CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTSPART III

Item 10. Directors, Executive Officers and Corporate Governance

Directors and Executive Officers

SomeThe current directors and executive officers of Focus are as follows:

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In accordance with Nasdaq Rule 5606(a), the following Board Diversity Matrix sets forth the gender identity and demographic background of the informationBoard.

One director is of Middle Eastern descent.

Set forth below are the backgrounds of our executive officers and our directors.

Ruediger Adolf

Mr. Adolf has served as our Chairman and Chief Executive Officer and as a member of our Board of Directors (the “Board of Directors”) since our formation in 2015. Mr. Adolf founded Focus Financial Partners, LLC (“Focus LLC”), our subsidiary, and has served as Chief Executive Officer of Focus LLC since 2004. He also served as a member of the board of managers of Focus LLC from 2004 to 2018. From 1998 to 2003, Mr. Adolf served as Senior Vice President and General Manager of American Express’ (“AMEX”) Global Brokerage and Banking division. Prior to this Annual Report on Form 10-K (this “Annual Report”) may contain forward-looking statements. Forward-looking statements give our current expectations, contain projectionsrole, Mr. Adolf was Senior Vice President of results of operations or of financial condition, or forecasts of future events. Words such as “may,” “assume,” “forecast,” “position,” “predict,” “strategy,” “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe,” “project,” “budget,” “potential,” “continue,” “will”Strategy and similar expressions are used to identify forward-looking statements. They can be affected by assumptions used or by known or unknown risks or uncertainties. Consequently, no forward-looking statements can be guaranteed. When considering these forward-looking statements, you should keep in mindBusiness Development. Before joining AMEX, Mr. Adolf was a partner at McKinsey & Company. Other than the risk factors and other cautionary statements described under “Part I, Item 1A, Risk Factors.” Actual results may vary materially. You are cautionedCompany, Mr. Adolf does not to place undue reliancecurrently serve on any forward-looking statements. You should also understand that it is not possible to predictpublic or identify all such factorsprivate company boards of directors. Mr. Adolf holds a Mag. iur. and should not consider the following list to be a complete statement of all potential risks and uncertainties. Factors that could cause our actual results to differ materiallyDr. iur. from the results contemplated by such forward-looking statements include:University of Innsbruck, Austria.

Mr. Adolf is qualified to serve as a director because of his operational and historical experience as our Founder and Chief Executive Officer, and as a member of our Board of Directors. Mr. Adolf is also qualified because of his extensive experience in the financial services industry, particularly in the wealth management industry.

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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 forward-looking statementsof Mr. Carey’s board positions are expresslyin 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 in their entirety byto 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 foregoing cautionary statements. Our forward-looking statements speak only asChief Executive Officer, President and Chairman of the dateboard of this Annual Report ordirectors 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 date asaudit committee, of World Finance, which they are made. Except as required by applicable law, including federal securities laws, we do not intend to update or revise any forward-looking statements.

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GLOSSARY

The following terms are used throughout this Annual Report:

Base Earnings. This is a percentagepublic 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 estimated operating cash flow earnings before partner compensation (i.e., Target Earnings) upon which we applyFinance 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 multipleBachelor of Business Administration with a concentration in Accounting from Temple University.

Mr. Feliciani is qualified to determine acquisition prices. We retain a preferred position in Base Earnings.

Commission-based. Commission-based revenue is derived from commissions paid by clients or payments from third parties for sales of investment or insurance products.

Fee-based. Fee-based services are those for which a partner firm primarily charges a fee directly to the client for wealth management services, recordkeeping and administration services and other services rather than being primarily compensated through commissions from clients or from third parties for recommending financial products.

Fiduciary Duty. A fiduciary duty is a legal duty to act in another party’s interests, with utmost good faith, to make full and fair disclosure of all material facts and to exercise all reasonable care to avoid misleading clients.

GAAP. Accounting principles generally accepted in the United States of America.

