AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 31/10/2026
Moat38
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 1/4 · Specialist performance and sustained segment demand support a competitive franchise. Easy contractual exit and competitors with broader distribution leave structural protection weak; no network effect, exclusive distribution or relative cost advantage is demonstrated.
durability · 2/4 · Long-horizon fixed-income results and consecutive positive Canvas, ETF and multi-asset flows demonstrate persistence. Mixed equity results and fiscal 2025 aggregate outflows counter that evidence; the broader fiscal 2026 recovery has a shorter record and a changed flow definition.
customer dependency · 1/4 · Repeat segment demand indicates commercial relevance indirectly. Mandates generally permit exit without meaningful penalties, and realized aggregate outflows show limited dependence despite the subsequent recovery.
erosion resilience · 2/4 · Broader fiscal 2026 inflows and operating recovery demonstrate adaptation after significant outflows and profit deterioration. Industry fee pressure remains a prospective threat; realized impairments and regulatory settlement costs temper resilience.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Nine-month management fees increased from $5,113.7 million to $5,533.4 million against average AUM growth from $1,596.4 billion to $1,714.5 billion, indicating approximately stable to slightly improved aggregate fee realization. Historical fees excluding performance fees fell from 42.1 to 41.1 basis points in fiscal 2024, partly from mix. Outcomes are mixed and do not establish discretionary pricing power.
retention · 2/4 · Fiscal 2026 aggregate net inflows and sustained demand in Canvas and multi-asset strategies offset fiscal 2025's $97.4 billion long-term net outflows. This is indirect operating evidence of repeat demand, with comparability limited by newly included uncalled commitments and some ETF conversions.
margin resilience · 2/4 · Adjusted operating margin declined from 29.9% in fiscal 2023 to 24.5% in fiscal 2025, then recovered to 26.7% for the first nine months of fiscal 2026 versus 23.9% a year earlier. GAAP operating income also improved, aided by lower amortization; settlement and restructuring adjustments remain material. This is mixed resilience, not evidence of a moat from margin levels.
contractual freedom · 1/4 · Fees are set through agreements and vary with services, assets and market conditions. Annual fund approval and short-notice termination without substantial penalty constrain durable control over terms; unilateral repricing rights are not established.
Predictability83
Financial-sector stability over 5 consecutive reported annual periods: equal weights for nondeclining revenue frequency, revenue-growth volatility (5–40pp), positive consolidated earnings frequency, and net-income/revenue margin volatility (3–20pp). Uses reported accounting scope; not industrial FCF or a growth forecast.
- Nondeclining revenue years (%)
- 50.00
- Revenue growth volatility (pp)
- 5.01
- positiveEarningsShare
- 100.00
- netMarginStdDev
- 6.12
- observedAnnualPeriods
- 5.00
Financial strength50
Qualitative financial_services assessment: equal-weight average of four current evidence-backed grades (0–4), scaled to 100. Policy financial-services-1; not an industrial ratio score or credit rating.
capital adequacy · 2/4 · June 2026 issuer-attributable GAAP equity of $11.74 billion, separately presented corporate cash of $2.67 billion and corporate debt of $2.40 billion support a bounded assessment of meaningful resources. Equity declined and includes substantial goodwill and intangibles. These are accounting balances, not eligible regulatory capital; subsidiary net-capital requirements and headroom are absent, and CIP balances are excluded from corporate funding.
liquidity funding · 2/4 · Corporate cash of $2.67 billion and the July 2031 revolving facility with $1.5 billion commitments and $700 million outstanding provide funding flexibility. Cash declined from September 2025, and actual revolver borrowing partly offsets senior-note repayment. Investment totals contain financed and third-party-related amounts; full cash availability and the remaining maturity schedule are not supplied.
asset liability risk · 2/4 · The Company has direct investment and financed-asset exposures, and its investment results fluctuate. Voluntary sponsored-fund support creates a contingent business exposure, although no significant additional support was provided during the nine months. Corporate debt and direct CIP investments are distinguished from consolidated fund balances; incomplete recourse, collateral and credit-risk detail limits confidence.
earnings resilience · 2/4 · Nine-month operating income recovered to $820.1 million from $518.7 million and issuer-attributable net income to $695.2 million from $407.3 million. Earlier operating deterioration, recurring acquisition adjustments and the third-quarter sequential earnings decline demonstrate variability. Fund-level income is not substituted for issuer earnings.
