10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 _______________________________________________________________________________________

FORM 10-Q

 _______________________________________________________________________________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number 001-14818

 _______________________________________________________________________________________

Federated Hermes, Inc.

(Exact name of registrant as specified in its charter)

 _______________________________________________________________________________________

Pennsylvania	25-1111467
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1001 Liberty Avenue		15222-3779
Pittsburgh,	Pennsylvania
(Address of principal executive offices)		(Zip Code)

(Registrant’s telephone number, including area code) 412-288-1900

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class B common stock, no par value	FHI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  o.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   ☐    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date: As of October 20, 2023, the Registrant had outstanding 9,000 shares of Class A common stock and 86,245,850 shares of Class B common stock.

Table of Contents

Part I. Financial Information
	Item 1.	Financial Statements
		Consolidated Balance Sheets	4
		Consolidated Statements of Income	5
		Consolidated Statements of Comprehensive Income	6
		Consolidated Statements of Changes in Equity	7
		Consolidated Statements of Cash Flows	8
		Notes to the Consolidated Financial Statements	9
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	55
	Item 4.	Controls and Procedures	55
Part II. Other Information
	Item 1.	Legal Proceedings	55
	Item 1A.	Risk Factors	55
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	55
	Item 5.	Other Information	55
	Item 6.	Exhibits	56
Signatures			57

FORWARD-LOOKING STATEMENTS

Certain statements in this report on Form 10-Q constitute forward-looking statements, which involve known and unknown risks, uncertainties, and other factors that could cause the actual results, levels of activity, performance or achievements of Federated Hermes, Inc. and its consolidated subsidiaries (collectively, Federated Hermes), or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are typically identified by words or phrases such as “forecast,” “project,” “predict,” “trend,” “approximate,” “potential,” “opportunity,” “believe,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “projection,” “plan,” “assume,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “can,” “may,” and similar expressions. Among other forward-looking statements, such statements include certain statements relating to, or, as applicable, statements concerning management’s assessments, beliefs, expectations, assumptions, judgments, projections or estimates regarding: the pandemic and its impact; asset flows, levels, values and mix and their impact; the possibility of impairments; business mix; the level, timing, degree and impact of changes in interest rates or gross or net yields; rates of inflation; fee rates and recognition; sources, levels and recognition of revenues, expenses, gains, losses, income and earnings; the level and impact of reimbursements, rebates or assumptions of fund-related expenses and fee waivers for competitive reasons such as to maintain positive or zero net yields (Voluntary Yield-related Fee Waivers), to maintain certain fund expense ratios, to meet regulatory requirements or to meet contractual requirements (collectively, Fee Waivers); whether, under what circumstances and the degree to which Fee Waivers will be implemented; the impact of market volatility, liquidity, and other market conditions; the possibility of a recession occurring; whether and when revenue or expense is recognized; whether and when capital contributions could be made, the availability of insurance reimbursements with regard to indemnification obligations or other claims; the components and level of, and prospect for, distribution-related expenses; guarantee and indemnification obligations; the impact of acquisitions on Federated Hermes’ growth; the timing and amount of acquisition-related payment obligations; the results of negotiations involving consideration in business transactions; payment obligations pursuant to employment or incentive and business arrangements; vesting rights and requirements; business and market expansion opportunities, including acceleration of global growth; interest and principal payments or expenses; taxes, tax rates and the impact of tax law changes; borrowing, debt, future cash needs and principal uses of cash, cash flows and liquidity; the ability to raise additional capital; type, classification and consolidation of investments; uses of treasury stock; Federated Hermes’ product and market performance and Federated Hermes’ performance indicators; investor preferences; product and strategy demand, distribution, development and restructuring initiatives and related planning and timing; the effect, and degree of impact, of changes in customer relationships; the probability of insurance recoveries, the outcome and impact of legal proceedings; regulatory matters, including the pace, timing, impact, effects and other consequences of the current regulatory environment; the attractiveness and resiliency of money market funds; dedication of resources; accounting-related determinations; compliance, and related legal and other professional services expenses; and interest rate, concentration, market, currency and other risks and their impact. Any forward-looking statement is inherently subject to significant business, economic, competitive, regulatory and

other risks and uncertainties, many of which are difficult to predict and beyond Federated Hermes’ control. Among other risks and uncertainties, market conditions can change significantly and impact Federated Hermes’ business and results, including by changing Federated Hermes’ asset flows, levels, and mix, and business mix, which could cause a decline in revenues and net income, result in impairments and change the amount of Fee Waivers incurred by Federated Hermes. The obligation to make purchase price payments in connection with acquisitions is subject to certain adjustments and conditions, and the obligation to make contingent payments is based on net revenue growth levels and will be affected by the achievement of such levels. The obligation to make additional payments pursuant to employment or incentive arrangements can be based on satisfaction of certain conditions set forth in those arrangements. Future cash needs, cash flows and uses of cash will be impacted by a variety of factors, including the number and size of any acquisitions, Federated Hermes’ success in developing, structuring and distributing its products and strategies, potential changes in assets under management (AUM) and/or changes in the terms of distribution and shareholder services contracts with intermediaries who offer Federated Hermes’ products to intermediary customers, opportunities to repurchase shares, and potential increased legal, compliance and other professional services expenses stemming from additional or modified regulation or the dedication of such resources to other initiatives. Federated Hermes’ risks and uncertainties also include liquidity and credit risks in Federated Hermes’ money market funds and revenue risk, which will be affected by yield levels in money market fund products, Fee Waivers, changes in fair values of AUM, any additional regulatory reforms, investor preferences and confidence, and the ability of Federated Hermes to collect fees in connection with the management of such products. Many of these factors could be more likely to occur as a result of continued scrutiny of the mutual fund industry by domestic or foreign regulators, and any disruption in global financial markets. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and neither Federated Hermes nor any other person assumes responsibility for the accuracy and completeness, or updating, of such statements in the future. For more information on these items and additional risks that could impact the forward-looking statements, see Item 1A - Risk Factors included in Federated Hermes’ Annual Report on Form 10-K for the year ended December 31, 2022.

Part I. Financial Information

Item 1. Financial Statements

Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
	September 30, 2023		December 31, 2022
ASSETS
Current Assets
Cash and Cash Equivalents	$	376,960	$	336,782
Investments—Consolidated Investment Companies	118,201		108,448
Investments—Affiliates and Other	59,272		76,524
Receivables, net of reserve of $21 and $21, respectively	72,524		58,068
Receivables—Affiliates	52,659		35,941
Prepaid Expenses	25,726		27,004
Other Current Assets	6,318		8,264
Total Current Assets	711,660		651,031
Long-Term Assets
Goodwill	801,556		800,417
Intangible Assets, net of accumulated amortization of $58,100 and $47,650, respectively	401,971		409,157
Property and Equipment, net of accumulated depreciation of $117,235 and $119,640, respectively	31,409		35,743
Right-of-Use Assets, net	101,159		92,860
Other Long-Term Assets	32,585		31,271
Total Long-Term Assets	1,368,680		1,369,448
Total Assets	$	2,080,340	$	2,020,479
LIABILITIES
Current Liabilities
Accounts Payable and Accrued Expenses	$	79,733	$	73,901
Accrued Compensation and Benefits	124,602		149,760
Lease Liabilities	15,869		18,394
Other Current Liabilities	35,383		15,358
Total Current Liabilities	255,587		257,413
Long-Term Liabilities
Long-Term Debt	347,777		347,581
Long-Term Deferred Tax Liability, net	176,707		180,410
Long-Term Lease Liabilities	95,995		86,809
Other Long-Term Liabilities	33,605		40,753
Total Long-Term Liabilities	654,084		655,553
Total Liabilities	909,671		912,966
Commitments and Contingencies (Note (17))
TEMPORARY EQUITY
Redeemable Noncontrolling Interests in Subsidiaries	70,631		61,821
PERMANENT EQUITY
Federated Hermes, Inc. Shareholders’ Equity
Common Stock:
Class A, No Par Value, 20,000 Shares Authorized, 9,000 Shares Issued and Outstanding	189		189
Class B, No Par Value, 900,000,000 Shares Authorized, 99,505,456 Shares Issued	468,073		440,953
Additional Paid-In Capital from Treasury Stock Transactions	15		0
Retained Earnings	1,148,486		1,015,589
Treasury Stock, at Cost, 13,257,106 and 10,229,521 Shares Class B Common Stock, respectively	(473,332)		(365,363)
Accumulated Other Comprehensive Income (Loss), net of tax	(43,393)		(45,676)
Total Permanent Equity	1,100,038		1,045,692
Total Liabilities, Temporary Equity and Permanent Equity	$	2,080,340	$	2,020,479

(The accompanying notes are an integral part of these Consolidated Financial Statements.)

4

Consolidated Statements of Income
(dollars in thousands, except per share data)
(unaudited)
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Revenue
Investment Advisory Fees, net—Affiliates	$	215,673	$	206,394	$	666,983	$	574,081
Investment Advisory Fees, net—Other	61,098		57,250		184,106		180,600
Administrative Service Fees, net—Affiliates	88,023		75,021		252,402		218,710
Other Service Fees, net—Affiliates	33,507		38,265		102,364		85,120
Other Service Fees, net—Other	4,355		4,213		12,222		13,404
Total Revenue	402,656		381,143		1,218,077		1,071,915
Operating Expenses
Compensation and Related	139,123		126,668		435,884		388,719
Distribution	89,838		91,032		280,258		223,837
Systems and Communications	21,213		19,294		63,259		57,234
Professional Service Fees	17,561		14,203		52,881		41,647
Office and Occupancy	10,632		10,622		34,910		32,457
Advertising and Promotional	3,857		6,496		13,308		13,965
Travel and Related	4,034		3,421		11,101		8,543
Intangible Asset Related	3,451		2,894		10,194		9,319
Other	11,523		9,733		31,303		23,147
Total Operating Expenses	301,232		284,363		933,098		798,868
Operating Income	101,424		96,780		284,979		273,047
Nonoperating Income (Expenses)
Investment Income, net	6,160		2,599		16,228		5,270
Gain (Loss) on Securities, net	(3,438)		(6,825)		2,094		(39,406)
Debt Expense	(3,133)		(3,302)		(9,377)		(7,873)
Other, net	(8)		(38)		101		31
Total Nonoperating Income (Expenses), net	(419)		(7,566)		9,046		(41,978)
Income Before Income Taxes	101,005		89,214		294,025		231,069
Income Tax Provision	26,739,000		21,640,000		75,291,000		58,140,000
Net Income Including the Noncontrolling Interests in Subsidiaries	74,266		67,574		218,734		172,929
Less: Net Income (Loss) Attributable to the Noncontrolling Interests in Subsidiaries	(760)		(1,905)		1,932		(10,070)
Net Income	$	75,026	$	69,479	$	216,802	$	182,999
Amounts Attributable to Federated Hermes, Inc.
Earnings Per Common Share—Basic and Diluted	$	0.86	$	0.78	$	2.44	$	2.02
Cash Dividends Per Share	$	0.28	$	0.27	$	0.83	$	0.81

(The accompanying notes are an integral part of these Consolidated Financial Statements.)

5

Consolidated Statements of Comprehensive Income
(dollars in thousands)
(unaudited)
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net Income Including the Noncontrolling Interests in Subsidiaries	$	74,266	$	67,574	$	218,734	$	172,929
Other Comprehensive Income (Loss), net of tax
Permanent Equity
Foreign Currency Translation Gain (Loss)	(21,814)		(43,760)		2,283		(103,778)
Temporary Equity
Foreign Currency Translation Gain (Loss)	(454)		(1,713)		106		(3,238)
Other Comprehensive Income (Loss), net of tax	(22,268)		(45,473)		2,389		(107,016)
Comprehensive Income Including the Noncontrolling Interests in Subsidiaries	51,998		22,101		221,123		65,913
Less: Comprehensive Income (Loss) Attributable to Redeemable Noncontrolling Interests in Subsidiaries	(1,214)		(3,618)		2,038		(13,308)
Comprehensive Income Attributable to Federated Hermes, Inc.	$	53,212	$	25,719	$	219,085	$	79,221

(The accompanying notes are an integral part of these Consolidated Financial Statements.)

6

Consolidated Statements of Changes in Equity
(dollars in thousands)
(unaudited)
	Federated Hermes, Inc. Shareholders’ Equity
	Common Stock		Additional Paid-in Capital from Treasury Stock Transactions		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss), net of tax		Total Permanent Equity		Redeemable Noncontrolling Interests in Subsidiaries/ Temporary Equity
Balance at December 31, 2022	$	441,142	$	0	$	1,015,589	$	(365,363)	$	(45,676)	$	1,045,692	$	61,821
Net Income (Loss)	0		0		69,601		0		0		69,601		1,865
Other Comprehensive Income (Loss), net of tax	0		0		0		0		9,620		9,620		232
Subscriptions—Redeemable Noncontrolling Interest Holders	0		0		0		0		0		0		12,776
Consolidation (Deconsolidation)	0		0		0		0		0		0		(33,962)
Stock Award Activity	10,677		0		(9,950)		9,950		0		10,677		0
Dividends Declared	0		0		(24,145)		0		0		(24,145)		0
Distributions to Noncontrolling Interests in Subsidiaries	0		0		0		0		0		0		(3,224)
Purchase of Treasury Stock	0		0		0		(4,742)		0		(4,742)		0
Balance at March 31, 2023	$	451,819	$	0	$	1,051,095	$	(360,155)	$	(36,056)	$	1,106,703	$	39,508
Net Income (Loss)	0		0		72,175		0		0		72,175		827
Other Comprehensive Income (Loss), net of tax	0		0		0		0		14,477		14,477		328
Subscriptions—Redeemable Noncontrolling Interest Holders	0		0		0		0		0		0		19,684
Consolidation (Deconsolidation)	0		0		0		0		0		0		12,119
Stock Award Activity	8,970		0		(39)		20		0		8,951		0
Dividends Declared	0		0		(25,084)		0		0		(25,084)		0
Distributions to Noncontrolling Interests in Subsidiaries	0		0		0		0		0		0		(14,454)
Purchase of Treasury Stock	0		0		0		(43,366)		0		(43,366)		0
Balance at June 30, 2023	$	460,789	$	0	$	1,098,147	$	(403,501)	$	(21,579)	$	1,133,856	$	58,012
Net Income (Loss)	0		0		75,026		0		0		75,026		(760)
Other Comprehensive Income (Loss), net of tax	0		0		0		0		(21,814)		(21,814)		(454)
Subscriptions—Redeemable Noncontrolling Interest Holders	0		0		0		0		0		0		35,323
Consolidation (Deconsolidation)	0		0		0		0		0		0		(6,601)
Stock Award Activity	7,473		15		0		0		0		7,488		0
Dividends Declared	0		0		(24,687)		0		0		(24,687)		0
Distributions to Noncontrolling Interest in Subsidiaries	0		0		0		0		0		0		(14,889)
Purchase of Treasury Stock	0		0		0		(69,831)		0		(69,831)		0
Balance at September 30, 2023	$	468,262	$	15	$	1,148,486	$	(473,332)	$	(43,393)	$	1,100,038	$	70,631

Consolidated Statements of Changes in Equity
(dollars in thousands)
(unaudited)
	Federated Hermes, Inc. Shareholders’ Equity
	Common Stock		Additional Paid-in Capital from Treasury Stock Transactions		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss), net of tax		Total Permanent Equity		Redeemable Noncontrolling Interests in Subsidiaries/ Temporary Equity
Balance at December 31, 2021	$	449,118	$	0	$	1,187,001	$	(538,464)	$	16,362	$	1,114,017	$	63,202
Net Income (Loss)	0		0		55,863		0		0		55,863		(1,266)
Other Comprehensive Income (Loss), net of tax	0		0		0		0		(17,134)		(17,134)		(457)
Subscriptions—Redeemable Noncontrolling Interest Holders	0		0		0		0		0		0		30,340
Consolidation (Deconsolidation)	0		0		0		0		0		0		(16,034)
Stock Award Activity	9,288		0		(12,116)		12,147		0		9,319		707
Dividends Declared	0		0		(24,952)		0		0		(24,952)		0
Distributions to Noncontrolling Interests in Subsidiaries	0		0		0		0		0		0		(4,339)
Change in Estimated Redemption Value of Redeemable Noncontrolling Interests	0		0		(14,221)		0		0		(14,221)		14,221
Acquisition of Additional Equity of FHL	0		3,518		0		34,048		0		37,566		(37,805)
Purchase of Treasury Stock	0		0		0		(102,537)		0		(102,537)		0
Balance at March 31, 2022	$	458,406	$	3,518	$	1,191,575	$	(594,806)	$	(772)	$	1,057,921	$	48,569
Net Income (Loss)	0		0		57,657		0		0		57,657		(6,899)
Other Comprehensive Income (Loss), net of tax	0		0		0		0		(42,884)		(42,884)		(1,068)
Subscriptions—Redeemable Noncontrolling Interest Holders	0		0		0		0		0		0		15,314
Stock Award Activity	9,430		(46)		0		62		0		9,446		0
Dividends Declared	0		0		(24,705)		0		0		(24,705)		0
Distributions to Noncontrolling Interests in Subsidiaries	0		0		0		0		0		0		(1,185)
Purchase of Treasury Stock	0		0		0		(89,542)		0		(89,542)		0
Balance at June 30, 2022	$	467,836	$	3,472	$	1,224,527	$	(684,286)	$	(43,656)	$	967,893	$	54,731
Net Income (Loss)	0		0		69,479		0		0		69,479		(1,905)
Other Comprehensive Income (Loss), net of tax	0		0		0		0		(43,760)		(43,760)		(1,713)
Subscriptions—Redeemable Noncontrolling Interest Holders	0		0		0		0		0		0		4,494
Consolidation (Deconsolidation)	0		0		0		0		0		0		15,599
Stock Award Activity	8,895		0		0		0		0		8,895		0
Dividends Declared	0		0		(24,141)		0		0		(24,141)		0
Distributions to Noncontrolling Interest in Subsidiaries	0		0		0		0		0		0		(16,620)
Retirement of Treasury Stock	(42,700)		(3,472)		(267,664)		313,836		0		0		0
Purchase of Treasury Stock	0		0		0		(6,937)		0		(6,937)		0
Balance at September 30, 2022	$	434,031	$	0	$	1,002,201	$	(377,387)	$	(87,416)	$	971,429	$	54,586

(The accompanying notes are an integral part of these Consolidated Financial Statements.)

7

Consolidated Statements of Cash Flows
(dollars in thousands)
(unaudited)
	Nine Months Ended
	September 30,
	2023		2022
Operating Activities
Net Income Including the Noncontrolling Interests in Subsidiaries	$	218,734	$	172,929
Adjustments to Reconcile Net Income to Net Cash Provided (Used) by Operating Activities
Depreciation and Amortization	20,817		21,197
Share-Based Compensation Expense	27,165		27,619
Subsidiary Share-Based Compensation Expense	0		707
(Gain) Loss on Disposal of Assets	(157)		3,986
Provision (Benefit) for Deferred Income Taxes	(3,984)		(6,969)
Consolidation/(Deconsolidation) of Other Entities	3,490		(20)
Net Unrealized (Gain) Loss on Investments	(1,920)		35,425
Net Sales (Purchases) of Investments—Consolidated Investment Companies	(36,311)		(26,216)
Other Changes in Assets and Liabilities:
(Increase) Decrease in Receivables, net	(30,981)		4,537
(Increase) Decrease in Prepaid Expenses and Other Assets	19,389		(23,734)
Increase (Decrease) in Accounts Payable and Accrued Expenses	(23,942)		(22,984)
Increase (Decrease) in Other Liabilities	(10,101)		5,058
Net Cash Provided (Used) by Operating Activities	182,199		191,535
Investing Activities
Purchases of Investments—Affiliates and Other	(13,600)		(18,606)
Proceeds from Redemptions of Investments—Affiliates and Other	27,967		21,389
Cash Paid for Property and Equipment	(5,803)		(4,094)
Net Cash Provided (Used) by Investing Activities	8,564		(1,311)
Financing Activities
Dividends Paid	(73,963)		(73,804)
Purchases of Treasury Stock	(112,013)		(211,216)
Distributions to Noncontrolling Interests in Subsidiaries	(32,567)		(22,144)
Contributions from Noncontrolling Interests in Subsidiaries	67,783		50,148
Cash paid for Business Acquisitions	(857)		(7,053)
Proceeds from New Borrowings	0		488,300
Payments on Debt	0		(311,650)
Other Financing Activities	15		(2,571)
Net Cash Provided (Used) by Financing Activities	(151,602)		(89,990)
Effect of Exchange Rates on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	1,120		(29,980)
Net Increase (Decrease) in Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	40,281		70,254
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Beginning of Period	340,955		238,052
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, End of Period	381,236		308,306
Less: Restricted Cash Recorded in Other Current Assets	3,886		3,516
Less: Restricted Cash and Restricted Cash Equivalents Recorded in Other Long-Term Assets	390		270
Cash and Cash Equivalents	$	376,960	$	304,520

(The accompanying notes are an integral part of these Consolidated Financial Statements.)

8

Notes to the Consolidated Financial Statements

(unaudited)

(1) Basis of Presentation

Federated Hermes, Inc. and its consolidated subsidiaries (collectively, Federated Hermes) provide investment advisory, administrative, distribution and other services to various investment products, including sponsored investment companies, collective funds and other funds (Federated Hermes Funds) and separate accounts (which include separately managed accounts, institutional accounts, certain sub-advised funds and other managed products, collectively Separate Accounts) in both domestic and international markets. In addition, Federated Hermes markets and provides stewardship and real estate development services to various domestic and international companies. The interim consolidated financial statements of Federated Hermes included herein (Consolidated Financial Statements) have been prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP). In the opinion of management, the financial statements reflect all adjustments that are of a normal recurring nature and necessary for a fair presentation of the results for the interim periods presented.

