
(b) |
(158,402)
|
|
153,120
|
(c) |
Kieran
Caterina
|
|
-0-
|
|
50,000
(a)
|
|
2,059
|
(b) |
(95,292)
|
|
126,560
|
(d) |
Diane
M. LaPointe
|
|
-0-
|
|
50,000
(a)
|
|
1,637
|
(b) |
(10,610)
|
|
126,560
|
(d) |
Henry
Van der Eb
|
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
____________
(a)
|
This
amount is included in the bonus column of the Summary Compensation
Table.
|
(b)
|
Of
this amount, none is included in the change in pension value and
nonqualified deferred compensation earnings column of the Summary
Compensation Table because in no instance were such earnings above market
or preferential (defined as being in excess of 120% of the applicable
federal long-term rate).
|
(c)
|
Of
this amount, $150,000 was included in the bonus column, 2007 amount, of
the Summary Compensation Table.
|
(d)
|
Of
this amount, $75,000 was included in the bonus column, 2007 amount, of the
Summary Compensation Table and $50,000 was included in the bonus column,
2008 amount, of the Summary Compensation
Table.
|
As
discussed in the Compensation Discussion and Analysis herein, the Company
deferred a portion of the annual bonuses paid to Messrs. Jamieson and Alpert in
2007 and to Mr. Caterina and Ms. LaPointe in both 2007 and 2008. The mandatory
deferrals for 2008, shown as contributions in the table above, vest on May 31,
2010 and will be paid in June 2010, subject to the individual’s continued
employment at the time of payment to receive this compensation. The mandatory
deferrals for 2007, included as a portion of the aggregate balances at December
31, 2008 in the table above, vested on March 31, 2009 and were paid on April 6,
2009, based on the individual’s continued employment on the date of payment.
These deferrals earn a return equal to the greater of (i) the rate of return on
the Company’s U.S. Treasury money market fund or (ii) the rate of return on one
of the Company’s investment partnerships after payment of the management fee but
before the payment of the performance fee. For the 2007
deferrals, this was (i).
Potential
Payments upon Termination of Employment or
Change-of-Control. Among the named executives, only Mr. Farber
is entitled to any severance payments upon termination of employment with the
Company. Mr. Farber’s employment agreement, described above under the
heading Employment Agreements, provides that if his employment is terminated as
a result of his death, resignation for good reason, or termination by the
Company other than for cause or as a result of his disability, he or his estate
shall be entitled to receive his minimum 2009 cash compensation for the balance
of the period ending December 31, 2009. Therefore, if Mr. Farber’s
employment had terminated for one of the reasons above on December 31, 2008, he
would have been entitled to receive a cash payment of $3,000,000. Mr.
Farber's employment agreement contains certain change-of-control provisions
which state that in the event of a sale by GGCP, Inc. of over one-half of its
ownership of the Company’s Class B Common Stock to a third party, Mr. Farber
will be paid an amount representing the capitalization of the incentive-based
management fee, calculated based upon Mr. Farber’s applicable percentage share
of the incentive based management fee at the time the proceeds are
received. Assuming the Company had been sold on December 31, 2008 at
a valuation multiple reflected in the December 31, 2008 market capitalization,
the value of Mr. Farber’s contractual entitlement under this provision would
have been approximately $15,000,000. Finally, Mr. Farber’s agreement
further provides that if the Company were to terminate his employment for cause,
he would only be entitled to receive his 2009 cash compensation through the date
of such termination. Upon a termination of his employment for cause
on December 31, 2008, the Company would have had no further obligation to
him.
Upon a
change-of-control of the Company, all restricted stock awards (the
“RSAs”) held by the named executives (if still employed by the Company
at such time) automatically vest, and the accumulated but unpaid dividends
associated with these RSAs would become immediately payable. Assuming
that a change-of-control of the Company had occurred on December 31,
2008, and assuming a price per share of $27.32, which was the
closing price of Class A Stock on December 31, 2008, the value of Mr. Jamieson’s
RSAs on such date would have been $437,120, the value
of Mr. Farber’s RSAs held on such date would have been $683,000, and
the value of the RSAs held on such date by each of Messrs. Caterina,
Alpert, Van der Eb and Ms. LaPointe would have
been $136,600. In addition, the accumulated but unpaid
dividends on these shares through December 31, 2008, which would be payable upon
a change–of-control on that date, amounted to $32,800 for Mr. Jamieson, $49,000
for Mr. Farber, and $10,250 each for Messrs. Caterina, Alpert, and Van der Eb
and Ms. LaPointe. Additionally, upon a termination of Mr. Farber’s
employment due to his death or permanent disability, all of his RSAs would
automatically vest and the accumulated but unpaid dividends associated with
these RSAs would become immediately payable. Upon a termination of
Mr. Farber’s employment due to his death or disability on December 31, 2008, the
value of the RSAs and of the accumulated but unpaid dividends on the RSAs would
have been the same as in the assumed change-of-control circumstance ($683,000
and $49,000, respectively).
No RSA
holders, including the named executives, were entitled to receive the
distribution of or value for Teton Advisors, Inc. shares that the Company made
to its shareholders in March 2009.