Capital allocation50
Qualitative financial_services assessment: equal-weight average of four current evidence-backed grades (0–4), scaled to 100. Policy financial-services-1; not an industrial ratio score or credit rating.
capital efficiency · 2/4 · Issuer-attributable nine-month earnings of $695.2 million against average beginning and ending issuer GAAP equity of approximately $11.91 billion imply a calculated, unannualized accounting return of about 5.8%. Earnings improved, but the substantial goodwill and intangible base and repeated impairments make efficiency mixed. This is not a reported regulatory-capital return or acquisition-specific return.
distributions and buffers · 2/4 · Fiscal 2025 shareholder returns and debt repayments demonstrate actual distributions. Third-quarter fiscal 2026 returns of $521.5 million exceeded that quarter's $171.5 million attributable net income, while corporate cash and issuer equity declined. Resources and extended credit access provide a buffer, but complete cash-flow coverage and regulatory distribution constraints are unavailable.
dilution and cost · 2/4 · Outstanding shares declined from 520.95 million to 507.51 million alongside $447.1 million of repurchases. This offsets dilution, but nonvested awards increased, $200 million of compensation expense remains unrecognized, and additional stock-plan capacity was approved. July special grants add approximately $15 million per recipient of grant-date value; authorization, grant value and recognized expense are distinct.
investment discipline · 2/4 · Apera's cash purchase and revenue-contingent payments, together with Putnam's revenue-growth conditions, show some outcome-linked spending. Sustained Canvas demand provides a positive post-acquisition operating result. Repeated intangible impairments and continuing acquisition costs counter that evidence; returns on purchase prices are not disclosed.
Management50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Actual debt repayments and revenue-contingent acquisition payments demonstrate some discipline. Continuing acquisition spending, substantial capital returns and repeated intangible impairments leave outcomes mixed. Acquisition-specific returns and full distribution cash-flow coverage are unavailable.
incentive alignment · 2/4 · Existing performance compensation, ownership guidelines and clawbacks support alignment. July 2026 grants add operating-margin and relative-return conditions, long cliff vesting and forfeiture provisions, while carry requires fund performance hurdles. Half of each special equity award is time-based, company-wide awards remain predominantly time-based, and future payouts are not achieved outcomes.
execution · 2/4 · Fiscal 2026 broad inflows, sustained segment demand and improved operating results demonstrate execution. Fiscal 2025 outflows, uneven investment performance, impairments and a $100 million regulatory settlement charge prevent a strong company-wide grade. Operating outcomes are indirect evidence of management contribution.
governance · 2/4 · Eight of eleven directors are independent, standing committees are independent, directors face annual election, and shareholder rights and mandatory clawbacks are disclosed. The realized regulatory settlement charge tempers evidence of effective oversight, without establishing board responsibility. Stock-plan expansions received actual shareholder approval.
Evidence
In addition, consolidation in the financial services industry has created stronger competitors, some with greater financial resources and broader distribution channels than our own.
2025 Form 10-K, Business—Competition · Filed 10/11/2025
Our regulators have broad authority with respect to the regulation of investment management and other financial services, including among other things, the authority to grant or cancel required licenses or registrations, impose net capital and other financial or operational requirements on us, and other enforcement powers described below.
2025 Form 10-K, Regulation—regulatory powers · Filed 10/11/2025
For our U.S. mutual funds, most of our investment management agreements between our subsidiaries and funds must be renewed each year, and must be approved annually by a vote of each fund’s board of directors or trustees as a whole and separately by a majority of the independent fund directors or trustees under the Investment Company Act of 1940 (the “Investment Company Act”), or by a vote of the holders of a majority of the fund’s outstanding voting securities, and such agreements generally may be terminated by either party without penalty after prior written notice.