In preparing the Consolidated Financial Statements, management is required to make estimates and assumptions that affect the amounts reported therein and in the accompanying notes. Actual results may differ from those estimates, and such differences may be material to the Consolidated Financial Statements.

The Consolidated Financial Statements should be read in conjunction with Federated Hermes’ Annual Report on Form 10-K for the year ended December 31, 2022. Certain items reported in previous periods have been reclassified to conform to the current period’s presentation.

(2) Significant Accounting Policies

For a complete listing of Federated Hermes’ significant accounting policies, please refer to Federated Hermes’ Annual Report on Form 10-K for the year ended December 31, 2022. The following previously disclosed significant accounting policy has been updated.

Principles of Consolidation

Consolidation of Variable Interest Entities

Federated Hermes has a controlling financial interest in variable interest entities (VIEs) and is, therefore, deemed to be the primary beneficiary of a VIE if it has (1) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and (2) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Federated Hermes manages carried interest vehicles (CIVs), whose primary purpose is to collect and distribute carried interest paid by foreign private equity and infrastructure funds, that have been determined to be VIEs. As the primary beneficiary, Federated Hermes consolidates certain CIVs. As a result, when carried interest is recognized as revenue, a portion of this revenue is allocated to current and former employee limited partners and is recorded to Compensation and Related expense. Financial information for the CIVs is not available timely and is therefore consolidated on a one quarter lag, adjusted for any known material carried interest revenue and compensation transactions occurring through the balance sheet date.

(3) Business Combination

CWH Acquisition

Effective October 1, 2022, Federated Hermes completed the acquisition of substantially all of the assets of C.W. Henderson and Associates, Inc. (CWH), a Chicago-based registered investment advisor specializing in the management of tax-exempt municipal securities (CWH Acquisition). This acquisition enhanced Federated Hermes’ existing separately managed accounts business. The CWH Acquisition included an upfront cash payment of $28.1 million. The purchase agreement also provides for a series of contingent purchase price payments, which can total as much as $17.6 million in the aggregate and is payable annually over the first five years if certain levels of net revenue growth are achieved.

Federated Hermes performed a valuation of the fair value of the CWH Acquisition. The accounting for this acquisition was finalized in the third quarter 2023. There were no changes to provisional amounts for the acquired assets and assumed liabilities.

9

Notes to the Consolidated Financial Statements

(unaudited)

The following table summarizes the final purchase price allocation determined as of the acquisition date:

(in millions)
Right-of-Use Asset	$	0.8
Intangible Assets1	15.4
Goodwill2	16.4
Less: Lease Liability Assumed	0.8
Less: Fair Value of Contingent Consideration	3.7
Total Upfront Purchase Price Consideration	$	28.1

1    Includes $14.8 million for customer relationships with an estimated useful life of 12 years and $0.6 million for a trade name with an estimated useful life of five years, all of which are recorded in Intangibles Assets, net on the Consolidated Balance Sheets.

2    The goodwill recognized is attributable to enhanced revenue and AUM growth opportunities from future investors and the assembled workforce of the CWH business and is deductible for tax purposes.

(4) Revenue from Contracts with Customers

The following table presents Federated Hermes’ revenue disaggregated by asset class:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Money market	$	186,760	$	170,542	$	559,622	$	402,639
Equity	123,485		127,183		371,282		406,642
Fixed-income	47,142		49,197		142,590		159,025
Other1	45,269		34,221		144,583		103,609
Total Revenue	$	402,656	$	381,143	$	1,218,077	$	1,071,915

1    Primarily includes Alternative / Private Markets (including but not limited to private equity, real estate and infrastructure), multi-asset and stewardship services revenue.

The following table presents Federated Hermes’ revenue disaggregated by performance obligation:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Asset Management1	$	276,771	$	263,644	$	851,089	$	754,681
Administrative Services	88,023		75,021		252,402		218,710
Distribution2	31,466		36,026		96,360		78,285
Other3	6,396		6,452		18,226		20,239
Total Revenue	$	402,656	$	381,143	$	1,218,077	$	1,071,915

1    The performance obligation can include administrative, distribution and other services recorded as a single asset management fee under Topic 606, as it is part of a unitary fee arrangement with a single performance obligation.

2    The performance obligation is satisfied at a point in time. A portion of this revenue relates to a performance obligation that has been satisfied in a prior period.

3    Primarily includes shareholder service fees and stewardship services revenue.

The following table presents Federated Hermes’ revenue disaggregated by geographical market:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Domestic	$	322,028	$	311,254	$	971,077	$	849,570
Foreign1	80,628		69,889		247,000		222,345
Total Revenue	$	402,656	$	381,143	$	1,218,077	$	1,071,915

1    This represents revenue earned by non-U.S. domiciled subsidiaries.

10

Notes to the Consolidated Financial Statements

(unaudited)

The following table presents Federated Hermes’ revenue disaggregated by product type:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Federated Hermes Funds	$	337,203	$	319,680	$	1,021,748	$	877,910
Separate Accounts	61,098		57,250		184,106		180,600
Other1	4,355		4,213		12,223		13,405
Total Revenue	$	402,656	$	381,143	$	1,218,077	$	1,071,915

1    Primarily includes stewardship services revenue.

For nearly all revenue, Federated Hermes is not required to disclose certain estimates of revenue expected to be recorded in future periods as a result of applying the following exemptions: (1) contract terms are short-term in nature (i.e., expected duration of one year or less due to termination provisions) and (2) the expected variable consideration would be allocated entirely to future service periods.

Federated Hermes expects to recognize revenue in the future related to the unsatisfied portion of the stewardship services and real estate development performance obligations at September 30, 2023. Generally, contracts are billed in arrears on a quarterly basis and have a three-year duration, after which the customer can terminate the agreement with notice, generally from three to twelve months. Based on existing contracts and the applicable foreign exchange rates as of September 30, 2023, Federated Hermes may recognize future fixed revenue from these services as presented in the following table:

(in thousands)
Remainder of 2023	$	3,454
2024	7,243
2025	2,225
2026 and Thereafter	1,121
Total Remaining Unsatisfied Performance Obligations	$	14,043

(5) Concentration Risk

(a) Revenue Concentration by Asset Class

The following table presents Federated Hermes’ significant revenue concentration by asset class:

	Nine Months Ended
	September 30,
	2023		2022
Money Market Assets	46	%	37	%
Equity Assets	30	%	38	%
Fixed-Income Assets	12	%	15	%

The change in the relative proportion of Federated Hermes’ revenue attributable to money market assets for the nine months ended September 30, 2023, as compared to the same period in 2022, was primarily the result of an increase in money market revenue due to the elimination of fee waivers in order for certain money market funds to maintain positive or zero net yields (Voluntary Yield-related Fee Waivers) and higher average assets. See section below entitled Low Short-Term Interest Rates.

The change in the relative proportion of Federated Hermes’ revenue attributable to equity and fixed-income assets for the nine months ended September 30, 2023, as compared to the same period in 2022, was primarily the result of increased money market revenue described above, as well as decreased equity revenue from lower average equity assets and decreased fixed-income revenue from lower average fixed-income assets and asset mix in 2023.

Low Short-Term Interest Rates

In March 2020, in response to disrupted economic activity as a result of the outbreak of a novel coronavirus (the Pandemic), the Federal Open Market Committee (FOMC) of the Federal Reserve Board (Fed) decreased the federal funds target rate range to 0% - 0.25%. The federal funds target rate drives short-term interest rates. As a result of the near-zero interest-rate environment, the gross yield earned by certain money market funds was not sufficient to cover all of the fund’s operating expenses. Beginning in the first quarter 2020, Federated Hermes had implemented Voluntary Yield-related Fee Waivers. These waivers

11

Notes to the Consolidated Financial Statements

(unaudited)

had been partially offset by related reductions in distribution expense as a result of Federated Hermes’ mutual understanding and agreement with third-party intermediaries to share the impact of the Voluntary Yield-related Fee Waivers. In response to global economic activity and elevated inflation levels, the FOMC raised the federal funds target rate multiple times in 2022 and 2023. The range is currently at 5.25% - 5.50% as of the September 2023 FOMC meeting. These rate increases eliminated the net negative pre-tax impact of the Voluntary Yield-related Fee Waivers in the second half of 2022.

There were no Voluntary Yield-related Fee Waivers during the three and nine months ended September 30, 2023. There were no material Voluntary Yield-related Fee Waivers during the three months ended September 30, 2022. During the nine months ended September 30, 2022, Voluntary Yield-related Fee Waivers totaled $85.3 million. These fee waivers were partially offset by related reductions in distribution expenses of $66.5 million, such that the net negative pre-tax impact to Federated Hermes was $18.8 million for the nine months ended September 30, 2022.

(b) Revenue Concentration by Investment Fund Strategy

Federated Hermes’ revenue concentration in the investment fund, Federated Hermes Government Obligations Fund, was 14% for both the three- and nine-month periods ended September 30, 2023, and 14% and 11% for the three- and nine-month periods ended September 30, 2022, respectively. A significant and prolonged decline in the AUM in this fund could have a material adverse effect on Federated Hermes’ future revenues and, to a lesser extent, net income, due to a related reduction in distribution expenses associated with these funds.

(c) Revenue Concentration by Intermediary

Approximately 11% of Federated Hermes’ total revenue for both the three- and nine-month periods ended September 30, 2023, and 14% and 11% for the three- and nine-month periods ended September 30, 2022, respectively, was derived from services provided to one intermediary, The Bank of New York Mellon Corporation, including its Pershing subsidiary. Significant negative changes in Federated Hermes’ relationship with this intermediary could have a material adverse effect on Federated Hermes’ future revenues and, to a lesser extent, net income due to a related reduction in distribution expenses associated with this intermediary.

(6) Consolidation

The Consolidated Financial Statements include the accounts of Federated Hermes, certain Federated Hermes Funds and other entities in which Federated Hermes holds a controlling financial interest. Federated Hermes is involved with various entities in the normal course of business that may be deemed to be voting rights entities (VREs) or VIEs. From time to time, Federated Hermes invests in Federated Hermes Funds for general corporate investment purposes or, in the case of newly launched products, in order to provide investable cash to establish a performance history. Federated Hermes’ investment in, and/or receivables from, these Federated Hermes Funds represents its maximum exposure to loss. The assets of each consolidated Federated Hermes Fund are restricted for use by that Federated Hermes Fund. Generally, neither creditors of, nor equity investors in, the Federated Hermes Funds have any recourse to Federated Hermes’ general credit. Given that the entities consolidated by Federated Hermes generally follow investment company accounting, which prescribes fair-value accounting, a deconsolidation generally does not result in the recognition of gains or losses for Federated Hermes.

In the ordinary course of business, Federated Hermes could implement fee waivers, rebates or expense reimbursements for various Federated Hermes Funds for competitive reasons (such as Voluntary Yield-related Fee Waivers or to maintain certain fund expense ratios/yields), to meet regulatory requirements or to meet contractual requirements (collectively, Fee Waivers). For the three and nine months ended September 30, 2023, Fee Waivers totaled $142.4 million and $398.8 million, respectively, of which $114.0 million and $313.5 million, respectively, related to money market funds which meet the scope exception of the consolidation guidance. For the three and nine months ended September 30, 2022, Fee Waivers totaled $118.2 million and $444.7 million, respectively, of which $89.1 million and $351.0 million, respectively, related to money market funds which meet the scope exception of the consolidation guidance.

Like other sponsors of investment companies, Federated Hermes in the ordinary course of business could make capital contributions to certain affiliated money market Federated Hermes Funds in connection with the reorganization of such funds into certain other affiliated money market Federated Hermes Funds or in connection with the liquidation of money market Federated Hermes Funds. In these instances, such capital contributions typically are intended to either offset realized losses or other permanent impairments to a fund’s net asset value (NAV), increase the market-based NAV per share of the fund’s portfolio that is being reorganized to equal the market-based NAV per share of the acquiring fund or to bear a portion of expenses relating to a fund liquidation. Under current money market fund regulations and Securities and Exchange Commission

12

Notes to the Consolidated Financial Statements

(unaudited)

(SEC) guidance, Federated Hermes is required to report these types of capital contributions to U.S. money market mutual funds to the SEC as financial support to the investment company that is being reorganized or liquidated. There were no contributions for the nine months ended September 30, 2023 and 2022.

In accordance with Federated Hermes’ consolidation accounting policy, Federated Hermes first determines whether the entity being evaluated is a VRE or a VIE. Once this determination is made, Federated Hermes proceeds with its evaluation of whether to consolidate the entity. The disclosures below represent the results of such evaluations as of September 30, 2023 and December 31, 2022.

(a) Consolidated Voting Rights Entities

Although most of the Federated Hermes Funds meet the definition of a VRE, Federated Hermes consolidates VREs only when it is deemed to have control. Consolidated VREs are reported on Federated Hermes’ Consolidated Balance Sheets primarily in Investments—Consolidated Investment Companies and Redeemable Noncontrolling Interests in Subsidiaries.

(b) Consolidated Variable Interest Entities

As of the periods ended September 30, 2023 and December 31, 2022, Federated Hermes was deemed to be the primary beneficiary of, and therefore consolidated, certain entities as a result of its controlling financial interest. The following table presents the balances related to the consolidated VIEs that were included on the Consolidated Balance Sheets as well as Federated Hermes’ net interest in the consolidated VIEs for each period presented:

(in millions)	September 30, 2023		December 31, 2022
Cash and Cash Equivalents	$	10.8	$	8.0
Investments—Consolidated Investment Companies	61.2		50.1
Receivables-Affiliates	11.6		0.3
Other Current Assets	0.4		0.4
Other Long-Term Assets	12.4		13.4
Less: Liabilities	19.7		5.7
Less: Accumulated Other Comprehensive Income (Loss), net of tax	0.4		1.2
Less: Redeemable Noncontrolling Interests in Subsidiaries	56.3		49.5
Federated Hermes’ Net Interest in VIEs	$	20.0	$	15.8

Federated Hermes’ net interest in the consolidated VIEs represents the value of Federated Hermes’ economic ownership interest in those VIEs. During the nine months ended September 30, 2023, Federated Hermes consolidated an existing VIE due to Federated Hermes increasing its ownership in this fund. One VIE was deconsolidated in the first quarter 2023 due to an increase in outside investments which briefly reduced Federated Hermes’ ownership below controlling interest level. This VIE was reconsolidated in the third quarter 2023 when Federated Hermes increased its ownership in the VIE. In the second quarter 2023, Federated Hermes consolidated a new fund, which was deconsolidated in the third quarter 2023 due to an increase in outside investments, as well as Federated Hermes redeeming a portion of its investment in the fund, resulting in a decrease in its ownership below controlling interest level. There was no material impact to the Consolidated Statements of Income as a result of these consolidations and deconsolidations on a net basis.

As of September 30, 2023, the consolidation of a certain VIE included a receivable of $9.8 million recorded in Receivables—Affiliates and a corresponding liability of $10.0 million recorded in Other Current Liabilities related to carried interest earned in September 2023. After it was received by the consolidated VIE, the carried interest was dispersed by that VIE to settle the $10.0 million liability in October 2023.

(c) Non-Consolidated Variable Interest Entities

Federated Hermes’ involvement with certain Federated Hermes Funds that are deemed to be VIEs includes serving as investment manager, or, at times, holding a minority interest or both. Federated Hermes’ variable interest is not deemed to absorb losses or receive benefits that could potentially be significant to the VIE. Therefore, Federated Hermes is not the primary beneficiary of these VIEs and has not consolidated these entities.

At September 30, 2023 and December 31, 2022, Federated Hermes’ maximum risk of loss related to investments in variable interests in non-consolidated VIEs was $112.0 million and $101.7 million, respectively, (primarily recorded in Cash and Cash Equivalents on the Consolidated Balance Sheets) and was entirely related to Federated Hermes Funds. AUM for these non-consolidated Federated Hermes Funds totaled $8.6 billion and $5.4 billion at September 30, 2023 and December 31, 2022,

13

Notes to the Consolidated Financial Statements

(unaudited)

respectively. Of the Receivables—Affiliates at September 30, 2023 and December 31, 2022, $0.8 million and $0.7 million, respectively, was related to non-consolidated VIEs and represented Federated Hermes’ maximum risk of loss from non-consolidated VIE receivables.

(7) Investments

At September 30, 2023 and December 31, 2022, Federated Hermes held investments in non-consolidated fluctuating-value Federated Hermes Funds of $52.4 million and $67.0 million, respectively, primarily in mutual funds which represent equity investments for Federated Hermes, and held investments in Separate Accounts of $6.9 million and $9.5 million at September 30, 2023 and December 31, 2022, respectively, that were included in Investments—Affiliates and Other on the Consolidated Balance Sheets. Federated Hermes’ investments held in Separate Accounts as of September 30, 2023 and December 31, 2022 were primarily composed of stocks of large domestic and foreign companies ($3.2 million and $3.4 million, respectively) and domestic debt securities ($2.3 million and $4.6 million, respectively).

Federated Hermes consolidates certain Federated Hermes Funds into its Consolidated Financial Statements as a result of its controlling financial interest in these Federated Hermes Funds (see Note (6)). All investments held by these consolidated Federated Hermes Funds were included in Investments—Consolidated Investment Companies on Federated Hermes’ Consolidated Balance Sheets.

The investments held by consolidated Federated Hermes Funds as of September 30, 2023 and December 31, 2022 were composed of domestic and foreign debt securities ($58.2 million and $57.8 million, respectively), stocks of large domestic and foreign companies ($54.2 million and $45.3 million, respectively), stocks of small and mid-sized domestic and foreign companies ($3.6 million and $3.3 million, respectively) and mutual funds ($2.2 million and $2.1 million, respectively).

The following table presents gains and losses recognized in Gain (Loss) on Securities, net on the Consolidated Statements of Income in connection with Federated Hermes’ investments:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Investments—Consolidated Investment Companies
Net Unrealized Gains (Losses)	$	(1,680)	$	1,137	$	2,582	$	(16,446)
Net Realized Gains (Losses)1	(125)		(4,568)		(1,101)		(6,047)
Net Gains (Losses) on Investments—Consolidated Investment Companies	(1,805)		(3,431)		1,481		(22,493)
Investments—Affiliates and Other
Net Unrealized Gains (Losses)	(1,518)		(3,248)		(662)		(18,979)
Net Realized Gains (Losses)1	(115)		(146)		1,275		2,066
Net Gains (Losses) on Investments—Affiliates and Other	(1,633)		(3,394)		613		(16,913)
Gain (Loss) on Securities, net	$	(3,438)	$	(6,825)	$	2,094	$	(39,406)

1    Realized gains and losses are computed on a specific-identification basis.

(8) Fair Value Measurements

Fair value is the price that would be received to sell an asset or the price that would be paid to transfer a liability as of the measurement date. A fair-value reporting hierarchy exists for disclosure of fair value measurements based on the observability of the inputs to the valuation of financial assets and liabilities. The levels are:

Level 1 – Quoted prices for identical instruments in active markets. Level 1 assets can include equity and debt securities that are traded in an active exchange market, including shares of mutual funds.

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 assets and liabilities may include debt and equity securities, purchased loans and over-the-counter derivative contracts whose fair value is determined using a pricing model without significant unobservable market data inputs.

14

Notes to the Consolidated Financial Statements

(unaudited)

Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable in active markets.

NAV Practical Expedient – Investments that calculate NAV per share (or its equivalent) as a practical expedient. These investments have been excluded from the fair value hierarchy.

(a) Fair Value Measurements on a Recurring Basis

The following table presents fair value measurements for classes of Federated Hermes’ financial assets and liabilities measured at fair value on a recurring basis:

(in thousands)	Level 1		Level 2		Level 3		Total
September 30, 2023
Financial Assets
Cash and Cash Equivalents	$	376,960	$	0	$	0	$	376,960
Investments—Consolidated Investment Companies	60,037		58,164		0		118,201
Investments—Affiliates and Other	56,840		2,407		25		59,272
Other1	6,623		0		0		6,623
Total Financial Assets	$	500,460	$	60,571	$	25	$	561,056
Total Financial Liabilities2	$	48	$	3,467	$	8,180	$	11,695
December 31, 2022
Financial Assets
Cash and Cash Equivalents	$	336,782	$	0	$	0	$	336,782
Investments—Consolidated Investment Companies	49,119		59,329		0		108,448
Investments—Affiliates and Other	71,369		5,130		25		76,524
Other1	6,538		469		0		7,007
Total Financial Assets	$	463,808	$	64,928	$	25	$	528,761
Total Financial Liabilities2	$	27	$	4	$	8,439	$	8,470

1    Amounts primarily consist of restricted cash and security deposits as of September 30, 2023 and December 31, 2022.

2    Amounts primarily consist of acquisition-related future contingent consideration liabilities and unrealized derivative losses as of September 30, 2023 and acquisition-related future contingent consideration liabilities as of December 31, 2022.

The following is a description of the valuation methodologies used for financial assets and liabilities measured at fair value on a recurring basis. Federated Hermes did not hold any nonfinancial assets or liabilities measured at fair value on a recurring basis at September 30, 2023 or December 31, 2022.

