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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 10-K/A

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(Mark One)

☒     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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For the fiscal year ended December 31, 2022

OR

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(646) 519-2456

(Registrant’s Telephone Number, Including Area Code)

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Securities registered pursuant to Section 12(g) of the Act: None

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒ Yes ☐ No

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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S -T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

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If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

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Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b -2 of the Exchange Act): ☐ Yes ☒ No

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The aggregate market value of the Class A common stock held by non-affiliates was $1,963,340,301 on June 30, 2022, the last business day of the registrant’s most recently completed second fiscal quarter.

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As of April 17, 2023, the registrant had 65,960,079 shares of Class A common stock and 12,540,262 shares of Class B common stock outstanding.

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Documents incorporated by reference: None.

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EXPLANATORY NOTE

On February 16, 2023, Focus Financial Partners Inc. (the “Company,” “Focus,” “we,” “us” or “our”) filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “Original 10-K”). This Amendment No. 1 (this “Amendment”) amends Part III, Items 10 through 14 of the Original 10-K to include information previously omitted from the Original 10-K in reliance on General Instruction G(3) to Form 10-K. General Instruction G(3) to Form 10-K provides that registrants may incorporate by reference certain information from a definitive proxy statement which involves the election of directors if such definitive proxy statement is filed with the Securities and Exchange Commission (the “SEC”) within 120 days after the end of the fiscal year. We do not anticipate that a definitive proxy statement involving the election of directors will be filed before May 1, 2023 (i.e., within 120 days after the end of our 2022 fiscal year). Accordingly, Part III of the Original 10-K is hereby amended and restated as set forth below. The information included herein as required by Part III, Items 10 through 14 of Form 10-K is more limited than what is required to be included in a definitive proxy statement to be filed in connection with an annual meeting of stockholders.

In addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), new certifications by our principal executive officer and principal financial officer are filed as exhibits to this Amendment under Item 15 of Part IV hereof.

Except as stated herein, this Amendment does not reflect events occurring after the filing of the Original 10-K with the SEC on February 16, 2023 and no attempt has been made in this Amendment to modify or update other disclosures as presented in the Original 10-K.

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James D. Carey

Mr. Carey has served on our Board of Directors since July 2018. Mr. Carey is a Managing Director of Stone Point Capital LLC (together with its affiliates, “Stone Point”). He has been with Stone Point or its predecessor entities since 1997. Mr. Carey currently serves as a director on the following public company boards of directors: Enstar Group Limited and HireRight GIS Group Holdings LLC. In addition, Mr. Carey currently serves as a director on the following private company boards of directors: Alliant Insurance Services, Inc., The Citco Group of Companies (Observer), Delta Parent Holdings, Inc. (Kroll, LLC), Eagle Point Credit Management LLC, Northshore Holdings Limited (Atrium), NorthBay Holdings Limited (Atrium) and Sedgwick Claims Management Services, Inc. All of Mr. Carey’s board positions are in connection with Mr. Carey’s full time responsibilities as a Managing Director with Stone Point. Mr. Carey holds a Bachelor of Science in Finance from Boston College, a Juris Doctor from Boston College Law School and a Master of Business Administration from Duke University Fuqua School of Business.

Mr. Carey is qualified to serve as a director because of his extensive financial services industry and board experience, and because of his affiliation with Stone Point.

Elizabeth R. Neuhoff

Ms. Neuhoff most recently served as the Chief Executive Officer, President and Chairman of the board of directors of Neuhoff Communications, a broadcast and digital media company, from 2012 to 2022. From 1993 to 2005, Ms. Neuhoff served in a number of capacities at Interep, an independent national media marketing firm, including as Executive Vice President. Ms. Neuhoff currently serves on the board of directors, and as a member of the audit committee, of World Finance, which is a public company. In addition, Ms. Neuhoff currently serves as a director on the following private company boards of directors: West Bend Mutual Insurance Company, where she previously also served as a member of its audit committee, and Zip’s Carwash. Ms. Neuhoff was previously also on the board of directors of Gray Television, Inc., a public company. Ms. Neuhoff holds a Bachelor of Arts in French from the University of Oklahoma.

Ms. Neuhoff is qualified to serve as a director because of her entrepreneurial and operational experience as Chief Executive Officer and President of Neuhoff Communications, and prior board of directors and audit committee positions.

Joseph Feliciani, Jr.

Mr. Feliciani has served on our Board of Directors since April 2019. Mr. Feliciani served as the Chief Operating Officer of Finance of BlackRock, Inc. (“BlackRock”) from 2016 through his retirement in 2018 and as the Chief Accounting Officer of BlackRock from 1997 through 2016. During his tenure at BlackRock, he served as Chair of that firm’s retirement committee and as a member of the Finance Executive Committee, Global Operating Committee and Enterprise Risk Management Committee. Prior to joining BlackRock, Mr. Feliciani was the Controller of the asset management business of PNC Financial Services Group, Inc. Other than the Company, Mr. Feliciani does not currently serve on any public or private company boards of directors. Mr. Feliciani holds a Bachelor of Business Administration with a concentration in Accounting from Temple University.

Mr. Feliciani is qualified to serve as a director because of his accounting, audit, financial services industry, risk management and public company corporate governance experience.

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Rajini Sundar Kodialam

Ms. Kodialam has served as our Chief Operating Officer since our formation in 2015 and has served on our Board of Directors since July 2018. Ms. Kodialam co-founded Focus LLC and has served as Managing Director of Focus LLC since 2005, and served as a member of the board of managers from July 2017 to July 2018. Prior to co-founding Focus LLC, Ms. Kodialam worked at AMEX from 1998 to 2005 where she served as a Vice President from 1999 to 2005. Prior to joining AMEX, Ms. Kodialam was with McKinsey & Company. Other than the Company, Ms. Kodialam does not currently serve on any public company boards of directors. Ms. Kodialam currently serves on the board of directors of SmartAsset, which is a private company. Ms. Kodialam holds a Bachelor of Arts from Delhi University, India, a Post Graduate Diploma in Management from the Indian Institute of Management, Ahmedabad and a Master of Business Administration in Finance and Marketing from the Columbia University Graduate School of Business.

Ms. Kodialam is qualified to serve as a director because of her operational and historical experience as a co-founder and Managing Director of Focus LLC and as a member of our Board of Directors, as well as her extensive experience in the financial services industry.

George S. LeMieux

Mr. LeMieux has served on our Board of Directors since March 2022. Mr. LeMieux has served as Chairman of Gunster Yoakley & Stewart, P.A., a Florida based law firm, since 2011. From 2009 to 2011 Mr. LeMieux served as a U.S. Senator in the 111th Congress. Prior to that, Mr. LeMieux served as Florida’s chief deputy attorney general, and as chief of staff to Florida’s former governor. Other than the Company, Mr. LeMieux does not currently serve on any public company boards of directors. Mr. LeMieux currently serves on the board of directors of Gunster Yoakley & Stewart, which is a private company. Mr. LeMieux holds a Bachelor of Arts in Political Science from Emory University and a Juris Doctorate from Georgetown University Law Center.

Mr. LeMieux is qualified to serve as a director because of his extensive experience as Chairman of Gunster Yoakley & Stewart and his former public service positions.