2025 Form 10-K, Business—U.S. mutual fund management agreements · Filed 10/11/2025
Our non-U.S. mutual funds, private funds, institutional and high-net-worth separate accounts, and the products for which we provide sub-advisory services, are typically subject to various termination rights and/or renewal provisions, which often provide for termination upon relatively short notice with little or no penalty.
2025 Form 10-K, Business—other management agreement termination rights · Filed 10/11/2025
The investment management industry is facing transformative pressures and trends from a variety of different sources including increased fee pressure; a continued shift away from actively managed core equities and fixed income strategies towards alternative, passive and smart beta strategies; increased demands from clients and distributors for client engagement and services; a trend towards institutions developing fewer relationships and partners and reducing the number of investment managers they work with; increased regulatory activity and scrutiny of many aspects of the investment management industry, including transparency/unbundling of fees, inducements, conflicts of interest, capital, liquidity, solvency, leverage, operational risk management, controls and compensation; addressing the key emerging markets in the world, such as China and India, which often have populations with different needs, preferences and horizons than the U.S.
2025 Form 10-K, industry competition and fee pressures · Filed 10/11/2025
Our fees for providing investment management services are generally based on a percentage of AUM in the accounts that we advise, and vary based on the asset classes of the accounts, the types of services that we provide, and the market for those services.
2025 Form 10-K, investment management fee economics · Filed 10/11/2025
45 Table of Contents The calculations of adjusted operating income, adjusted operating margin, adjusted net income and adjusted diluted earnings per share are as follows: (in millions) 2025 2024 2023 for the fiscal years ended September 30, Operating income $ 604.1 $ 407.6 $ 1,102.3 Add (subtract): Elimination of operating revenues upon consolidation of investment products¹ 50.7 47.4 37.5 Acquisition-related retention 162.4 263.6 164.9 Compensation and benefits expense from gains on deferred compensation, net 23.4 50.5 20.3 Other acquisition-related expenses 41.4 97.4 50.2 Amortization of intangible assets 406.5 338.2 341.1 Impairment of intangible assets 226.6 389.2 — Special termination benefits 69.7 75.8 63.2 Compensation and benefits expense related to minority interests in certain subsidiaries 55.4 43.4 44.3 Adjusted operating income $ 1,640.2 $ 1,713.1 $ 1,823.8 Total operating revenues $ 8,770.7 $ 8,478.0 $ 7,849.4 Add (subtract): Acquisition-related pass through performance fees (109.4) (97.5) (169.7) Sales and distribution fees (1,474.7) (1,381.2) (1,203.7) Allocation of investment management fees for sales, distribution and marketing expenses (536.2) (481.9) (409.4) Elimination of operating revenues upon consolidation of investment products¹ 50.7 47.4 37.5 Adjusted operating revenues $ 6,701.1 $ 6,564.8 $ 6,104.1 Operating margin 6.9 % 4.8 % 14.0 % Adjusted operating margin 24.5 % 26.1 % 29.9 % 46 Table of Contents (in millions, except per share data) 2025 2024 2023 for the fiscal years ended September 30, Net income attributable to Franklin Resources, Inc.
2025 Form 10-K, pages 45–46, operating results and non-GAAP reconciliation · Filed 10/11/2025
(in millions, except share and per share data)
June 30,
2026
September 30,
2025
Assets
Cash and cash equivalents
$
2,670.3
$
3,088.1
Receivables
1,566.9
1,541.7
Investments (including $1,047.7 and $1,179.5 at fair value at June 30, 2026 and September 30, 2025)
2,706.9
2,374.0
Assets of consolidated investment products
Cash and cash equivalents
1,090.6
485.8
Investments, at fair value
15,535.2
12,278.8
Property and equipment, net
886.6
949.1
Goodwill
6,299.9
6,206.0
Intangible assets, net
4,015.8
4,166.0
Operating lease right-of-use assets
752.2
764.3
Other
718.6
514.5
Total Assets
$
36,243.0
$
32,368.3
Liabilities
Compensation and benefits
$
1,730.1
$
1,760.3
Accounts payable and accrued expenses
632.7
615.4
Debt
2,401.9
2,362.0
Liabilities of consolidated investment products
June 2026 Form 10-Q, consolidated balance sheets—assets and corporate debt · Filed 31/07/2026
Redeemable Noncontrolling Interests
1,480.8
1,182.0
Stockholders’ Equity
Preferred stock, $1.00 par value, 1,000,000 shares authorized; none issued
—
—
Common stock, $0.10 par value, 1,000,000,000 shares authorized; 507,507,250 and 520,951,796 shares issued and outstanding at June 30, 2026 and September 30, 2025
50.8
52.1
Capital in excess of par
660.5
956.8
Retained earnings
11,520.6
11,516.0
Accumulated other comprehensive loss
(493.7)
(447.1)
Total Franklin Resources, Inc.