CERTAIN
OWNERSHIP OF OUR STOCK
The
following table sets forth, as of March 31, 2009, certain information with
respect to all persons known to us who beneficially own more than 5% of the
Class A Stock or Class B Stock. The table also sets forth information with
respect to stock ownership of the directors, nominees, each of the executive
officers named in the Summary Compensation Table, and all directors and
executive officers as a group. The number of shares beneficially owned is
determined under rules of the Securities and Exchange Commission (the
“Commission”), and the information is not necessarily indicative of beneficial
ownership for any other purpose. Under such rules, beneficial ownership includes
any shares over which a person has the sole or shared voting or investment power
and any shares which the person can acquire within 60 days (e.g., through the
exercise of stock options). Except as otherwise indicated, the shareholders
listed in the table have sole voting and investment power with respect to the
shares set forth in the table.
Name of Beneficial Owner*
|
|
Title
of
Class
|
|
Amount and
Nature
of
Beneficial
Ownership
|
|
|
Percent
of
Class (%)
|
5% or More
Shareholders
|
|
|
|
|
|
|
|
Barclays
Global Investors, N.A.
|
|
Class
A
|
|
382,926
|
(1) |
|
5.2
|
Edward
S. Barr
|
|
Class
A
|
|
383,463
|
(2) |
|
5.2
|
Cascade
Investment, L.L.C
|
|
Class
A
|
|
1,702,703
|
(3) |
|
23.1
|
Frederick
J. Mancheski
|
|
Class
A
|
|
1,845,739
|
(4) |
|
25.0
|
Royce
& Associates, LLC
|
|
Class
A
|
|
568,575
|
(5) |
|
7.7
|
Directors
and Executive Officers
|
|
|
|
|
|
|
|
Mario
J. Gabelli
|
|
Class
B
|
|
20,272,532
|
(6) |
|
99.5
|
Bruce
N. Alpert
|
|
Class
A
|
|
34,390
|
(7) |
|
**
|
|
|
Class
B
|
|
655
|
|
|
**
|
Kieran
Caterina
|
|
Class
A
|
|
5,000
|
(8) |
|
**
|
Jeffrey
M. Farber
|
|
Class
A
|
|
25,000
|
(9) |
|
**
|
Douglas
R. Jamieson
|
|
Class
A
|
|
42,147
|
(10) |
|
**
|
|
|
Class
B
|
|
20,000
|
|
|
**
|
Diane
M. LaPointe
|
|
Class
A
|
|
5,000
|
(8) |
|
**
|
Henry
Van der Eb
|
|
Class
A
|
|
5,000
|
(8) |
|
**
|
Edwin
L. Artzt
|
|
Class
A
|
|
10,000
|
(11) |
|
**
|
Raymond
C. Avansino, Jr.
|
|
Class
A
|
|
84,000
|
(12) |
|
1.1
|
Richard
L. Bready
|
|
Class
A
|
|
1,000
|
|
|
**
|
John
D. Gabelli
|
|
Class
A
|
|
17,434
|
(13) |
|
**
|
|
|
Class
B
|
|
1,065
|
|
|
**
|
Eugene
R. McGrath
|
|
Class
A
|
|
1,000
|
(14) |
|
**
|
Robert
S. Prather, Jr.
|
|
Class
A
|
|
10,010
|
(11) |
|
**
|
Elisa
M. Wilson
|
|
Class
A
|
|
10,000
|
(11) |
|
**
|
|
|
Class
B
|
|
4,357
|
|
|
**
|
All
Directors and Executive Officers as a Group (14 persons)
|
|
Class
A
|
|
249,981
|
|
|
3.4
|
|
|
Class
B
|
|
20,298,609
|
|
|
99.6
|
____________
(*)
|
The
address of each beneficial owner of more than 5% of the Class A Stock or
Class B Stock is as follows: Barclays Global Investors, N.A., 45 Freemont
Street, San Francisco, CA 94195; Edward S. Barr, 1999 Richmond Road Ste
1B, Lexington, KY 40502; Cascade Investment, L.L.C. (“Cascade”), 2365
Carillon Point, Kirkland, WA 98033; Frederick J. Mancheski, 1060 Vegas
Valley Drive, Las Vegas, Nevada 89109; Royce & Associates, LLC, 1414
Avenue of the Americas, New York, NY 10019; and Mario J. Gabelli, GAMCO
Investors, Inc., One Corporate Center, Rye, NY
10580.
|
(**)
|
Represents
beneficial ownership of less than
1%.
|
|
Pursuant
to a resolution approved by the Board of Directors, as of March 31, 2009,
there are 44,287 shares of the Class B Stock that may be converted into
Class A Stock.
|
(1)
|
As
reported in a Schedule 13G that was filed with the Commission on February
5, 2009. According to this filing, Barclays Global Investors,
N.A. beneficially owns 202,178 shares and Barclay’s Global Fund Advisors
beneficially owns 180,748 shares.
|
(2)
|
As
reported in a Schedule 13G that was filed with the Commission on February
17, 2009.
|
(3)
|
As
reported in an Amendment No. 7 to Schedule 13D that was filed with the
Commission by Cascade on October 6, 2008, Cascade beneficially owns
1,702,703 shares of Class A Stock which includes shares of common stock
held directly and issuable upon conversion of several convertible
promissory notes. The shares beneficially owned by Cascade may
be deemed to be beneficially owned by William H. Gates III, the sole
member of Cascade.
|
(4)
|
As
reported in an Amendment to Schedule 13D filed with the Commission by Mr.
