Hello and welcome to the annual meeting of stockholders of Oppenheimer Holdings, Inc. During the meeting, you can submit questions or comments at any time. If you are a Class B shareholder, you may enter a question or comment at any time by clicking on the Q&A icon. If you are a Class A shareholder and have a question, you may email that question to info@opco.com. It is now my pleasure to turn today's meeting over to Albert Lowenthal, Chairman of Oppenheimer Holdings, Inc. Mr. Lowenthal, the floor is yours.
Good afternoon, ladies and gentlemen. I want to welcome you to the 2026 annual meeting of Oppenheimer Holdings, Inc. This meeting is again being held virtually. I am Albert G. Lowenthal, and I will be chairing the meeting. It is now 4:30 P.M., and I would ask that the meeting come to order. I ask Mr. Dennis McNamara, the Secretary of the Corporation, to act as Secretary of the meeting, and Ms. Ericka Ortiz-Indart of Computershare Shareholder Services, our transfer agent, to act as Inspector of Election. Ms. Ortiz-Indart has executed an affidavit to execute her duties as the inspector faithfully. I direct that the Secretary attach the affidavit to the minutes of this meeting. The meeting will first address the formalities as described in our recent proxy statement.
We have posted to our virtual meeting site a copy of our recent proxy statement and our annual report for the 2025 fiscal year, consisting of the annual report and the SEC Form 10-K. I hope that each of you had an opportunity to review them. First order of business today will be to address the meeting's formalities, after which our CEO, Robert Lowenthal, will make a presentation and answer questions. Notice calling this meeting, together with a proxy statement, was mailed to stockholders on March 17th, 2026. I have before me an affidavit of mailing of William Valentine of Computershare relating to the proof of mailing of the notice calling this meeting and the proxy statement in accordance with the bylaws of the corporation, and I direct that this affidavit of mailing be filed with the minutes of this meeting.
I have before me a certified list of the holders of the Class B voting stock at the close of business on March 6, 2026, the record date fixed by the board of directors for the purpose of determining the stockholders entitled to vote at this meeting, which has been certified by Sharon Barton of Computershare Shareholder Services, our transfer agent. The list indicates that there are 99,665 shares of Class B voting common stock entitled to vote at this meeting. The list will be open for inspection by any stockholder of the corporation for the duration of this meeting. The Inspector of Elections report has now been received. Number of shares of Class B voting common stock represented in person by stockholders at this meeting is zero.
Number of shares of Class B voting common stock represented by proxies received from stockholders is 97,387, being a sufficient representation for a quorum. Total number of shares of Class B voting common stock represented at the meeting represent approximately 97.7% of the issued and outstanding Class B voting common stock of the corporation. Legal notice of the meeting having been given, the quorum being present, I now declare the meeting lawfully called and convened and ready for the transaction of business. I propose to proceed with the formalities of this meeting before having our CEO, Robert Lowenthal, address you with respect to the year ended December 31, 2025, and the current year, and answering any questions you may have. First order of business is the nomination and election of directors.
The Nominating and Corporate Governance Committee, in accordance with its charter, has recommended that the nine persons named in the proxy statement, all of whom currently serve as directors, be nominated. I would now ask a holder of Class B voting shares to nominate the slate of nominees named in the proxy statement for election as directors of the corporation.
I nominate the following persons for election as members of the board of directors of the corporation to serve until the next annual meeting of stockholders and until their successors have been elected and qualified. Evan Behrens, Tim Dwyer, Paul Friedman, Jessica Glasser, Stacy Kantor, Albert Lowenthal, Robert Lowenthal, Larry Roth, Suzanne Spalding.
Is there a second or to the motion?
I second the motion.
Are there any other nominees? If not, I will entertain a motion that nominations be closed.
I move that nominations be closed.
Is there a second to the motion?
I second the motion.
Each holder of shares of Class B voting common stock entitled to vote will have the right to one vote for each share recorded in his or her name. The nine nominees for director receiving the highest number of votes shall be elected. Any Class B common stockholder who wishes to vote in person by ballot should submit their voting by pressing the vote button on your screen now. The inspector's report having been filed, I report on the voting as follows. Each of the nominees for director has been elected to serve as a director of the corporation till the next annual meeting of stockholders and until his or her respective successor has been elected and qualified. Each nominee having received at least 97,385 votes in favor of his or her election.