Greg S. Morganroth, MD

Dr. Morganroth has served on our Board of Directors since September 2020. Dr. Morganroth founded the California Skin Institute in 2007, and serves as its Chief Executive Officer. Prior to founding the California Skin Institute, Dr. Morganroth was in private practice in Mountain View, CA since 1996. Other than the Company, Dr. Morganroth does not currently serve on any public company boards of directors. Dr. Morganroth currently serves on the board of directors of the California Skin Institute and its related subsidiaries, each of which is a private company. Dr. Morganroth holds a Bachelor of Science in Psychology from the University of Michigan and a Doctor of Medicine from the University of Michigan School of Medicine. Dr. Morganroth completed his internship at the University of Pennsylvania, a dermatology residency at Yale University and a Mohs, laser and dermatologic surgery fellowship at the Skin and Mohs Surgery Center at the Baptist Medical Center, Kansas City, Missouri.

Dr. Morganroth is qualified to serve as a director because of his entrepreneurial and operational experience as founder and Chief Executive Officer of the California Skin Institute, which has successfully acquired over 50 dermatology and cosmetic surgery practices.

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Fayez S. Muhtadie

Mr. Muhtadie has served on our Board of Directors since July 2018 and served on the board of managers of Focus LLC from July 2017 to July 2018. Mr. Muhtadie is a Managing Director of Stone Point. Prior to joining Stone Point in 2003, Mr. Muhtadie worked at Credit Suisse First Boston as an analyst in the Financial Institutions Investment Banking Group and as a financial analyst at Aon Capital Markets. Other than the Company, Mr. Muhtadie does not currently serve on any public company boards of directors. Mr. Muhtadie currently serves on the following private company boards of directors: Delta Parent Holdings, Inc. (Kroll, LLC), Eliassen Group Holdings GP LLC, Greenspoint Capital LLC, LS Parent Corporation (LegalShield), Mercury Parent Holdings, Inc. (Ascensus, LLC) and SKY Harbor Capital Holdings LLC. All of Mr. Muhtadie’s board positions are in connection with Mr. Muhtadie’s full time responsibilities as a Managing Director with Stone Point. Mr. Muhtadie holds a Bachelor of Science in Business Administration from The Ohio State University and holds a Master of Business Administration from the Columbia University Graduate School of Business.

Mr. Muhtadie is qualified to serve as a director because of his financial services industry and board experience and his affiliation with Stone Point.

Leonard Chang

Mr. Chang has served as our Senior Managing Director and Head of M&A since 2019 and as Managing Director since our formation in 2015. Mr. Chang co-founded Focus LLC and has served as Managing Director of Focus LLC since 2004. Prior to co-founding Focus LLC, Mr. Chang worked at the Boston Consulting Group from 2001 to 2004 where he served as a Consultant. Prior to joining Boston Consulting Group, Mr. Chang was with AMEX where he last served as Manager. Mr. Chang holds a Bachelor of Science in Economics with dual concentration in Finance and Management from the Wharton School at the University of Pennsylvania and a Master of Business Administration from Harvard Business School.

James Shanahan

Mr. Shanahan has served as our Chief Financial Officer since our formation in 2015 and has served as Chief Financial Officer of Focus LLC since 2006. From 2001 to 2006, Mr. Shanahan served in the Chief Financial Officer/Vice President of Operations roles for Sybari Software, a software security company that became a subsidiary of Microsoft in 2005. Prior to Microsoft, Mr. Shanahan was with PricewaterhouseCoopers from 1992 to 2001 where he last served as a Senior Audit Manager. Mr. Shanahan is a Certified Public Accountant and holds a Master of Business Administration and a Bachelor of Business Administration from Hofstra University. Additionally, Mr. Shanahan is a Chartered Financial Consultant and Personal Financial Specialist.

J. Russell McGranahan

Mr. McGranahan has served as our General Counsel and Corporate Secretary since our formation in 2015 and has served as General Counsel of Focus LLC since 2015. From 2006 to 2015, Mr. McGranahan served as a Managing Director, M&A Counsel and Corporate Secretary at BlackRock. Prior to BlackRock, Mr. McGranahan was counsel in the mergers and acquisitions and corporate departments of Skadden, Arps, Slate, Meagher & Flom LLP from 2000 to 2006. Prior to Skadden, Mr. McGranahan was a corporate associate at White & Case LLP.  Mr. McGranahan holds a Bachelor of Arts in Economics and World Politics from the Catholic University of America and a Juris Doctorate from Yale Law School. Additionally, Mr. McGranahan has also earned the Chartered Financial Analyst® designation.

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Corporate Governance

Composition of our Board of Directors

Our Board of Directors consists of eight members, including our Chief Executive Officer and Chief Operating Officer. Our directors are divided into three classes, currently serving staggered three-year terms. Class I, Class II and Class III directors serve until our Annual Meetings of Stockholders in 2025, 2023 and 2024, respectively. Ms. Neuhoff and Messrs. Adolf and Carey are assigned to Class I, Ms. Kodialam and Mr. Feliciani are assigned to Class II, and Messrs. LeMieux, Morganroth and Muhtadie are assigned to Class III. At each Annual Meeting of Stockholders, directors will be elected to succeed the class of directors whose terms have expired. The Board continues to annually evaluate the use of a classified Board. The Board believes that such a structure provides stability and encourages directors to take a long-term perspective on Focus. The Board also feels that this is appropriate given the short period of time that Focus has been a public company and because of the share ownership and nomination rights of Stone Point, our private equity investor, as described below.

In connection with our initial public offering, we entered into a nomination agreement with investment vehicles affiliated with Stone Point. Stone Point has the right to nominate two members of our Board of Directors for so long as it holds at least 50% of the interest it held, in the form of our Class A and Class B common stock on a combined basis, on the date of our initial public offering. Stone Point also has the right to nominate one member of our Board of Directors for so long as it holds 5% of our Class A and Class B common stock outstanding on a combined basis. Additionally, Stone Point has the right to nominate at least two directors, for so long as it has the right to nominate two directors, and then one director, for so long as it has the right to nominate one director, for service on our Compensation Committee. Stone Point also has the right to nominate one director, for so long as it has the right to nominate as least one director, for service on our Nominating, Governance and Sustainability Committee. Stone Point has nominated Messrs. Muhtadie and Carey to serve on our Board of Directors.

Any replacement director nominated by Stone Point must be an employee or partner of Stone Point of the same level of seniority within Stone Point as the initial directors designated by Stone Point and must qualify as an independent director under the independence standards of NASDAQ and satisfy such other criteria set forth in the nomination agreement. In addition, the nomination agreement requires Stone Point to vote its shares of Class A and Class B common stock in favor of our Chief Executive Officer and Rajini Sundar Kodialam (or such other officer of Focus designated by the Chief Executive Officer and approved by the Board of Directors if Ms. Kodialam is no longer a member of the Board of Directors) when nominated for election to our Board of Directors.

Committees of the Board of Directors

We currently have the following standing committees: the Audit and Risk Committee, the Compensation Committee, and the Nominating, Governance and Sustainability Committee.

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The table below shows the current chair and membership of the Board and each standing Board committee, the independence status of each Board member and the number of Board and Board committee meetings held during fiscal year 2022.

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C = Chair

● = Member

* = Non-Independent Director

** = Financial Expert

L = Lead Independent Director

During the year ended December 31, 2022, the Board of Directors held 8 meetings, the Audit and Risk Committee held 8 meetings, the Compensation Committee held 2 meetings, and the Nominating, Governance and Sustainability Committee held 1 meeting. Other than Mr. Carey, all other directors then serving attended or participated in at least 75% of the meetings of the Board of Directors and the respective committees of which he or she was a member. Mr. Carey attended or participated in at least 70% of the meetings of the Board of Directors and the committee of which he was a member. We encourage all of our directors to attend our Annual Meetings of Stockholders. All directors then serving were present at the 2022 Annual Meeting of Stockholders.