High Net Worth. High net worth individuals are generally defined in the financial industry as those with liquid financial assets, excluding primary residence, in excess of $1 million.

Lift Out. The circumstance when a group of wealth management professionals, already workingserve as a team, seeks to leave their current employerdirector because of his accounting, audit, financial services industry, risk management and join another employer or start their own registered investment advisor firm.

Open-architecture. An investment platform that grants clients access to a wide range of investment funds and products offered by third parties. By contrast, a closed architecture is an investment platform that grants clients access only to proprietary investment funds and products.

Partnership. The term we use to refer to our business and relationship with our partner firms. It is not intended to describe a particular form of legal entity or a legal relationship.

Target Earnings. The estimated operating cash flow earnings before partner compensation.

Ultra-High Net Worth. Ultra-high net worth individuals are generally defined in the financial industry as those with liquid financial assets, excluding primary residence, in excess of $30 million.

Wealth Management. Comprehensive professional services that combine investment advice, financial and tax planning, consulting, tax return preparation, family office services and other services that help clients achieve their objectives regarding accumulation, preservation and distribution of long-term wealth.

Wirehouse. Brokerage firm that provides a full range of investment, research, trading and wealth management services to clients. The term originated prior to the advent of modern wireless communications, when brokerage firms were connected to their branches primarily through telephone and telegraph wires.

​public company corporate governance experience.

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PART IRajini Sundar Kodialam

Unless otherwise indicated orMs. 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 context requires, all referencesboard of managers from July 2017 to “we,” “us,” “our,”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,” and “Focus Inc,” refer to Focus Financial Partners Inc. and its consolidated subsidiaries. “Focus LLC” refers to Focus Financial Partners, LLC,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 Delaware limited liability companyprivate 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 consolidated subsidiaryMaster of ours.Business Administration in Finance and Marketing from the Columbia University Graduate School of Business.

The term “partner firms” refersMs. Kodialam is qualified to our consolidated subsidiaries engaged in wealth managementserve as a director because of her operational and related services, the businesses of which are typically managed by the principals. The term “principals” refers to the wealth management professionals who manage the businesses of our partner firms pursuant to the relevant management agreement. The term “our partnership” refers to our businesshistorical experience as a co-founder and relationship with our partner firms and is not intended to describe a particular form of legal entity or a legal relationship.

Item 1. Business

Corporate Structure

Focus Inc. is a holding company whose most significant asset is a membership interest in Focus LLC. Focus LLC directly or indirectly owns all of the outstanding equity interests in our partner firms. Focus Inc. is the sole managing memberManaging Director of Focus LLC and is responsible for all operational, management and administrative decisions of Focus LLC. Subject to certain restrictions, unitholders of Focus LLC (other than Focus Inc. and any of its subsidiaries) may receive sharesas a member of our Class A common stock pursuant to the exerciseBoard of an exchange right or a call right.

Our Company

We are a leading partnership of independent, fiduciary wealth management firms operatingDirectors, as well as her extensive experience in the highly fragmented registered investment adviser (“RIA”) industry, withfinancial 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 footprint of over 80 partner firms primarilyFlorida based law firm, since 2011. From 2009 to 2011 Mr. LeMieux served as a U.S. Senator in the United States. We have achieved this market leadership by positioning ourselves111th 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 partnerCompany, Mr. LeMieux does not currently serve on any public company boards of choice for many firms in an industry where a number of secular trends are driving consolidation. Our partner firms primarily service ultra-high net worth and high net worth individuals and families by providing highly differentiated and comprehensive wealth management services. Our partner firms benefit from our intellectual and financial resources, operating as part of a scaled business model with aligned economic interests, while retaining their entrepreneurial culture and independence.