I now propose to move to the ratification of the appointment of auditors for this fiscal year. The audit committee of your board of directors has, pursuant to its charter, the sole authority and responsibility to appoint independent auditors for ratification by the stockholders. The audit committee has selected Deloitte & Touche LLP for appointment as the corporation's independent registered public accounting firm for 2026. Accordingly, I request that a holder of Class B voting common stock move that the selection by the audit committee of Deloitte & Touche LLP as the corporation's auditors for the 2026 fiscal year be ratified.
I move that Deloitte & Touche LLP be appointed as the corporation's independent registered public accounting firm for the corporation's 2026 fiscal year, their remuneration to be fixed by the audit committee.
Is there a second to the motion?
I second the motion.
Each holder of shares of Class B voting common stock entitled to vote will have the right to one vote for each share recorded in his or her name. To pass, this matter requires the approval by a simple majority of the votes cast by the holders of Class B voting stock, represented in person or by proxy at this meeting. Any Class B common stockholder who wishes to vote in person by ballot should submit their vote by pressing the vote button on your screen now. The inspector's report having been filed, I report that the appointment of Deloitte & Touche LLP as the corporation's independent registered public accounting firm for the corporation's 2026 fiscal year at a rate of remuneration to be set by the audit committee, has been ratified, having received 97,387 votes in favor of the proposal.
I now propose to move to the Say-on-Pay proposal. I will now ask a holder of Class B voting stock to move the approval on an advisory, non-binding basis, the 2025 compensation paid to Oppenheimer Holdings Inc.'s named executives, including the compensation discussion and analysis, compensation tables, and narrative discussions set forth in the proxy statement.
Chairman, I move that the 2025 compensation paid to Oppenheimer Holdings Inc.'s named executive officers, as disclosed pursuant to the Securities and Exchange Commission's compensation disclosure rules, including the compensation discussion and analysis, compensation tables, narrative discussion set forth on pages 38- 55 of the corporation's proxy statement be approved.
Is there a second to the motion?
I second the motion.
Each holder of shares of Class B voting common stock entitled to vote will have the right to one vote for each share recorded in his or her name. To pass, this resolution requires the approval of a simple majority of the votes cast by the holders of Class B voting stock, represented in person or by proxy at this meeting. Any Class B common stockholder who wishes to vote in person by ballot should submit their vote by pressing the vote button on your screen now. The inspector's report having been filed, I report that the advisory non-binding vote on 2025 executive compensation has been approved, having received 97,381 votes in favor of the proposal. I now propose to move the Say When on Pay proposal.
I will now ask a holder of Class B voting stock to move the approval on an advisory, non-binding basis that the frequency of a stockholder vote on executive compensation be held every three years.
Mr. Chairman, I move that an advisory non-binding proposal that the frequency of a stockholder vote on compensation of the corporation's executives be named in the corporation's proxy statement be held every three years, be approved.
Is there a second to the motion?
I second the motion.
Each holder of shares of Class B voting common stock entitled to vote will have the right to one vote for each share recorded in his or her name. To pass, this resolution requires the approval of a simple majority of the votes cast by the holders of Class B voting stock represented in person or by proxy at this meeting. Any Class B common stockholder who wishes to vote in person by ballot should submit their vote by pressing the vote button on your screen now.
The inspector's report having been filed, I report that the advisory non-binding vote on the frequency of a stockholder vote on executive compensation every three years has been approved, having received 97,381 votes in favor of the proposal. I now propose to move to the approval of an amendment and restatement to the corporation's certificate of incorporation, as described in the proxy statement. We'll now ask a holder of Class B voting stock to move the approval of the amendment and restatement to the corporation's certificate of incorporation, as described in the proxy statement.
Chairman, I move that the amendment and restatement to the corporation's certificate of incorporation, as described in the proxy statement, be approved, ratified, and confirmed, and the proper officers and directors of the corporation be authorized and directed to take all such action and execute all such documents as are necessary to implement the terms of the foregoing resolution.