Audit and Risk Committee

We have an Audit and Risk Committee composed of Ms. Neuhoff and Messrs. Feliciani and Morganroth, with Mr. Feliciani currently acting as chair of the committee. Our Board of Directors has determined that Ms. Neuhoff and Messrs. Feliciani and Morganroth qualify as independent within the meaning of Rule 10A-3 under the Exchange Act and under NASDAQ independence requirements. Our Board of Directors has determined that Mr. Feliciani qualifies as an “audit committee financial expert” as defined under Item 407(d)(5)(ii) of Regulation S-K and has experience that results in his financial sophistication as defined under NASDAQ rules.

The Audit and Risk Committee oversees, reviews, acts on and reports on various auditing and accounting matters to our Board of Directors, including: the selection of our independent accountants, the scope of our annual audits, the fees to be paid to the independent accountants, the performance of our independent accountants and our accounting practices. In addition, the Audit and Risk Committee oversees our compliance with legal and regulatory requirements.

The Audit and Risk Committee also oversees management of the Company’s cybersecurity and data security risk, information technology systems, business continuity and resiliency and similar matters, as well as the Company’s assessments and reviews of such matters. In addition, the Audit and Risk Committee monitors the Company’s status on cybersecurity risk and risk management policies.

A copy of the Audit and Risk Committee charter is available free of charge under the Governance tab in the Investor Relations section of our website at www.focusfinancialpartners.com.

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Compensation Committee

We have a Compensation Committee composed of Messrs. Carey, LeMieux and Muhtadie, with Mr. Muhtadie currently acting as chair of the committee. Messrs. Carey, LeMieux and Muhtadie qualify as “Non-Employee Directors” for the purposes of Rule 16b-3 under the Exchange Act.

The Compensation Committee establishes salaries, incentives and other forms of compensation for officers and other employees. Our Compensation Committee also oversees our incentive compensation and benefit plans.

The Compensation Committee may delegate to its chair or other members such powers and authority as the committee deems to be appropriate, except such powers and authority required by law to be exercised by the whole committee. The Compensation Committee may also form and delegate authority and duties to subcommittees as it deems appropriate; provided that any subcommittee shall include those members of the committee serving pursuant to nomination agreements between the Company and any significant stockholders that may be in effect from time to time. Meetings may, at the discretion of the Compensation Committee, include members of management, other members of the Board, consultants or advisors, and such other persons as the Compensation Committee believes to be necessary or appropriate. The Chief Executive Officer will not be present during any deliberations or voting with respect to his or her compensation.

The Compensation Committee regularly reviews the services provided by its outside independent compensation consultant, Semler Brossy Consulting Group LLC (“Semler Brossy”), and believes that Semler Brossy is independent under applicable SEC rules in providing compensation consulting services. In making this determination, the committee considered, among other things, the factors delineated in Rule 10C-1 under the Exchange Act (“Rule 10C-1”), including the NASDAQ listing rules implementing Rule 10C-1, certain representations of Semler Brossy with respect to these factors and Semler Brossy’s conflict of interest policies. The Compensation Committee determined that the engagement of Semler Brossy did not raise any conflict of interest or other issues that compromise the independence of its relationship with the committee.

A copy of the Compensation Committee charter is available free of charge under the Governance tab in the Investor Relations section of our website at www.focusfinancialpartners.com.

Nominating, Governance and Sustainability Committee

We have a Nominating, Governance and Sustainability Committee composed of Messrs. LeMieux and Muhtadie.

The Nominating, Governance and Sustainability Committee identifies, evaluates and recommends qualified nominees to serve on our Board of Directors, with consideration of nomination agreements that may be in place from time to time with significant stockholders, reviews and approves corporate governance guidelines and generally oversees our ESG initiatives. The committee also leads a review of the Company’s Corporate Governance Guidelines.

Further, as reflected in its charter, the Nominating, Governance and Sustainability Committee is responsible for assisting the Board in overseeing the Company’s initiatives, strategies, policies, programs and associated risks relating to sustainability, including with respect to ESG matters (such as climate-related risks and other sustainability-related risks), and making such recommendations to the Board and management with respect to those matters as the committee deems advisable. A copy of the Nominating, Governance and Sustainability Committee charter is available free of charge under the Governance tab in the Investor Relations section of our website at www.focusfinancialpartners.com, and additional information regarding our commitment to environmental sustainability and climate change is available free of charge under the Sustainability tab in the Investor Relations section of our website at www.focusfinancialpartners.com. The Nominating, Governance and Sustainability Committee formally met once during the year ended December 31, 2022, and each director then serving on the committee attended or participated in that meeting, and additionally members had several other discussions throughout the year relating to new board members.

A copy of the Nominating, Governance and Sustainability Committee charter is available free of charge under the Governance tab in the Investor Relations section of our website at www.focusfinancialpartners.com.

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Identifying and Evaluating Candidates For Director

The Nominating, Governance and Sustainability Committee seeks advice on potential director candidates from current directors and executive officers when identifying and evaluating new candidates for director. The Nominating, Governance and Sustainability Committee may also direct management to engage third-party firms that specialize in identifying director candidates to assist with any search. The Board of Directors will consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to stand for election at the next Annual Meeting of Stockholders (or, if applicable, a special meeting of stockholders). Our stockholders that wish to nominate a director for election to the Board should follow the procedures set forth in our bylaws.

As set forth in our Corporate Governance Guidelines, the minimum qualifications for serving as a member of our Board of Directors are that a person demonstrate, by significant accomplishment in his or her field, an ability to make a meaningful contribution to the Board’s oversight of the business and affairs of Focus and that a person have an impeccable record and reputation for honest and ethical conduct in both his or her professional and personal activities. In addition, nominees for director shall be selected on the basis of, among other things, experience, knowledge, skills, expertise, diversity, ability to make independent analytical inquiries, understanding of Focus’ business environment, willingness to devote adequate time and effort to Board responsibilities, and knowledge of the obligations of Focus set forth in any nomination agreements between Focus and any significant stockholders that may be in effect from time to time. The Board of Directors does not have a formal diversity policy but seeks nominees with distinct professional experience, knowledge, skills and expertise so that the Board as a whole has the range of skills and viewpoints necessary to fulfill its responsibilities.

Board Leadership Structure and Role in Risk Oversight

Our Board of Directors recognizes that the leadership structure and combination or separation of the Chief Executive Officer and Chairman roles is driven by the needs of the Company at any point in time. As a result, no policy exists requiring combination or separation of leadership roles and our governing documents do not mandate a particular structure.  This allows our Board of Directors the flexibility to establish the most appropriate structure for the Company at any given time.

Currently, our Chief Executive Officer is also our Chairman. The Board believes that, at this time, having a combined Chief Executive Officer and Chairman is the appropriate leadership structure for the Company. In making this determination, the Board considered, among other matters, Mr. Adolf’s experience as founder and the leader of Focus LLC, and believes that his experience and knowledge allow him to serve as both Chairman and Chief Executive Officer.  In addition, the Board believes that such structure promotes clearer leadership and direction for the Company and allows for a single, focused chain of command to execute our strategic initiatives and business plans.