Our partnership is builtdirectors. Mr. LeMieux currently serves on the following principles,board of directors of Gunster Yoakley & Stewart, which enable usis 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 attractserve as a director because of his extensive experience as Chairman of Gunster Yoakley & Stewart and retain high-quality wealth management firmshis 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 accelerate their growth:

We were founded by entrepreneursserves 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 began revenue-generatingits related subsidiaries, each of which is a private company. Dr. Morganroth holds a Bachelor of Science in Psychology from the University of Michigan and acquisition activities in 2006. Since that time, we have: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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WeFayez 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 midstColumbia University Graduate School of Business.

Mr. Muhtadie is qualified to serve as a fundamental shiftdirector 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 growing wealth management services industry. The deliveryChief Financial Officer/Vice President of wealth management servicesOperations 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 movinga Certified Public Accountant and holds a Master of Business Administration and a Bachelor of Business Administration from traditional brokerage, commission-based platformsHofstra 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 fiduciary, open-architectureManaging Director, M&A Counsel and fee-based structure. This shift has resultedCorporate 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 significant transfercorporate associate at White & Case LLP.  Mr. McGranahan holds a Bachelor of client assetsArts in Economics and wealth management professionals from traditional brokerage, commission-based platforms to independent wealth management practices. We believe that our leading partnership of independent, fiduciary wealth management firms positions us to benefit from these trends.

The independent wealth management industry, including RIAs, is highly fragmented, which we believe enables us to continue our growth strategy of acquiring high-quality independent wealth management firms, directly and through acquisitions by our partner firms. We have a track record of enhancing the competitive position of our partner firms by providing them with access to the intellectual expertise, resources and network benefits of our large organization. Our scale enables us to help our partner firms achieve operational efficiencies and ensure organizational continuity. Additionally, our scale, resources and value-added services increase our partner firms’ ability to achieve growth through a variety of tactical, operational and strategic initiatives, as well as the consummation of their own acquisitions.

Our partnership is comprised of trusted professionals providing comprehensive wealth management services through a largely recurring, fee-based model, which differentiates our partner firmsWorld Politics from the traditional brokerage platforms whose revenues are largely derivedCatholic University of America and a Juris Doctorate from commissions. We derive a substantial majority of our revenues from wealth management fees for investment advice, financial and tax planning, consulting, tax return preparation, family office services and other services. WeYale Law School. Additionally, Mr. McGranahan has also generate other revenues from recordkeeping and administration service fees, commissions and distribution fees and outsourced services.

Our Growth Strategy

We believe we are well-positioned to take advantage of favorable trends inearned the wealth management industry, including the migration of wealth management professionals from traditional brokerage, commission-based platforms to a fiduciary, open-architecture and fee-based structure. We plan to grow our business through the growth of our existing partner firms and the expansion of our partnership.

Growth of Our Existing Partner Firms

High-Quality, Growth-Oriented Partner Firms

Our goal has been and continues to be to acquire high-quality, entrepreneurial wealth management firms that have built their businesses through a proven track record of growth. We believe that our partner firms will continue to take advantage of the shift in client assets to the RIA space and grow organically through acquisitions of wealth management practices and customer relationships, by attracting new clients, adding new wealth management professionals, increasing client assets from existing clients and through financial market appreciation over time. The economic arrangements put in place at the time of acquisition through our management agreements incentivize the principals of our partner firms to continue executing on their growth plans.Chartered Financial Analyst® designation.

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Value-Added ServicesCorporate 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 a team of approximately 100 professionals who support our partner firms by providing value added services, including marketingthe following standing committees: the Audit and business development support; human resources support, including adviser coachingRisk Committee, the Compensation Committee, and developmentthe Nominating, Governance and structuring compensation and incentive models, career path planning and succession planning advice, recruiting and talent management, operational and technology expertise, cash and credit solutions, trust services, insurance solutions, valuation solutions, legal and regulatory support and providing negotiating leverage with vendors. Our value added services also include access to our M&A expertise, which facilitates acquisition opportunities for our partner firms through a proactive outreach program, structuring, executing and funding transactions and providing guidance to partner firms to facilitate their integration into our partnership as well as integration of mergers they execute. We assign a relationship leader to each partner firm who is responsible for coordinating our value added services to assist that partner firm in accelerating its growth. Our partner firms also have access to our intellectual expertise and partner firm network, which ultimately enhance their operations, enabling them to better serve their clients.