Frederick J. Mancheski and dated December 31, 2007, Mr. Mancheski
beneficially owns 1,845,739 shares of Class A Stock. Pursuant to an
Exchange and Standstill Agreement between GAMCO and Mr. Mancheski, dated
May 31, 2006, Mr. Mancheski agreed, among other things, (i) not to solicit
proxies in opposition to Company management; (ii) not to attempt to
exercise any control over management or the Company; (iii) to vote his
shares in favor of the nominees and positions advocated by the Board of
Directors; (iv) subject to certain exceptions, not to acquire any
additional shares of the Company or seek to acquire the Company; (v) not
to become part of a "group" with any other persons; (vi) not to initiate,
propose or submit one or more shareholder proposals or induce or attempt
to induce any other person to initiate any shareholder proposal; (vii) not
to seek to call or to request the call of, a special meeting of the
Company's shareholders, or make a request for a list of the Company's
shareholders; (viii) not to deposit any Class A Stock or other Voting
Securities (as defined in the Exchange and Standstill Agreement) in a
voting trust or enter into any other arrangement or agreement with respect
to the voting thereof; and (ix) not to commence, encourage, or support any
derivative action in the name of the Company or any class action against
the Company or any of its officers or directors, each for a period of ten
years.
|
(5)
|
As
reported in an Amendment to Schedule 13G, dated January 26, 2009.
According to this filing, Royce & Associates, LLC has sole voting and
sole dispositive power with respect to these
shares.
|
(6)
|
Of
this amount 244,032 are owned directly by Mr. Gabelli and 20,028,500 of
these shares are owned by GGCP, Inc. (“GGCP”). Mr. Gabelli disclaims
beneficial ownership of the shares owned by GGCP in excess of his
ownership interest in GGCP.
|
(7)
|
Includes
2,000 shares that may be acquired through the exercise of stock options
and includes 5,000 shares which are restricted as to Mr.
Alpert’s ability to dispose of these until December 2010 for 1,500 shares
and until December 2012 for 3,500
shares.
|
(8)
|
All
5,000 shares are restricted as to the officer’s ability to dispose of
these until December 2010 for 1,500 shares and until December 2012 for
3,500 shares.
|
(9)
|
All
25,000 shares are restricted as to Mr. Farber’s ability to dispose of
these until July 2011 for 7,500 shares and until July 2013 for 17,500
shares.
|
(10)
|
Includes
20,000 shares that may be acquired through the exercise of stock options
and includes 16,000 shares which are restricted as to Mr. Jamieson’s
ability to dispose of these until December 2010 for 4,800 shares and until
December 2012 for 11,200 shares.
|
(11)
|
Consists
solely of shares that may be acquired through the exercise of stock
options.
|
(12)
|
Includes
60,000 shares that are owned by entities for which Mr. Avansino serves as
a director or officer. Mr. Avansino disclaims beneficial
ownership of 60,000 shares.
|
(13)
|
Includes
2,000 shares which are restricted as to Mr. John Gabelli’s ability to
dispose of these until December 2010 for 600 shares and until December
2012 for 1,400 shares, and 7,500 shares that may be acquired through the
exercise of stock options.
|
(14)
|
Mr.
McGrath has shared voting and dispositive power with respect to these
shares.
|
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based
solely on a review of filings made under Section 16(a) of the Securities
Exchange Act of 1934, we believe that our directors and executive officers and
our shareholders who own 10% or more of our Class A Stock or Class B
Stock have complied with the requirements of Section 16(a) of the
Securities Exchange Act of 1934 to report ownership, and transactions which
change ownership, on time with the exception as follows: in connection with a
distribution of Class B Shares made by GGCP to all of its shareholders on a
pro-rata basis, there were late Form 4 filings reporting the distribution of B
Shares to Bruce Alpert, Mario Gabelli, John Gabelli and Douglas Jamieson; and
the grant of 6,000 options to Mr. Avansino was reported on a late Form
4.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
GGCP,
Inc. (“GGCP”) owns a majority of our Class B Stock, representing approximately
95% of the combined voting power and 72% of the outstanding shares of our common
stock at December 31, 2008. Mario J. Gabelli serves as the
Chief Executive Officer, a director and is the controlling shareholder of
GGCP. In addition three of our directors or executive officers are
shareholders of GGCP, namely Bruce N. Alpert, Douglas R. Jamieson, and Elisa M.
Wilson.
On May
31, 2006, we entered into an Exchange and Standstill Agreement with Frederick J.
Mancheski, a significant shareholder, pursuant to which, among other things, he
agreed to exchange his 2,071,635 shares of Class B Stock for an equal number of
shares of Class A Stock. Certain shareholders of GGCP, including two of our
executive officers and a director, who received shares of Class B Stock in a
distribution from GGCP, also agreed to exchange their shares of Class B Stock
for an equal number of shares of Class A Stock. Pursuant to a
Registration Rights Agreement that we entered into with Mr. Mancheski, we filed
a shelf registration statement that was declared effective by the SEC on
September 1, 2006 for the sale by Mr. Mancheski and others, including certain of
our officers, employees and a director, of up to 2,486,763 shares of Class A
Stock.
For 2008,
the Company incurred charges of $299,713 for incremental costs (but not the
fixed costs) relating to our use of an airplane in which GGCP owns a fractional
interest.