June 2026 Form 10-Q, consolidated balance sheets—common shares and equity components · Filed 31/07/2026
stockholders’ equity
11,738.2
12,077.8
Nonredeemable noncontrolling interests
1,181.7
929.0
Total stockholders’ equity
12,919.9
13,006.8
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity
$
36,243.0
$
32,368.3
June 2026 Form 10-Q, consolidated balance sheets—issuer and noncontrolling equity · Filed 31/07/2026
Investments held by the Company generated net gains of $62.1 million and $32.8 million for the three and nine months ended June 30, 2026, as compared to net losses of $31.4 million and $41.7 million for the three and nine months ended June 30, 2025.
June 2026 Form 10-Q, investment results of the Company · Filed 31/07/2026
Interest expense decreased $2.3 million and $5.9 million for the three and nine months ended June 30, 2026 reflecting the repayment of $450 million of senior notes in March 2026 and $400 million of senior notes in March 2025, partially offset by interest recognized on borrowings under our revolving credit facility.
June 2026 Form 10-Q, interest expense and senior note repayments · Filed 31/07/2026
During the three and nine months ended June 30, 2026, we repurchased 10.4 million and 14.5 million shares of our common stock at a cost of $348.1 million and $447.1 million and we repurchased 7.3 million and 8.1 million shares of our common stock at a cost of $157.4 million and $173.2 million in the prior year periods.
June 2026 Form 10-Q, stock repurchases · Filed 31/07/2026
39
Table of Contents
On October 1, 2025, we completed the acquisition of Apera Asset Management for cash consideration of €65.2 million net of closing adjustments, funded from existing cash.
June 2026 Form 10-Q, page 39, Apera acquisition consideration · Filed 31/07/2026
In addition, we will pay up to €125.0 million in cash through the fifth anniversary of the closing date based on achieving revenue targets.
June 2026 Form 10-Q, Apera contingent consideration · Filed 31/07/2026
As part of our acquisition of Putnam, which closed on January 1, 2024, we will pay up to $375.0 million between the third and seventh anniversaries of the closing date related to revenue growth targets from the strategic partnership with Great-West, which will be recognized in operating income.
June 2026 Form 10-Q, Putnam revenue-contingent acquisition payments · Filed 31/07/2026
We have in certain instances voluntarily elected to provide the funds with direct or indirect financial support based on our business objectives.
June 2026 Form 10-Q, voluntary financial support to sponsored funds · Filed 31/07/2026
We did not provide significant additional financial or other support to our sponsored funds during the nine months ended June 30, 2026.
June 2026 Form 10-Q, actual sponsored-fund support during the period · Filed 31/07/2026
The Second Amended and Restated Credit Agreement amends and restates the Company’s existing revolving credit agreement to, among other things, increase the aggregate commitments and extend its maturity to July 30, 2031.
June 2026 Form 10-Q, Note 14—credit agreement maturity extension · Filed 31/07/2026
The Second Amended and Restated Credit Agreement provides for a five-year revolving credit facility with $1.5 billion of aggregate commitments with the option to increase the aggregate commitments by a maximum of $500.0 million.
June 2026 Form 10-Q, Note 14—revolving credit commitments · Filed 31/07/2026
As of July 30, 2026, there was $700.0 million outstanding under the Second Amended and Restated Credit Agreement.