Some of our key value-added services are described in detail below.

Marketing and Business Development. We offer marketing and business development coaching to our partner firms on topics including referral programs, revenue enhancement measures, communications, website and social media, brand strategy and public relations support. Our marketing team works closely with each of our partner firms to understand their unique value proposition and help them better market themselves to their clients and their centers of influence, including accounting and law firms who serve as potential referral sources. To further support our partner firms, we hold a minority investment in Financial Insight Technology, Inc. (known as SmartAsset), a New York-based fintech company that connects prospective clients with financial advisers and provides tools to help individuals make more informed financial decisions.

Talent Management. We support the mentoring of next generation talent at each of our partner firms through continuous coaching programs that we organize and execute. These programs emphasize key learnings gained from observing top talent across our organization, allowing our firms to benefit from best practices across our talent pool. We also help our partner firms recruit new talent, helping them to grow and enhance their businesses through the addition of experienced advisors and other professionals.

Compensation Structures and Succession Planning. We help our partner firms align their compensation models to further incentivize their teams. We also facilitate wealth management professional career path planning and advise on principal promotions to the respective management company. These services allow our partner firms to attract and retain the highest quality wealth management professionals. Our acquisition structure facilitates succession planning by maintaining the partner firm and management company as separate entities, thereby allowing for the principals owning the management company to transition over time without disrupting client relationships at the partner firm.

Operations and Technology. We assist partner firms in selecting and implementing third-party technology solutions that strengthen each firm’s operational performance. Our partner firms can request that our operations team conduct detailed operational assessments to determine their staffing and operating efficiency. Additionally, our operations team provides partner firms negotiating leverage with vendors and cost-efficient access to third-party technology.

Cash and Credit Solutions. Through Focus Client Solutions we have created a network of third-party banks and non-bank lenders to provide a competitive array of cash and credit solutions. These alternatives enable our partner firms to proactively help their clients achieve higher yields on cash, as well as unlock home equity and business opportunities through refinancing, commercial lending and other options.

Insurance Solutions. Through Focus Risk Solutions we have created a network of third-party insurance brokers who can facilitate a competitive array of insurance solutions through their relationships with established insurance carriers. These solutions enable our partner firms to proactively help their clients with risk management in various lines of insurance, including life, health, and property and casualty.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.

Trust Services​. Through Focus Fiduciary Solutions we have created

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 networkmember. Mr. Carey attended or participated in at least 70% of third-party advisor-coordinated, independent trustees who have the scalemeetings of the Board of Directors and expertise to meet the diverse needscommittee of which he was a member. We encourage all of our partners firms’ clientsdirectors to attend our Annual Meetings of Stockholders. All directors then serving were present at the 2022 Annual Meeting of Stockholders.

Audit and can do so at highly competitive pricing. We work on a consultative basis with our partners to help them explore and develop service offerings for their clients.Risk Committee

Legal and Regulatory Support. We have an experienced teamAudit and Risk Committee composed of legal professionalsMs. 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 placehis 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 help support our partner firms in fulfilling their regulatory responsibilities by providing subject matter guidanceBoard 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 expertise. We also assist our partner firms in negotiating and drafting acquisition and other agreements. We also have relationships with numerous high quality law firms and compliance consultants that can assist our partner firms create, implement and maintain a robust compliance environment.

Sharing of Best Practices / Collaboration with Other Partner Firms. Our partner firms have access to networking opportunities, best practices roundtable discussions and training seminars. We offer offsite and virtual meetings, seminars and other forums for partner firms to learn and adopt bestaccounting practices. We host partners meetings where wealth management professionals from our partner firms have opportunities to collaborate and share ideas. In addition, we host periodic summits for chief investment officers, chiefthe Audit and Risk Committee oversees our compliance officers, chief operating officers, chief financial officerswith legal and chief marketing officers, where our partner firms can share specialized expertiseregulatory requirements.