We lease
an approximately 60,000 square foot building located at 401 Theodore Fremd
Avenue, Rye, New York as our headquarters (the “Building”) from M4E, LLC,
(“M4E”) an entity that is owned by the children of Mario J. Gabelli (“Mario
Gabelli” or “Chairman”), including Ms. Wilson. Under the lease for the Building,
which expires on April 30, 2023, we are responsible for all operating expenses,
costs of electricity and other utilities and taxes. For 2008, the rent was
$889,570, or $14.83 per square foot, for the period January 1, 2008 through
December 31, 2008. In August of 2008, the lease was extended until
2023, and the rent was increased to $18 per sq. foot for 2009. As a
member of M4E, Ms. Wilson is entitled to receive her pro-rata share of
compensation received by M4E under the lease.
We
sub-lease approximately 3,300 square feet in the Building to LICT Corporation
(“LICT”), a company for which Mario Gabelli serves as Chairman and is deemed to
be the controlling shareholder in his role as general partner to MJG IV Limited
Partnership (“MJG IV”), the majority shareholder of LICT, which also pays rent
to us at the rate of $28 per square foot plus $3 per square foot for
electricity, subject to adjustment for increases in taxes and other operating
expenses. The total amount paid in 2008 for rent and other expenses under this
lease was $117,169. Concurrent with the extension of the lease
on the Building, GAMCO and LICT agreed to extend the term of the sub-lease until
December 31, 2023 on the same terms and conditions. Mario Gabelli is
the general partner of MJG IV, and his children, including Ms. Wilson, are the
limited partners of MJG IV. As of July 1, 2008, we also sub-lease
approximately 1,600 square feet in the Building to Teton Advisors, Inc.
(“Teton”), formerly a 42%-owned subsidiary of GAMCO whose shares were
distributed to GAMCO shareholders on March 20, 2009. Teton pays rent
to us at the rate of $28 per square foot plus $3 per square foot for
electricity, subject to adjustment for increases in taxes and other operating
expenses. The total amounts paid in 2008 to us for rent and other expenses under
this lease were $33,456.
In 2008,
GAMCO entered into a sublease of its office space in Reno, Nevada to CIBL, Inc.
(“CIBL”). Mario Gabelli is a director of CIBL and deemed to be
the controlling shareholder of CIBL through his role as general partner of MJG
IV, the majority shareholder of CIBL. Under the terms of the Reno
sublease, GAMCO granted CIBL the right to use such part of GAMCO’s Reno office
as GAMCO and CIBL shall from time to time agree. The sublease grants
CIBL the right to use the Reno office until July 31, 2009 with an automatic
renewal for one additional calendar year. For the two months of 2008,
the rent for the Reno sublease was $1,000.
In
addition to the sub-lease of space in the Building, we entered into a number of
agreements in connection with the Company’s distribution of the shares of Class
A and B Common Stock in Teton. These agreements are as follows: a
Separation and Distribution Agreement, a Transitional Administrative and
Management Services Agreement ("Administrative Agreement") and Service Mark and
Name License Agreement (the “License Agreement”). Pursuant to the
Administrative Agreement, we provide certain services to Teton including senior
executive functions, strategic planning and general corporate management
services; mutual fund administration services; treasury services, including
insurance and risk management services and administration of benefits;
operational and general administrative assistance including office space, office
equipment, administrative personnel, payroll, and procurement services as
needed; accounting and related financial services, including the services of
Jeffrey M. Farber to act as Teton’s Chief Financial Officer; legal, regulatory
and compliance advice, including the retention of a Chief Compliance Officer;
and human resources functions, including sourcing of permanent and temporary
employees as needed, recordkeeping, performance reviews and
terminations. The License Agreement provides Teton and the funds that
it manages the use of certain names and service marks. Pursuant to
the Administrative Agreement and the License Agreement, GAMCO will be
compensated by Teton $45,000 per quarter, or $180,000 per year, plus 20 basis
points of the net assets managed in the Teton funds for providing mutual fund
administration services to these funds. In 2008, Teton paid
$60,000 to GAMCO pursuant to this agreement. The mutual fund
administration services will be provided to Teton for a monthly
payment in an amount equal to 20 basis points of the average net assets
managed by the funds that Teton advises in such month. We sub-lease space
in the Building to Teton as discussed above.
Our
Chairman and Gabelli Securities, Inc. (“Gabelli Securities”), a majority owned
subsidiary of the Company, serve as co-general partners of Gabelli Associates
Fund, LP. Our Chairman receives portfolio manager compensation through an
incentive allocation directly from the partnership. However, in 2008,
there was no incentive fee allocation.