Is there a second to the motion?
I second the motion.
Each holder of shares of Class B voting common stock entitled to vote will have the right to one vote for each share recorded in his or her name. To pass this matter requires the approval of a simple majority of the votes cast by the holders of Class B voting stock represented in person or by proxy at this meeting. Any Class B common stockholder who wishes to vote in person by ballot should submit their vote by pressing the Vote button on your screen now. Inspector's report having been filed, I report that the amendment and restatement to the corporation's certificate of incorporation, as described in the proxy statement, has been approved, and the proper officers and directors of the corporation have been authorized and directed to take all such action and execute such documents as necessary to implement the terms of the foregoing resolution.
Such proposal is having received 97,381 votes in favor thereof. Is there any additional business to properly come before the meeting? There being no additional business, I ask that a holder of Class B voting common stock move that the meeting be adjourned. Thereafter, Mr. Lowenthal, Robert Lowenthal, will address those present and answer any questions you may have.
I move that the meeting be adjourned.
Is there a second to the motion?
I second the motion.
All in favor, please say aye.
Aye.
Aye.
I declare the meeting adjourned. We've now completed the formalities of the meeting, and our CEO, Robert Lowenthal, will now address the year ended December 31, 2025, and the current year, and answer any questions you may have.
Beginning on slide four, business overview. Oppenheimer continues to remain focused on the growth of our two main businesses, wealth management and capital markets. Wealth management is the crown jewel of the company and provides consistent and stable revenues. Depending on the market environment, capital markets contributes to varying degrees. In 2025, we enjoyed a constructive secondary market and significant volatility across both equities and fixed income, helping to drive increased revenues in both areas. In addition, capital markets were open to new issuance, and our investment banking clients were able to raise considerable capital throughout the year. We completed the year with record shareholder equity and book value per share. Momentum continued into the first quarter of 2026. Despite the cost associated with the class action litigation, operating performance was excellent. Next slide. Our people are the most valuable asset.
We maintain a significant presence in the U.S., with offices in 88 locations across the country. We maintain a strong presence in London and Tel Aviv, along with smaller offices in Switzerland, the Channel Islands, and Hong Kong. Through these international offices, we support U.S. institutional clients focused on U.S. equities and global fixed income securities. We also cover sponsors and corporations that raise capital and seek our advice regarding mergers and acquisitions. Next slide. The company's operating business performed well in 2025. We had record overall revenues of $1.6 billion and record earnings per share of over $14 per share. Our core wealth management business produced record retail commissions and record advisory fees as clients engaged in a volatile but rising equity market.
51% increase in investment banking revenues drove strong results in our capital markets business and helped to offset slightly lower interest revenues as rates decreased through several Fed rate cuts during the year. Next slide. Momentum continued into 2026 with a 100% increase in investment banking revenues in Q1 of 2026 compared to Q1 of 2025. This was driven by several large transactions that closed during the quarter. Compensation costs were elevated during the quarter, largely driven by the outstanding liability-based equity awards issued to our financial advisors over the past five years. These awards are tied to the stock price, which was up $16.90, or 23%, during the quarter. Significant increase to our non-compensation expenses was related to the announced settlement of the cash sweep class action litigation.
The settlement agreement requires approval from the district court we hope to receive within 90 days. This will resolve the matter entirely. While we regret the cost associated with settling this litigation, our view is that the risk of a jury trial was too high, and that getting the matter resolved and focusing on our core operating business was the best course of action. Next slide. For illustration purposes only, we are providing here an adjusted earnings per share to show how the operating business performed during the quarter after reversing the stock-based liability expenses cost to settle the class action litigation. If those two expenses were backed out, the after-tax earnings for the corporation would have been $47.5 million or $4.46 per share.
The impact to the organization was significant, lowering our shareholder equity to $952 million, down from a record at December 31, 2025 of $983.8 million. Next slide. During the quarter, the company's public shares were up $16.90, the company passing the threshold of $1 billion in market capitalization. Stock closed the quarter at $89.19 per share on March 31, 2026. Since that time, the company announced the class action litigation and the stock has reached new all-time highs. We are pleased that the market is recognizing the value embedded in the business, but the dramatic moves in the stock also create further expenses associated with the stock-based liability awards to our financial advisors. Next slide.