The Audit and business development practices. Our partner firms areRisk Committee also encouraged to share best practices regularly in order to enhance their collective ability to better serve their clients.

Expansion of Our Partnership

Our Acquisition Models

We are a source of permanent capital and buy substantially alloversees management of the assetsCompany’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 firms we acquire. We utilize three models for acquisitions: (1) direct acquisitionsAudit and Risk Committee charter is available free of wealth management practices who become partner firms of Focus but operate on an autonomous basis, (2) acquisitions of wealth management practices and customer relationships on behalfcharge under the Governance tab in the Investor Relations section of our partner firms to accelerate the growth of their businesses, and (3) acquisitions of wealth management practices on behalf of Connectus Wealth Advisers (“Connectus”), one of our partner firms. Firms that join Connectus manage their client relationships and retain their brand identity post-acquisition, but rely on a shared infrastructure and other services provided by Connectus.

website at Acquisitions of New Partner Firmswww.focusfinancialpartners.com

Since inception, a fundamental aspect of our growth strategy has been the acquisition of high-quality, independent wealth management firms to expand our partnership. We believe that there are approximately 1,000 firms in the United States that are high-quality targets for future acquisitions. While most of our acquisitions have taken place in the United States, we also see opportunities in several countries where market and regulatory trends toward the fiduciary standard and open-architecture access mirror those occurring in the United States. We have already begun expansion into Australia, Canada and the United Kingdom.

Our unique value proposition, differentiated partnership model and track record have allowed us to grow and enhance our leadership position in the independent wealth management industry.

We are highly selective in choosing our partner firms and conduct extensive financial, legal, regulatory, tax, operational and business due diligence. We evaluate a variety of criteria including the quality of the wealth management professionals, client characteristics, historical revenues and cash flows, the recurring nature of the revenues, compliance policies and procedures and the alignment of interests between the wealth management professionals and their clients. We focus on firms with owners who are committed to the long-term management and growth of their businesses.

With limited exceptions, our partner firm acquisitions have been structured as acquisitions of substantially all of the assets of the firm we chose to partner with but only a portion of the underlying economics in order to align the principals’ interests with our own objectives. To determine the acquisition price, we first estimate the operating cash flow of the business based on current and projected levels of revenue and expense, before compensation and benefits to.

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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 selling principalscommittee. 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 individuals who become principals. 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 referhave 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 operating cash flowBoard and management with respect to those matters as the committee deems advisable. A copy of the business as Earnings Before Partner Compensation (“EBPC”)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 this EBPC estimate as Target Earnings (“Target Earnings”)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. In economic terms, we typically purchase 40%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 60%new board members.

A copy of the partner firm’s EBPC. The purchase priceNominating, Governance and Sustainability Committee charter is a multipleavailable free of charge under the corresponding percentage of Target Earnings and may consist of cash or a combination of cash and equity, and the right to receive contingent consideration. We refer to the corresponding percentage of Target Earnings on which we base the purchase price as Base Earnings (“Base Earnings”). Under a management agreement between our operating subsidiary and the management company and the principals, the management company is entitled to management fees typically consisting of all future EBPC of the acquired wealth management firm in excess of Base Earnings up to Target Earnings, plus a percentage of any EBPC in excess of Target Earnings. Through the management agreement, we create downside earnings protection for ourselves by retaining a preferred position in Base Earnings.

Since 2006, when we began revenue-generating and acquisition activities, we have grown to a partnership with over 80 partner firms. Acquisitions of partner firms to date have been structured as illustrated below, with limited exceptions. Subsidiary mergers at the partner firm level and acquisitions in foreign jurisdictions have been structured differently, and we expect some differencesGovernance tab in the future depending on legal and tax considerations.Investor Relations section of our website at www.focusfinancialpartners.com.