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Pursuant to our Corporate Governance Guidelines and charter of Lead Independent Director, as long as the offices of Chairman and Chief Executive Officer are held by the same person, a majority of the directors will appoint an independent director to act as the Board’s lead independent director (the “Lead Independent Director”). The specific duties and responsibilities of the Lead Independent Director, as well as the required qualifications and other details, are set forth in Focus’ charter of Lead Independent Director, a copy of which is available free of charge under the Governance tab in the Investor Relations section of our website at www.focusfinancialpartners.com. Responsibilities of the Lead Independent Director include the following:

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Because Mr. Adolf serves as both Chairman and Chief Executive Officer, our Board has appointed Mr. Muhtadie as Lead Independent Director. Our Board believes that its independence and oversight of management is maintained effectively through this structure, the composition of our Board, and sound corporate governance policies and practices.

In addition, our non-management directors meet in executive session at least quarterly. If the group of non-management directors includes any directors who are not independent, at least once per year an executive session comprising only of independent directors will be scheduled. Our Lead Independent Director is the presiding director at these meetings.

The Board, directed by the Audit and Risk Committee, is actively involved in overseeing our risk management processes. The Board focuses on our general risk management strategy and ensures that appropriate risk mitigation procedures are implemented by management. Further, operational and strategic presentations by management to the Board include consideration of the challenges and risks of our businesses, and the Board and management actively engage in discussion on these topics. In addition, each of the Board’s committees considers risk within its area of responsibility.

Compensation Committee Interlocks and Insider Participation

None of our executive officers serve on the board of directors or compensation committee of any company that has an executive officer who serves on our Board or Compensation Committee. No member of our Board is an executive officer of any company for which one of our executive officers serves as a member of the board of directors or compensation committee of that company.

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Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than 10% of a class of our equity securities registered pursuant to Section 12 of the Exchange Act (“Reporting Persons”) to file certain reports with the SEC and NASDAQ concerning their beneficial ownership of such securities. Based solely upon a review of the copies of reports on Forms 3, 4 and 5 and amendments thereto furnished to us, or written representations that no reports on Form 5 were required, we believe that all Reporting Persons complied with all Section 16(a) filing requirements in the year ended December 31, 2022, except that, on one occasion, with respect to the initial incentive unit equity award Mr. LeMieux received upon joining the Board, due to a delay by the Company in obtaining SEC filing codes, the Company did not timely file a Form 4 on behalf of Mr. LeMieux, but such transaction was subsequently reported on Form 4, and all transactions are reflected in this Amendment.

Communication with Directors

The Board of Directors recommends that stockholders initiate communications with the Board, the Chairman, the Lead Independent Director or any Board committee by writing to Focus’ General Counsel at 515 N. Flagler Drive, Suite 550, West Palm Beach, FL 33401. This process assists the Board in reviewing and responding to stockholder communications. The Board has instructed the General Counsel to review correspondence directed to the Board and, at the General Counsel’s discretion, to forward items that he deems to be appropriate for the Board’s consideration.

Corporate Governance Guidelines

Our Board has adopted Corporate Governance Guidelines to further its goal of providing effective governance of our business and affairs for the long-term benefit of our stockholders. A copy of the Corporate Governance Guidelines is available free of charge under the Governance tab in the Investor Relations section of our website at www.focusfinancialpartners.com.

The Nominating, Governance and Sustainability Committee is responsible for periodically reviewing the Corporate Governance Guidelines and recommending changes as appropriate to ensure the effective functioning of our Board in relation to its corporate governance practices.

Code of Ethics

Our Board has adopted a Code of Business Conduct and Ethics that is applicable to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer and controller or persons performing similar functions, as well as to directors, principals, officers and employees of our subsidiaries. Our Board has also adopted a Financial Code of Ethics, applicable to our Chief Executive Officer and our Chief Financial Officer, in accordance with applicable U.S. federal securities laws and the corporate governance rules of NASDAQ. Our Code of Business Conduct and Ethics and the Financial Code of Ethics are available free of charge under the Governance tab in the Investor Relations section of our website at www.focusfinancialpartners.com.

We will provide copies of these documents to any person, without charge, upon request in writing to us at Focus Financial Partners Inc., Attn: Corporate Secretary, 515 N. Flagler Drive, Suite 550, West Palm Beach, FL 33401. We intend to satisfy the disclosure requirement under Item 406(b) of Regulation S-K regarding amendments to, or waivers from, provisions of our Code of Business Conduct and Ethics and our Financial Code of Ethics by posting such information on our website at the address specified above.

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Election of Directors; Resignation Policy

Focus has adopted a resignation policy in connection with its plurality voting standard in the election of directors. Pursuant to Focus’  Corporate Governance Guidelines, a director who fails to receive a majority of votes for re-election in an uncontested election must offer his or her resignation to the Board for its consideration. In addition, a director whose resignation is under consideration must abstain from participating in any recommendation or decision regarding that resignation. The Nominating, Governance and Sustainability Committee will make a recommendation to the Board as to whether to accept or reject the proposed resignation, or whether other action should be taken. The Board will act on the proposed resignation, taking into account the Nominating, Governance and Sustainability Committee’s recommendation, and will promptly and publicly disclose its decision regarding the resignation. If the proposed resignation is not accepted, the director will continue to serve until the next annual meeting of stockholders at which the director is up for re-election, and until the director’s successor is elected and qualified, or until the earlier of the director’s death, resignation or removal. In addition, in accordance with our Corporate Governance Guidelines, a person who is 75 or older cannot stand for election or reelection as a director as of the date of the relevant annual meeting, and we have not granted any exemptions or waivers to this requirement. A copy of the Corporate Governance Guidelines is available free of charge under the Governance tab in the Investor Relations section of our website at www.focusfinancialpartners.com.

Stock Ownership Guidelines

The Board believes that directors and named executive officers more effectively represent Focus’ stockholders, whose interests they are charged with protecting, if they are stockholders themselves. The Board has therefore established stock ownership guidelines for directors and named executive officers, which are set forth in Focus’ Corporate Governance Guidelines. Within five years of joining the Board or Focus, as the case may be, each director and named executive officer is required to obtain, and must continue to hold during his or her tenure on the Board or with Focus, as the case may be, Focus equity with a value (which may be inclusive of the intrinsic value of incentive units, restricted common units or other equity awards (vested or unvested) granted as part of each such director’s or named executive officer’s regular compensation) equal to:

Any director or named executive officer not meeting his or her required ownership level at any time shall retain 50% of the Focus equity granted as part of such director’s or named executive officer’s compensation for service (determined on a net, after-tax basis) until such required ownership level is met and maintained. In addition, if any director or named executive officer falls below the required ownership level due solely to a decline in the value of Focus equity, then he or she will not be required to acquire additional Focus equity to reach the minimum ownership level, and will not be in violation of the minimum ownership requirements so long as he or she complies with the immediately preceding sentence until such time as he or she again reaches the required minimum ownership level. Furthermore, any Focus equity owned by a trust established by the relevant director or named executive officer for the benefit of his or her family members will be included for purposes of determining his or her compliance with the minimum ownership requirements. A copy of the Corporate Governance Guidelines is available free of charge under the Governance tab in the Investor Relations section of our website at www.focusfinancialpartners.com.