Cash and Cash Equivalents

Cash and Cash Equivalents include deposits with banks and investments in money market funds. Investments in money market funds totaled $329.5 million and $289.8 million at September 30, 2023 and December 31, 2022, respectively. Cash investments in publicly available money market funds are valued under the market approach through the use of quoted market prices in an active market, which is the NAV of the funds, and are classified within Level 1 of the valuation hierarchy.

Investments—Consolidated Investment Companies

Investments—Consolidated Investment Companies represent securities held by consolidated Federated Hermes Funds. For publicly traded securities available in an active market, the fair value of these securities is classified as Level 1 when the fair value is based on quoted market prices. The fair values of certain securities held by consolidated Federated Hermes Funds which are determined by third-party pricing services and utilize observable market inputs of comparable investments are classified within Level 2 of the valuation hierarchy.

Investments—Affiliates and Other

Investments—Affiliates and Other primarily represent investments in fluctuating-value Federated Hermes Funds, as well as investments held in Separate Accounts. For investments in fluctuating-value Federated Hermes Funds that are publicly available, the securities are valued under the market approach through the use of quoted market prices available in an active market, which is the NAV of the funds, and are classified within Level 1 of the valuation hierarchy. For publicly traded

15

Notes to the Consolidated Financial Statements

(unaudited)

securities available in an active market, the fair value of these securities is classified as Level 1 when the fair value is based on quoted market prices. The fair values of certain securities which are determined by third-party pricing services and utilize observable market inputs of comparable investments are classified within Level 2 of the valuation hierarchy.

Acquisition-related future contingent consideration liabilities

From time to time, pursuant to agreements entered into in connection with certain business combinations and asset acquisitions, Federated Hermes could be required to make future consideration payments if certain contingencies are met. In connection with certain business combinations, Federated Hermes records a liability representing the estimated fair value of future consideration payments as of the acquisition date. The liability is subsequently re-measured at fair value on a recurring basis with changes in fair value recorded in earnings. As of September 30, 2023, acquisition-related future consideration liabilities of $8.2 million were primarily related to the CWH Acquisition and a business combination made in 2020 and were recorded in Other Current Liabilities ($1.2 million) and Other Long-Term Liabilities ($7.0 million) on the Consolidated Balance Sheets. Management estimated the fair value of future consideration payments based primarily upon expected future cash flows using an income approach valuation methodology with unobservable market data inputs (Level 3).

The following table presents a reconciliation of the beginning and ending balances for Federated Hermes’ liability for future consideration payments related to these business combinations:

(in thousands)
Balance at December 31, 2022	$	8,439
Changes in Fair Value	598
Contingent Consideration Payments	(857)
Balance at September 30, 2023	$	8,180

Investments using Practical Expedients

For investments in mutual funds that are not publicly available but for which the NAV is calculated monthly and for which there are redemption restrictions, the investments are valued using NAV as a practical expedient and are excluded from the fair value hierarchy. As of September 30, 2023 and December 31, 2022, these investments totaled $18.5 million and $18.3 million, respectively, and were recorded in Other Long-Term Assets.

(b) Fair Value Measurements on a Nonrecurring Basis

Federated Hermes did not hold any assets or liabilities measured at fair value on a nonrecurring basis at September 30, 2023.

(c) Fair Value Measurements of Other Financial Instruments

The fair value of Federated Hermes’ debt is estimated by management using observable market data (Level 2). Based on this fair value estimate, the carrying value of debt appearing on the Consolidated Balance Sheets approximates fair value, net of unamortized issuance costs in the amount of $2.2 million.

(9) Derivatives

Federated Hermes Limited (FHL), a British Pound Sterling-denominated subsidiary of Federated Hermes, enters into foreign currency forward transactions in order to hedge against foreign exchange rate fluctuations. None of these forwards have been designated as hedging instruments for accounting purposes. As of September 30, 2023, FHL held foreign currency forwards with a combined notional amount of £83.8 million with expiration dates ranging from December 2023 through June 2024. Federated Hermes recorded $3.5 million in Other Current Liabilities on the Consolidated Balance Sheets, which represented the fair value of these derivative instruments as of September 30, 2023.

As of December 31, 2022, FHL held foreign currency forward derivative instruments with a combined notional amount of £67.3 million with expiration dates ranging from March 2023 through September 2023. Federated Hermes recorded $0.5 million in Other Current Assets on the Consolidated Balance Sheets, which represented the fair value of these derivative instruments as of December 31, 2022.

16

Notes to the Consolidated Financial Statements

(unaudited)

(10) Intangible Assets, including Goodwill

Intangible Assets, net at September 30, 2023 decreased $7.2 million from December 31, 2022 primarily due to amortization expense.

Goodwill at September 30, 2023 increased $1.1 million from December 31, 2022 primarily as a result of foreign exchange rate fluctuations on goodwill denominated in a foreign currency.

(11) Debt

Unsecured Senior Notes

On March 17, 2022, Federated Hermes entered into a Note Purchase Agreement (Note Purchase Agreement) by and among Federated Hermes and the purchasers of certain unsecured senior notes in the aggregate amount of $350 million ($350 million Notes), at a fixed interest rate of 3.29% per annum, payable semiannually in arrears in March and September in each year of the agreement. Citigroup Global Markets Inc. and PNC Capital Markets LLC acted as lead placement agents in relation to the $350 million Notes and certain subsidiaries of Federated Hermes are guarantors of the obligations owed under the Note Purchase Agreement. As of September 30, 2023, $347.8 million, net of unamortized issuance costs in the amount of $2.2 million, was recorded in Long-Term Debt on the Consolidated Balance Sheets.

The entire principal amount of the $350 million Notes will become due March 17, 2032, subject to certain prepayment requirements under limited conditions. Federated Hermes can elect to prepay the $350 million Notes under certain limited circumstances including with a make-whole amount if mandatorily prepaid without the consent of the holders of the $350 million Notes. The Note Purchase Agreement does not feature a facility for the further issuance of additional notes or borrowing of any other amounts and there is no commitment fee payable in connection with the $350 million Notes.

The Note Purchase Agreement includes representations and warranties, affirmative and negative financial covenants, including an interest coverage ratio covenant and a leverage ratio covenant, reporting requirements, other non-financial covenants and other customary terms and conditions. Federated Hermes was in compliance with all of its covenants at and during the period ended September 30, 2023. See the Liquidity and Capital Resources section of Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information.

The Note Purchase Agreement includes certain stated events of default and cross default provisions which would permit the lenders/counterparties to accelerate the repayment of the $350 million Notes if not cured within the applicable grace periods. The events of default generally include breaches of contract, failure to make required payments, insolvency, certain material misrepresentations and other proceedings, whether voluntary or involuntary, that would require repayment of the $350 million Notes prior to their stated date of maturity. Any such accelerated amounts would accrue interest at a default rate and could include an additional make-whole amount upon repayment. The $350 million Notes rank without preference or priority in relation to other unsecured and senior indebtedness of Federated Hermes.

Revolving Credit Facility

On July 30, 2021, Federated Hermes entered into an unsecured Fourth Amended and Restated Credit Agreement by and among Federated Hermes, certain of its subsidiaries as guarantors party thereto, a syndicate of eleven banks as Lenders party thereto, PNC Bank, National Association as administrative agent, PNC Capital Markets LLC, as sole bookrunner and joint lead arranger, Citigroup Global Markets, Inc., as joint lead arranger, Citibank, N.A. as syndication agent, and Toronto-Dominion Bank, New York Branch as documentation agent (Credit Agreement). The Credit Agreement consists of a $350 million revolving credit facility with an additional $200 million available via an optional increase (or accordion) feature. Borrowings under the Credit Agreement may be used for general corporate purposes, including, without limitation, stock repurchases, dividend payments (including any special dividend payments), and acquisitions.

As of September 30, 2023, the interest on borrowings from the revolving credit facility is calculated at the term Secured Overnight Financing Rate (SOFR) which includes a benchmark adjustment based on its historical relationship to the London Interbank Offering Rate (LIBOR). The borrowings under the revolving credit facility may include up to $50 million for which interest is calculated at the daily SOFR plus a spread unless a base rate option is elected (Swing Line). Effective July 1, 2023, Federated Hermes began using SOFR as a replacement to LIBOR in order to calculate interest on borrowings, if any, as permitted by the Credit Agreement. This is only a change to the rate index used for future borrowings under the Credit Agreement due to the discontinuance of LIBOR in the market and is not an amendment to the Credit Agreement.

17

Notes to the Consolidated Financial Statements

(unaudited)

The Credit Agreement, which expires on July 30, 2026, has no principal payment schedule, but instead requires that any outstanding principal be repaid by the expiration date. Federated Hermes, however, can elect to make discretionary principal payments. There was no activity on the Credit Agreement during the nine months ended September 30, 2023.

As of September 30, 2023 and December 31, 2022, there were no outstanding borrowings under the revolving credit facility. The commitment fee under the Credit Agreement is 0.10% per annum on the daily unused portion of each Lender’s commitment. As of September 30, 2023, Federated Hermes has $350 million available for borrowings under the revolving credit facility and an additional $200 million available via its optional accordion feature.

The Credit Agreement includes representations and warranties, affirmative and negative financial covenants, including an interest coverage ratio covenant and a leverage ratio covenant, reporting requirements, other non-financial covenants and other customary terms and conditions. Federated Hermes was in compliance with all covenants at and during the nine months ended September 30, 2023. See the Liquidity and Capital Resources section of Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information.

The Credit Agreement also has certain stated events of default and cross default provisions which would permit the lenders/counterparties to accelerate the repayment of debt outstanding if not cured within the applicable grace periods. The events of default generally include breaches of contract, failure to make required loan payments, insolvency, cessation of business, notice of lien or assessment, and other proceedings, whether voluntary or involuntary, that would require the repayment of amounts borrowed. The Credit Agreement also requires certain subsidiaries to enter into a Third Amended and Restated Continuing Agreement of Guaranty and Suretyship to guarantee payment of all obligations incurred through the Credit Agreement.

(12) Share-Based Compensation

During the nine months ended September 30, 2023, Federated Hermes awarded 380,796 shares of restricted Federated Hermes Class B common stock, the majority of which was granted in connection with a bonus program in which certain key employees received a portion of their bonus in the form of restricted stock under the Plan. This restricted stock, which was granted on the bonus payment date and issued out of treasury, generally vests over a three-year period.

During 2022, Federated Hermes awarded 494,043 shares of restricted Class B common stock in connection with a bonus program in which certain key employees received a portion of their bonus in the form of restricted stock under the Plan. This bonus restricted stock, which was granted on the bonus payment date and issued out of treasury, generally vests over a three-year period. Federated Hermes also awarded 474,500 shares of restricted Class B common stock under this same Plan that generally vest over a ten-year period. In addition, Federated Hermes awarded 1,345,999 shares of restricted Class B common stock under the Federated Hermes UK Sub-Plan that generally vest over a five-year period. Of that amount, 1,183,066 shares were granted pursuant to award agreements to certain FHL employees in exchange for their beneficial interests in awards of restricted FHL shares in connection with the acquisition of the remaining FHL noncontrolling interests.

(13) Equity

In June 2022, the board of directors authorized a share repurchase program with no stated expiration date that allows the repurchase of up to 5.0 million shares of Class B common stock. No other program existed as of September 30, 2023. The program authorizes executive management to determine the timing and the amount of shares for each purchase. The repurchased stock is to be held in treasury for employee share-based compensation plans, potential acquisitions and other corporate activities, unless Federated Hermes’ board of directors subsequently determines to retire the repurchased stock and restore the shares to authorized but unissued status (rather than holding the shares in treasury). During the nine months ended September 30, 2023, Federated Hermes repurchased approximately 3.4 million shares of its Class B common stock for $117.0 million ($6.8 million of which was accrued in Other Current Liabilities as of September 30, 2023), nearly all of which were repurchased in the open market. At September 30, 2023, approximately 1.4 million shares remain available to be repurchased under this share repurchase program. See Note (19) to the Consolidated Financial Statements for information regarding a new share repurchase program approved on October 26, 2023.

18

Notes to the Consolidated Financial Statements

(unaudited)

The following table presents the activity for the Class B common stock and Treasury stock for the three and nine months ended September 30, 2023 and 2022. Class A shares have been excluded as there was no activity during these same periods.

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2023	2022	2023	2022
Class B Shares
Beginning Balance	88,290,140	89,197,952	89,275,935	93,410,968
Stock Award Activity	5,000	0	387,996	1,704,592
Purchase of Treasury Stock	(2,046,790)	(211,885)	(3,415,581)	(6,129,493)
Ending Balance	86,248,350	88,986,067	86,248,350	88,986,067
Treasury Shares
Beginning Balance	11,215,316	20,307,504	10,229,521	16,094,488
Stock Award Activity	(5,000)	0	(387,996)	(1,704,592)
Purchase of Treasury Stock	2,046,790	211,885	3,415,581	6,129,493
Retirement of Treasury Stock	0	(10,000,000)	0	(10,000,000)
Ending Balance	13,257,106	10,519,389	13,257,106	10,519,389

(14) Earnings Per Share Attributable to Federated Hermes, Inc. Shareholders

The following table sets forth the computation of basic and diluted earnings per share using the two-class method for amounts attributable to Federated Hermes:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands, except per share data)	2023		2022		2023		2022
Numerator
Net Income Attributable to Federated Hermes, Inc.	$	75,026	$	69,479	$	216,802	$	182,999
Less: Total Net Income Available to Participating Unvested Restricted Shareholders1	(3,310)		(3,565)		(10,309)		(9,072)
Total Net Income Attributable to Federated Hermes Common Stock - Basic and Diluted	$	71,716	$	65,914	$	206,493	$	173,927
Denominator
Basic Weighted-Average Federated Hermes Common Stock2	83,710		84,531		84,499		86,109
Dilutive Impact from Non-forfeitable Restricted Stock	0		5		3		2
Diluted Weighted-Average Federated Hermes Common Stock2	83,710		84,536		84,502		86,111
Earnings Per Share
Net Income Attributable to Federated Hermes Common Stock - Basic and Diluted2	$	0.86	$	0.78	$	2.44	$	2.02

1    Includes dividends paid on unvested restricted Federated Hermes Class B common stock and their proportionate share of undistributed earnings attributable to Federated Hermes shareholders.

2    Federated Hermes common stock excludes unvested restricted stock which are deemed participating securities in accordance with the two-class method of computing earnings per share, except for circumstances where shares vest upon retirement and the employee has reached retirement age.

19

Notes to the Consolidated Financial Statements

(unaudited)

(15) Accumulated Other Comprehensive Income (Loss) Attributable to Federated Hermes, Inc. Shareholders

Accumulated Other Comprehensive Income (Loss), net of tax, attributable to Federated Hermes shareholders resulted from foreign currency translation gain (loss):

(in thousands)
Balance at December 31, 2022	$	(45,676)
Other Comprehensive Income (Loss)	2,283
Balance at September 30, 2023	$	(43,393)
Balance at December 31, 2021	$	16,362
Other Comprehensive Income (Loss)	(103,778)
Balance at September 30, 2022	$	(87,416)

(16) Redeemable Noncontrolling Interests in Subsidiaries

The following table presents the changes in Redeemable Noncontrolling Interests in Subsidiaries:

(in thousands)	Consolidated Investment Companies		Other Entities		Total
Balance at December 31, 2022	$	50,317	$	11,504	$	61,821
Net Income (Loss)	1,925		(60)		1,865
Other Comprehensive Income (Loss), net of tax	0		232		232
Subscriptions—Redeemable Noncontrolling Interest Holders	12,669		107		12,776
Consolidation/(Deconsolidation)	(33,962)		0		(33,962)
Distributions to Noncontrolling Interests in Subsidiaries	(2,499)		(725)		(3,224)
Balance at March 31, 2023	$	28,450	$	11,058	$	39,508
Net Income (Loss)	486		341		827
Other Comprehensive Income (Loss), net of tax	0		328		328
Subscriptions—Redeemable Noncontrolling Interest Holders	19,642		42		19,684
Consolidation/(Deconsolidation)	12,119		0		12,119
Distributions to Noncontrolling Interests in Subsidiaries	(14,017)		(437)		(14,454)
Balance at June 30, 2023	$	46,680	$	11,332	$	58,012
Net Income (Loss)	(804)		44		(760)
Other Comprehensive Income (Loss), net of tax	(8)		(446)		(454)
Subscriptions—Redeemable Noncontrolling Interest Holders	35,323		0		35,323
Consolidation/(Deconsolidation)	(6,601)		0		(6,601)
Distributions to Noncontrolling Interests in Subsidiaries	(14,621)		(268)		(14,889)
Balance at September 30, 2023	$	59,969	$	10,662	$	70,631

20

Notes to the Consolidated Financial Statements

(unaudited)

(in thousands)	Consolidated Investment Companies		FHL and Other Entities		Total
Balance at December 31, 2021	$	24,659	$	38,543	$	63,202
Net Income (Loss)	(1,744)		478		(1,266)
Other Comprehensive Income (Loss), net of tax	0		(457)		(457)
Subscriptions—Redeemable Noncontrolling Interest Holders	29,577		763		30,340
Consolidation/(Deconsolidation)	(16,034)		0		(16,034)
Stock Award Activity	0		707		707
Distributions to Noncontrolling Interests in Subsidiaries	(771)		(3,568)		(4,339)
Change in Estimated Redemption Value of Redeemable Noncontrolling Interests in FHL	0		14,221		14,221
Acquisition of Additional Equity of FHL	0		(37,805)		(37,805)
Balance at March 31, 2022	$	35,687	$	12,882	$	48,569
Net Income (Loss)	(7,616)		717		(6,899)
Other Comprehensive Income (Loss), net of tax	0		(1,068)		(1,068)
Subscriptions—Redeemable Noncontrolling Interest Holders	14,977		337		15,314
Distributions to Noncontrolling Interests in Subsidiaries	(1,024)		(161)		(1,185)
Balance at June 30, 2022	$	42,024	$	12,707	$	54,731
Net Income (Loss)	(2,104)		199		(1,905)
Other Comprehensive Income (Loss), net of tax	0		(1,713)		(1,713)
Subscriptions—Redeemable Noncontrolling Interest Holders	3,591		903		4,494
Consolidation/(Deconsolidation)	15,599		0		15,599
Distributions to Noncontrolling Interests in Subsidiaries	(15,512)		(1,108)		(16,620)
Balance at September 30, 2022	$	43,598	$	10,988	$	54,586

(17) Commitments and Contingencies

(a) Contractual

From time to time, pursuant to agreements entered into in connection with certain business combinations and asset acquisitions, Federated Hermes is obligated to make future payments under various agreements to which it is a party. See Note (8) for additional information regarding these payments.

(b) Guarantees and Indemnifications

On an intercompany basis, various subsidiaries of Federated Hermes guarantee certain financial obligations of Federated Hermes, Inc. and of other consolidated subsidiaries, and Federated Hermes, Inc. guarantees certain financial and performance-related obligations of various wholly-owned subsidiaries. In addition, in the normal course of business, Federated Hermes has entered into contracts that provide a variety of indemnifications. Typically, obligations to indemnify third parties arise in the context of contracts entered into by Federated Hermes, under which Federated Hermes agrees to hold the other party harmless against losses arising out of the contract, provided the other party’s actions are not deemed to have breached an agreed-upon standard of care. In each of these circumstances, payment by Federated Hermes is contingent on the other party making a claim for indemnity, subject to Federated Hermes’ right to challenge the claim. Further, Federated Hermes’ obligations under these agreements can be limited in terms of time and/or amount. It is not possible to predict the maximum potential amount of future payments under these or similar agreements due to the conditional nature of Federated Hermes’ obligations and the unique facts and circumstances involved in each particular agreement. As of September 30, 2023, management does not believe that a material loss related to any of these matters is reasonably possible.

21

Notes to the Consolidated Financial Statements

(unaudited)

(c) Legal Proceedings

Like other companies, Federated Hermes has claims asserted and threatened against it in the ordinary course of business. As of September 30, 2023, Federated Hermes does not believe that a material loss related to any of these claims is reasonably possible.

(d) Other

During the first quarter 2023, an administrative error was identified related to a failure to register certain shares of a Federated Hermes closed-end tender fund. Federated Hermes estimated a probable cost of $18.9 million as of September 30, 2023 related to correcting this issue, of which $17.9 million represents a settlement with affected shareholders that was paid during the second quarter 2023. During the first quarter 2023, Federated Hermes recorded $2.5 million to Operating Expenses - Other representing Federated Hermes' retention under the insurance policy. Management believes an insurance reimbursement of $16.4 million is probable based on the contractual terms of the insurance policies. Accordingly, $16.4 million has been recorded to Receivables, net at September 30, 2023. However, the insurance claim is now the subject of litigation with two of Federated Hermes’ insurance carriers. Changes to these estimates, which are contingent upon resolution of the insurance claim with the applicable insurers, could be materially different from the amount Federated Hermes has accrued.

(18) Income Taxes

In connection with the restructuring of an infrastructure fund in the second quarter 2023, Federated Hermes purchased certain limited partners’ rights to receive future carried interest at fair value, which was calculated by a third-party, for $9.8 million and was included in Operating Expenses - Other in the second quarter 2023. Due to the restructuring, an existing clawback risk on previously earned carried interest was removed. The purchase of these carried interest rights and related legal and professional fees and other costs are not deductible for tax purposes. Negotiations for additional consideration continue with a subset of limited partners. An additional $2.9 million was recorded in Operating Expenses - Other in the third quarter 2023. The final consideration may be different from the amounts recorded and the difference could be significant, potentially in a material way.