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In connectionIdentifying 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 typical acquisition, we enter into an acquisition agreement with the target firm and its selling principals pursuantspecial meeting of stockholders). Our stockholders that wish to which we purchase substantially all of the assets of the target firm. The purchase price isnominate a multiple of Base Earnings, which is a percentage of Target Earnings. The purchase price is comprised of a base purchase price and a right to receive contingent consideration in the form of earn out payments. The contingent considerationdirector for acquisitions of new partner firms is generally paid over a six-year period upon the satisfaction of specified growth thresholds in years three and six. These growth thresholds are typically tiedelection to the compound annual growth rate (“CAGR”)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 partner firm’s earnings. Such growth thresholds can be set annually or for different time frames as well, for example, annually over a six-year period. The contingent consideration for acquisitions made by our partner firms is paid upon the satisfaction of specified financial thresholds. These thresholds are typically tied to revenue as adjusted for certain criteria or other operating metrics, based on the retention or growthBoard’s oversight of the business acquired. These arrangements may resultand 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 paymentbasis of, additional purchase price considerationamong other things, experience, knowledge, skills, expertise, diversity, ability to the sellers for periods following the closingmake independent analytical inquiries, understanding of an acquisition. Contingent consideration payments are typically payable in cashFocus’ business environment, willingness to devote adequate time and in some cases, equity.

The acquisition agreements contain customary representationseffort to Board responsibilities, and warrantiesknowledge of the parties,obligations of Focus set forth in any nomination agreements between Focus and closingany 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 generally conditioned on the delivery of certain ancillary documents, including an executed management agreement, a confidentiality and non-solicitation agreement, a non-competition agreement and a notice issueddriven by the acquired firm to its clients notifying themneeds of the acquisitionCompany at any point in time. As a result, no policy exists requiring combination or separation of leadership roles and requesting their consentour governing documents do not mandate a particular structure.  This allows our Board of Directors the flexibility to establish the most appropriate structure for the assignmentCompany 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 any agreementsFocus LLC, and believes that his experience and knowledge allow him to serve as both Chairman and Chief Executive Officer.  In addition, the successor firm.

In connection withBoard believes that such structure promotes clearer leadership and direction for the acquisition, management companiesCompany and selling principals agree to non-competition and non-solicitation provisions of the management agreement, as well as standalone non-competition and non-solicitation agreements required by the acquisition agreement. Such non-competition and non-solicitation agreements typically have five-year terms. The non-competition and non-solicitation provisions of the management agreement continue during the term of the management agreement andallows for a periodsingle, focused chain of two years thereafter.

Our partner firms are primarily overseen by the principals who own the management company formed concurrently with the acquisition. Our operating subsidiary, the management companycommand to execute our strategic initiatives and the principals enter into a long-term management agreement pursuant to which the management company provides the personnel responsible for overseeing the day-to-day operations of the partner firm. The term of the management agreement is generally six years subject to automatic renewals for consecutive one-year terms, unless earlier terminated by either the management company or us in certain limited situations. Subject to applicable cure periods, we may terminate the management agreement upon the occurrence of an event of cause, which may include willful misconduct by the management company or any principal that is reasonably likely to result in a material adverse effect, the failure of the management company to comply with regulatory or other governmental compliance procedures or a material breach of the agreement by the management company or the principals. In some cases, we may have the right to terminate the agreement if any principal ceases to be involved on a full-time basis in the management of the management company or the performance of services under the agreement. Generally, the management company may terminate the management agreement upon a material breach of the agreement by us and the expiration of the applicable cure period.