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Cybersecurity, Data and Other Risk Management; Privacy

The Board provides oversight of our cybersecurity and data security risk management processes and procedures. The Audit and Risk Committee remains responsible for assisting the Board with oversight of enterprise risk generally, including cybersecurity, information technology and business continuity and resiliency specifically. Pursuant to the Audit and Risk Committee charter, the Audit and Risk Committee provides oversight of the management of the Company’s cybersecurity risk, information technology systems, business continuity and resiliency and similar matters, as well as the Company’s assessments and reviews of such matters. Senior management of the Company reports quarterly to the Board at its regular meetings on the status of the Company’s cybersecurity risk, risk management policies and risk assessment initiatives.

Additionally, cybersecurity assessments are conducted of Focus and of each of our partner firms by an independent third-party. The recommendations contained in those assessments are then reviewed and thereafter expected to be implemented as appropriate. An annual cybersecurity monitoring program has also been implemented for our partner firms by an independent third-party. This program is based on the NIST standards and includes, among others, penetration and vulnerability testing, access controls and employee education. We also retain external vendors to perform penetration testing and vulnerability scanning with respect to Focus itself.

Focus also mandates cybersecurity and data security education and training for all of its employees. For example, all Focus and partner firm employees are required to take quarterly or semi-annual cybersecurity training modules. As part of our ongoing employee cybersecurity and data security training efforts, we also arrange for all employees to periodically receive simulated socially engineered  “phishing”  emails in order to test and improve their awareness. Employees who “click” or otherwise fail these tests receive immediate notifications and may be required to undergo additional training.

Focus’ cybersecurity and data security risk program also provides for evolving targets and objectives and incorporates expertise and suggested best practices from external consultants and experts. Focus and its partner firms also regularly monitor relevant guidance provided by applicable regulators, such as the SEC, which oversees our partner firms that are U.S. registered investment advisory firms. Focus remains committed to implementing leading data protection standards.

Our cybersecurity and data security risk program also delineates a structure with clear organizational roles and responsibilities. As described above, our Audit and Risk Committee is responsible for governance by setting overall strategic direction with respect to cybersecurity and data security risk mitigation. A Focus IT steering committee is led by a senior member of management and is tasked with recommending policies, budgets and priorities relating to cybersecurity and data security risk mitigation for approval by senior management, and also for assessing the user experience and overseeing our cybersecurity and data security risk program generally. Focus has also engaged a virtual Chief Technology Officer, who is responsible for implementing and executing these policies, budgets and priorities, managing vendors, providing technical advice and managing our cybersecurity and data security risk program generally.

Focus also continues to enhance its vendor risk assessment, due diligence and engagement process (including its contracting process with vendors and the inclusion of updated contractual protections in vendor agreements) with the goal of better protecting confidential or sensitive information. Vendors that handle confidential or sensitive information for Focus are expected to go through an initial risk assessment, and thereafter, periodic assessments will generally be conducted depending on the risk profile for the relevant vendor (for example, based on the type of information being stored or processed by that vendor). In addition, we expect our vendors to implement adequate measures to ensure the security of confidential or sensitive information, which is articulated in our Vendor Code of Conduct. In accordance with our business principles and applicable laws, rules and regulations, including the laws, rules and regulations that apply to our partner firms, we have also implemented a number of physical and technical standards, procedures, tools and other safeguards for protecting the personal information of our employees, clients and other business partners, including data security and privacy policies and controls for handling personal data. For example, Focus has posted a formal privacy policy on its website that describes the types of personal information we may collect about users when they use the Focus website, the purposes for which we may use that information, and the circumstances in which we may share or disclose that information. In addition, the majority of Focus’ partner firms are regulated entities with their own mandated privacy policies.

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We also have an information security incident response team tasked with handling cybersecurity and data security incidents. That team works with our internal and external resources as necessary with the goal of containing, mitigating and remediating cybersecurity or data security risks. In addition, we have implemented an emergency notification system to provide prompt notification to potentially affected users of potential cybersecurity or data security incidents using appropriate means of transmission (for example, using text messages for potential issues impacting e-mail systems). Procedures are also in place for our partner firms to escalate issues to the IT steering committee or other appropriate Focus team members when any of our partner firms are potentially impacted by a cybersecurity or data security incident.

Other Governance Matters

The Board also continues to annually evaluate the need for a supermajority (two-thirds) vote of stockholders to amend Focus’ charter and bylaws, as well as the Board’s ability to amend Focus’ bylaws without the approval of stockholders. The Board believes that the requirement of a supermajority vote ensures that the vast majority of stockholders approve such changes and that the Board’s ability to amend Focus’ bylaws without stockholder approval provides the Board with flexibility to amend the bylaws when appropriate quickly, at low cost, and with certainty. The Board also believes such provisions are appropriate for the time being given the limited time the Company has been a public company and the large holding by Stone Point. The Board will continue to revisit these issues.

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Summary of Executive Compensation Practices

We strive to maintain judicious governance standards and compensation practices by regularly reviewing best practices. As in prior years, we incorporated many best practices into our 2022 executive compensation program, including the following:

What We Do

What We Don’t Do

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To help retain and motivate our named executive officers, our Compensation Committee aims to offer competitive compensation packages through a mix of cash (including variable, performance-based cash awards) and long-term, equity-based incentives. The Compensation Committee does not have any formal policies for allocating total compensation among the various components, other than that annual equity awards are set to be equal to the annual cash incentive award granted to each named executive officer pursuant to the terms of his or her respective Employment Agreement (defined below). The Compensation Committee uses its judgment, in consultation with Semler Brossy, to establish an appropriate balance of base salary and annual cash incentive awards and equity awards with delayed vesting. The balance may change from year to year based on corporate strategy, financial performance and non-financial objectives, among other considerations. For 2022, our named executive officers had a compensation mix with more than 78.5% to 82.0% of annual executive compensation being performance based and “at risk.”

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Pay-for-Performance Compensation Structure for NEOs

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Process for Determining Executive Compensation

Role of the Compensation Committee

The Compensation Committee oversees our executive compensation and employee benefit programs, and reviews and approves all compensation decisions relating to our NEOs. The Compensation Committee also approves its report for inclusion in this Amendment and has reviewed and discussed this Compensation Discussion and Analysis with management.

The Compensation Committee reviews NEO base salaries annually.  The Compensation Committee has discretion to increase, but not decrease, each named executive officer’s base salary under the terms of his or her respective Employment Agreement. Such annual adjustments are based on factors that may include general competitiveness with peer and industry base salaries, any material increases in responsibilities and adjustments consistent with those made for all employees.

The Compensation Committee approves the amount of our annual incentive cash pool, and any and all awards to our NEOs from this pool. The Compensation Committee determines the quantitative and qualitative criteria that it will use to determine the amount of the aggregate pool and individual NEO awards. The Compensation Committee makes final decisions regarding the incentive cash pool size and the individual participant amounts at the end of each year, with input from the Chief Executive Officer. The Compensation Committee sets target ranges in some cases above Employment Agreement provisions in the interests of providing proper incentives and considering the growth and competitive environment of the Company.

All equity awards are granted pursuant to the terms of the Focus Financial Partners 2018 Omnibus Incentive Plan (the “Omnibus Plan”), which has been in place since our initial public offering in July 2018 (see further description under the section below entitled “—2018 Omnibus Incentive Plan”). Other than a limited number of equity awards that can be made at the discretion of the Chief Executive Officer to non-named executive officers, the Compensation Committee approves all equity awards. The value of annual equity incentive grants made to our NEOs has in recent years equaled the value of the annual cash incentive compensation awarded to each NEO, with the number of equity units granted determined by a methodology established by the Compensation Committee.