(19) Subsequent Events

On October 26, 2023, Federated Hermes’ board of directors declared a $0.28 per share dividend to Federated Hermes’ Class A and Class B common stock shareholders of record as of November 8, 2023 to be paid on November 15, 2023.

On October 26, 2023, the board of directors authorized an additional share repurchase program with no stated expiration date that allows the repurchase of up to 5.0 million shares of Class B common stock. This program authorizes executive management to determine the timing and the amount of shares for each purchase. The repurchased stock is to be held in treasury for employee share-based compensation plans, potential acquisitions and other corporate activities, unless Federated Hermes' board of directors subsequently determines to retire the repurchased stock and restore the shares to authorized but unissued status (rather than holding the shares in treasury). See Note (13) for additional information on Federated Hermes' share repurchase programs.

22

Part I, Item 2. Management's Discussion and Analysis

of Financial Condition and Results of Operations (unaudited)

The discussion and analysis below should be read in conjunction with the Consolidated Financial Statements appearing elsewhere in this report. Management has presumed that the readers of this interim financial information have read or have access to Management’s Discussion and Analysis of Financial Condition and Results of Operations appearing in Federated Hermes’ Annual Report on Form 10-K for the year ended December 31, 2022.

General

Federated Hermes is a global leader in active, responsible investing with $715.2 billion in managed assets as of September 30, 2023. The majority of Federated Hermes’ revenue is derived from advising Federated Hermes Funds and Separate Accounts in domestic and international public and private markets. Federated Hermes also derives revenue from providing administrative and other fund-related services (including distribution and shareholder servicing) as well as stewardship and real estate development services.

Investment advisory fees, administrative service fees and certain fees for other services, such as distribution and shareholder service fees, are contract-based and are generally calculated as a percentage of the average net assets of managed investment portfolios. Federated Hermes’ revenue is primarily dependent upon factors that affect the value of managed/serviced assets, including market conditions and the ability to attract and retain assets. Generally, managed assets in Federated Hermes’ public market investment products and strategies can be redeemed or withdrawn at any time with no advance notice requirement, while managed assets in Federated Hermes’ private market investment products and strategies are subject to restrictions to withdrawals. Fee rates for Federated Hermes’ services generally vary by asset and service type and can vary based on changes in asset levels. Generally, advisory fees charged for services provided to multi-asset and equity products and strategies are higher than advisory fees charged to alternative/private markets and fixed-income products and strategies, which in turn are higher than advisory fees charged to money market products and strategies. Likewise, Federated Hermes Funds typically have higher advisory fees than Separate Accounts. Similarly, revenue is also dependent upon the relative composition of average AUM across both asset and product types. Federated Hermes can implement Fee Waivers for competitive reasons such as Voluntary Yield-related Fee Waivers, to maintain certain fund expense ratios, to meet regulatory requirements or to meet contractual requirements. Since Federated Hermes’ public market products are largely distributed and serviced through financial intermediaries, Federated Hermes pays a portion of fees earned from sponsored products to the financial intermediaries that sell these products and strategies. These payments are generally calculated as a percentage of net assets attributable to the applicable financial intermediary and represent the vast majority of Distribution expense on the Consolidated Statements of Income. Certain components of Distribution expense can vary depending upon the asset type, distribution channel and/or the size of the customer relationship. Federated Hermes generally pays out a larger portion of the revenue earned from managed assets in money market and multi-asset funds than the revenue earned from managed assets in equity, fixed-income and alternative/private markets funds.

Federated Hermes’ most significant operating expenses are Compensation and Related expense and Distribution expense. Compensation and Related expense includes base salary and wages, incentive compensation and other employee expenses including payroll taxes and benefits. Incentive compensation, which includes stock-based compensation, can vary depending on various factors including, but not limited to, the overall results of operations of Federated Hermes, investment management performance and sales performance.

The discussion and analysis of Federated Hermes’ financial condition and results of operations are based on Federated Hermes’ Consolidated Financial Statements. Management evaluates Federated Hermes’ performance at the consolidated level. Therefore, Federated Hermes operates in one operating segment, the investment management business. Management analyzes all expected revenue and expenses and considers market demands in determining an overall fee structure for services provided and in evaluating the addition of new business. Federated Hermes’ growth and profitability are dependent upon its ability to attract and retain AUM and upon the profitability of those assets, which is impacted, in part, by Fee Waivers. Fees for mutual fund-related services are ultimately subject to the approval of the independent directors or trustees of the mutual funds and, as required by law, fund shareholders. Management believes that meaningful indicators of Federated Hermes’ financial performance include AUM, gross and net product sales, total revenue and net income, both in total and per diluted share.

23

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

Business Developments

Fund-Related Transactions

During the second quarter 2023, a shareholder in a private equity fund sold a portion of their investment to a third-party. As part of the terms of this sale, $25.1 million of carried interest was recorded as revenue and $17.5 million was recorded as related compensation expense.

In an independent transaction during the second quarter 2023, as part of a restructuring of an infrastructure fund, Federated Hermes purchased certain limited partners’ rights to receive future carried interest at fair value, which was calculated by a third-party, for $9.8 million and was included in Operating Expenses - Other in the second quarter 2023. Due to the restructuring, an existing clawback risk on previously earned carried interest was removed, resulting in $14.2 million of carried interest being recorded as revenue and $8.8 million of related compensation expense being recorded. The purchase of these carried interest rights and related legal and professional fees and other costs are not deductible for tax purposes. Negotiations for additional consideration continue with a subset of limited partners. An additional $2.9 million was recorded in Operating Expenses - Other in the third quarter 2023. The final consideration may be different from the amounts recorded and the difference could be significant, potentially in a material way.

Pandemic

On May 5, 2023, the World Health Organization declared that COVID-19 no longer represents a global health emergency. The President of the U.S. also ended the national public health emergency declaration on May 11, 2023. Federated Hermes will continue to monitor and assess in the ordinary course of business any lingering potential impacts of the Pandemic on Federated Hermes’ employees and business, results of operations, financial condition, cash flows, and stock price (collectively, Financial Condition). As of September 30, 2023, the Pandemic has not materially affected Federated Hermes’ Financial Condition.

Low Short-Term Interest Rates

In March 2020, in response to disrupted economic activity as a result of the Pandemic, the FOMC decreased the federal funds target rate range to 0% - 0.25%. The federal funds target rate drives short-term interest rates. As a result of the near-zero interest-rate environment, the gross yield earned by certain money market funds was not sufficient to cover all of the fund’s operating expenses. Beginning in the first quarter 2020, Federated Hermes had implemented Voluntary Yield-related Fee Waivers. These waivers had been partially offset by related reductions in distribution expense as a result of Federated Hermes’ mutual understanding and agreement with third-party intermediaries to share the impact of the Voluntary Yield-related Fee Waivers. In response to global economic activity and elevated inflation levels, the FOMC raised the federal funds target rate multiple times in 2022 and 2023. The range is currently at 5.25% - 5.50% as of the September 2023 FOMC meeting. These rate increases eliminated the net negative pre-tax impact of the Voluntary Yield-related Fee Waivers in the second half of 2022.

There were no Voluntary Yield-related Fee Waivers during the three and nine months ended September 30, 2023. There were no material Voluntary Yield-related Fee Waivers during the three months ended September 30, 2022. During the nine months ended September 30, 2022, Voluntary Yield-related Fee Waivers totaled $85.3 million. These fee waivers were partially offset by related reductions in distribution expenses of $66.5 million, such that the net negative pre-tax impact to Federated Hermes was $18.8 million for the nine months ended September 30, 2022.

Current Regulatory Environment

The following discussion focuses on various aspects of the current regulatory environment in which Federated Hermes operated its business during the third quarter 2023. Please see Federated Hermes’ prior public filings, including, the discussions under Item 1 – Business – Current Regulatory Environment – Domestic and Item 1 – Business – Current Regulatory Environment – International, in Federated Hermes’ Annual Report on Form 10-K for the year ended December 31, 2022, and under Part 1, Item 2 – Management’s Discussion and Analysis – Business Developments – Current Regulatory Environment, in Federated Hermes Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2023 and June 30, 2023 for historical information on the regulatory environment, and related regulatory developments, for periods prior to June 30, 2023, which also includes further background information relevant to certain of the matters discussed below.

Federated Hermes and its investment management business are subject to extensive regulation both within and outside the U.S. Federated Hermes and its products, such as the Federated Hermes Funds, and strategies are subject to: various federal securities laws, such as the Securities Act of 1933 (1933 Act), the Securities Act of 1934 (1934 Act), 1940 Act, and Advisers Act; state laws regarding securities fraud and registration; regulations or other rules promulgated by various regulatory authorities, or

24

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

other authorities. Various laws and regulations that have or are expected to be re-examined, modified, or reversed, or that become effective, and any new proposed laws, rules, regulations and directives or consultations (collectively, both domestically and internationally, as applicable, Regulatory Developments) continue to impact the investment management industry generally, and will continue to impact, to various degrees, Federated Hermes’ Financial Condition.

Domestic

The pace of new proposed and final laws, rules and regulations and other regulatory activity continues at a high level in 2023. Despite receiving criticism for the expedited pace and layering of new regulation, the SEC (among other regulatory authorities, self-regulatory organizations, or exchanges) has continued to advance its robust rulemaking initiatives. Based on the SEC’s Spring 2023 Unified Agenda of Regulatory and Declaratory Actions (SEC Spring Reg Flex Agenda), which identified 55 rulemaking initiatives on the SEC’s calendar for 2023 and 2024, and the number of final and proposed rules promulgated by the SEC through September 30, 2023, the SEC expects to promulgate at least 18 additional final rules and four additional proposed rules in the fourth quarter 2023, and at least nine additional final rules and five additional proposed rules in the first half of 2024. These final and proposed rules are expected to impose significant new requirements on the investment management industry, including Federated Hermes.

On October 16, 2023, the SEC Division of Examinations (DOE) issued its 2024 examination priorities for investment advisors, investment companies, broker-dealers and other registrants, including the key risks, examination topics and priorities that the DOE plans to focus on in 2024. The SEC indicated that the DOE will prioritize areas that pose emerging risks to investors or the markets in addition to core and perennial risk areas, including, among other topics: (1) Regulation Best Interest; (2) conflict of interest disclosures; (3) conflict mitigation practices; (4) complex, high cost, illiquid or microcap products, including derivatives, exchange-traded funds, variable annuities, real estate investment trusts, and private placements, and related investment advice, recommendations and disclosures; (5) Form CRS, (6) the SEC’s marketing rule; (7) crypto assets; and (8) emerging financial technologies, such as artificial intelligence, and their usage. The SEC emphasized that its published examination priorities are not an exhaustive list, and are in addition to its normal examinations, risk alerts, and other outreach to registrants and investors.

On July 12, 2023, the SEC adopted a final rule imposing additional money market fund reforms, enhancing Form PF reporting requirements for large liquidity fund advisors, and requiring additional disclosures through amendments to Form N-CSR and Form N-1A. These reforms were the first amendments to Rule 2a-7 under the 1940 Act since the amendments to Rule 2a-7, and certain other regulations, adopted by the SEC on July 23, 2014, and related guidance (collectively, 2014 Money Fund Rules and Guidance). The final rule purports to improve the resiliency and transparency of money market funds by: (1) de-linking and removing the regulatory tie between the imposition of redemption gates and liquidity fees and the 30% threshold for a money market fund’s weekly liquid assets; (2) removing provisions from Rule 2a-7 under the 1940 Act that permit a money market fund to temporarily suspend redemptions; (3) increasing minimum portfolio liquidity requirements from 10% to 25% for daily liquid assets and from 30% to 50% for weekly liquid assets to provide a more substantial buffer in the event of rapid redemptions from money market funds; (4) requiring institutional prime and institutional tax-exempt money market funds to impose mandatory liquidity fees when such a fund experiences daily net redemptions that exceed 5% of its net assets, unless the fund’s liquidity costs are de minimis; (5) requiring non-government money market funds to impose a discretionary liquidity fee if the fund’s board (or its delegate) determines that a fee is in the best interest of the fund; (6) allowing retail and government money market funds to handle a negative interest rate environment either by converting from a stable NAV or share price to a floating NAV or share price or by using a reverse distribution mechanism (RDM) or share cancellation to reduce the number of shares outstanding to maintain a stable NAV per share, subject to certain board determinations and disclosures to shareholders; and (7) enhancing certain reporting requirements that are intended to improve the SEC’s ability to monitor and assess money market fund data. The amendments adopted in the final rule became effective on October 2, 2023. The compliance date for the discretionary liquidity fee, increased minimum liquidity requirements, changes to the stress testing requirements and amendments specifying the method for calculating weighted average maturity and weighted average life, is April 2, 2024. The reporting amendments will become effective June 11, 2024. There is a six-month transition period for money market funds to comply with certain of the amendments, including the minimum portfolio liquidity requirements and the discretionary liquidity fee requirement. Money market funds have 12 months after the effective date of the amendments to comply with the mandatory liquidity fee requirement.

Federated Hermes actively participated in the debate surrounding the SEC’s proposed money market fund reforms through, among other actions, engagement with SEC and Staff and by submitting 12 comment letters during the comment process, which were cited 197 times by the SEC in its adopting release for its money market fund reforms. Throughout the comment process, Federated Hermes supported, and now continues to support: (1) de-linking and removing the regulatory tie between the imposition of redemption gates and liquidity fees and the 30% threshold for a money market fund’s weekly liquid assets;

25

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

(2) providing a money market fund’s board of directors/trustees the discretion to impose a liquidity fee when the board determines that a liquidity fee is in the best interest of the money market fund; (3) allowing retail and government money market funds to handle a negative interest rate environment by using a RDM or share cancellation to reduce the number of shares outstanding to maintain a stable NAV per share; and (4) not requiring swing pricing. Federated Hermes also emphasized that swing pricing and mandatory liquidity fees would precipitate runs on money market funds, not prevent them. Federated Hermes is particularly concerned that mandatory liquidity fees will have an effect similar to the effect swing pricing would likely have had on money market funds. The SEC’s action of adopting a mandatory liquidity fee requirement, without specifically proposing it in its money market fund reform proposing release and seeking public comment on it, may be challenged in court due to its unworkability and lack of supporting data.

Federated Hermes also asserted in certain of its comment letters, among other points, that: (1) institutional prime and municipal money market funds are safer than uninsured bank deposits; (2) institutional prime and municipal money market funds have less systemic risk than equivalent bank deposits; (3) the SEC’s money market fund reforms would increase systemic risk by driving institutions into less regulated vehicles (or securities subject to fire sales) or bank deposits (which likely would be uninsured); and (4) the Financial Stability Oversight Council (FSOC) should consider how certain banks would be better served by moving uninsured institutional depositor cash into money market funds. Federated Hermes emphasized that money market funds do not require special attention or vigilance by the Fed through, for example, emergency lending facilities, and should instead be correctly viewed as a resilient cornerstone of the capital markets. In a July 3, 2023 comment letter, Federated Hermes further discussed how the Fed’s discount window can be used as a means of addressing market illiquidity such as witnessed in March 2020 and as an alternative to the use of emergency lending facilities.

On October 2, 2023, the Department of Treasury and Internal Revenue Service (IRS) issued a new revenue procedure (Proc. Rev. 2023-35, 2023-42 IRB), which covers the wash sale rules for money market funds and describes the circumstances in which the IRS will not treat a redemption of shares in a money market fund as part of a wash sale for purposes of Section 1091 of the Internal Revenue Code of 1986, as amended (Internal Revenue Code). This new revenue procedure is intended to reduce undue tax compliance burdens resulting from the new SEC money market reforms. Under this new revenue procedure, a redemption of shares of any money market fund will not be treated as part of a wash sale under Section 1091 of the Internal Revenue Code such that redeeming money market fund shareholders will be allowed to immediately take losses attributable to liquidity fees. Previously, the IRS had only provided an exemption from the wash sale rules for certain money market funds. The new revenue procedure is effective for any money market fund shares redeemed after October 2, 2023.

Management believes money market funds provide, and will continue to provide, a more attractive investment opportunity compared to other competing products, such as insured and uninsured deposit account alternatives. Management also believes that money market funds are investment products that have proven their resiliency. Federated Hermes continues to review the SEC’s adopting release for its money market fund reforms, plan for changes to its money market fund business required by the reforms and assess the impact of the reforms on Federated Hermes’ Financial Condition. Also, while Federated Hermes agrees with certain of the money market fund reforms adopted by the SEC, Federated Hermes also supports efforts to permit the use of amortized cost valuation by, and to override the floating NAV and certain other requirements imposed under the 2014 Money Fund Rules and Guidance for, institutional and municipal (or tax-exempt) money market funds. Work is being undertaken to re-introduce legislation in both the Senate and the House of Representatives in a continuing effort to get these money market fund reform revisions regarding the use of amortized cost passed and signed into law.

On July 27, 2023, Federated Hermes also submitted a comment letter on the FSOC’s April 21, 2023 (1) proposed analytic framework for financial stability risk identification, assessment, and response, and (2) proposed guidance on nonbank financial company designations as systemically important, which included requests for public comment on these proposals. The proposed new framework is purportedly intended to provide greater transparency to the public about how the FSOC identifies, assesses, and addresses potential risks to financial stability, regardless of whether the risk stems from activities, individual firms or otherwise. The proposed interpretative guidance on the FSOC’s procedures for designating nonbank financial companies as systemically important for Fed supervision and enhanced prudential standards (such as capital and liquidity requirements) pursuant to Section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and enhanced prudential standards would replace the FSOC’s existing guidance issued in 2019 and describes the procedural steps the FSOC would take in considering whether to designate a nonbank financial company. Importantly, under the FSOC’s proposals, the FSOC would no longer look to federal and state regulators to address risks to financial stability before the FSOC would begin to consider a nonbank financial company for potential designation. The FSOC’s proposal would separate into two documents the FSOC’s procedures and substantive analysis for considering a nonbank financial company for potential designation. The FSOC’s proposals would eliminate language added in the FSOC’s 2019 guidance that would have required the FSOC to conduct a cost-benefit analysis and an assessment of the likelihood of a nonbank financial company’s material financial distress

26

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

prior to deciding whether the firm should be subject to Fed supervision. The FSOC also would not necessarily need to consider the financial impact of a designation on the entity being designated or the broader market in which the company participates. In the Fact Sheet issued by the FSOC on April 21, 2023, the FSOC noted that it’s monitoring for potential risks to financial stability may cover a broad range of asset classes, institutions, and activities, such as, among others, financial entities, including banking organizations, broker-dealers, asset managers, investment companies, insurance companies, mortgage originators and servicers, and specialty finance companies. In a September 26, 2023 letter to the Chairman of the Federal Deposit Insurance Corporation (FDIC) in response to a September 23, 2023 speech in which the FDIC Chairman discussed the financial stability risks posed by nonbank financial companies, including the purported structural liquidity vulnerabilities of money market funds and open-end investment companies, Federated Hermes challenged FSOC’s authority to dispense with the requirement to conduct a cost-benefit analysis and to no longer defer in any way to the primary regulator of an entity that is subject to designation as a systemically important financial institution. Federated Hermes also stressed that: (1) money market funds and other mutual funds are not less regulated and are far more transparent than banks; (2) money market funds are not interconnected with the financial system in a way that transmits risk and do not pose a threat to the financial stability of the United States; (3) money market funds and other mutual funds did not cause or amplify the 2008 Financial Crisis, the 2020 Pandemic shutdown crisis or the spring 2023 bank panic; (4) money market funds, other mutual funds and other types of SEC-regulated investment funds, are not “shadow banks”; and (5) money market funds and other mutual funds are not nonbank financial institutions as defined in the Bank Holding Company Act and should not be subject to designation as systemically important financial institutions.

In its July 27, 2023 comment letter, Federated Hermes stressed its concern that the FSOC’s proposal could decimate the money market fund industry if money market funds were to be designated and subjected to Fed supervision and enhanced prudential standards under Section 113 of the Dodd-Frank Act. Federated Hermes argued that the FSOC is engaged in a regulatory frolic and detour inconsistent with its statutory mission and the systemic risk issues confronting it at present. Federated Hermes argued that the FSOC’s proposal is aimed at designating money market funds (among other types of entities) and their asset managers and subjecting them to Fed supervision, which would be inconsistent with the statutory criteria for designation under Title I of the Dodd-Frank Act and the supervisory program established by the Dodd-Frank Act and at odds with the stated intent of Congress in enacting the Dodd-Frank Act in 2010. Federated Hermes also argued that the changes proposed by the FSOC are contrary to the text of the Dodd-Frank Act, violate the Administrative Procedure Act and other norms of administrative law, and are unlawful and unconstitutional on various grounds, including violation of the Constitution’s separation of powers doctrine and due process clause. The FSOC’s proposal also may be subject to challenge under the Major Questions Doctrine as interpreted by the U.S. Supreme Court’s decision in West Virginia vs. Environmental Protection Agency, in which the Supreme Court weakened the deference given to an administrative agency’s regulatory authority. Under the Major Questions Doctrine, a court is required to defer to Congress rather than administrative agencies regarding matters that it concludes have significant economic and/or political impact if it believes that Congress did not specifically grant such powers to an agency. FSOC’s proposed new framework also has drawn criticism from the Chairman of the House Financial Services Committee, who, in a June 15, 2023 letter, urged FSOC to revisit its proposal due to concerns, among others, that FSOC’s proposals are contrary to the due process protections afforded by the U.S. Constitution and that FSOC’s designation of nonbank financial companies as systemically important, and subjecting them to Fed supervision and enhanced prudential standards, could pose significant consequences on the broader U.S. financial system.

