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Compass Diversified Announces Amendments to Management Services Agreement Reducing Management Costs and Further Strengthening Shareholder Alignment
Reduces fixed economics paid to CODI's external manager from the current 2.00% base management fee to 1.375% at current Adjusted Net Assets levels, with 1.25% paid as a base management fee and 0.125% paid as a Share Alignment Award intended to support increased CODI share ownership by the external managerIntroduces a separate Performance-Based Award that must be earned through shareholder-return and operating-performance results with a target grant value equal to 0.125% of average Adjusted Net A
About this update from D/b/a Compass Diversified Holdings Shares Of Beneficial Interest
WESTPORT, Conn., July 13, 2026 (GLOBE NEWSWIRE) -- Compass Diversified (NYSE: CODI) ("CODI" or the "Company"), an owner of leading middle market businesses, today announced that it has entered into a Ninth Amended and Restated Management Services Agreement (the "Amended MSA") with Compass Group Management LLC (the "Manager"), the Company's external manager. The Amended MSA becomes effective upon execution, with the revised fee and incentive-award provisions taking effect on January 1, 2027. The Amended MSA follows a Board-led review that considered investor perspectives, market practices and pre-existing contractual requirements. In addition to reducing management fees, it is designed to further strengthen alignment with shareholder outcomes. The Amended MSA reduces the base management fee rate from 2.00% to 1.25% of Adjusted Net Assets ("ANA") at the Company's current ANA levels and caps 2027 base management fees at $30 million. It also replaces the existing incentive fee with a Share Alignment Award designed to build CODI share ownership by senior Manager personnel and a Performance-Based Award earned through shareholder-return and operating-performance results, each as described below. Based on current estimates, total 2027 management fees are expected to decline by approximately $19 million to $22 million compared to what the existing formula would have produced, depending on the Company's ANA for 2027 and the level of payout under the Performance-Based Award. "Following a thoughtful Board-led review and negotiations with the Manager, we reached a constructive agreement that reduces fees and further strengthens alignment with long-term shareholder outcomes," said Larry Enterline, Independent Board Chair of CODI. "We are not satisfied with CODI's current market valuation, and we continue to take concrete steps to help better translate the underlying value of our businesses into shareholder value. The revised framework is expected to create meaningful economic value for shareholders and to support CODI's focus on accelerating deleveraging, strengthening financial flexibility and positioning the Company to efficiently return capital to shareholders."
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