GAMCO
Asset Management Inc. (“GAMCO Asset Management”), a wholly-owned subsidiary of
the Company, has entered into agreements to provide advisory and administrative
services to MJG Associates, Inc. (“MJG Associates”), which has been wholly-owned
by our Chairman since 1990, and to Gabelli Securities with respect to the
private investment funds managed by each of them. Pursuant to such agreements,
Gabelli Securities and MJG Associates paid GAMCO Asset Management $50,000 and
$10,000, respectively, (excluding reimbursement of expenses) for 2008. Mr. John
Gabelli, one of our directors and the brother of our Chairman, is the sole
shareholder of an entity that is the general partner of two investment
partnerships - Manhattan Partners I, L.P. (“Manhattan I”) and Manhattan Partners
II, L.P. (Manhattan II). Manhattan I and Manhattan II paid GAMCO
Asset Management investment advisory fees in the amount of $47,380 for
2008. In turn, GAMCO Asset Management paid John Gabelli $15,113, a
fee consistent with the payouts of all investment relationship staff of GAMCO
Asset Management, for serving as the relationship manager for both Manhattan I
and Manhattan II for 2008. Manhattan I paid management fees in the
amount of $19,518 to the general partners of Gemini Global Partners,
L.P. In addition, an entity that Mr. John Gabelli's wife is the
sole shareholder of is the co-general partner of S.W.A.N. Partners, LP
(“S.W.A.N.”) which is a separately managed account of GAMCO Asset
Management. S.W.A.N. paid GAMCO Asset Management investment advisory
fees in the amount of approximately $36,134 for 2008. In turn, GAMCO
Asset Management paid John Gabelli $3,609, a fee consistent with the payouts of
all investment relationship staff of GAMCO Asset Management, for serving as
relationship manager for S.W.A.N. for 2008.
Gabelli
Securities International Limited (“GS International”) was formed in 1994 to
provide management and investment advisory services to offshore funds and
accounts. A family member of our Chairman owns 55% of GS International, and
Gabelli Securities owns the remaining 45%. In 1994, Gabelli International Gold
Fund Limited (“GIGFL”), an offshore investment company investing primarily in
securities of issuers with gold-related activities, was formed, and GS
International entered into an agreement to provide management services to GIGFL.
Gabelli Securities in turn entered into an agreement with GS International to
provide investment advisory services to GIGFL in return for receiving all
investment management fees paid by GIGFL. Pursuant to such agreement, Gabelli
Securities received investment management fees of $60,921 and no incentive fee
for 2008. In April 1999, Gabelli Global Partners, Ltd., an offshore investment
fund, was incorporated. GS International and Gemini Capital Management, LLC
(“Gemini”), an entity owned by a son of our Chairman, were engaged by the fund
as investment advisors as of July 1, 1999. The fund paid half of the management
fees and incentive fees for 2008 in the amounts of $41,710 and $85,028,
respectively, to GS International which amounts it in turn paid to Gabelli
Securities for services provided. Therefore, for 2008, Gemini received half of
the management fee and incentive fee paid by the fund in the amounts of $41,710
and $85,028, respectively. In April 1999, Gabelli Securities formed
Gabelli Global Partners, L.P., an investment limited partnership for which
Gabelli Securities and Gemini are the general partners. In March 2002, Gabelli
Global Partners, L.P. changed its name to Gemini Global Partners, L.P. Gemini
received half of the management fee paid by the partnership to the general
partners in the amount of $87,759 and half of incentive fee earned by the
general partners in the amount of $74,024 for 2008. In December 1999,
Gabelli European Partners, Ltd., an offshore investment fund, was incorporated.
GS International was engaged as an investment advisor by the fund as of January
1, 2000. For services rendered by Gabelli Securities, GS International paid
Gabelli Securities all of the management fees it received for 2008 from the fund
in the amount of $8,971. There was no incentive fee earned in
2008.
We incur
expenses for certain professional and administrative services, purchase services
from third party providers, such as payroll, transportation, insurance and
public relation services, on behalf of GGCP and MJG Associates. GGCP
and MJG Associates reimburse us for these expenses. The amount
reimbursable from GGCP and MJG Associates to us for such expenses for 2008 was
approximately $202,452 and $596,237, respectively. Of these amounts,
$52,449 and $0 were owing to the Company at December 31, 2008 by GGCP and MJG
Associates, respectively.
Certain
directors and executive officers have immediate family members who are employed
by us, our subsidiaries, and certain related entities. The base salaries and
bonuses of each of these immediate family members are established in accordance
with our compensation practices applicable generally to staff members with
equivalent qualifications and responsibilities and holding similar positions.
None of the directors or executive officers has a material interest in any of
these employment relationships of their immediate family members and none of the
sons or daughters of our directors mentioned below resides in the same house as
the related director. None of the immediate family members mentioned below is an
executive officer with us. A daughter of Mr. Avansino, one of our directors, is
employed by one of our subsidiaries in a sales and marketing role and earned in
2008 a base salary of $65,000, a bonus of $15,000, a payment in lieu of health
insurance of $4,000, and incentive-based variable compensation based on revenues
generated by certain relationships (“Variable Compensation”) of $111,067 plus
usual and customary benefits. She also received 1,500 restricted stock awards
with an effective grant date, under FAS 123(R) and FSP 123(R)-2, of December 20,
2007 and with a grant date fair value of $63.50 per share, equal to the close of
the Company’s Class A Stock on that day. Compensation expense of
$22,860 for this award was recognized by the Company for financial statement
reporting purposes for fiscal year ended December 31, 2008 in accordance with
FAS 123(R). A son of Mr. John Gabelli was employed by the
Company in a research analyst role and earned in 2008 a salary of $53,333 and a
bonus of $3,000. He also received 1,000 restricted stock awards with
an effective grant date, under FAS 123(R) and FSP 123(R)-2, of December 20, 2007
and with a grant date fair value of $63.50 per share, equal to the close of the
Company’s Class A Stock on that day. Compensation expense of $15,240
for this award was recognized by the Company for financial statement reporting
purposes for fiscal year ended December 31, 2008 in accordance with FAS
123(R). A sister-in-law of Mr. Jamieson, our President and Chief
Operating Officer, is employed by one of our subsidiaries in a marketing role
and earned in 2008 a base salary of $85,000, a bonus of $10,000, and
incentive-based variable compensation based on revenues generated by certain
relationships (“Variable Compensation”) of $579 plus usual and customary
benefits. She also received 1,000 restricted stock awards with an
effective grant date, under FAS 123(R) and FSP 123(R)-2, of December 20, 2007
and with a grant date fair value of $63.50 per share, equal to the close of the
Company’s Class A Stock on that day. Compensation expense of $15,240
for this award was recognized by the Company for financial statement reporting
purposes for fiscal year ended December 31, 2008 in accordance with FAS 123(R).