On November 22, 2022, the SEC proposed to amend Rule 22c-1 (the voluntary swing pricing rule) and Rule 22e-4 (the liquidity rule) under the 1940 Act, as well as certain disclosure forms under the 1940 Act for open-end management investment companies, other than money market funds and exchange-traded funds (ETFs). The amendments outlined in the proposing release include, among others: (1) mandating swing pricing for such funds during times of stressed market conditions; (2) implementing a “hard close” for such funds, whereby purchase and redemption orders must be received by a fund, its transfer agent or a registered clearing agency by an established cut-off time to receive the applicable day’s price; (3) eliminating the “less liquid” investment category from the existing four category liquidity classification framework under Rule 22e-4 of the 1940 Act, and thereby broadening the “illiquid” investment category; (4) requiring such funds to classify all portfolio investments daily instead of monthly; (5) mandating such funds to determine and maintain a highly liquid investment minimum (HLIM) equal to at least 10% of net assets; and (6) imposing expanded Form N-PORT reporting and disclosure obligations on such funds. In the proposing release the SEC contends that the proposed amendments would “enhance funds’ liquidity risk management to help better prepare them for stressed market conditions and to require the use of swing pricing for certain funds in certain circumstances to limit dilution” and “enhance open-end fund resilience in periods of market stress by promoting funds’ ability to meet redemptions in a timely manner while limiting dilution of remaining shareholders’ interests in the fund.” In its comment letter dated February 14, 2023, Federated Hermes supported the comments and recommendations of the Investment Company Institute (ICI) and the Securities Industry and Financial Markets Association (SIFMA) on the proposal, including strongly opposing the use of swing pricing because the implementation of swing pricing is unnecessary to achieve the

27

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

SEC’s desired objective, would be extremely costly, would be very difficult for the industry to implement, would be difficult for investors to understand and would represent an unwarranted change in the character of a hugely popular investment vehicle which provides investors with the benefits of professional management, diversification and access to the capital markets to help them meet their financial goals. Federated Hermes noted that there are less onerous alternatives to mandating swing pricing in those limited circumstances where material dilution is a real concern, such as discretionary liquidity fees to be applied at a fund’s board’s discretion in the exercise of its fiduciary duty to a fund and its shareholders. Federated Hermes strongly opposes a hard close concept, which was proposed to ensure fund managers have the appropriate data necessary to determine whether a fund’s NAV should be adjusted via swing pricing, but which would result in unintended consequences to third-party intermediaries and underlying investors and would be particularly detrimental to retirement plan participants in 401(k) plans using open-end mutual funds on their menu. Federated Hermes strongly opposes eliminating the “less liquid” investment category from the existing four category liquidity classification framework under the liquidity rule because funds investing primarily in bank loans will not be able to comply with the 15% limit on illiquid investments under the 1940 Act, subjecting these funds to undeserving harm. The comment period for this proposal ended on February 14, 2023.

On September 5, 2023, 38 members of Congress sent a letter to SEC Chairman Gary Gensler voicing their concerns on the SEC’s open-end investment management company liquidity proposal, and requesting that the SEC withdrawal its proposal, given potential harm to retail investors and retirement plan participants due to potential increased costs, reduced returns, and limitations on investment choices if the proposal was adopted as proposed. Specifically, the letter indicates that the SEC’s proposal to require swing pricing and “hard closes” for open-end investment companies “would require the majority of individual investors to plan trades several hours earlier than a mandated 4:00 p.m. ET deadline” and that this “fundamental change to mutual fund operations would create a two-tiered market that would disadvantage retail and retirement investors” because it “would limit the investor’s ability to react to shifts in the market on any given day” (particularly for investors living on the west coast of the U.S.). The letter also indicates that the SEC’s proposal “would redefine a myriad of assets that commonly appear in mutual fund form by classifying them as ‘illiquid’ and subjecting them to a 15 percent cap of fund assets” which “would limit or prohibit open-end funds from using certain investment strategies [such as bank loan strategies], reducing choice, and likely returns for fund shareholders, including many retirement savers.” After noting that market participants have noted that the proposal is based on assumptions about the operation of open-end investment companies that the historical record contradicts, the letter also indicates that “[w]ithout clear evidence to support the rationale behind this proposal, the purported benefits [of the proposal] are speculative.”

The SEC, the FSOC and other federal regulators also continue to focus on climate and environmental, social, and governance (ESG)-related disclosures by corporate issuers, registered investment advisors and registered investment companies. For example, on July 28, 2023, the FSOC’s Climate-related Financial Risk Committee (CFRC) issued a staff progress report on actions underway to support capacity building and disclosure among FSOC member agencies, address data gaps, and assess climate-related financial risks. Among other actions, the progress report indicates that the CFRC is developing a framework to identify and assess climate-related financial risk, as well as a set of risk indicators for banking, insurance, and financial markets. In March 2022, the SEC issued a proposed rule that incorporates certain concepts and vocabulary from the Task Force on Climate-related Financial Disclosures (TCFD) and the Greenhouse Gas Protocol (GHG Protocol) as part of a proposed disclosure regime that would mandate, among other things, certain climate risk disclosures by public companies, such as Federated Hermes, including on Form 10-K, about a company’s governance, risk management, and strategy with respect to climate-related risks, as well as Scope 1, Scope 2, and, for certain issuers, Scope 3 emissions data. Consistent with its previously submitted comment letter, Federated Hermes continues to support the ICI’s comments to the SEC on the proposal, including, among others, that: (1) any final rule should only require companies to provide material climate risk-related information in a company’s Form 10-K, with any non-material information required by any amendments to Regulation S-K to be provided in a new climate report; (2) the SEC not amend Regulation S-X to require a company to provide material financial metrics in footnotes to its financial statements; and (3) it is premature to require disclosure of Scope 3 emissions data. Federated Hermes also continues to believe that any SEC rule on climate disclosure should: (1) supplement its principles-based disclosure regime, not replace it with prescriptive metrics; (2) focus on material disclosures; and (3) maintain the global competitiveness of U.S. capital markets.

On September 20, 2023, the SEC adopted amendments to rule 35d-1 (Names Rule) under the 1940 Act which: (1) purportedly improve and broaden the scope of funds that must comply with the current requirement to adopt a policy to invest at least 80% of their assets in accordance with the investment focus the fund’s name suggests; (2) provide enhanced disclosure and reporting requirements related to terms used in fund names; and (3) establish certain additional recordkeeping requirements. Specifically, the amendments, among other things: (1) apply the Names Rule’s 80% investment policy requirement to any fund name with terms suggesting that the fund focuses in investments that have, or investments whose issuers have, particular characteristics, such as “growth” or “value” or certain terms that reference a thematic investment focus, including terms indicating that the

28

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

fund’s investment decisions incorporate one or more ESG factors; (2) update funds’ prospectus disclosure requirements to require a fund with an 80% investment policy to define the terms used in its name, including the criteria the fund uses to select the investments that the term describes; (3) amend Form N-PORT to purportedly enhance transparency regarding how funds’ investments reflect their investment focus as required under the amended Names Rule; (4) include new recordkeeping provisions related to a fund’s compliance with the Names Rule’s requirements; (5) retain the Names Rule’s current requirements for a fund to invest in accordance with its 80% investment policy “under normal circumstances,” and for the 80% investment requirement to apply at the time a fund invests its assets, but also add a new requirement that a fund review its portfolio assets’ treatment under its 80% investment policy at least quarterly and specific time frames—generally 90 days—for getting back into compliance if a fund departs from its 80% investment policy; (6) generally require a registered closed-end fund or business development company whose shares are not listed on a national securities exchange to obtain shareholder approval before changing its 80% investment policy unless the fund conducts a tender or repurchase offer in advance of the change, subject to certain conditions; and (7) retain the current Names Rule’s requirement that, unless the 80% investment policy is a fundamental policy of the fund, 60 days’ notice must be provided to fund shareholders of any change in the fund’s 80% investment policy, and update the notice requirement to expressly address electronic delivery of the notice and the content of the notice. Federated Hermes is reviewing the amendments to the Names Rule and their impact on its business.

The Department of Labor’s (DOL) final rule on Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights (Final DOL ESG/Proxy Voting Rule) amended the Investment Duties regulation under Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA) to clarify the application of ERISA’s fiduciary duties of prudence and loyalty to selecting investments and investment courses of action, including considering ESG factors, selecting qualified default investment alternatives, exercising shareholder rights, such as proxy voting, and the use of written proxy voting policies and guidelines. The Final DOL ESG/Proxy Voting Rule also reversed and modified certain amendments to the Investment Duties regulation adopted in 2020. Specifically, among other things, the Final DOL ESG/Proxy Voting Rule clarified that a fiduciary's duty of prudence must be based on factors that the fiduciary reasonably determines are relevant to a risk and return analysis and that such factors may include the economic effects of climate change and other ESG considerations on the particular investment or investment course of action, such as when exercising shareholder rights, including voting on shareholder resolutions and board nominations. The DOL Final ESG/Proxy Voting Rule became effective on January 30, 2023, except that its proxy voting provisions apply from and after December 1, 2023.

Aggressive rulemaking, particularly regarding climate/ESG disclosure, could be challenged by legislators and in the courts by investment management industry participants and other industry groups. For example, on July 12, 2023, Republican representatives in the U.S. House of Representatives kicked off a series of hearings dissecting ESG investing and examining new legislation that would block the SEC’s proposed regulations that would require publicly traded companies to report how their businesses impact the environment and steps being taken to manage climate risks because ESG-reporting should be voluntary, and such regulations are too broad, costly and difficult to assess, and could have a chilling effect on new investments across the economy. Particularly in the context of climate/ESG disclosures, the likely success of any court challenge could be bolstered considering the U.S. Supreme Court’s interpretation of the Major Questions Doctrine discussed above.

In addition to Congress, the SEC, the FSOC, the DOL and other federal regulators focusing on, and, in certain cases, conducting investigations and hearings regarding, ESG activities and regulation, state Attorneys General and legislatures continue to debate the legality of ESG investing under unfair and deceptive practices laws, antitrust laws, securities laws and other grounds. There is an ideological battle unfolding at the state level, pitting Republican, conservative-leaning “Red” state governments that would seek to exclude or limit ESG investing against Democratic, liberal-leaning or “Blue” state governments that support ESG-focused investing. For example, on July 6, 2023, 15 state Attorneys General sent a letter to the directors of a mutual fund complex demanding responses to certain conflict of interest-related questions, including questions based on the funds’ and their sponsor’s ESG-related activities. The Attorneys General premised their demand on their authority under state laws prohibiting deceptive and unfair acts and practices, state securities laws, and state common law to act for the protection of their states’ residents, state entities that hold mutual funds, and the integrity of the marketplace. Among other conflicts of interest, the Attorneys General asserted that the funds’ sponsor’s and investment advisor’s ESG commitments to push political goals of certain ESG organizations raise serious concerns over the sponsor’s and investment advisor’s duty to act exclusively for the financial benefit of its shareholders and may have cost mutual funds’ returns. In addition, on June 30, 2023, 21 state Attorneys General sent letters to 53 asset managers advising them to uphold their fiduciary duty when managing assets, engaging with companies, and voting proxies for their states.

There also have been stepped up efforts by states to ensure ESG investment strategies are not modifying their investment decisions to emphasize ESG factors due to the values of the asset manager versus their impact on investment returns. State ESG legislation takes a variety of forms, including, for example: (1) legislation that targets asset managers who “boycott” industries,

29

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

such as oil and gas companies, as defined by their excluding or otherwise underweighting exposure to these companies due to their desire to direct capital away from the industry, not for financial return purposes, or that prohibits public entities or businesses operating in a state from “discriminating” against individuals or other companies based on ESG scores or other value-based scores. Certain of these states maintain a list of asset managers who have been banned from managing state assets; (2) legislation that requires all investment to be made for maximizing investment return and restrict or prohibit the pursuit of ESG-related goals and/or the use of ESG factors in investment decisions and seek to prohibit asset managers from making investment decisions which are outside of a risk/return objective. Generally, this type of ESG legislation includes provisions that require asset managers to uphold their fiduciary duty to focus on risk/reward and take all material risks into consideration when managing assets; (3) legislation that prohibits investment in, or promotes divestment from, specific industries or sectors; and (4) legislation that promotes or requires an asset manager to consider ESG factors when making risk/return decisions for their portfolios or to pursue ESG-related goals. Generally, this type of ESG legislation models traditional active asset management processes which include qualitative evaluation of risk and opportunity alongside financial indicators. This type of ESG legislation may require a manager to illustrate to a State governing body how it considers those factors and, if required, how the manager withholds from investing in specific companies. Since the beginning of the third quarter 2023, at least three states enacted new or additional ESG-related legislation. For example, in September 2023, the California legislature passed climate reporting laws that generally require large businesses doing business in California that were formed in the United States and that have revenues of more than $1 billion to report on GHG emissions (including Scope 3 disclosures) and climate-related financial risk. As of October 2, 2023, 20 states have enacted anti-ESG regulations, eight states have enacted pro-ESG regulations, and three states have enacted disclosure-related ESG regulations.

Federated Hermes believes that it is appropriate to integrate ESG factors within traditional qualitative analysis of risk/returns for purposes of assessing risks and opportunities within the time horizon of the strategy in an effort to obtain long-term returns for clients and shareholders.

Federated Hermes, like other investment managers, is complying with Rule 2a-5 under the 1940 Act. Rule 2a-5 establishes an updated regulatory framework for fund valuation practices by establishing requirements for determining fair value in good faith for purposes of the 1940 Act. The rule expressly permits boards, subject to continued board oversight and certain other conditions, to designate certain parties, such as fund investment advisors, to perform fair value determinations. The rule also defines when market quotations are “readily available” for purposes of the 1940 Act, the threshold under Rule 2a-4 under the 1940 Act for determining whether a fund must fair value a security. Under Rule 2a-5, a market quotation is “readily available” only when that quotation is a quoted price (unadjusted) in active markets for identical investments that the fund can access at the measurement date. The rule further provides that a quotation will not be readily available if it is not reliable. This definition contradicts common practices for cross-trades between affiliated funds under Rule 17a-7 under the 1940 Act. Rule 17a-7 permits cross trades of securities for which market quotations are readily available between affiliated funds, which allows funds to transfer such securities without incurring trading costs. The definition of “readily available” in Rule 2a-5 essentially limits Rule 17a-7 to equity securities because fixed-income securities are not traded on an exchange and would not have a “quoted price (unadjusted) in active markets.” Federated Hermes is relying on previously issued SEC no-action letters to continue to conduct cross trades in its fixed-income funds (unless and until the SEC rescinds those no-action letters). The inability to conduct cross-trades between Federated Hermes fixed-income funds can increase trading expenses and have a negative impact on fund performance.

Other actions by the DOL also affect investment management industry participants, including Federated Hermes. In addition to the DOL’s July 26, 2022 proposed amendments to the Class Prohibited Transaction Exemption 84-14, also known as the Qualified Professional Asset Manager (QPAM) Exemption, on September 8, 2023, the DOL submitted a new DOL fiduciary rule (New DOL Fiduciary Rule) for review to the Office of Management and Budget (OMB), which review normally takes 90 days. According to the notice of proposed rulemaking at the OMB: (1) the New DOL Fiduciary Rule will amend the regulatory definition of the term “fiduciary” to more appropriately define when persons who render investment advice for a fee to employee benefit plans and individual retirement accounts (IRA) are fiduciaries for purposes of ERISA and the Internal Revenue Code; (2) the New DOL Fiduciary Rule will take into account practices of investment advisors, and the expectations of plan officials and participants, and IRA owners who receive investment advice, as well as developments in the investment marketplace, including the ways investment advisors are compensated that can be subject to an investment advisor’s harmful conflicts of interest; and (3) in conjunction with this rulemaking, the Employee Benefits Security Administration (EBSA) will evaluate available prohibited transaction class exemptions and propose amendments or new exemptions to ensure consistent protection of employee benefit plans and IRA investors.

30

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

Since the beginning of the third quarter 2023, other proposed rules, new guidance and other actions have been issued or taken that impact U.S. investment management industry participants, including Federated Hermes. Federated Hermes is reviewing these Regulatory Developments and their impact on its business. For example:

•On October 13, 2023, the SEC adopted new Rule 13f-2 and related Form SHO, along with an amendment to the national market system plan (NMS Plan) governing the consolidated audit trail (CAT), to purportedly provide greater transparency of short sale-related data. Under Rule 13f-2, institutional investment managers that meet or exceed certain prescribed reporting thresholds will report on Form SHO certain short position and short activity data for equity securities. The SEC will thereafter aggregate and publish certain data collected from Form SHO. Under the amendment to the NMS Plan governing CAT (CAT NMS Plan), CAT reporting firms will indicate whether an order is a short sale effected by a market maker in connection with bona fide market making (BFMM) activities for which the BFMM exception in Rule 203(b)(2)(iii) of Regulation SHO is claimed. Rule 13f-2, Form SHO, and the amendment to the CAT NMS Plan will become effective 60 days following the date of publication of the adopting release in the Federal Register. The compliance date for Rule 13f-2 and Form SHO will be 12 months after the effective date of the adopting release – with public aggregated reporting to follow three months later. The compliance date for the amendment to the CAT NMS Plan will be 18 months after the effective date of the adopting release.

•On October 13, 2023, the SEC adopted Rule 10c-1a under the 1934 Act purportedly to increase the transparency and efficiency of the securities lending market by requiring that: (1) certain persons report specified information about securities loans to a registered national securities association (RNSA), in the format and manner required by the RNSA, and within specified time periods; and (2) an RNSA, in turn, make publicly available certain information it receives, within specified time periods, and keep confidential certain information it receives. Rule 10c-1a will become effective 60 days following the date of publication of the adopting release in the Federal Register. The compliance dates for Rule 10c-1a require that: (1) an RNSA propose rules to implement Rule 10c-1a within four months of the effective date of Rule 10c-1a and that such RNSA rules are effective no later than 12 months after the effective date of Rule 10c-1a; (2) covered persons report the information required by Rule 10c-1a to an RNSA starting on the first business day 24 months after the effective date of Rule 10c-1a (“reporting date”); and (3) an RNSA make specified information publicly available within 90 calendar days of the reporting date.

•On October 10, 2023, the SEC adopted amendments to modernize the rules governing beneficial ownership reporting. The amendments: (1) shorten the deadlines for initial and amended beneficial ownership reporting in Schedule 13D and 13G filings; (2) clarify the Schedule 13D disclosure requirements with respect to derivative securities; and (3) require that Schedule 13D and 13G filings be made using a structured, machine readable data language. In addition, the adopting release provides guidance regarding: (1) the application of the current beneficial ownership reporting rules to an investor’s use of certain cash-settled derivative securities; and (2) the application of the current legal standard found in Sections 13(d)(3) and 13(g)(3) of the Securities Exchange Act of 1934 to certain common types of shareholder engagement activities. The amendments will become effective 90 days after publication in the Federal Register. Compliance with the revised Schedule 13G filing deadlines will be required beginning on September 30, 2024. Compliance with the structured data requirement for Schedules 13D and 13G will be required on December 18, 2024.

•On September 29, 2023, the SEC proposed to amend the offering process and to create a tailored form to register the offerings of index-linked annuities (RILAs), a type of annuity contract that provides investors a return based on the performance of a market index. The proposed amendments would: (1) provide investors with disclosures tailored to RILAs; (2) highlight key information about RILAs as complex products; and (3) enhance the registration, disclosure, and advertising framework for RILAs. The public comment period for the proposed amendments will remain open for the longer of 60 days following publication of the release on the SEC’s website or 30 days following publication in the Federal Register.

•On September 13, 2023, the SEC proposed rule and form amendments concerning access to and management of accounts on the SEC’s Electronic Data Gathering, Analysis, and Retrieval system (EDGAR) related to potential technical changes to EDGAR (collectively referred to as EDGAR Next). The proposal would require: (1) that electronic filers authorize and maintain designated individuals as account administrators and, through their account administrators, take certain actions to manage their accounts on a dashboard on EDGAR; and (2) that electronic filers may only authorize individuals as account administrators or in the other roles described in the proposal if those individuals first obtain individual account credentials in the manner to be specified in the EDGAR Filer Manual. The public comment period for the proposed rule and form amendments will end on November 21, 2023.

•On August 23, 2023, the SEC reopened the comment period for its proposed revisions to the “Safeguarding Advisory Client Assets” (Custody Rule) under the Advisers Act. The SEC previously proposed to exercise its authority under Section 411 of

31

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

the Dodd-Frank Act by amending and redesignating rule 206(4)-2 under the Advisers Act to purportedly enhance investor protections relating to advisory client assets. The proposed amendments would: (1) expand the current Custody Rule to protect and subject a broader array of client assets and advisory activities to the Custody Rule’s protections; (2) purportedly enhance the custodial protections that client assets receive under the Custody Rule; and (3) update related recordkeeping and reporting requirements for investment advisors. The reopened public comment period will end on October 30, 2023.