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Role of Independent Compensation Consultant

During the year ended December 31, 2022, the Compensation Committee engaged Semler Brossy as its independent compensation consultant to assist the committee with its responsibilities related to our executive officer and director compensation programs. A representative of Semler Brossy attends Compensation Committee meetings as requested and communicates with the chair and other members of the Compensation Committee between meetings. Semler Brossy provides no services to management or the Compensation Committee that are unrelated to the duties and responsibilities of the Compensation Committee, and the Compensation Committee makes all decisions regarding the compensation of our named executive officers and directors. Semler Brossy reports directly to the Compensation Committee, and all work conducted by Semler Brossy for us is on behalf of the Compensation Committee.

Role of our Chief Executive Officer and Senior Management

Our Chief Executive Officer and Chief Operating Officer regularly interact with the Compensation Committee and its chair to suggest and discuss executive compensation structure and programs. Our Chief Executive Officer makes recommendations for the annual cash and equity incentive awards for NEOs and other personnel (other than himself).

Use of Market Data and Peer Group Analysis

From time to time, Semler Brossy provides the Compensation Committee with market and peer group data for comparison purposes, such as to compare equity and pay mix practices. Semler Brossy does not provide, and the board does not utilize, regular compensation benchmarks in its compensation determinations. The firms included in the peer group used for these limited purposes in 2022 included: LPL Financial Holdings, Stifel Financial, Evercore ISI, Affiliated Managers Group, Houlihan Lokey, SEI Investments, Morningstar, FactSet, Moelis & Company, Envestnet, PJT Partners and Virtus Investment Partners.

Risk Assessment of Compensation Plans

We believe that our compensation program does not encourage excessive or unnecessary risk taking. This is primarily due to the fact that our compensation programs are designed to encourage our named executive officers and other employees to focus on both short-term and long-term strategic goals, thereby creating an ownership culture and helping to align the interests of our employees and our stockholders. Accordingly, our incentive compensation program is balanced between short-term and long-term incentives, each representing 50% of total incentive compensation.

Short-term incentive compensation is paid annually in cash, but is dependent on satisfying quantitative and qualitative factors established by the Compensation Committee. Long-term incentive compensation awarded to our named executive officers each year has been granted as equity-based awards (in the form of incentive units or restricted common units) that vest ratably over a four-year period. The value of the incentive units is entirely dependent on an increase in the price of our common stock, while the value of the restricted common units rises and falls in line with the price of our common stock. Overall, the equity grants create strong alignment with stockholders. Further, incentive units and restricted common units are not freely exchangeable into common stock, but subject to quarterly exchanges (once vested).

Additionally, the Board of Directors has adopted equity holding guidelines requiring our Chief Executive Officer to hold six times his salary in equity, and all other named executive officers four times their salaries in equity. The combination of annual performance-based compensation and long-term equity awards (which amount to 78.5% to 82.0% of total annual compensation), in addition to holding requirements extending after vesting, creates substantial disincentives for any short-term risk taking. Overall, we believe that the balance within our compensation program results in an appropriate compensation structure for the Company and that the program does not pose risks that could have a material adverse effect on our business or financial performance.

2022 Executive Compensation Determinations

Base Salaries

Base salaries serve to provide fixed cash compensation to our named executive officers for performing their ongoing responsibilities. Initial base salaries for each of our NEOs were as set forth in each of their Employment Agreements.

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The Compensation Committee reviewed our named executive officers’ base salaries based on the considerations outlined above and determined that it would keep our NEOs’ base salaries constant in 2022.

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Annual Cash Incentive Awards

In 2022, the Compensation Committee did not make any changes to the framework for year-end incentive compensation that was adopted in 2021, which was based on five criteria, each weighted 20%. The first four criteria were quantitative measures consistent with four of the Company’s publicly stated financial goals of achieving 20% annual growth in revenue, 10% annual organic revenue growth, 20% annual Adjusted EBITDA Growth¹, and 20% annual growth in Adjusted Net Income Excluding Tax Adjustments Per Share², in each case on average and over time. The fifth criteria was a qualitative assessment against a number of strategic factors as determined by the Compensation Committee.

¹Adjusted EBITDA is defined as net income excluding interest income, interest expense, income tax expense, amortization of debt financing costs, intangible amortization and impairments, if any, depreciation and other amortization, non-cash equity compensation expense, non-cash changes in fair value of estimated contingent consideration, loss on extinguishment of borrowings, other expense-net and secondary offering expenses, if any. Additional information regarding the calculation and reconciliation of Adjusted EBITDA is available in the section entitled “Adjusted EBITDA” included in the Original 10-K.

²Adjusted Net Income Excluding Tax Adjustments Per Share is calculated by dividing Adjusted Net Income Excluding Tax Adjustments by the Adjusted Shares Outstanding. Adjusted Net Income Excluding Tax Adjustments is defined as net income excluding income tax expense, amortization of debt financing costs, intangible amortization and impairments, if any, non-cash equity compensation expense, non-cash changes in fair value of estimated contingent consideration, loss on extinguishment of borrowings and secondary offering expenses, if any. The calculation of Adjusted Net Income Excluding Tax Adjustments also includes adjustments to reflect a pro forma 27% income tax rate reflecting the estimated U.S. federal, state, local and foreign income tax rates applicable to corporations in the jurisdictions we conduct business and is used for comparative purposes. The actual effective income tax rate, in current or future periods, may differ significantly from the pro forma income tax rate of 27%. Adjusted Shares Outstanding includes: (i) the weighted average shares of Class A common stock outstanding during the periods, (ii) the weighted average incremental shares of Class A common stock related to stock options outstanding during the periods, (iii) the weighted average incremental shares of Class A common stock related to unvested Class A common stock outstanding during the periods, (iv) the weighted average incremental shares of Class A common stock related to restricted stock units outstanding during the periods, (v) the weighted average number of Focus LLC common units outstanding during the periods (assuming that 100% of such Focus LLC common units, including contingently issuable Focus LLC common units, if any, have been exchanged for Class A common stock), (vi) the weighted average number of Focus LLC restricted common units outstanding during the periods (assuming that 100% of such Focus LLC restricted common units have been exchanged for Class A common stock) and (vii) the weighted average number of common unit equivalents of Focus LLC vested and unvested incentive units outstanding during the periods based on the closing price of our Class A common stock on the last trading day of the periods (assuming that 100% of such Focus LLC common units have been exchanged for Class A common stock). Additional information regarding the calculation and reconciliation of Adjusted Net Income Excluding Tax Adjustments Per Share is available in the section

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entitled “Adjusted Net Income Excluding Tax Adjustments and Adjusted Net Income Excluding Tax Adjustments Per Share” included in the Original 10-K.

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In the fourth quarter of 2022, the Compensation Committee reviewed the performance of each NEO and the Company against each of these criteria. For the four quantitative criteria, based on estimated preliminary results available at that time, the Compensation Committee determined that applying this framework would have resulted in the values shown in the table below for each such quantitative criteria.

For the fifth criteria, the Compensation Committee considered the following elements with no specific weighting as part of a qualitative assessment:

The Compensation Committee reviewed the NEOs’ self-assessments and made its own independent assessment of performance against each of these elements. Based on these reviews and assessments and several discussions among the Compensation Committee members and management, the Compensation Committee approved a value of 200% for the qualitative criteria. The Compensation Committee noted the overall strong performance across a majority of the qualitative elements against a challenging macroeconomic backdrop. Given the small size and cohesiveness of the senior leadership team, the Compensation Committee elected to develop one value for the qualitative criteria for all of the NEOs and did not develop separate values for each NEO.