A son of our Chairman, who is employed by one of our subsidiaries, earned in
2008 a base salary of $83,333 plus usual and customary benefits. He
also received 8,000 restricted stock awards with an effective grant date, under
FAS 123(R) and FSP 123(R)-2, of December 20, 2007 and with a grant date fair
value of $63.50 per share, equal to the close of the Company’s Class A Stock on
that day. Compensation expense of $121,920 for this award was
recognized by the Company for financial statement reporting purposes for fiscal
year ended December 31, 2008 in accordance with FAS 123(R). Our Chairman’s
spouse, who has been employed by a subsidiary of the Company in a sales and
marketing role since 1984, has been a director of that subsidiary since 1991 and
has been his spouse since 2002, earned in 2008 no base salary and no bonus but
did receive usual and customary benefits. She also received 4,000
restricted stock awards with an effective grant date, under FAS 123(R) and FSP
123(R)-2, of December 20, 2007 and with a grant date fair value of $63.50 per
share, equal to the close of the Company’s Class A Stock on that
day. Compensation expense of $60,960 for this award was recognized by
the Company for financial statement reporting purposes for fiscal year ended
December 31, 2008 in accordance with FAS 123(R). In total, these two
family members of our Chairman had Variable Compensation in 2008 in the total
amount of $3,613,305. Ms. Wilson, a director and the daughter of our
Chairman, is also a professional staff member of the Company. Ms.
Wilson has been on extended unpaid leave from the Company since January 1, 2004
and therefore received no compensation during 2008. The spouse of our
Controller and Co-Principal Accounting Officer is employed as the Chief
Financial Officer and the Interim Chief Executive Officer of LICT, the Chief
Financial Officer and the Interim Chief Executive Officer of CIBL, and the Chief
Financial Officer of Morgan Group Holding, Inc. (“Morgan”). In
addition to serving as the Chairman of LICT and as a Director of CIBL, our
Chairman also serves as the Chairman and Chief Executive Officer of
Morgan.
In 2008,
we paid certain legal fees incurred for current and former
employees. We expect all to be reimbursed by our insurance
carriers. We received $132,317 in reimbursement from our insurance
carriers in 2008, $579,998 in reimbursement from our insurance carriers in
January 2009, and expect to recover all or a substantial portion of the
remainder of the legal fees paid in 2008 from our insurance carrier during the
remainder of 2009. In 2008, we also received $332,684 in insurance
reimbursement from our insurance carriers for similar expenses paid in prior
years.
As
required by our Code of Ethics, our staff members are required to maintain their
brokerage accounts at Gabelli & Company unless they receive permission to
maintain an outside account. Gabelli & Company offers all of its staff the
opportunity to engage in brokerage transactions at discounted rates.
Accordingly, many of our staff members, including the executive officers or
entities controlled by them, have brokerage accounts at Gabelli & Company
and have engaged in securities transactions through it at discounted rates. From
time to time, we through our subsidiaries in the ordinary course of business
have also provided brokerage or investment advisory services to our directors,
the substantial shareholders listed in the table under “Certain Ownership of Our
Stock” or entities controlled by such persons for customary fees.
REPORT
OF THE AUDIT COMMITTEE
Messrs. Avansino,
Bready, McGrath and Prather, each of whom is an independent director, are the
members of the Audit Committee. In this report, the term “we” refers to the
members of the Audit Committee.
The Board
of Directors has adopted a written charter for the Audit Committee. A copy of
that charter can be found on our web site at www.gabelli.com
(under Corporate Information, Corporate Governance). Our job is one of oversight
as set forth in our charter. The Company’s management is responsible for
preparing its financial statements and for maintaining internal controls. The
independent registered public accounting firm is responsible for auditing the
financial statements and expressing an opinion as to whether those audited
financial statements fairly represent the financial position, results of
operations and cash flows of the Company in conformity with U.S. generally
accepted accounting principles.
We have
reviewed and discussed the Company’s audited 2008 financial statements with
management and with Ernst & Young LLP, the Company’s independent
registered public accounting firm.
We have
discussed with Ernst & Young LLP the matters required by Statement on Auditing
Standards No. 90, Audit Committee Communications.
We have
received from Ernst & Young LLP the written statements required by The
Public Company Accounting Oversight Board (the “PCAOB”) Rule 3290, Independence
Discussions with Audit Committees, and have discussed with Ernst &
Young LLP its independence. Based on the review and discussions referred to
above, we have recommended to the Board of Directors that the audited financial
statements be included in the Company’s Annual Report on Form 10-K for the
year ended December 31, 2008 for filing with the Securities and Exchange
Commission.