•On August 23, 2023, the SEC adopted new rules and amendments under the Advisers Act to enhance the regulation of private fund advisors. The new rules require private fund advisors registered with the SEC to: (1) provide investors with quarterly statements detailing information regarding private fund performance, fees, and expenses; (2) obtain an annual audit for each private fund; and (3) obtain a fairness opinion or valuation opinion in connection with an advisor-led secondary transaction. The new rules also require that all private fund advisors, including investment advisors not registered with the SEC: (1) prohibit engaging in certain activities and practices that are contrary to the public interest and the protection of investors unless they provide certain disclosures to investors, and in some cases, receive investor consent; and (2) prohibit providing certain types of preferential treatment that have a material negative effect on other investors and prohibit other types of preferential treatment unless disclosed to current and prospective investors. Additionally, the amendments require all registered investment advisors, including those that do not advise private funds, to document in writing the annual review of their compliance policies and procedures.

•On July 26, 2023, the SEC adopted new final rules to purportedly enhance and standardize disclosures regarding cybersecurity risk management, strategy, governance, and incidents by public companies, such as Federated Hermes, that are subject to 1934 Act reporting requirements. The amendments will require: (1) current disclosure on Form 8-K about cybersecurity incidents determined to be material, including the material aspects of the nature, scope, timing and material impact or reasonably likely material impact of the incident on a public company and its financial condition and results of operations, generally within four business days of the determination that the incident is material; (2) periodic disclosures about a public company’s processes to assess, identify, and manage material cybersecurity risks, management’s role in assessing and managing material cybersecurity risks, and the board of directors’ oversight of cybersecurity risks; and (3) the cybersecurity disclosures to be presented in Inline eXtensible Business Reporting Language (or Inline XBRL). The amendments became effective on September 5, 2023. Smaller reporting public companies must begin to comply with the Form 8-K disclosure requirements on June 15, 2024. Other public companies, such as Federated Hermes, must begin to comply with the Form 8-K disclosure requirements on December 18, 2023. Public companies must comply with the periodic disclosure requirements beginning with annual reports for fiscal years ending on or after December 15, 2023. Public companies must comply with the InLine XBRL requirements beginning one year after initial compliance with the relevant disclosure requirements.

•On July 26, 2023, the SEC proposed rule amendments to purportedly modernize the internet advisor exemption from the prohibition on SEC registration for smaller investment advisors. The proposed amendments would: (1) require an investment advisor relying on the exemption to always have an operational interactive website through which the advisor provides investment advisory services on an ongoing basis to more than one client; and (2) eliminate the current rule’s de minimis exception for non-internet clients, thus requiring that an internet investment advisor must provide advice to all its clients exclusively through an operational interactive website. The public comment period ended on October 2, 2023.

•On July 26, 2023, the SEC proposed new rules and amendments to purportedly address certain conflicts of interest associated with the use of predictive data analytics by broker-dealers and investment advisors in investor interactions. The proposal would require: (1) a broker-dealer or investment advisor to eliminate or neutralize the effect of conflicts of interest associated with such a firm’s use of covered technologies in investor interactions that place the firm’s or its associated person’s interest ahead of investors’ interests; (2) a broker-dealer or investment advisor that has any investor interaction using covered technology to have written policies and procedures reasonably designed to prevent violations of (in the case of investment advisors) or achieve compliance with (in the case of broker-dealers) the proposed rules; and (3) certain recordkeeping related to the proposed conflicts rules. Under the proposed rules, “covered technology” would include a broker-dealers or investment advisor’s use of analytical, technological, or computational functions, algorithms, models, correlation matrices, or similar methods or processes that optimize for, predict, guide, forecast, or direct investment-related behaviors or outcomes of an investor. The proposed new rules and amendments also would generally apply to a broker-dealer’s or investment advisor’s use of a covered technology to the extent it is used in connection with such a firm’s engagement or communication with an investor, including by exercising discretion with respect to an investor’s account, providing information to an investor, or soliciting an investor. The public comment period ended on October 10, 2023.

•On July 12, 2023, the proposed enhancements to Rule 15c3-3 under the 1934 Act, which protects a customer’s cash and securities held at a broker-dealer, require certain broker-dealers to increase the frequency of the computations of the net cash

32

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

they owe to customers and other broker-dealers from weekly to daily. Specifically, the proposed amendments would require, among other things, carrying broker-dealers with average total credits equal to or greater than $250 million to make the relevant computations daily, as of the close of the previous business day, and to make deposits no later than one hour after the opening of banking business on the following business day. The public comment period ended on September 11, 2023.

Federated Hermes continues to monitor developments regarding previously issued regulatory proposals and developments, including, among others: (1) new listing standards for the New York Stock Exchange (NYSE) that adopt and comply with written incentive compensation recovery or claw-back policies meeting the standards specified by Rule 10D-1 under the 1934 Act; (2) recently adopted amendments to Form PF; and (3) recently adopted amendments to modernize the disclosure requirements relating to repurchases of an issuer’s equity securities. Please refer to our prior quarterly reports on Form 10-Q and annual reports on Form 10-K for further information regarding other Regulatory Developments that can affect Federated Hermes’ Financial Condition.

In addition to the above Regulatory Developments, as noted above, the SEC and other regulators also continue in 2023 to conduct risk-based, for cause and sweep examinations, bring enforcement actions, issue risk alerts, and review and comment on issuer and fund filings. In addition to routine and for cause examinations conducted on individual firms, SEC sweep exams have included, or are expected to include, examinations regarding private fund advisors, including their use of artificial intelligence, off-channel communications, the use of hypothetical performance, the investment advisor marketing rule, ETF revenue sharing payments, ESG practices and disclosures, and approval of registered investment company advisory fees, among others. Among other enforcement actions, on September 25, 2023, the SEC announced it had brought and settled for an aggregate $25 million, two enforcement actions against an investment advisor, the first for failing to develop and implement a reasonably designed anti-money laundering program and one for making materially misleading statements about its controls for incorporating ESG factors into research and investment recommendations for ESG integrated products. Among other risk alerts, on September 23, 2023, the SEC issued a risk alert titled “Risk Alert: Investment Advisers: Assessing Risks, Scoping Examinations, and Requesting Documents” in which the SEC provided additional information regarding the SEC Division of Enforcement’s risk-based approach for both selecting registered investment advisors to examine and in determining the scope of risk areas to examine, and also provided the SEC staff’s typical initial request for documents and information. In addition to the SEC’s aggressive “regulation by enforcement” posture, the SEC staff has become more aggressive in commenting on issuer and fund filings, imposing new interpretations of certain requirements, and taking firm positions, resulting in “regulation by the comment process.”

The Financial Industry Regulatory Authority (FINRA) staff also continues to engage in such investigations, enforcement actions, and examinations of registered broker-dealers. For example, in October 2023, FINRA provided an update on its sweep exam related to special purpose acquisition companies (SPACs). This sweep exam reviewed broker-dealer offerings of SPACs and services provided to SPACs and their sponsors, principal stockholders, board members, related parties, and other affiliates, and included a review of, among other things, practices relating to reasonable investigation, best interest analysis, disclosure of outside activities or potential conflicts, net capital, and supervision. The update sets forth several questions for broker-dealers to consider based on examination observations.

These investigations, examinations and actions have led, and can lead, to further regulation, guidance statements and scrutiny of the investment management industry. The degree to which regulatory investigations, actions and examinations will continue, as well as their frequency and scope, can vary and is uncertain.

Regulation or potential regulation by regulators other than the SEC, DOL, FSOC and FINRA, as well as state or federal lawmakers, also continued, and can continue, to affect investment management industry participants, including Federated Hermes. For example, various state legislatures or regulators have adopted or are beginning to adopt state-specific cybersecurity and/or privacy requirements that can apply to varying degrees to investment management industry participants, including Federated Hermes.

On June 14, 2023, the Tax on Wall Street Speculation Act of 2023 was introduced into the U.S. House of Representatives and U.S. Senate. The proposed legislation would enact a financial transaction tax (FTT) of 0.5% on the trading of equities, 0.1% on the trading of bonds and 0.005% on the trading of derivatives and other financial instruments. The proposed legislation has been introduced annually since 2021 and has not yet gained significant support within Congress.

International

Like the U.S., the pace of regulation in the European Union (EU) and United Kingdom (UK) has remained heightened so far in 2023. In its Business Plan 2023/24, the Financial Conduct Authority (FCA) set forth an ambitious program for 2023, including:

33

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

(1) a focus on putting consumer needs first, particularly with the UK Consumer Duty coming into force in July 2023; (2) preparing financial services for the future, through the Future Regulatory Framework (FRF) and Edinburgh Reforms; (3) strengthening the UK’s position in global wholesale markets; and (4) reducing and preventing financial crime. The FCA’s Business Plan follows the publication of its Strategy: 2022-2025, in which the FCA indicated it would focus on reducing and preventing serious harm, setting, and testing higher standards, and promoting competition and positive change. The Central Bank of Ireland (CBI) has disclosed that its key regulation and supervision priorities for 2023 include, among other areas, (1) assessing and managing risks to the financial and operational resilience of firms; (2) addressing systemic risks generated by non-banks; (3) consulting on regulatory developments under the Consumer Protection Framework and Individual Accountability Framework; (4) ensuring that the EU Anti-Money Laundering Plan results in a consistent and robust EU-wide framework; (5) implementing new EU regulations on digital operational resilience (DORA) and markets in crypto assets; and (6) strengthening the resilience of the financial system to climate risks.

In the third quarter 2023, the FCA, CBI, and European Securities and Markets Authority (ESMA) alone issued over 20 consultation papers, discussion papers, reports, statements, regulatory technical standards (RTS) and other guidance-related documents relevant to the investment management industry. Examples of these papers, reports, statements, RTS and other documents are discussed below. These regulators and supervisory authorities are expected to continue to address these and other topics, and publish additional consultation papers and other regulatory documents, throughout the remainder of 2023.

UK regulators continue to rationalize the EU legislation and regulatory requirements that were quickly “on-shored” upon Brexit taking effect. A paired-back version of the Retained EU Law (Revocation and Reform) Bill received Royal Assent on June 29, 2023 and is now known as the Retained EU Law (Revocation and Reform) Act 2023 (i.e., the Brexit Freedoms Act). The Brexit Freedoms Act implements a renewed regulatory framework in the UK. Among other things, under the Brexit Freedoms Act: (1) a large amount of EU legislation (approximately 600 retained laws) will be automatically revoked and the principle of supremacy and other general principles of EU law will be abolished, which will end the special status of EU law, by December 31, 2023; (2) any remaining retained EU laws will be “assimilated law” after December 31, 2023, at which point it will no longer be necessary to interpret assimilated law in accordance with corresponding EU law; (3) any secondary retained EU law, or the same categories of assimilated law, can be revoked and alternative provisions made, so long as no regulatory burden is increased, up until June 23, 2026; (4) certain retained EU laws can be modified by statutory instrument; (5) certain retained EU law can be more easily restated, replaced or updated; and (6) it is easier for UK domestic courts to depart from retained EU case law.

The Financial Services and Markets Bill also was granted Royal Assent on June 29, 2023, and is now known as the Financial Services and Markets Act 2023 (FSM Act). The FSM Act contains significant reforms to the UK’s regulatory framework for financial services, aims to establish an enhanced regulatory regime better tailored to UK markets, and provides certain updated objectives for financial services regulators aimed at focusing on long-term growth and international competitiveness. Among other things, the FSM Act: (1) provides for a phased revocation of retained EU law relating to financial services; (2) empowers His Majesty’s Treasury (HM Treasury), relevant national authorities (i.e., financial service regulators, such as the FCA and Prudential Regulation Authority (PRA)), and the Bank of England (BoE) to modify or replace existing retained EU laws or to prepare new transitional amendments to bring about a new UK-specific regulatory regime; (3) grants HM Treasury the power to designate certain third parties as “critical” on the basis of the materiality of the services which the third party provides to firms, the number and types of firms which use a third party and other defined criteria, and authorizes the FCA, PRA and BoE to oversee critical services; (4) reforms the UK financial promotions regime; (5) enables the regulation of crypto assets to support their adoption in the UK; (6) facilitates the use of new technologies such as blockchain in financial markets; and (7) implements other outcomes of the Future Regulatory Framework review, which included consultations that concluded on February 9, 2022.

On June 27, 2023, HM Treasury, on behalf of the UK Government, and the European Commission entered into a memorandum of understanding (MOU) establishing a framework for financial services regulatory cooperation between the UK and EU. Premised on an objective of preserving financial stability, market integrity, and the protection of investors and consumers, the MOU provides for: (1) the bilateral exchanges of views and analysis relating to regulatory developments and other issues of common interest; (2) transparency and appropriate dialogue in the process of adoption, suspension and withdrawal of equivalence decisions; (3) bilateral exchanges of views and analysis relating to market developments and financial stability issues; and (4) enhanced cooperation and coordination, including in international bodies as appropriate. The MOU also provides that each participant will endeavor to share information on regulatory developments to allow for a timely identification of potential cross-border implementation issues, to the extent that such information is available and can be shared. The MOU also established a Joint EU-UK Financial Regulatory Forum (EU-UK Forum). The EU-UK Forum will serve as a platform to facilitate structured regulatory cooperation in the area of financial services and is intended to take stock of progress and to undertake forward planning of regulatory cooperation with general operational objectives to: (1) improve transparency;

34

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

(2) reduce uncertainty; (3) identify potential cross-border implementation issues, including concerns linked to potential regulatory arbitrage by firms; (4) consider working towards compatibility of each other’s standards, as appropriate; (5) promote domestic implementation consistent with international standards; (6) share knowledge to facilitate a common understanding of the EU and UK’s regulatory frameworks; and (7) exchange information and views on other issues of common interest within the scope of these regulatory cooperation arrangements.

Federated Hermes continues to have permission from the FCA to allow certain Irish-domiciled Undertakings for the Collective Investment in Transferable Securities (UCITS) funds and Luxembourg-based direct lending funds to continue to be marketed in the UK under the temporary marketing permissions regime, which currently is scheduled to end on December 31, 2025. The overseas funds regime (OFR) has also been established. The OFR is targeted at UCITS and is a long-term replacement to the temporary permissions regime which enables Federated Hermes’ Irish UCITS funds to continue to be marketed in the UK post-Brexit.

The post-Brexit regulatory environment (particularly the need to obtain full authorizations on a country-by-country basis) also continues to create a level of uncertainty regarding the ability and requirements to distribute products and provide investment management services between the UK and EU, increasing regulatory burdens and compliance and other costs for UK funds being distributed in the EU and EU funds (such as Irish-domiciled funds) being distributed in the UK. The ability to engage investment managers for EU funds and UK funds also could be impacted, resulting in structural and other changes for UK- and EU-domiciled funds. The impact of Brexit on Federated Hermes’ UK domiciled funds is difficult to quantify and remains uncertain given the number of Regulatory Developments and recent surge in the number of ESG-related funds in both the EU and UK. As of September 30, 2023, EU-resident shareholders in Federated Hermes’ UK domiciled funds and the UK-resident shareholders in Federated Hermes’ Irish-domiciled funds were permitted to remain in the funds. Subscriptions also can continue.

The regulation of money market funds in the EU and UK is another example of potential divergence between the EU and UK post-Brexit. EU and UK money market fund regulation is considered “equivalent” until December 31, 2025. Accordingly, UK-domiciled money market funds currently remain on par with current EU regulatory requirements. As a result, EU-based funds can still use passports to sell to UK investors. However, following various consultations, reports, and speeches by representatives of International Organization of Securities Commissions (IOSCO) and the Financial Stability Board (FSB) in 2020, 2021, 2022, and 2023 similar to the SEC in the U.S., ESMA, the BoE, the European Systemic Risk Board (ESRB), the European Banking Authority (EBA), and the International Monetary Fund (IMF), among other regulators, have been re-examining existing money market fund regulation, soliciting public comment on proposed money market fund reforms, and issuing reports and recommendations. While money market fund reform continues to be discussed in the UK and the EU, new proposals for reform have not been promulgated. It has been reported that, in late January 2023, Andrew Bailey, a governor of the BoE and Chairman of the FSB, expressed concerns regarding money market funds given their perceived impact during the recent financial crisis and the “mini budget” crisis in the UK in 2022, and indicated that the BoE and FCA will come out with their own money market fund reform proposals in 2023. On July 20, 2023, the European Commission adopted a report to European Parliament and the Council of the EU (Council) regarding its assessment of the functioning of Regulation (EU) 2017/1131 on money market funds (MMF Regulation). In the report, the European Commission, drawing on a number of studies carried out by European and international bodies, including ESMA, ESRB and FSB, and the results of a targeted consultation published in 2022, concluded that, among other things: (1) the EU MMF Regulation, as it existed in March 2020, enhanced financial stability and overall successfully passed the test of recent market developments, including the market stress of March 2020, more recent interest rate increases, and related financial asset re-pricing; (2) recent market developments show that there could be benefits to further increasing the resilience of EU money market funds, notably by decoupling the potential activation of liquidity management tools (such as redemption gates and liquidity fees) from regulatory liquidity thresholds; (3) proposals to increase minimum liquid asset requirements are difficult to implement and may have unintended consequences; (4) proposals to increase the loss-absorption capacity of money market funds by imposing constraints on the shares that can be redeemed immediately (known as “minimum balance at risk”) or by requiring money market funds to maintain capital buffers are either untested and contingent on significant operational adjustments or they would make it more expensive to operate money market funds and likely lead to closures of some money market funds and lower returns for investors; and (5) the European Commission will not propose a revision of the EU MMF Regulation at this time, but will continue to monitor the money market funds sector and related vulnerabilities based on the work of ESMA and relevant national competent authorities. Given the above, it is possible that the EU or UK could either deviate from one another regarding, or simply not adopt, any new or amended money market fund reforms in the future. Management believes that the final SEC rule on money market fund reforms could influence the UK and EU regulators.

35

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

In a September 4, 2023 ESMA Working Paper No. 2, 2023 titled, “Bang for (breaking) the buck: Regulatory constraints and money market funds reforms” (ESMA Working Paper), the authors: (1) set out a framework to assess money market fund resilience; (2) demonstrate that the maximum redemptions a money market fund can face depends on regulatory constraints and asset liquidity; and (3) utilize the framework to assess the impact of regulatory reforms, such as an increase in liquidity requirements, changes to the allowed price deviation for money market funds using amortized cost or requirements to invest in more liquid assets, to, among other things, conclude that removing the use of amortized cost has the largest positive effect in terms of resilience, while higher liquidity requirements have more limited effects. In a September 6, 2023 progress report, “Enhancing the Resilience of Non-Bank Financial Intermediation” (FSB Progress Report), the FSB reviewed its 2021 money market reform recommendations, discussed perceived vulnerabilities of money market funds, and recognized that individual jurisdictions need flexibility to tailor measures to their specific circumstances. In its FSB Progress Report, the FSB also indicated that: (1) through its “Thematic Peer Review of Money Market Fund Reforms” announced on August 14, 2023, it will take stock of the money market fund policy measures adopted by FSB member jurisdictions by the end of 2023; (2) it will be working with IOSCO to assess the functioning and resilience of commercial paper and negotiable certificates of deposits markets by the end of 2023; and (3) it will be working with IOSCO to complete an assessment of the effectiveness of money market fund reforms in addressing risks to financial stability by the end of 2026.

As discussed above, Federated Hermes believes that money market funds are investment products that have proven their resiliency. Federated Hermes intends to continue to engage with UK and EU regulators in 2023 and beyond, both individually and through industry groups, to shape any further money market fund reforms to avoid overly burdensome requirements or the erosion of benefits that money market funds provide.

On July 5, 2023, the FSB issued a consultation report on addressing structural vulnerabilities from the liquidity mismatch in open-end funds. The report proposes revisions to the FSB’s 2017 policy recommendations to address structural vulnerabilities from asset management activities. The revisions include, among others: (1) providing greater clarity on the redemption terms that open-end funds can offer to investors based on the liquidity of their asset holdings; (2) ensuring a broad set of anti-dilution and quantity-based liquidity management tools for use by open-end fund managers in normal and stressed market conditions; (3) greater inclusion of anti-dilution liquidity management tools in open-end fund constitutional documents and greater use, and consistency in use, of such liquidity management tools in both normal and stressed market conditions; and (4) providing clearer public disclosures from open-end fund managers on the availability and use of liquidity management tools in normal and stressed market conditions. In a September 4, 2023 comment letter, Federated Hermes supported comments submitted by the ICI and, among other points, stressed that any further guidance regarding the use of liquidity management tools should maintain a balance between providing clear expectations and allowing for the flexibility necessary to adapt to the unique dynamics of individual markets and funds. The FSB published responses to this consultation report on September 14, 2023. The IOSCO also proposed on July 5, 2023 detailed guidance for open-end funds’ use of anti-dilution liquidity management tools. The IOSCO report provides detailed guidance to support greater and more consistent use of anti-dilution liquidity management tools by open-ended funds in both normal and stressed market conditions. In a September 4, 2023 comment letter, Federated Hermes emphasized, among other points, that: (1) the consideration, use and calibration of anti-dilution liquidity management tools should be to the discretion of the managers and boards of the responsible entities; (2) all open-end funds should be able, if deemed appropriate by their boards, to implement an anti-dilution liquidity management tool; and (3) guidance should allow for flexibility in implementing anti-dilution liquidity management tools. In a September 6, 2023 press release issued along with an FSB Report “The Financial Stability Implications of Leverage in Non-Bank Financial Intermediation,” the FSB warned that the financial system remains vulnerable to further liquidity strains, and that a key area of policy focus in 2023 will be addressing financial stability risks from non-bank financial intermediation leverage. In its FSB Progress Report, the FSB indicated that: (1) it, in consultation with IOSCO, will be issuing a final report revising its 2017 recommendations on liquidity mismatch in open-end funds in late 2023; (2) IOSCO will be operationalizing the revised FSB recommendations through amendments to IOSCO’s 2018 recommendations after the FSB issues its revised recommendations; (3) IOSCO, in consultation with the FSB, will be developing guidance on liquidity management tools to complement the revised FSB recommendations by late 2023; (4) it, in consultation with IOSCO, will be initiating a pilot program intended to close identified data gaps for monitoring financial stability risks relating to open-end funds’ liquidity mismatch and the use of liquidity management tools in 2023, with follow-up work being conducted in 2024; (5) it and IOSCO will be organizing a workshop on experiences among authorities on design/use of stress tests for open-end funds in early 2024; and (6) it and IOSCO will thereafter be monitoring implementation of, and assessing the effectiveness of, their revised recommendations.