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This collective analysis resulted in a total weighting factor of 93.65% as demonstrated in the table below (preliminary results were estimated in the fourth quarter of 2022 and adjusted in the first quarter of 2023 using final year-end results). For each metric below, if less than the minimum level is achieved, no weighted value would result for that metric, and if more than the maximum level is achieved, the maximum weighted value for that metric would apply.

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This weighted value was then applied to the target bonus amount of each NEO, resulting in a cash incentive award equal to 93.65% of the target bonus, rounded to the nearest thousand dollar. The Compensation Committee did not make any changes to the NEOs’ target bonus amounts for 2022 from the target amounts in place for 2021. For Ms. Kodialam and Messrs. Adolf and Chang, the target bonus was 250% of base salary. For Messrs. Shanahan and McGranahan, the target bonus was 200% of base salary.

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Ninety percent of each NEO’s estimated cash award was paid in the fourth quarter of 2022, with the remaining 10% withheld until determination of the Company’s final results. The Company’s actual final results exceeded the preliminary estimates and adjustments were made resulting in the total figures reflected above. These adjustments and the 10% hold back were paid to the NEOs in the first quarter of 2023. The 2022 cash incentive awards are disclosed in the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table.

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Annual Long-Term Incentive Awards

The value of equity grants made to our NEOs with respect to fiscal 2022 performance was equal to the estimated value of the cash incentive compensation calculated in the fourth quarter of 2022 and not the higher final amount calculated in the first quarter of 2023. For 2022, 50% of the equity grants to NEOs were made in the form of restricted common units and 50% of the grants were in the form of incentive units. The number of restricted common units granted to our NEOs was determined based on the closing price of our Class A common stock on the date of grant, December 12, 2022, or $37.59.  The number of incentive units granted to our NEOs was determined using an equity valuation methodology based upon the Black-Scholes model, which was determined to be approximately $14.32 per unit. These valuation methods resulted in the number of restricted common units and incentive units being granted to our NEOs shown in the following table:

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The restricted common units have no hurdle rate and will vest in four equal installments on each anniversary of the grant date. The incentive units were issued with a $37.59 hurdle rate (the closing price of Focus’ Class A common stock on the date of grant) and will vest in four equal installments on each anniversary of the grant date.

Restricted common units are common units in Focus LLC subject to the specified vesting conditions. Incentive units are profits interests in Focus LLC that are economically similar to stock options. They have no intrinsic value at the grant date and will obtain value only as the price of the underlying security rises above its hurdle amount.  They do not require the payment of an exercise price and do not have an expiration date. Holders obtain value by exercising rights to exchange such units (after vesting) for our Class A common stock.

Special Long-Term Incentive Awards

The Company has from time to time issued special long-term incentive awards on an other than annual basis. No such incentive awards have been issued since the Company’s initial public offering in July 2018. In March 2022, the Compensation Committee applied its discretion to modify the performance and vesting conditions of certain incentive units originally granted on July 25, 2018. See footnote 6 of the “Summary Compensation Table” and the section below entitled “—Narrative Disclosure to Outstanding Equity Awards at 2022 Fiscal Year-End” for additional information.

Employment Agreements and Severance and Change in Control Benefits

We have entered into written Employment Agreements with each of our named executive officers that set forth the terms of each named executive officer’s employment. Each of our named executive officers is employed “at will.”  These arrangements are further described under the section below entitled “Employment Agreements.”

Our named executive officers are entitled to certain severance and change in control benefits. Such benefits arise upon termination of employment due to death, disability, without cause, good reason and in connection with a change of control or Company Sale (defined below). These arrangements are further described under the section below entitled “—Potential Payments Upon Termination or Change in Control.”

Each named executive officer is subject to a general non-competition and non-solicitation clause for periods of one year and two years, respectively, following termination of employment as well as general non-disparagement, non-disclosure and assignment-of-development clauses.

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Due to the competitive nature of the financial services industry, the Compensation Committee believes these severance and change-in-control provisions are key components of our executive compensation program and are essential to Focus’ ability to recruit and retain talent.

Other Benefits

Employee Benefits

We offer a comprehensive array of benefits to our employees, including our named executive officers. These benefits are offered in order to attract and retain employees. Subject to the terms of any applicable plans, policies or programs, each NEO is entitled to receive employee benefits, including any and all vacation, deferred compensation, retirement, disability, group life, accident and health insurance as we may provide from time to time to salaried employees generally, and such other benefits as the Compensation Committee may from time to time establish for the named executive officers. We also maintain term life insurance for each named executive officer for the benefit of such executive’s estate, and provide certain other disability and health benefits.

Retirement Benefits

We currently maintain a retirement plan intended to provide benefits under section 401(k) of the Internal Revenue Code whereby employees, including our named executive officers, are allowed to contribute a portion of their base salaries to a tax-qualified retirement account. We provide matching contributions in amounts determined annually by our management. The contributions made on behalf of our named executive officers for fiscal 2022 are disclosed in the notes to the Summary Compensation Table.

Outreach and Say on Pay Vote

We recognize the importance of executive compensation to our stockholders. We have an extensive, proactive program of investor outreach on these and other issues. We are routinely in contact with our existing stockholders and maintain an active dialog with prospective investors.

Our non-binding advisory vote on the compensation of our named executive officers at our 2022 Annual Meeting on May 26, 2022 received the support of approximately 78% of stockholders voting, excluding broker non-votes. The Compensation Committee reviewed the results of this vote and concluded that this level of approval reflects strong shareholder support of our compensation strategy and programs. In light of this level of support from our stockholders, our Compensation Committee determined that no significant changes to our executive compensation program should be made in 2022. Our stockholders previously approved our Board of Directors recommendation to hold the vote on the compensation of our named executive officers annually. We have engaged with stockholders on a range of topics, including executive compensation.

Tax Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code generally limits the tax deductibility of compensation paid to certain executive officers to $1 million during any fiscal year. Compensation paid pursuant to certain grandfathered arrangements that are “performance based” within the meaning of Section 162(m) may be excluded from this limitation.

While the tax impact of any compensation arrangement is one factor to be considered, such impact is evaluated in light of the Company’s overall compensation philosophy and objectives, and the Compensation Committee maintains the flexibility to pay non-deductible incentive compensation if it determines it is in the best interest of the Company and its stockholders.

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Other Compensation Practices and Policies

Anti-Hedging and Pledging Policies

Under our Insider Trading Policy, directors and named executive officers, as well as other employees, are prohibited from engaging in the following activities:

Stock Ownership Guidelines

To align the interests of our named executive officers with the interests of the Company’s other stockholders, our named executive officers must comply with stock ownership guidelines that we recently established. For information regarding these guidelines, please see the section entitled “Corporate Governance—Stock Ownership Guidelines” above.

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Compensation Committee Report³

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Amendment.

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³ The information contained in this Compensation Committee Report shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that the Company specifically requests that the information be treated as soliciting material or specifically incorporates it by reference into a document filed under the Securities Act of 1933, as amended, or the Exchange Act.