June 2026 Form 10-Q, Note 14—July 30 revolving borrowings · Filed 31/07/2026
Components of the change in AUM by asset class were as follows:
(in billions)
Equity
Fixed Income
Alternative 1
Multi-Asset
Cash
Management
Total
for the three months ended
June 30, 2026
AUM at April 1, 2026
$
669.7
$
434.3
$
282.8
$
207.5
$
87.8
$
1,682.1
Long-term inflows
65.9
30.4
11.8
13.9
—
122.0
Long-term outflows
(63.9)
(27.8)
(2.7)
(9.2)
—
(103.6)
Long-term net flows
2.0
2.6
9.1
4.7
—
18.4
Cash management net flows
—
—
—
—
(7.0)
(7.0)
Total net flows
2.0
2.6
9.1
4.7
(7.0)
11.4
Acquisition
—
—
0.1
—
—
0.1
Net market change, distributions and other
85.2
4.5
2.2
6.4
(0.3)
98.0
AUM at June 30, 2026
$
756.9
$
441.4
$
294.2
$
218.6
$
80.5
$
1,791.6
_______________
1Beginning in fiscal year 2026, non-fee generating uncalled capital commitments, which were previously included in net market change, distributions, and other, are reflected in long-term inflows in the period the capital is committed.
June 2026 Form 10-Q, AUM changes by asset class for the third quarter · Filed 31/07/2026
CONSOLIDATED STATEMENTS OF INCOME
Unaudited
Three Months Ended
June 30,
Nine Months Ended
June 30,
(in millions, except per share data)
2026
2025
2026
2025
Operating Revenues
Investment management fees
$
1,866.2
$
1,640.8
$
5,533.4
$
5,113.7
Sales and distribution fees
404.5
351.9
1,189.8
1,092.3
Shareholder servicing fees
74.3
59.9
214.2
185.3
Other
13.4
11.4
43.0
35.7
Total operating revenues
2,358.4
2,064.0
6,980.4
6,427.0
Operating Expenses
Compensation and benefits
958.5
901.1
2,953.9
2,812.5
Sales, distribution and marketing
555.4
480.7
1,640.3
1,491.1
Information systems and technology
June 2026 Form 10-Q, consolidated statements of income—fees and revenues · Filed 31/07/2026
25 Table of Contents (in billions) Average AUM 1 Percent Change Mix of Average AUM for the nine months ended June 30, 2026 2025 2026 2025 Equity $ 711.0 $ 626.0 14 % 41 % 39 % Fixed Income 438.9 474.3 (7 %) 26 % 30 % Alternative 278.1 251.3 11 % 16 % 16 % Multi-Asset 206.3 176.9 17 % 12 % 11 % Cash Management 80.2 67.9 18 % 5 % 4 % Total $ 1,714.5 $ 1,596.4 7 % 100 % 100 % _______________ 1Average AUM is calculated as the average of the month-end AUM for the trailing ten months.
June 2026 Form 10-Q, page 25, nine-month average AUM and asset mix · Filed 31/07/2026
35 Table of Contents The calculations of adjusted operating income, adjusted operating margin, adjusted net income and adjusted diluted earnings per share are as follows: (in millions) Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 Operating income $ 215.8 $ 154.1 $ 820.1 $ 518.7 Add (subtract): Elimination of operating revenues upon consolidation of investment products* 17.3 12.0 48.8 37.6 Acquisition-related retention (23.6) 47.9 42.5 128.4 Compensation and benefits expense from gains on deferred compensation, net 17.8 0.1 35.2 4.6 Other acquisition-related expenses 5.9 10.5 16.9 30.6 Amortization of intangible assets 50.7 112.2 156.4 337.3 Impairment of intangible assets 33.0 — 33.0 24.4 Special termination benefits 77.2 26.9 123.4 44.7 Compensation and benefits expense related to minority interests in certain subsidiaries 14.8 14.1 44.5 41.5 Charges related to significant regulatory settlements 100.0 — 100.0 — Adjusted operating income $ 508.9 $ 377.8 $ 1,420.8 $ 1,167.8 Total operating revenues $ 2,358.4 $ 2,064.0 $ 6,980.4 $ 6,427.0 Add (subtract): Acquisition-related pass through performance fees (3.7) (2.1) (72.6) (87.4) Sales and distribution fees (404.5) (351.9) (1,189.8) (1,092.3) Allocation of investment management fees for sales, distribution and marketing expenses (150.9) (128.8) (450.5) (398.8) Elimination of operating revenues upon consolidation of investment products* 17.3 12.0 48.8 37.6 Adjusted operating revenues $ 1,816.6 $ 1,593.2 $ 5,316.3 $ 4,886.1 Operating margin 9.2% 7.5% 11.7% 8.1% Adjusted operating margin 28.0% 23.7% 26.7% 23.9% 36 Table of Contents (in millions, except per share data) Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 Net income attributable to Franklin Resources, Inc.
