T. Rowe Price 8-K

Summary

OHA operating arrangement and CEO compensation update. T. Rowe Price and Oak Hill Advisors (OHA) entered an updated evergreen operating arrangement, and Glenn R. August will continue as OHA CEO under a new employment agreement. New incentive plans link OHA partner compensation to management fees, performance revenue and growth in fee-related earnings.

Key Figures

• August’s annual base salary is $0.35M; he is also eligible for annual bonus and incentive compensation.
• For 2027, August’s allocation is 16.333% of the OHA Partner Cash Compensation Pool and 8.166% of the Value Creation Incentive (VCI) Pool.
• The VCI Pool is based on a percentage of calendar-year cash fee revenue, with the percentage determined by growth in certain fee-related earnings. Beginning in 2027, some variable compensation for partners above a cash-compensation threshold will be deferred as equity awards.
• A supplemental pool may be funded with up to $20M annually from 2027 through 2030; awards are subject to Compensation Committee approval and eligibility requirements.
• If terminated without cause or for good reason, August is eligible for 12 months of base-salary continuation, a prorated annual bonus based on actual results, and up to 12 months of COBRA coverage, subject to the agreement’s conditions.

Investor Takeaways

• OHA fee-related earnings growth will determine VCI pool percentages; the 2027 performance period is the first specified under the plan.