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Narrative Disclosure to Summary Compensation Table and Grants Of Plan-Based Awards Table

Employment Agreements

Each of the named executive officers was party to an employment agreement during 2022 (each, including any applicable amendment, an “Employment Agreement,” and collectively, the “Employment Agreements”). Ms. Kodialam and Messrs. Adolf and Shanahan originally entered into employment agreements in 2013, and Mr. McGranahan originally entered into an employment agreement in 2015. Each of these employment agreements was amended and restated as of April 2017.  Mr. Chang originally entered into an employment agreement in April 2017, which was amended effective as of December 31, 2019. The narrative below summarizes the payments and benefits that each named executive officer is currently eligible to receive on an annual basis.

Base Salary

Each named executive officer’s base salary is a fixed component of compensation for each year for performing specific job duties and functions. The Employment Agreements provide for annual salaries of at least $800,000, $530,000, $425,000, $475,000 and $425,000 for Mr. Adolf, Ms. Kodialam, Mr. Chang, Mr. Shanahan and Mr. McGranahan, respectively. Base salary will be reviewed by the Board of Directors or the Compensation Committee periodically according to our normal compensation review standards. The Board or Compensation Committee (as applicable) has discretion to increase, but not decrease, each named executive officer’s base salary under the Employment Agreements. For 2022, the Compensation Committee did not make any change to the 2021 base salary for the named executive officers, resulting in the following annual base salaries for 2022: $909,155 for Mr. Adolf, $596,520 for Ms. Kodialam, $478,342 for Mr. Chang, $534,617 for Mr. Shanahan and $478,342 for Mr. McGranahan.

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Annual Bonus

Each named executive officer is entitled to participate in our annual cash bonus plan that is applicable for the fiscal year in question. The annual cash bonus plan is typically structured to create a bonus pool for each individual fiscal year. The Compensation Committee makes final decisions regarding the bonus pool size and the individual participant amounts each year with input from the Chief Executive Officer, which may be more or less than the target range for the individual participant. Under the Employment Agreements, the annual target cash bonus opportunities for each of the named executive officers are as follows: 150% to 200% of Mr. Adolf’s base salary, 150% to 200% of Ms. Kodialam’s base salary, 150% to 200% of Mr. Chang’s base salary, 125% to 150% of Mr. Shanahan’s base salary and 125% to 150% of Mr. McGranahan’s base salary. For 2022, to maintain proper incentives and navigate the challenges of a volatile macroeconomic environment, the Compensation Committee set target ranges above the amounts specified in the Employment Agreements, but consistent with the target amounts in place for 2021. The target amounts were set at 250% for Ms. Kodialam and Messrs. Adolf and Chang, and 200% for Messrs. Shanahan and McGranahan. Actual payouts of the annual cash incentive awards were determined by the Compensation Committee by applying a formula as part of the year-end process.

Long-Term Incentive Compensation

Each named executive officer has also historically been eligible to participate in our incentive unit plan and, effective with the closing of our initial public offering, the Omnibus Plan. The number of restricted common units and incentive units granted to each named executive officer is determined annually in an amount collectively equal to the annual cash bonus awarded to the named executive officer for such year, as determined by the Compensation Committee by applying a formula as part of the year-end process. For more information, see the section entitled “Compensation Discussion and Analysis—Annual Long-Term Incentive Awards”  above. The grant date fair value of the restricted common unit awards and the incentive unit awards provided to each named executive officer have been disclosed above in the “Stock Awards” and “Option Awards” columns, respectively, of the Summary Compensation Table.

Other Compensation Elements

Ms. Kodialam and Messrs. Adolf and Shanahan are each entitled to five weeks of vacation during each calendar year, and Messrs. Chang and McGranahan are each entitled to four weeks of vacation during each calendar year, in each such case, excluding paid holidays. Subject to the terms of any applicable plans, policies or programs, each named executive officer is entitled to receive employee benefits, including any and all vacation, deferred compensation, retirement, disability, group life, accident and health insurance as we may provide from time to time to salaried employees generally, and such other benefits as the Compensation Committee may from time to time establish for the named executive officers. We currently maintain a retirement plan intended to provide benefits under Section 401(k) of the Internal Revenue Code where employees, including our named executive officers, are allowed to contribute a portion of their base salaries to a tax-qualified retirement account. We provide matching contributions in amounts determined pursuant to the retirement plan. For 2022, our plan provided for a Company matching contribution rate of 100% of the participant’s pre-tax contributions, up to the annual allowable U.S. Internal Revenue Service limits.  The contributions made on behalf of our named executive officers for fiscal year 2022 are disclosed above in the notes to the Summary Compensation Table. We also provide supplemental term life insurance for each named executive officer for the benefit of such named executive officer’s estate, and provide certain other disability and health benefits.

2018 Omnibus Incentive Plan

In 2018, our Board of Directors adopted, and our sole stockholder prior to the initial public offering approved, the Omnibus Plan, which became effective upon the completion of our initial public offering. Pursuant to the Omnibus Plan, the employees, consultants and directors of the Company and its affiliates who perform services for us, including each of our named executive officers, may be eligible to receive awards. The description of the Omnibus Plan set forth below is a summary of the material features of the plan. This summary is qualified in its entirety by reference to the Omnibus Plan, a copy of which was filed as Exhibit 4.4 to our Registration Statement on Form S-8 filed with the Securities and Exchange Commission on July 31, 2018.

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The Omnibus Plan provides for potential grants of the following awards with respect to shares of our Class A common stock, to the extent applicable: (i) incentive stock options qualified as such under U.S. federal income tax laws; (ii) non-qualified stock options or any other form of stock options; (iii) restricted stock awards; (iv) phantom stock awards; (v) restricted stock units; (vi) bonus stock; (vii) performance awards; (viii) annual cash incentive awards; (ix) any of the foregoing award types (other than incentive stock options) as awards related to Class A Units or other units of Focus LLC; (x) incentive units in Focus LLC, which are intended to constitute “profits interests” within the meaning of Revenue Procedures 93-27 and 2001-43; and (xi) restricted common units in Focus LLC (collectively referred to as “awards”).

The Compensation Committee of our Board of Directors generally oversees the Omnibus Plan pursuant to its terms and all applicable federal, state or other rules or laws, except in the event that our Board of Directors chooses to take action under the Omnibus Plan. The Compensation Committee has the power to determine to whom and when awards will be granted and the amount of such awards (measured in cash, shares, stock options, or units), prescribe and interpret the terms and provisions of each award agreement (the terms of which may vary), accelerate the vesting or exercise terms of an award, delegate duties under the Omnibus Plan, and execute all other responsibilities permitted or required under the Omnibus Plan.

The maximum aggregate number of shares of Class A common stock initially reserved for issuance pursuant to awards under the Omnibus Plan after its effective date was equal to 6,000,000 shares (including such number of Focus LLC units or other securities which can be exchanged for or converted into shares). The reserve pool is subject to adjustment due to recapitalization or reorganization, or related to forfeitures or the expiration of awards, as provided under the Omnibus Plan. If the shares or units subject to any award are not issued or transferred, or cease to be issuable or transferable for any reason, including (but not exclusively) because shares or units are withheld or surrendered in payment of taxes, or any exercise of or purchase related to an award, or because an award is forfeited, terminated, expires unexercised, is settled in cash, or is otherwise terminated without a delivery of shares or units, those shares or units will again be available for issue, transfer, or exercise pursuant to awards under the Omnibus Plan to the extent allowable by law. The Omnibus Plan also contains a provision that will add an additional number of shares equal to the lesser of (a) 3,000,000 shares, (b) 5% of the outstanding (vested and unvested) shares and Focus LLC units as of the last day of the previous year, or (c) an amount determined by our Board of Directors, each year between 2019 and 2028.

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