June 2026 Form 10-Q, pages 35–36, operating income and adjustment reconciliation · Filed 31/07/2026
Note 11 – Stock-Based Compensation Stock and stock unit award activity was as follows: (shares in thousands) Time-Based Shares Performance- Based Shares Total Shares Weighted- Average Grant-Date Fair Value for the nine months ended June 30, 2026 Nonvested balance at October 1, 2025 14,959 353 15,312 $ 22.81 Granted 8,691 176 8,867 22.68 Vested (2,252) (180) (2,432) 26.25 Forfeited/canceled (2,353) — (2,353) 20.76 Nonvested Balance at June 30, 2026 19,045 349 19,394 $ 22.57 Total unrecognized compensation expense related to nonvested stock and stock unit awards was $200.0 million at June 30, 2026.
June 2026 Form 10-Q, Note 11—stock-based award activity · Filed 31/07/2026
Peer Group Comparison(1) % of Mutual Fund AUM in Top Two Peer Group Quartiles Benchmark Comparison(2) % of Strategy Composite AUM Exceeding Benchmark As of September 30, 2025 1-Year 3-Year 5-Year 10-Year 1-Year 3-Year 5-Year 10-Year Fixed Income 53% 71% 71% 64% 68% 76% 83% 92% Equity 60% 62% 49% 58% 37% 41% 34% 44% Total AUM(3) 51% 57% 62% 54% 53% 55% 52% 62% (1) Mutual fund performance is sourced from Morningstar and measures the percentage of ranked fund AUM in the top two quartiles of their peer groups.
2026 proxy statement, investment performance comparisons as of September 2025 · Filed 22/12/2025
- Increased Canvas AUM by 71% year-over-year to $16.3 billion with positive net inflows in every quarter since its acquisition in 2021.
2026 proxy statement, Canvas growth and consecutive net inflows · Filed 22/12/2025
Long-term net outflows were $97.4 billion and reinvested distributions were $30.4 billion.
2026 proxy statement, fiscal 2025 long-term net outflows · Filed 22/12/2025
This year, we returned $930 million to shareholders through dividends and share repurchases, funded the majority of our remaining acquisition-related payments, and repaid $400 million senior notes due in March 2025.
2026 proxy statement, fiscal 2025 capital returns and debt repayment · Filed 22/12/2025
Compensation Elements Our executive compensation program consists primarily of three elements: (1) base salary, (2) short-term incentive compensation based on company-wide investment and financial performance objectives and NEO-specific strategic initiatives, and which is paid in a combination of cash and time-based incentive RSU awards, and (3) RSU awards subject to long-term performance-based vesting conditions.