The sweeping changes implemented by the Brexit Freedoms Act and FSM Act heighten the risk of regulatory divergence between the UK and the EU post-Brexit. Such divergence has already begun in certain areas of financial services regulation. For example, EU investment firms in EU Member States are required to comply with the Investment Firms Directive (IFD) and Investment Firms Regulation (IFR); however, the IFD and IFR do not bind the UK, and a new UK prudential regime for

36

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

Markets in Financial Instruments (MiFID) firms titled Investment Firms Prudential Regime (IFPR) has been established. The IFPR, which became effective on January 1, 2022, introduced a single prudential regime, and represents a significant change for FCA-authorized investment firms in the UK that are authorized under MiFID, including alternative investment fund managers (AIFMs) with MiFID top-up permissions.

As another example of potential divergence, EU regulators have previously issued or proposed directives, rules, and laws regarding sustainable finance, including the Sustainability-Related Disclosures Regulation or SFDR and the Taxonomy Regulation, as well as proposals on the use of ESG- or sustainability-related terms in fund names. The Taxonomy Regulation establishes a framework to facilitate sustainable investment, including when Member States establish measures (e.g., labels or standards) setting requirements regarding financial products or corporate bonds presented as “environmentally sustainable.” On April 12, 2023, the European Supervisory Authorities (ESAs) published a joint consultation, “Joint Consultation Paper on the Review of SFDR Delegated Regulation regarding PAI and financial product disclosures”, in which the ESAs set out proposed RTS on content and presentation of disclosures pursuant to the SFDR. In addition to other adjustments, the purpose of this joint consultation is to broaden the disclosure framework and address certain technical issues that have emerged since the SFDR was originally implemented, which concern sustainability indicators in relation to principal adverse impacts, and to propose amendments to RTS on pre-contractual and periodic documents on website product disclosures for financial products, in order to include GHG emissions reduction targets, including intermediary targets and milestones and actions pursued. The consultation period ended on July 4, 2023. In a July 4, 2023 comment letter, Federated Hermes noted that implementation of the SFDR has resulted in significant challenges for financial market participants and national supervisors and recommended certain fundamental changes to the SFDR legislation to improve its clarity and focus on engagement and transition plans. Among other comments, Federated Hermes expressed its belief that fund managers ought to be able to: (1) design their funds to meet the objectives and interests of investors; (2) describe in detail to investors and the regulator how fund managers intend to deliver on the investment objectives and which indicators should be used to measure the fund’s performance against its stated investment policy; and (3) name their funds in accordance to the demonstrated investment policy. On August 2, 2023, ESMA published an updated implementation timeline with important deadlines for the implementation of key regulations including for, among other regulations, the SFDR, the Taxonomy Regulation, and the related Corporate Sustainability Reporting Directive or CSRD, which together form the basis for the EU Sustainable Finance Framework.

Rather than adopt the SFDR, the UK decided to more closely align with the Taskforce on Climate Related Financial Disclosures (TCFD). The FCA also has proposed its own guidelines regarding the use of ESG- and sustainability-related terms in fund names. On August 2, 2023, the UK Government Department for Business and Trade published guidance on UK sustainability disclosure standards (SDS). The SDS are based on the International Financial Reporting Standards Board (IFRS®) SDS issued by the International Sustainability Standards Board (ISSB). The UK SDS will set out corporate disclosures on the sustainability-related risks and opportunities that companies face. They will form the basis of any future requirements in UK legislation or regulation for companies to report on risks and opportunities relating to sustainability matters, including risks and opportunities arising from climate change. On July 25, 2023, IOSCO issued a report endorsing the ISSB standards concluding that they serve as an effective and proportionate global framework of investor-focused disclosures in relation to climate-related matters. Federated Hermes continues to monitor developments regarding ESG, climate and sustainability disclosure and greenwashing in jurisdictions relevant to its business, including the UK and EU.

In addition to potential divergence between UK and EU law and regulation, the possibility of divergence exists between the laws of the EU, UK, U.S., and other jurisdictions, including, among others, in the areas of climate disclosures, ESG and fund naming requirements and other reforms. For example, following a December 2022 consultation, the Australian Government issued a second consultation paper, “Climate-related financial disclosure,” in which it sought views on proposed positions for the detail, implementation and sequencing of standardized, internationally-aligned requirements for the disclosure of climate-related financial risks and opportunities in Australia, including views on proposed positions relating to coverage, content, framework and enforcement of the requirements. The consultation period ended on July 21, 2023.

The activities of the FSB and the IOSCO also continue to be monitored by the investment management industry, including Federated Hermes. In the third quarter 2023, in addition to their consultations and guidance referenced above, the FSB and IOSCO published consultations and other papers on, among other topics: (1) IOSCO Thematic Analysis: Emerging Risks in Private Finance; (2) Financial Resources and Tools for Central Counterparty Resolution; (3) IMF-FSB Synthesis Paper: Policies for Crypto-Assets; (4) FSB Global Regulatory Framework for Crypto-Asset Activities; (5) International regulation of crypto-asset activities: a proposed framework: FSB overview of responses to the consultation; (6) FSB High-Level Recommendations for the Regulation, Supervision and Oversight of Global Stablecoin Arrangements; (7) Roadmap for Addressing Financial Risks from Climate Change: 2023 Progress Report; (8) Continuity of access to financial market infrastructure (FMI) services for firms in resolution: FSB statement following survey feedback; and (9) IOSCO Policy

37

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

Recommendations for Decentralized Finance (DeFi). In an August 22, 2023 comment letter in response to the FSB’s June 2023 consultation report titled “Enhancing Third-Party Risk Management and Oversight: a toolkit for financial institutions and financial authorities,” Federated Hermes supported comments submitted by the ICI and requested that the FSB make abundantly clear in any final report that the toolkit is an optional resource that may be referred to by financial institutions when developing, and financial authorities when supervising, third-party service provider risk management processes, to avoid unintended and burdensome mandates.

Since the beginning of the third quarter 2023, UK and EU regulators and supervisory authorities issued, proposed, or adopted other new consultations, directives, rules, laws, and guidance that impact or could impact UK and EU investment management industry participants, including Federated Hermes. Federated Hermes is reviewing these Regulatory Developments and their impact on its business. For example:

•On September 25, 2023, the FCA and PRA published a Consultation Paper, “Diversity and inclusion in the financial sector – working together to drive change,” in which the FCA and PRA seek feedback on proposals to introduce a new regulatory framework on diversity and inclusion (D&I) in the financial sector. The proposed framework would establish minimum standards and provide a better understanding of regulatory expectations for D&I in the financial sector, with the aim of endeavoring to ensure greater consistency and transparency across the financial sector on firms’ approaches to D&I. The consultation period closes on December 18, 2023.

•On September 12, 2023, the FCA published a Policy Statement, “Introducing a gateway for firms who approve financial promotions,” in which the FCA sets forth its final policy position and response to feedback received on its prior 2022 consultation paper regarding the introduction of a gateway for firms who approve financial promotions. The Policy Statement supports legislative changes by the UK Government within the FSM Act, and, subject to certain exemptions, requires firms who want to approve financial promotions to apply to the FCA for permission. The FCA’s finalized approach, as set forth in the Policy Statement, includes, among other things: (1) how the FCA will assess applicants at the gateway and the basis for granting or refusing applications; (2) reporting requirements for firms that are granted permission to approve financial promotions; (3) not extending the compulsory jurisdiction of the UK Financial Ombudsman Service to the approval of financial promotions; and (4) provision for a review of the FCA’s approach within 24 months of the rules coming into force on February 7, 2024.

•On September 4, 2023, the ESRB published an issue note on policy options to address perceived risks in corporate debt and real estate investment funds from a financial stability perspective. The ESRB’s recommendations included, among other things, new regulatory proposals as well as amendments to existing regulation, such as the length of notice periods for redemptions and the use of anti-dilution liquidity management tools, such as swing pricing, dual pricing, anti-dilution levies or redemption fees, as part of their day-to-day management.

•On August 31, 2023, the FCA issued an updated Report on its wholesale data market study. The FCA launched its market study on March 2, 2023 following persistent user concerns about how well wholesale data markets are working. It focuses on competition in the provision of benchmarks, credit ratings data and market data vendor (MDV) services. Benchmarks are widely used in financial markets, often as a reference for index-tracking funds and to evaluate an asset manager’s performance. Credit ratings assess the creditworthiness of a wide range of financial obligations. MDVs are key distributors of wholesale data such as benchmarks and Credit Rating Agency data.

•On August 10, 2023, the FCA published its review of the processes that authorized fund managers (AFMs) used to assess fund value in 2023. The Collective Investment Schemes sourcebook (COLL) rules require AFMs to carry out an assessment of value at least annually, report publicly on their conclusions and appoint independent directors to AFM boards. The COLL rules require firms to assess whether the firms’ fees and charges are justified by the value provided to fund investors, measured against the COLL rules’ minimum considerations. Firms must report the details of these assessments to investors, together with an explanation of what action the firm has or will take if they find investors’ fees and charges are not justified. The FCA concluded that, compared with its last review, many firms have a better understanding of the COLL rules and have significantly improved their assessment of value processes.

•On August 7, 2023, the FCA published a Consultation Paper, “Rules relating to Securitization,” in which the FCA discusses the UK Securitization Regulation (UK SR), which is retained EU law (REUL) that specifies how securitization markets are regulated. Supervisory responsibility for the UK SR is currently shared primarily between the FCA and the PRA. As part of the repeal and replacement of REUL (an outcome of HM Treasury’s Future Regulatory Framework Review, now called the Smarter Regulatory Framework), HM Treasury plans that some provisions of the UK SR will be brought into new UK legislation and most firm-facing provisions of the UK SR will be covered by new FCA rules and PRA rules. This

38

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

consultation paper sets out the FCA’s proposed rules for the UK securitization markets and contains the proposed legal instrument which includes firm facing requirements of the UK SR plus all related technical standards and their annexes. The consultation period closes on October 30, 2023.

•On July 27, 2023, ESMA and EBA published a Report, “Implementation of SRD2 provisions on proxy advisors and the investment chain,” which discusses the implementation of Article 3j (regarding proxy advisors) and Chapter Ia with respect to the EBA (concerning the investment chain) of the European Commission’s second Shareholder Rights Directive (SRD2). The Report provides an analysis of the implementation of the SRD2 and presents certain conclusions regarding its implementation.

•On July 18, 2023, the CBI published a Discussion Paper, “An approach to macroprudential policy for investment funds,” in which the CBI seeks to enhance the debate on a potential approach to the development and operationalization of a macroprudential framework for the investment funds sector. The Discussion Paper purports to seek feedback on the “most salient issues related to the development of a comprehensive macroprudential framework for the funds sector” for use by the CBI’s when participating in international or European regulatory discussions on the topic, as well as its policy and analytical work on investment fund issues more broadly. The consultation period ends on November 15, 2023.

•On July 18, 2023, the FCA and PRA published a Consultation Paper, “Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251,” in which the FCA and PRA solicit feedback on proposed changes to the UK bilateral margining requirements under the European Market Infrastructure Regulation. The proposals aim to: (1) extend the temporary exemption for singe-stock equity options and index options from the UK bilateral margining requirements from January 4, 2024 until January 4, 2026; and (2) set out the PRA’s and FCA’s proposed approach to pre-approving bi-lateral initial margin models. The consultation period ended on October 18, 2023.

•On July 17, 2023, the FCA published a Consultation Paper, “Financial promotions on social media”, in which the FCA provides guidance on how its financial promotion requirements apply to promotions on social media. The guidance reiterate that financial promotions should be fair, clear, and not misleading, and reinforces that the FCA’s financial promotion rules are designed to be technology neutral and apply across all channels used to advertise, including social media. Among other things, the guidance clarifies when a communication might constitute a financial promotion. The consultation period ended on September 9, 2023.

•On July 13, 2023, the FCA published Engagement Paper 6, “Primary multilateral trading facilities,” in which the FCA solicited feedback on future rules for multilateral trading facilities (MTFs) under the FCA’s new public offers and admission to trading regime. The regime will create a new type of MTF admission document, which will be subject to the same liability and compensation scheme as regulated market prospectuses and give the FCA the power to make certain MTFs operating as primary markets require the production of an MTF admission prospectus.

•On July 12, 2023, the FCA published a Feedback Statement, “The potential competition impacts of Big Tech entry and expansion in retail financial services,” with the aim of continuing discussion regarding the areas where “Big Tech” is likely to create the biggest competition benefits for consumers and where there is the greatest risk of significant harm if competition does not develop. The feedback is derived from a prior 2022 consultation paper. Among other things, the Feedback Statement sets out feedback on: (1) the FCA’s analytical entry framework and entry scenarios; (2) potential competition benefits and harms; (3) regulatory concerns; and (4) next steps.

•On July 5, 2023, the FCA published a Consultation Paper, “The Framework for a UK Consolidated Tape,” which sets out the FCA’s proposed framework for a consolidated tape for bonds, the FCA’s criteria for the operation of a consolidated tape provider (CTP), and the tender process for appointing a CTP. A consolidated tape collates market data from trading venues and over-the-counter transactions, such as prices and volumes associated with trades in a financial market, with the aim to provide a comprehensive picture of transactions in a specific asset class, such as fixed income bonds or equity securities. The FCA indicated that it will finalize rules to establish a UK consolidated tape by 2024. The consultation period ended on September 15, 2023.

•On July 5, 2023, the FCA published a Policy Statement, “Guidance on the trading venue perimeter,” in which the FCA issued new guidance on the regulatory perimeter for trading venue intended to provide greater clarity on when firms may be operating a multilateral system and require authorization as a trading venue, as well promote consumer protection, market integrity and competition. The guidance is based on the results of a prior 2022 consultation paper. The guidance came into force on October 9, 2023.

39

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

•On July 3, 2023, ESMA published a Report, “Marketing requirements and marketing communications under the Regulation on cross-border distribution of funds,” which represents the second report submitted by ESMA to the European Parliament, the European Council, and European Commission under such regulation. The Report reviews applicable marketing requirements in all EU Member States and provides ESMA’s analysis of the effects of national laws, regulations and administrative provisions governing marketing communications.

Federated Hermes continues to monitor developments regarding previously issued regulatory proposals and developments, including, among others: (1) ESMA's Questions and Answers document on the Alternative Investment Fund Managers Directive (AIFMD), on the issue of “pre-marketing”; (2) the EU Commission draft Retail Investment Strategy package; (3) ESMA's suggested legislative amendments to the AIFMD and UCITS Directive regarding the definition of “undue costs” for investors; (4) FCA guidance regarding sanctions controls, as well as the Consumer Duty, which went into force on July 31, 2023 and requires firms “to act to deliver good outcomes for retail customers”; and (5) the UK Government's Call for Evidence in relation to financial services investment research. Please refer to our prior quarterly reports on Form 10-Q and annual reports on Form 10-K for further information regarding other Regulatory Developments that can affect Federated Hermes’ Financial Condition.

In addition to the above Regulatory Developments, the FCA, CBI and other global regulators continue to monitor investment management industry participants by examining various reports, financial statements and annual reports and conducting regular review meetings and inspections. The FCA and CBI, and other international regulatory authorities, also continue to conduct regulatory investigations, enforcement actions, and examinations and inquiries.

An EU FTT also continues to be discussed, although it remains unclear if or when an agreement will be reached regarding its adoption. The last proposal was to begin discussions at the EU level regarding the design of an EU FTT involving a gradual implementation by Member States based on the FTTs already implemented in France and Italy. Member States that would want to implement an FTT more quickly would have been permitted to do so. Member States were invited to provide input on the proposed approach to the EU FTT design, whether the FTTs in France and Italy would be a solid basis for an EU FTT, and whether an EU FTT should apply to equity derivative transactions. As attention continues on a post-Pandemic economy and as the EU and EU Member States continue to look to fund their budgets and the Pandemic-related measures that have been adopted, an EU FTT on securities transactions, or even bank account transactions, remains a potential additional source of revenue. The Council has recognized that the European Commission has clarified that, if there is no agreement by the end of 2022 (which there was not), the European Commission will, based on impact assessments, propose a new resource for the EU budget based on a new FTT and that the European Commission will endeavor to make those proposals by June 2024 with the FTT’s planned introduction by January 1, 2026. The Council also has indicated that further work will be required before final policy choices are made and an agreement on a possible FTT can be reached. The exact time needed to reach a final agreement on an EU FTT, implement any agreement and enact legislation is not known at this time. The weakened economy in Europe can increase the risk that additional jurisdictions propose to implement single-country FTTs. The debate regarding the use of a FTT as a funding source for governments continues. For example, on June 23, 2023, a European Commission Working Document regarding own resources of the EU was published in which an EU FTT was considered as a potential resource to assist in funding the EU budget. This Working Paper concluded that “the prospects of reaching an agreement in the future are limited given that the last substantive discussions took place under the Portuguese Council Presidency in 2021” and “[t]here is little expectations that any proposal would be agreed in the short term.” Also, on June 13, 2023, a policy brief was submitted to the G20 proposing that an international FTT be adopted by G20 nations to assist with funding net zero climate actions.

As of June 30, 2023, the publication of the few remaining tenors of U.S. dollar (USD) London Interbank Offered Rate (LIBOR) ceased. On April 3, 2023, the FCA authorized the publication of 1-, 3- and 6-month synthetic USD LIBOR for a limited time after June 30, 2023 to facilitate a smoother transition to an alternative reference rate. Specifically, overnight, and 12-month US dollar LIBOR permanently ceased on June 30, 2023, while the 1-, 3- and 6-month US dollar LIBOR tenors will continue until September 30, 2024, using an unrepresentative ‘synthetic’ methodology. The synthetic LIBOR rates are available for all legacy contracts except cleared derivatives and may not be used in new issues. Additionally, the 3-month synthetic sterling LIBOR is expected to cease on March 28, 2024. The FCA made clear that its primary purpose in requiring the publication of synthetic USD LIBOR is to facilitate an orderly transition of legacy contracts that are governed by UK or other non‑U.S. law and that had no realistic prospect of being amended by June 30, 2023. On May 15, 2023, the SEC Staff issued a LIBOR transition risk alert for investment advisors and investment companies to remind firms about the transition, convey findings from SEC examinations to assess firms’ preparedness for the LIBOR transition, and discuss certain practices in the areas of risk management, operations, portfolio management, fiduciary responsibility, and investor communications that firms have implemented to address the transition. At its July 28, 2023 meeting, the FSOC received a LIBOR update from representatives of the Fed, SEC, and Commodity Futures Trading Commission (CFTC), among others, in which it was reported, among other

40

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

things, that: (1) the transition from LIBOR to alternative reference rates on June 30, 2023, passed without incident, with most borrowers transitioning to an alternative reference rate or agreeing with lenders to extend a LIBOR interest period to allow for further negotiation with lenders; and (2) the most common alternative reference rate in the United States was the Secured Overnight Financing Rate (SOFR). In a July 3, 2023 “Statement on Alternatives to USD Libor”, IOSCO, among other things: (1) confirmed regulatory authorities’ concern that certain credit sensitive rates exhibit some of the same inherent “invested pyramid” weaknesses as LIBOR; and (2) made recommendations to administrators of alternative reference rates regarding disclosures, licensing restrictions, transparency considerations, and not representing that credit sensitive rates are “IOSCO compliant.”

The phase-out of LIBOR caused the renegotiation or re-pricing of certain credit facilities, derivatives or other financial transactions to which investment management industry participants, including Federated Hermes and its products, customers or service providers, are parties, altered the accounting treatment of certain instruments or transactions, or had other consequences, which, among other effects, required additional internal and external resources and operating expense. Federated Hermes closely monitored regulatory statements and industry developments regarding the obligations of registered investment advisors and funds when recommending and purchasing securities or other investments that use LIBOR as a reference rate or benchmark. Federated Hermes focused on identifying LIBOR-linked securities or other investments, including, but not limited to: derivatives contracts; floating-rate notes; municipal securities; and tranches of securitizations, including collateralized loan obligations. With respect to LIBOR-linked securities or other investments with maturities after the applicable LIBOR tenor cessation date, Federated Hermes sought to proactively address transition-related questions with the issuers or lead arrangers of such securities and other investments, as applicable, including, for example, questions regarding transition events, benchmark replacement, and benchmark replacement adjustments. As necessary, Federated Hermes sought to negotiate modifications to benchmark fallback language for such securities and other instruments to contemplate the permanent cessation of LIBOR. To the extent necessary, Federated Hermes continues these efforts with respect to any remaining securities or other investments held by Federated Hermes’ products and strategies that continue to use a USD LIBOR tenor with a cessation date of June 30, 2023. For example, Federated Hermes sent over 550 letters to issuers or lead arrangers setting forth its expectations regarding the transition from LIBOR. Federated Hermes also negotiated fall back language that provides for the use of an alternative reference rate or benchmark in its corporate credit facility and has an interest rate based on SOFR-plus a spread in its U.S.-registered Federated Hermes Funds’ credit facility. While management believes that Federated Hermes’ LIBOR transition efforts are substantially completed, Federated Hermes continues to monitor the impact that the transition from LIBOR will have on Federated Hermes and Federated Hermes’ products and strategies, customers, and service providers.