AUDIT
COMMITTEE
Robert S.
Prather, Jr. (Chairman)
Raymond
C. Avansino, Jr.
Richard
L. Bready
Eugene R.
McGrath
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
On March
27, 2009, after a competitive proposal process, the Audit Committee GAMCO
Investors, Inc. (“GAMCO”) approved the engagement of Deloitte & Touche LLP
(“D&T”) as the Company's independent registered public accounting firm for
the fiscal year ending December, 31, 2009 and dismissed Ernst & Young, LLP
(“EY”) from that role.
The
report of EY regarding the Company’s financial statements for the fiscal years
ended December 31, 2008 and December 31, 2007 did not contain any adverse
opinion or disclaimer of opinion and was not qualified or modified as to the
uncertainty, audit scope or accounting principles. During the fiscal years ended
December 31, 2008 and December 31, 2007, respectively, and in the subsequent
interim period through March 27, 2009, there were (i) no disagreements between
the Company and EY on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of EY, would have caused EY
to make reference to the subject matter of the disagreement in their reports on
the financial statements for such years, and (ii) no “reportable events” as that
term is defined in Item 304(a)(1)(v) of Regulation S−K.
GAMCO
provided EY with a copy of the disclosures it made in its Current Report on Form
8−K (the “Report”) prior to the time the Report was filed with the Securities
and Exchange Commission (the “Commission”) on March 31, 2009. GAMCO
requested that EY furnish a letter addressed to the Commission stating whether
or not it agreed with the statements made therein. A copy of
EY's letter dated March 31, 2009 was attached as Exhibit 99.1 to the
Report..
D&T
was engaged on March 27, 2009. In deciding to engage D&T, the
Audit Committee reviewed auditor independence and existing commercial
relationships with D&T, and concluded that D&T has no commercial
relationship with the Company that would impair its independence. During the
fiscal years ended December 31, 2008 and December 31, 2007, respectively, and in
the subsequent interim period through March 27, 2009, neither the Company nor
anyone acting on its behalf has consulted with D&T on any of the matters or
events set forth in Item 304(a)(2) of Regulation S−K.
A
representative of D&T will be present at the meeting. The representative
will have the opportunity to make a statement and respond to appropriate
questions from shareholders.
EY
had been the Company’s independent registered public accounting firm since its
inception in 1998. A representative of this firm will be present at the meeting.
The representative will have the opportunity to make a statement and respond to
appropriate questions from shareholders.
Ernst &
Young LLP Fees For 2008 and 2007
Fees for
professional services provided by our independent registered public accounting
firm in each of the last two fiscal years, in each of the following categories
are:
|
2008
|
|
2007
|
Audit
Fees
|
$
2,130,860
|
|
$2,181,718
|
Audit-Related
Fees
|
-0-
|
|
-0-
|
Tax
Fees
|
-0-
|
|
-0-
|
All
Other Fees
|
13,750
|
|
-0-
|
Audit
fees include fees relating to the audit of our annual financial statements and
review of financial statements included in our quarterly reports on
Form 10-Q. Audit fees also include fees for services related to
Section 404 of the Sarbanes-Oxley Act which consist of the review of
documentation and testing of our procedures and controls, services provided in
connection with other statutory and regulatory filings or engagements, including
consents related to SEC filings and securities offerings, and services related
to regulatory filings for the spin-off of Teton and for the
registration of GBL shares.
All other
fees include fees for services related to IT systems security testing and
services.
In
addition, EY serves as the auditor and completes tax compliance work of certain
of the mutual funds managed by the Company. The fees are paid by the
funds and approved by the independent directors of such funds. Audit
fees, tax fees, and all other fees paid to EY relating to services provided for
these funds in 2008 were $603,000, $76,900, and $7,000,
respectively. Audit fees, tax fees, and all other fees paid to EY
relating to services provided for these funds in 2007 were $601,800, $69,700,
and $24,000, respectively. The other fees relate to regulatory
filings for the launch of a closed-end fund in 2007 and for a shelf registration
and rights offering thereon in 2008.
Policies
and Procedures for Pre-Approving Audit and Non-Audit Services
The Audit
Committee has sole authority to pre-approve all audit and non-audit services
provided by the independent registered public accounting firm in accordance with
our Audit and Non-Audit Services Pre-Approval Policy and will not engage the
independent registered public accounting firm to perform non-audit services
prohibited by law or regulation. This authority may be delegated to a member of
the Audit Committee. The decisions of any Audit Committee member to whom
pre-approval authority is delegated must be presented to the full Audit
Committee at its next scheduled meeting. All of the services described under
Audit Fees and All Other Fees for 2008 and 2007 were pre-approved in accordance
with this policy.
SHAREHOLDER
PROPOSALS FOR THE 2010 ANNUAL MEETING
Qualified
shareholders who want to have proposals included in our proxy statement in
connection with our 2010 annual meeting pursuant to Rule 14a-8 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), must deliver such
proposals so that they are received at our principal executive offices at One
Corporate Center, Rye, New York 10580 by December 24, 2009, in order to be
considered for inclusion in next year’s proxy statement and
proxy. For any shareholder proposal submitted outside Rule 14a-8 of
the Exchange Act to be considered timely for purposes of Rule 14a-4(c) under the
Exchange Act, the Company must receive notice of such proposal by March 6,
2010.