2026 proxy statement, existing executive compensation elements · Filed 22/12/2025
Independent Oversight • 8 of 11 directors are independent • Strong Independent Lead Director with clearly delineated duties • Regular executive session of independent directors • All standing Board committees are composed entirely of independent directors Strong Corporate Governance Practices and Stockholder Rights • “Proxy Access” right for stockholders • No supermajority vote provisions • Stockholders can act by written consent • 25% of shares can call a special meeting • One-share, one-vote standard • Overboarding limits • Stock Ownership Guidelines • Trading Blackout Policy and prohibitions against hedging and pledging transactions • CEO and executive leadership succession planning Accountability and Commitment to Continuous Improvement • All directors are elected annually • Robust annual Board and committee evaluations • Active stockholder engagement • Clawback Policy for executive officers • Comprehensive Code of Ethics and Business Conduct • Director orientation and continuing education programs EXECUTIVE COMPENSATION HIGHLIGHTS What We Do Align pay with performance: a significant portion of total compensation for all NEOs is performance-based Grant long-term awards based on meaningful performance measures Maintain clawback policies Require significant stock ownership Limit perquisites Retain an independent consultant to the Compensation Committee Regularly review incentive compensation plans and compensation practices Engage with stockholders regarding compensation practices What We Don’t Do Provide excessive severance benefits Enter into change in control agreements with NEOs Provide excise tax gross-ups Reprice underwater stock options Permit hedging of Company stock Allow pledging of Company stock received as compensation Offer executive-specific retirement plans Pay dividends or dividend equivalents to NEOs on unvested performance shares 2026 Proxy Statement 5 TABLE OF CONTENTS CEO Compensation Other NEOs Compensation Pay Type Pay Element Purpose Base Salary Fixed Cash • Provides fixed pay for performing day-to-day responsibilities Short-Term Incentive At Risk Performance- Based Variable Compensation Cash • Performance-based variable compensation reinforces our pay-for-performance culture • Recognizes current year achievement of goals and objectives • Total award amount determined and divided into short and long-term incentives • All long-term incentive awards are subject to malus and clawback provisions Long-Term Incentive Time-Based Restricted Stock Units Performance-Based Share Units 2025 STOCKHOLDER ENGAGEMENT We engage with stockholders to provide multiple opportunities for them to express their views so that we may consider those views as we evaluate our governance practices, executive compensation program and other matters of interest to stockholders.
2026 proxy statement, governance and compensation practices · Filed 22/12/2025
The Clawback Policy provides for the mandatory recovery of erroneously awarded incentive-based compensation following accounting restatements from persons who served as an executive officer of the Company at any time during the performance period for such incentive-based compensation and who received such compensation during the three fiscal years preceding the date on which the Company is required to prepare an accounting restatement.
2026 proxy statement, mandatory executive compensation clawback policy · Filed 22/12/2025
Our effective investment management fee rate excluding performance fees (investment management fees excluding performance fees divided by average AUM) was 41.1 and 42.1 basis points for fiscal years 2024 and 2023.
2024 Form 10-K, historical effective management fee rates excluding performance fees · Filed 12/11/2024
The rate decrease was primarily due to increased AUM in lower fee products, including those from the acquisition of Putnam, certain transaction-related fees received in the prior year, and lower catch-up fees recognized at the closing of fundraising rounds in a secondary private equity fund, which ended in January 2024.
2024 Form 10-K, historical fee-rate decline attribution · Filed 12/11/2024
This quarter, we returned $521.5 million to shareholders, including $348.1 million in share repurchases.
July 2026 earnings release, third-quarter shareholder distributions · Filed 31/07/2026
vs. Qtr.
30-Jun-25
Year vs. Year
Financial Results
(in millions, except per share data)
Operating revenues
$
2,358.4
$
2,294.9
3
%
$
2,064.0
14
%
Operating income
215.8
323.3
(33
%)
154.1
40
%
Operating margin
9.2
%
14.1
%
7.5
%
Net income1
$
171.5
$
268.2
(36
%)
$
92.3
86
%
Diluted earnings per share
0.31
0.49
(37
%)
0.15
107
%
As adjusted (non-GAAP):2
Adjusted operating income
$
508.9
$
474.6
7
%
$
377.8
35
%
Adjusted operating margin
28.0
%
27.1
%
23.7
%
Adjusted net income
$
386.3
$
384.5
0
%
$
263.4
47
%
Adjusted diluted earnings per share
0.72
0.71
1
%
0.49
47
%
Assets Under Management
(in billions)
Ending
$
1,791.6
$
1,682.1
7
%
$
1,611.8
11
%
Average3
1,750.0
1,701.6
July 2026 earnings release, quarterly GAAP and adjusted financial results · Filed 31/07/2026
$
171.5
$
268.2
$
92.3
$
695.2
$
407.3
Add (subtract):
Net (income) loss of consolidated investment products*
—
(0.6)
3.9
0.1
(0.2)
Acquisition-related retention
July 2026 earnings release, attributable net income reconciliation · Filed 31/07/2026
4.Includes our direct investments in CIPs of $1.2 billion, approximately $380 million of employee-owned and other third-party investments made through partnerships, approximately $434 million of investments that are subject to long-term repurchase agreements and other net financing arrangements, and approximately $409 million of cash and investments related to deferred compensation plans.