The company continues to maintain a low-risk profile with regards to our balance sheet and is able to comfortably operate with no outstanding long-term debt. In consideration of the operating results, the board has authorized an increase of $0.02 to our quarterly dividend. Quarterly dividend will now be $0.20 per share per quarter or $0.80 per share on an annual basis. Next slide. Our FDIC sweep program continues to perform as intended, holding transient client assets in our 50 participating banks. Total assets at quarter end were $3 billion, and the interest income to the firm over the prior 12 months was $110.9 million. The firm will announce changes to the program documentation and associated agreements pursuant to the settlement of the litigation. We do not anticipate any significant impact to the design and economics of the program going forward.
Next slide. The firm remains committed to the growth and success of our wealth management business. The industry is very competitive and we work tirelessly to recruit and hire experienced professionals, but the cost of acquisition has risen considerably in recent years, making the task of raising our FA headcount a challenge. Oppenheimer also experiences attrition through retirement and death that further complicates this goal. In an effort to combat these industry trends, the firm has constructed trainee programs that begin with college graduates and the recruitment of young professionals that have been licensed in the industry, but have yet to fully develop a book of business. We believe the resources of the firm, the brand, and our experienced staff can transform these early career professionals into successful financial advisors. This is a long-term solution that will take years to bear fruit, but a necessary one as well. Next slide.
Oppenheimer is a full-service firm with the ability to support many different types of clients and financial advisors. However, 69% of our wealth management revenues are derived from advisory fees. Next slide. 2025 and Q1 of 2026 was a very good 15-month period for the capital markets business. The geopolitical backdrop and the transformative innovations in our economy lead me to believe that there is further growth ahead. We have yet to see a material reopening of the IPO market, which is a goal of the current administration. When that occurs, we believe Oppenheimer's capital markets business could stand to benefit greatly. Next slide. In conclusion, 2025 was a great year, and 2026 is off to a very good start.
Despite the headwinds of the extraordinary expenses associated with our liability-based stock award program class action settlement, Oppenheimer's operating business is doing quite well. We've incurred significant costs from these two items, but our capital position remains strong, and our business continues to experience favorable momentum. We'll continue to find areas of organic expansion and evaluate acquisitions opportunistically. 2026 is expected to have additional geopolitical uncertainty, potential volatility ahead of the midterm elections. The firm will maintain a cautious posture related to market risk and continue to invest in our core businesses. I'll now turn it over to our CFO, Brad Watkins.
Thank you, Robert Lowenthal. Before we wrap up, I would like to briefly address the non-GAAP financial measures referenced in our materials, including adjusted net income and adjusted earnings per share. As a reminder, these non-GAAP measures are supplemental and are not calculated in accordance with GAAP. They should be considered in conjunction with and not as a substitute for the GAAP results covered earlier in the presentation. Management uses these non-GAAP measures together with the GAAP results to review the performance of the business and facilitate period-to-period comparisons. We believe this perspective can be useful to investors and others when evaluated alongside our GAAP financial results. For the first quarter of 2026, our non-GAAP results exclude two items. The first being a $70 million pre-tax legal accrual related to the settlement of the cash sweep litigation.
The second item being a $22.3 million pre-tax expense associated with our liability-based stock link compensation program for financial advisors, which is required to be marked to market based upon changes in the share price. The legal accrual reflects a matter that management doesn't view as ordinary course litigation, while the stock link compensation expense is a recurring program whose impact could vary significantly based on market movements in our stock, which is largely out of the company's direct control. After these adjustments, adjusted net income for the first quarter of 2026 was $47.5 million or $4.46 per share, compared with a GAAP net loss of $20.6 million or $1.93 a share.
Thank you, Brad. Are there any questions that came in over the portal or by info@opco.com?
No, there are no questions at this time.
Okay. We will terminate the meeting. Thank you all for attending our annual meeting, and we hope to see you again next year.
This concludes the meeting. You may now disconnect.