OTHER
MATTERS
We know
of no other matters to be presented at the meeting other than the election of
directors and the ratification of auditors. If other matters are properly
presented at the meeting, the proxies will vote on these matters in accordance
with their judgment of the best interests of the Company.
We will provide a free copy of our
Annual Report on Form 10-K for the year ended December 31,
2008. Requests should be in writing and addressed to our Secretary at GAMCO Investors, Inc.,
One Corporate Center, Rye, NY 10580-1422.
EXHIBIT A
GUIDELINES
FOR DIRECTOR INDEPENDENCE
For a
director to be deemed "independent," the Board shall affirmatively determine
that the director has no material relationship with GAMCO Investors, Inc.
(together with its consolidated subsidiaries, “GAMCO”) or its affiliates or any
member of the senior management of GAMCO or his or her affiliates. This
determination shall be disclosed in the proxy statement for each annual meeting
of GAMCO’s shareholders. In making this determination, the Board
shall apply the following standards:
·
|
A
director who is an employee, or whose immediate family member is an
executive officer, of GAMCO will not be deemed independent until three
years after the end of such employment relationship. Employment
as an interim Chairman or Chief Executive Officer will not disqualify a
director from being considered independent following that
employment.
|
·
|
A
director who received, or whose immediate family member received in any
twelve month period over the last three years more than $120,000 in direct
compensation from GAMCO will not be deemed independent. In
calculating such compensation, the following will be
excluded:
|
o
|
director
and committee fees and pension or other forms of deferred compensation for
prior service (provided such compensation is not contingent in any way on
continued service);
|
o
|
compensation
received by a director for former service as an interim Chairman or Chief
Executive Officer;
|
o
|
compensation
received by an immediate family member for service as a non-executive
officer employee of GAMCO; and
|
o
|
dividend
or interest income and bona fide and documented reimbursed business
expenses.
|
·
|
A
director will not be considered independent
if:
|
o
|
the
director is a current partner or employee of a firm that is GAMCO’s
internal or external auditor;
|
o
|
the
director has an immediate family member who is a current partner of
GAMCO’s internal or external
auditor;
|
o
|
the
director has an immediate family member who is a current employee of
GAMCO’s internal or external auditor and personally works on GAMCO’s
audit; or
|
o
|
the
director or an immediate family member was within in the last three years
a partner or employee of GAMCO’s internal or external auditor and
personally worked on GAMCO’s audit within that
time.
|
·
|
A
director who is, or whose immediate family member is, employed as an
executive officer of another company where any of GAMCO’s current
executive officers serve on that company's compensation committee will not
be deemed independent until three years after the end of such service or
the employment relationship.
|
·
|
A
director who is, a general partner or employee, or whose immediate family
member is an executive officer or general partner, of an entity that makes
payments to, or receives payments from, GAMCO for property or services in
an amount which, in any of the last three fiscal years, exceeds the
greater of $1 million or 2% of such other entity's consolidated gross
revenues, will not be deemed
independent.
|
·
|
Further
to the provision above that applies to goods and services generally, a
director who is, or whose immediate family member is, an executive
officer, general partner or significant equity holder (i.e., in excess of
10%) of an entity that is a paid provider of professional services to
GAMCO, any of its affiliates, any executive officer or any affiliate of an
executive officer, if the payments for such services exceed $120,000 (but
do not exceed the greater of $1 million or 2% of such other entity's
consolidated gross revenues) within the preceding twelve-month period may
not be deemed independent.
|
·
|
A
director who is, or whose immediate family member is, affiliated with or
employed by a tax-exempt entity that receives significant contributions
(i.e., more than 2% of the annual contributions received by the entity or
more than $1 million in a single fiscal year, whichever amount is greater)
from GAMCO, any of its affiliates, any executive officer or any affiliate
of an executive officer within the preceding twelve-month period may not
be deemed independent, unless the contribution was approved by the Board
and disclosed in GAMCO’s proxy
statement.
|
For
purposes of these Guidelines, the terms:
·
|
"affiliate"
means any consolidated subsidiary of GAMCO and any other company or entity
that controls, is controlled by or is under common control with GAMCO, as
evidenced by the power to elect a majority of the board of directors or
comparable governing body of such entity;
and
|
·
|
"immediate
family" means spouse, parents, children, siblings, mothers- and
fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law
and anyone (other than domestic employees) sharing a person's home, but
excluding any person who is no longer an immediate family member as a
result of legal separation or divorce, or death or
incapacitation.
|
The Board
shall undertake an annual review of the independence of all non-employee
directors. In advance of the meeting at which this review occurs, each
non-employee director shall be asked to provide the Board with full information
regarding the director's business and other relationships with GAMCO and
its affiliates and with senior management and their affiliates to enable the
Board to evaluate the director's independence.
Directors
have an affirmative obligation to inform the Board of any material changes in
their circumstances or relationships that may impact their designation by the
Board as "independent." This obligation includes all business relationships
between, on the one hand, directors or members of their immediate family, and,
on the other hand, GAMCO and its affiliates or members of senior management and
their affiliates, whether or not such business relationships are subject to the
approval requirement set forth in the following provision.