July 2026 earnings release, note 4—investment ownership, financing and deferred-compensation scope · Filed 31/07/2026
5.Beginning in fiscal year 2026, non-fee generating uncalled capital commitments, which were previously included in net market change, distributions, and other, are reflected in long-term inflows in the period the capital is committed.
July 2026 earnings release, note 5—change in treatment of uncalled commitments · Filed 31/07/2026
"We delivered $18.4 billion in long-term net inflows across public and private assets, bringing fiscal year-to-date long-term net inflows to $63.3 billion.
July 2026 earnings release, management statement of quarterly and year-to-date net inflows · Filed 31/07/2026
Strong momentum continued in public markets, highlighted by $9.5 billion in multi-asset net inflows, our 19th consecutive quarter of positive flows in that asset class.
April 2026 earnings release, multi-asset net inflows and consecutive positive quarters · Filed 28/04/2026
1
“In other areas of growth, our ETF platform reached a new high with $58 billion in AUM and delivered $7.5 billion in net flows, inclusive of $3.5 billion in mutual fund conversions, its 17th consecutive positive quarter.
January 2026 earnings release, ETF flows including mutual fund conversions · Filed 30/01/2026
Special Equity Awards
The Awards are 100% equity-based, with half tied to financial performance based on average operating margin metrics and a relative total shareholder return modifier, designed to reinforce the team's accountability for delivering strong financial performance and sustained stockholder returns over the next three years and to provide critical stability of leadership for the Company over at least the next five years.
July 23, 2026 Form 8-K, special equity award performance conditions · Filed 23/07/2026
Each Award has a grant date fair value of approximately USD $15 million as determined and approved by the Committee, and is comprised of (i) 50% performance stock units (“PSUs”) subject to a three-year cliff vesting performance period covering the Company’s fiscal years ending September 30, 2027 to 2029 that are eligible to vest and convert to shares of common stock of the Company (“Stock”) as of December 1, 2029, subject to a potential payout range of 0% to 187.5% of the PSU portion of the Awards based on achievement of the applicable performance metrics and modifier, and (ii) 50% time-based restricted stock units (“RSUs”) subject to a five-year cliff vesting period that are eligible to vest and convert to shares of Stock as of August 31, 2031.
July 23, 2026 Form 8-K, granted special awards—value, payout range and vesting dates · Filed 23/07/2026
The Awards are not eligible to vest based on retirement, and generally provide for forfeiture on termination except in limited circumstances consistent with our equity award program.
July 23, 2026 Form 8-K, special award forfeiture and retirement terms · Filed 23/07/2026
The potential carry distributions from the Carry Incentives to the CEO and Executive Chairman, if any, are 100% at-risk based on the ultimate performance of the participating funds.
July 23, 2026 Form 8-K, carry incentives contingent on ultimate fund performance · Filed 23/07/2026
Any such distributions require that investment returns of a participating fund exceed pre-specified performance hurdles over a defined term.
July 23, 2026 Form 8-K, carry incentive performance hurdles · Filed 23/07/2026
(the “Company”) held on February 3, 2026 (the “Annual Meeting”), the Company’s stockholders approved an amendment and restatement of the Company's 1998 Employee Stock Investment Plan ("ESIP"), to increase the number of shares of common stock, par value $0.10 per share, of the Company ("Common Stock") authorized for issuance under the ESIP by an additional 5,000,000 shares, and an amendment and restatement of the Company’s 2002 Universal Stock Incentive Plan (“USIP”), to increase the number of shares of Common Stock authorized for issuance under the USIP by an additional 25,000,000 shares.
February 5, 2026 Form 8-K, shareholder approval of additional stock-plan authorizations · Filed 05/02/2026