This ownership and management structure allows the principals to maintain their entrepreneurial spirit through autonomous day-to-day decision making, while gaining access to our extensive resources and preserving the principals’ long-term economic incentive to continue to grow the business. The management company structure provides both flexibility to us and stability to our partner firms by permitting the principals to continue to build equity value in the management company as the partner firm grows and to control their internal economics and succession plans within the management company.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 following table provides an illustrative examplespecific 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 economics, including management fees earned bywebsite at www.focusfinancialpartners.com. Responsibilities of the management company, for periods of projected revenues, +10% growth in revenues and −10% growth in revenues. This example assumes (i) Target Earnings of $3.0 million; (ii) Base Earnings acquired of 60% of Target Earnings or $1.8 million; and (iii) a percentage of earnings in excess of Target Earnings retained byLead Independent Director include the management company of 40%.following:

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In certain circumstances,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 structurecomposition of our relationship with partner firms may differ from the typical structure described above. In addition, we expect some differences in the structure of our future international acquisitions. For example, the structure of our ownership interests in non-U.S. partner firms may differ from the way in which we own our U.S. partner firms.

Acquisitions by Our Partner Firms

We are instrumental to,Board, and support the acquisition of, wealth management practicessound corporate governance policies and customer relationships by our partner firms to further expand their businesses. Partner firms pursue acquisitions for a variety of reasons, including geographic expansion, acquisition of new talent and/or specific expertise and succession planning. Acquisitions by our partner firms allow them to add new talent and services to better support their client base while simultaneously capturing synergies from the acquired businesses. We believe there are currently over 5,000 firms in the United States that are suitable targets for our partner firms. We have an experienced team of professionals with deep industry relationships to assist in identifying potential acquisition targets for our partner firms. Through our proprietary in-house sourcing effort, we frequently identify acquisition opportunities for our partner firms. Additionally, many of our partner firms are well known in the industry and have developed extensive relationships. In recent years, principals and employees of our partner firms have identified attractive merger candidates, and we believe this trend will continue as our partner firms continue to build scale.practices.

In addition, to sourcing opportunities, weour 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 through each stagein 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 process to provide legal, financial, tax, compliancechallenges and operational expertise to guiderisks of our partner firms throughbusinesses, and the acquisition due diligence processBoard and execution. We providemanagement actively engage in discussion on these topics. In addition, each of the fundingBoard’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 acquisitions inwhich one of our executive officers serves as a member of the same mannerboard of directors or compensation committee of that a parent company would typically fund acquisitions by its subsidiaries.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 partner firms typically acquire substantiallyBoard 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 the assets of a target firm for cashour directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer and controller or a combination of cash and equity and the right to receive contingent consideration. In certain situations, when the acquisition involves a merger with a corporation, and the consideration includes our Class A common stock, Focus Inc. may purchase all of the equity of a target firm and then contribute the assets to our partner firm. In certain instances, our partner firms may acquire only the customer relationships. At the time a partner firm consummates an acquisition, we typically amend our management agreement with the partner firm to adjust Base Earnings and Target Earnings to reflect the projected post acquisition EBPC of the partner firm.

Our partner firms completed 28 transactions in 2019, 18 transactions in 2020 (including 4 transactions completed by Connectus) and 24 transactions in 2021 (including 8 transactions completed by Connectus). With our approval and support, our partner firms may choose to merge with each other as well. Consolidation of our existing partner firms leads to efficiencies and incremental growth in our cash flows.

Acquisitions Through Connectus

Connectus has wealth advisory subsidiaries in the United States, Australia, Canada and the United Kingdom. It was launched through a partner firm that joined us in 2007 and subsequently expanded in the United States, Australia, Canada and the United Kingdom. Connectus completed 4 transactions in 2020 and 8 transactions in 2021. We expect that Connectus’ international footprint will expand further. Connectus is designed for founders and teams of wealth management practices who want to continue managing their client relationships and maintaining their boutique cultures under their own brand names, while gaining the operational efficiencies of shared infrastructure and other services provided by Connectus. Connectus offers integrated technology, investment support and centralized services, including compliance, accounting and talent management. Connectus also provides marketing capabilities to support business expansion through lead generation and organic growth programs. Through us, Connectus advisers gain a strategic growth partner with specialized capabilities. They benefit from our global scale and extensive network of partner firms, continuity planning expertise and client solutions.

In connection with a typical Connectus acquisition, we enter into an acquisition agreement with the target firm and its selling principals pursuant to which Connectus purchases substantially all of the assets or equity of the target firm for cash. Because of Connectus’ unique structure, Focus in most cases retains 100% of post-acquisition profitability and the selling principals and advisers of the target firm receive market-based compensation and growth-based economics generally based on the growth of revenues.

Lift Outs of Established Wealth Management Professionals

From time to time, partner firms hire individuals or wealth management teams from traditional brokerage firms and wirehouses, or through Focus Independence, we offer such individuals or teams the opportunity to establish their own independent wealth management firms and ultimately join our partnership as a new partner firm. If joining as a new partner firm, we typically enter into an option agreement, which provides us with the option to acquire substantially all of the assets of a new RIA that such teams managed after their resignation from the brokerage firm or wirehouse approximately 12 to 13 months from such resignation date.

Our Partner Firms

Our partner firms provide comprehensive wealth management services to ultra-high net worth and high net worth individuals and families,persons performing similar functions, as well as business entities, under a largely recurring, fee-based model. Our partner firms provide these services across a diverse range of investment styles, asset classesto directors, principals, officers and clients. The substantial majorityemployees of our partner firmssubsidiaries. 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 RIAs, and certainavailable free of charge under the Governance tab in the Investor Relations section of our partner firms also have affiliated broker-dealers and/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 insurance brokers. Severalwaivers from, provisions of our partner firmsCode of Business Conduct and their principals have been recognized as leading wealth management firmsEthics and advisersour Financial Code of Ethics by financial publicationsposting such as Barron’s, The Financial Times and Forbes.

Our partner firms derive a substantial majority of their revenues from wealth management fees, which are comprised of fees earned from wealth management services, including investment advice, financial and tax planning, consulting, tax return preparation, family office services and other services. Fees are primarily based eitherinformation on aour website at the address specified above.

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contractual percentageElection 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 client’s assets baseddirector’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 marketBoard 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 client’s assets on the predetermined billing date, a flat fee, an hourly rate based on predetermined billing rates or a combinationFocus equity granted as part of such fees and are billed either in advancedirector’s or arrearsnamed executive officer’s compensation for service (determined on a monthly, quarterlynet, after-tax basis) until such required ownership level is met and maintained. In addition, if any director or semiannual basis. In certain cases,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 wealth management fees maytime 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 subject toincluded for purposes of determining his or her compliance with the minimum fee levels depending onownership requirements. A copy of the services performed. We also generate other revenue from recordkeeping and administration service fees, commissions and distribution fees and outsourced services.

We currently have over 80 partner firms. AllCorporate Governance Guidelines is available free of charge under the Governance tab in the Investor Relations section of our partner firm acquisitions have been paid for with cash or a combination of cash and equity and the right to receive contingent consideration. We have to date, with limited exceptions, acquired substantially all of the assets of the firms we choose to partner with and have assumed only post-closing contractual obligations, not any material existing liabilities.website at www.focusfinancialpartners.com.

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Cybersecurity, Data and Other Risk Management; Privacy

The following is a listBoard 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 February 17, 2022: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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Item 11. Executive Compensation

Compensation Discussion and Analysis

This Compensation Discussion and Analysis reviews the compensation policies and programs for our Chief Executive Officer, our Chief Financial Officer and our three next most highly paid executive officers during 2022 as determined under the rules of the SEC. These individuals are collectively referred to as our “named executive officers” or “NEOs.” The narrative discussion set forth in this Compensation Discussion and Analysis is intended to provide additional information related to the data presented in the compensation-related tables included throughout the “Executive Compensation” section of this Amendment.

Executive Summary

Named Executive Officers

During 2022, our named executive officers were:

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​Compensation Objectives

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The following shows certainSummary 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 value-added services we have provided to our partner firms through February 17, 2022:following:

​What We Do

What We Don’t Do