Federated Hermes is unable to fully assess at this time whether, or the degree to which, any continuing efforts or potential options being evaluated in connection with modified or new Regulatory Developments ultimately will be successful. The degree of impact of Regulatory Developments on Federated Hermes' Financial Condition can vary, including in a material way, and is uncertain.

Management continues to monitor and assess the impact of the increasing interest rate environment, and instability in the banking sector and financial markets, on asset values and money market fund and other fund asset flows, and related asset mixes, as well as the degree to which these factors impact Federated Hermes' institutional prime and municipal (or tax-exempt) money market business and Federated Hermes' Financial Condition. Management also continues to monitor, and expend internal and external resources in connection with, new money market fund reforms and the potential for additional regulatory scrutiny of money market funds, including institutional prime and institutional municipal (or tax-exempt) money market funds, as well as the impact of Regulatory Developments on Federated Hermes’ business generally.

The Regulatory Developments discussed above, and related regulatory oversight, also impacted, and/or can impact, Federated Hermes' intermediaries, other customers and service providers, their preferences, and their businesses. For example, these developments have caused, and/or can cause, certain product line-up, structure, pricing and product development changes, as well as money market, equity, fixed-income, alternative/private markets or multi-asset fund products to be less attractive to institutional and other investors, reductions in the number of Federated Hermes Funds offered by intermediaries, changes in the fees Federated Hermes, retirement plan advisors and intermediaries will be able to earn on investment products and services sold to retirement plan clients, changes in work arrangements and facility-related expenses, and reductions in AUM, revenues and operating profits. In addition, these developments have caused, and/or can cause, changes in asset flows, levels, and mix, as well as customer and service provider relationships.

Federated Hermes will continue to monitor Regulatory Developments as necessary and can implement additional changes to its business and practices as it deems necessary or appropriate. Further analysis and planning, or additional refinements to Federated Hermes' product line and business practices, can be required in response to market conditions, customer preferences or new or modified Regulatory Developments. The difficulty in, and cost of, complying with applicable Regulatory

41

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

Developments increases with the number, complexity, and differing (and potentially conflicting) requirements of new or amended laws, rules, regulations, directives, and other Regulatory Developments, among other factors.

In addition to the impact on Federated Hermes' AUM, revenues, operating income and other aspects of Federated Hermes' business described above, Federated Hermes' regulatory, product development and restructuring, and other efforts in response to the Regulatory Developments discussed above, including the internal and external resources dedicated to such efforts, have had, and can continue to have, on a cumulative basis, a material impact on Federated Hermes' expenses and, in turn, financial performance.

As of September 30, 2023, given the regulatory environment, and the possibility of future additional Regulatory Developments and oversight, Federated Hermes is unable to fully assess the impact of modified or new future Regulatory Developments, and Federated Hermes' efforts related thereto, on its Financial Condition. Modified or new Regulatory Developments in the current regulatory environment, and Federated Hermes' efforts in responding to them, could have further material and adverse effects on Federated Hermes' Financial Condition.

42

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

Asset Highlights

Managed Assets at Period End

	September 30,				Percent Change
(in millions)	2023		2022
By Asset Class
Equity	$	77,315	$	74,684	4	%
Fixed-Income	89,765		85,365		5
Alternative / Private Markets	20,337		20,182		1
Multi-Asset	2,728		2,902		(6)
Total Long-Term Assets	190,145		183,133		4
Money Market	525,085		441,294		19
Total Managed Assets	$	715,230	$	624,427	15	%
By Product Type
Funds:
Equity	$	40,801	$	40,633	0	%
Fixed-Income	42,569		44,896		(5)
Alternative / Private Markets	12,409		12,680		(2)
Multi-Asset	2,599		2,784		(7)
Total Long-Term Assets	98,378		100,993		(3)
Money Market	384,896		309,859		24
Total Fund Assets	483,274		410,852		18
Separate Accounts:
Equity	36,514		34,051		7
Fixed-Income	47,196		40,469		17
Alternative / Private Markets	7,928		7,502		6
Multi-Asset	129		118		9
Total Long-Term Assets	91,767		82,140		12
Money Market	140,189		131,435		7
Total Separate Account Assets	231,956		213,575		9
Total Managed Assets	$	715,230	$	624,427	15	%

43

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

Average Managed Assets

	Three Months Ended						Nine Months Ended
	September 30,				Percent Change		September 30,				Percent Change
(in millions)	2023		2022				2023		2022
By Asset Class
Equity	$	82,203	$	81,809	0	%	$	83,128	$	86,543	(4)	%
Fixed-Income	88,677		87,042		2		88,130		90,419		(3)
Alternative / Private Markets	21,413		21,193		1		21,254		22,090		(4)
Multi-Asset	2,861		3,144		(9)		2,934		3,368		(13)
Total Long-Term Assets	195,154		193,188		1		195,446		202,420		(3)
Money Market	516,046		438,601		18		503,182		429,878		17
Total Average Managed Assets	$	711,200	$	631,789	13	%	$	698,628	$	632,298	10	%
By Product Type
Funds:
Equity	$	43,687	$	45,135	(3)	%	$	44,320	$	48,353	(8)	%
Fixed-Income	43,437		47,489		(9)		43,741		52,025		(16)
Alternative / Private Markets	13,184		13,432		(2)		13,143		14,158		(7)
Multi-Asset	2,724		3,012		(10)		2,794		3,222		(13)
Total Long-Term Assets	103,032		109,068		(6)		103,998		117,758		(12)
Money Market	373,088		301,940		24		356,351		289,577		23
Total Average Fund Assets	476,120		411,008		16		460,349		407,335		13
Separate Accounts:
Equity	38,516		36,674		5		38,808		38,190		2
Fixed-Income	45,240		39,553		14		44,389		38,394		16
Alternative / Private Markets	8,229		7,761		6		8,111		7,932		2
Multi-Asset	137		132		4		140		146		(4)
Total Long-Term Assets	92,122		84,120		10		91,448		84,662		8
Money Market	142,958		136,661		5		146,831		140,301		5
Total Average Separate Account Assets	235,080		220,781		6		238,279		224,963		6
Total Average Managed Assets	$	711,200	$	631,789	13	%	$	698,628	$	632,298	10	%

44

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

Changes in Equity Fund and Separate Account Assets

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2023		2022		2023		2022
Equity Funds
Beginning Assets	$	44,383	$	44,207	$	43,342	$	57,036
Sales	1,733		2,581		7,059		10,210
Redemptions	(3,254)		(3,033)		(9,798)		(11,122)
Net Sales (Redemptions)	(1,521)		(452)		(2,739)		(912)
Net Exchanges	3		9		85		(145)
Impact of Foreign Exchange1	(285)		(667)		(69)		(1,635)
Market Gains and (Losses)2	(1,779)		(2,464)		182		(13,711)
Ending Assets	$	40,801	$	40,633	$	40,801	$	40,633
Equity Separate Accounts
Beginning Assets	$	38,609	$	36,781	$	38,181	$	39,680
Sales3	2,164		2,552		7,338		8,510
Redemptions3	(3,050)		(1,918)		(6,939)		(8,463)
Net Sales (Redemptions)3	(886)		634		399		47
Net Exchanges	15		0		41		0
Impact of Foreign Exchange1	(247)		(520)		(284)		(1,205)
Market Gains and (Losses)2	(977)		(2,844)		(1,823)		(4,471)
Ending Assets	$	36,514	$	34,051	$	36,514	$	34,051
Total Equity
Beginning Assets	$	82,992	$	80,988	$	81,523	$	96,716
Sales3	3,897		5,133		14,397		18,720
Redemptions3	(6,304)		(4,951)		(16,737)		(19,585)
Net Sales (Redemptions)3	(2,407)		182		(2,340)		(865)
Net Exchanges	18		9		126		(145)
Impact of Foreign Exchange1	(532)		(1,187)		(353)		(2,840)
Market Gains and (Losses)2	(2,756)		(5,308)		(1,641)		(18,182)
Ending Assets	$	77,315	$	74,684	$	77,315	$	74,684

1    Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.

2    Reflects the approximate changes in the fair value of the securities held by portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.

3    For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.

45

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

Changes in Fixed-Income Fund and Separate Account Assets

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2023		2022		2023		2022
Fixed-Income Funds
Beginning Assets	$	43,884	$	48,215	$	43,180	$	59,862
Sales	3,110		3,956		11,201		13,711
Redemptions	(3,794)		(6,058)		(12,082)		(22,614)
Net Sales (Redemptions)	(684)		(2,102)		(881)		(8,903)
Net Exchanges	0		(17)		(95)		79
Impact of Foreign Exchange1	(63)		(161)		(4)		(409)
Market Gains and (Losses)2	(568)		(1,039)		369		(5,733)
Ending Assets	$	42,569	$	44,896	$	42,569	$	44,896
Fixed-Income Separate Accounts
Beginning Assets	$	43,541	$	38,038	$	43,563	$	37,688
Sales3	5,167		3,725		8,014		8,385
Redemptions3	(1,339)		(526)		(5,141)		(2,357)
Net Sales (Redemptions)3	3,828		3,199		2,873		6,028
Net Exchanges	(25)		0		(25)		(1)
Impact of Foreign Exchange1	(33)		(70)		(11)		(151)
Market Gains and (Losses)2	(115)		(698)		796		(3,095)
Ending Assets	$	47,196	$	40,469	$	47,196	$	40,469
Total Fixed-Income
Beginning Assets	$	87,425	$	86,253	$	86,743	$	97,550
Sales3	8,277		7,681		19,215		22,096
Redemptions3	(5,133)		(6,584)		(17,223)		(24,971)
Net Sales (Redemptions)3	3,144		1,097		1,992		(2,875)
Net Exchanges	(25)		(17)		(120)		78
Impact of Foreign Exchange1	(96)		(231)		(15)		(560)
Market Gains and (Losses)2	(683)		(1,737)		1,165		(8,828)
Ending Assets	$	89,765	$	85,365	$	89,765	$	85,365

1    Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.

2    Reflects the approximate changes in the fair value of the securities held by portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.

3    For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.

46

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

Changes in Alternative / Private Markets Fund and Separate Account Assets

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2023		2022		2023		2022
Alternative / Private Markets Funds
Beginning Assets	$	13,338	$	13,911	$	13,050	$	14,788
Sales	541		537		1,824		1,637
Redemptions	(856)		(835)		(2,154)		(2,020)
Net Sales (Redemptions)	(315)		(298)		(330)		(383)
Net Exchanges	(3)		3		17		7
Impact of Foreign Exchange1	(450)		(1,013)		96		(2,390)
Market Gains and (Losses)2	(161)		77		(424)		658
Ending Assets	$	12,409	$	12,680	$	12,409	$	12,680
Alternative / Private Markets Separate Accounts
Beginning Assets	$	8,264	$	7,874	$	7,752	$	8,132
Sales3	119		409		744		1,069
Redemptions3	(10)		(94)		(249)		(505)
Net Sales (Redemptions)3	109		315		495		564
Net Exchanges	0		0		(23)		0
Impact of Foreign Exchange1	(312)		(625)		49		(1,440)
Market Gains and (Losses)2	(133)		(62)		(345)		246
Ending Assets	$	7,928	$	7,502	$	7,928	$	7,502
Total Alternative / Private Markets
Beginning Assets	$	21,602	$	21,785	$	20,802	$	22,920
Sales3	660		946		2,568		2,706
Redemptions3	(866)		(929)		(2,403)		(2,525)
Net Sales (Redemptions)3	(206)		17		165		181
Net Exchanges	(3)		3		(6)		7
Impact of Foreign Exchange1	(762)		(1,638)		145		(3,830)
Market Gains and (Losses)2	(294)		15		(769)		904
Ending Assets	$	20,337	$	20,182	$	20,337	$	20,182

1    Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.

2    Reflects the approximate changes in the fair value of the securities held by portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.

3    For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.

47

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

Changes in Multi-Asset Fund and Separate Account Assets

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2023		2022		2023		2022
Multi-Asset Funds
Beginning Assets	$	2,782	$	3,001	$	2,851	$	3,608
Sales	29		54		108		170
Redemptions	(114)		(130)		(391)		(397)
Net Sales (Redemptions)	(85)		(76)		(283)		(227)
Net Exchanges	0		0		3		6
Market Gains and (Losses)1	(98)		(141)		28		(603)
Ending Assets	$	2,599	$	2,784	$	2,599	$	2,784
Multi-Asset Separate Accounts
Beginning Assets	$	140	$	134	$	138	$	172
Sales2	1		0		2		1
Redemptions2	(5)		(2)		(15)		(10)
Net Sales (Redemptions)2	(4)		(2)		(13)		(9)
Market Gains and (Losses)1	(7)		(14)		4		(45)
Ending Assets	$	129	$	118	$	129	$	118
Total Multi-Asset
Beginning Assets	$	2,922	$	3,135	$	2,989	$	3,780
Sales2	30		54		110		171
Redemptions2	(119)		(132)		(406)		(407)
Net Sales (Redemptions)2	(89)		(78)		(296)		(236)
Net Exchanges	0		0		3		6
Market Gains and (Losses)1	(105)		(155)		32		(648)
Ending Assets	$	2,728	$	2,902	$	2,728	$	2,902

1    Reflects the approximate changes in the fair value of the securities held by portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.

2    For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.

48

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

Changes in Total Long-Term Assets

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2023		2022		2023		2022
Total Long-Term Fund Assets
Beginning Assets	$	104,387	$	109,334	$	102,423	$	135,294
Sales	5,413		7,128		20,192		25,728
Redemptions	(8,018)		(10,056)		(24,425)		(36,153)
Net Sales (Redemptions)	(2,605)		(2,928)		(4,233)		(10,425)
Net Exchanges	0		(5)		10		(53)
Impact of Foreign Exchange1	(798)		(1,841)		23		(4,434)
Market Gains and (Losses)2	(2,606)		(3,567)		155		(19,389)
Ending Assets	$	98,378	$	100,993	$	98,378	$	100,993
Total Long-Term Separate Accounts Assets
Beginning Assets	$	90,554	$	82,827	$	89,634	$	85,672
Sales3	7,451		6,686		16,098		17,965
Redemptions3	(4,404)		(2,540)		(12,344)		(11,335)
Net Sales (Redemptions)3	3,047		4,146		3,754		6,630
Net Exchanges	(10)		0		(7)		(1)
Impact of Foreign Exchange1	(592)		(1,215)		(246)		(2,796)
Market Gains and (Losses)2	(1,232)		(3,618)		(1,368)		(7,365)
Ending Assets	$	91,767	$	82,140	$	91,767	$	82,140
Total Long-Term Assets
Beginning Assets	$	194,941	$	192,161	$	192,057	$	220,966
Sales3	12,864		13,814		36,290		43,693
Redemptions3	(12,422)		(12,596)		(36,769)		(47,488)
Net Sales (Redemptions)3	442		1,218		(479)		(3,795)
Net Exchanges	(10)		(5)		3		(54)
Impact of Foreign Exchange1	(1,390)		(3,056)		(223)		(7,230)
Market Gains and (Losses)2	(3,838)		(7,185)		(1,213)		(26,754)
Ending Assets	$	190,145	$	183,133	$	190,145	$	183,133

1    Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.

2    Reflects the approximate changes in the fair value of the securities held by portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.

3    For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.

49

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

Changes in Federated Hermes’ average asset mix period-over-period across both asset classes and product types have a direct impact on Federated Hermes’ operating income. Asset mix impacts Federated Hermes’ total revenue due to the difference in the fee rates earned on each asset class and product type per invested dollar and certain components of distribution expense can vary depending upon the asset class, distribution channel and/or the size of the customer relationship. The following table presents the relative composition of average managed assets and the percent of total revenue derived from each asset class and product type for the periods presented:

	Percent of Total Average Managed Assets				Percent of Total Revenue
	Nine Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
By Asset Class
Money Market	72	%	68	%	46	%	37	%
Equity	12	%	14	%	30	%	38	%
Fixed-Income	12	%	14	%	12	%	15	%
Alternative / Private Markets	3	%	3	%	10	%	7	%
Multi-Asset	1	%	1	%	1	%	2	%
Other	—	%	—	%	1	%	1	%
By Product Type
Funds:
Money Market	51	%	46	%	43	%	34	%
Equity	6	%	8	%	23	%	29	%
Fixed-Income	6	%	8	%	9	%	12	%
Alternative / Private Markets	2	%	2	%	8	%	5	%
Multi-Asset	1	%	1	%	1	%	2	%
Separate Accounts:
Money Market	21	%	22	%	3	%	3	%
Equity	6	%	6	%	7	%	9	%
Fixed-Income	6	%	6	%	3	%	3	%
Alternative / Private Markets	1	%	1	%	2	%	2	%
Other	—	%	—	%	1	%	1	%

Total managed assets represent the balance of AUM at a point in time, while total average managed assets represent the average balance of AUM during a period of time. Because substantially all revenue and certain components of distribution expense are generally calculated daily based on AUM, changes in average managed assets are typically a key indicator of changes in revenue earned and asset-based expenses incurred during the same period.

Total average managed assets increased 13% and 10% for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022. As of September 30, 2023, total managed assets increased 15% from September 30, 2022. Average money market assets increased 18% and 17% for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022. Period-end money market assets increased 19% at September 30, 2023, as compared to September 30, 2022. Average equity assets remained flat and decreased 4% for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022. Period-end equity assets increased 4% at September 30, 2023, as compared to September 30, 2022, primarily due to market appreciation and foreign exchange rate fluctuations, partially offset by net redemptions. Average fixed-income assets increased 2% and decreased 3% for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022. Period-end fixed-income assets increased 5% at September 30, 2023, as compared to September 30, 2022, primarily due to assets acquired in an acquisition and market appreciation, partially offset by net redemptions. Average alternative/private markets assets increased 1% and decreased 4% for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022. Period-end alternative/private markets assets increased 1% at September 30, 2023, as compared to September 30, 2022, primarily due to foreign exchange rate fluctuations, partially offset by market depreciation.

The first-half equity rally broadened early in the third quarter on surprising economic growth, moderating inflation and rising expectations that the U.S. may be able to skirt a recession. The enthusiasm waned as the quarter wore on, however, as longer-

50

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

dated yields persistently climbed higher, with the 10-year Treasury yield reaching a 16-year high in September. The move reflected market worries over record public debt, and speculation that market rates may be resetting to levels that prevailed before the unprecedented monetary easing that kept rates artificially low during the 14-year global financial crisis/Pandemic era. During the quarter, the FOMC raised its federal funds target range in July by a quarter-point to 5.25% - 5.50% and, while holding steady at September’s FOMC meeting, suggested a similar increase is possible before year-end. Policymakers also projected rates to remain at current levels at least through summer 2024. For third quarter 2023, the S&P 500 returned (3.76)% and the broad bond market, as measured by Bloomberg US Aggregate Bond Index, returned (3.23)%.

Results of Operations

Revenue. Revenue increased $21.5 million for the three-month period ended September 30, 2023, as compared to the same period in 2022, primarily due to (1) an increase in money market revenue of $16.6 million due to a change in assets and product structures (partially offset in Distribution expense) and (2) an increase in carried interest of $11.0 million (partially offset in Compensation and Related expense). These increases were partially offset by a decrease in equity and fixed-income revenue of $3.8 million and $2.0 million, respectively, related to changes in the mix of average assets.

Revenue increased $146.2 million for the nine-month period ended September 30, 2023, as compared to the same period in 2022, primarily due to (1) a decrease of $85.3 million in Voluntary Yield-related Fee Waivers (see Business Developments - Low Short-Term Interest Rates for additional information, including the impact to expense and the net pre-tax impact), (2) an increase in money market revenue of $63.6 million due to a change in average assets and product structures (partially offset in Distribution expense) and (3) an increase in carried interest of $48.5 million (partially offset in Compensation and Related expense). These increases were partially offset by a decrease of $58.7 million in revenue due to lower long-term average assets.

For the nine-month periods ended September 30, 2023 and 2022, Federated Hermes’ ratio of revenue to average managed assets was 0.23% and 0.22%, respectively. The increase in the rate was primarily due to the increase in revenue from the elimination of Voluntary Yield-related Fee Waivers and an increase in carried interest, partially offset by a decrease in revenue from lower average equity and fixed-income assets during the first nine months of 2023 compared to the same period in 2022.

Operating Expenses. Total Operating Expenses for the three-month period ended September 30, 2023 increased $16.9 million, as compared to the same period in 2022. Compensation and Related expense increased $12.5 million primarily due to $7.6 million related to the consolidation of carried interest vehicles.

Total Operating Expenses for the nine-month period ended September 30, 2023 increased $134.2 million, as compared to the same period in 2022. Distribution expense increased $56.4 million primarily due to an increase of $66.5 million resulting from the elimination of Voluntary Yield-related Fee Waivers (see Business Developments - Low Short-Term Interest Rates for additional information, including the impact to revenue and the net pre-tax impact) partially offset by a $6.5 million decrease due to lower long-term average assets. Compensation and Related expense increased $47.2 million, primarily related to the consolidation of carried interest vehicles ($32.8 million) and increased staff and compensation rates ($9.4 million). Professional Service Fees increased $11.2 million primarily due to legal fees ($4.0 million) and increased spending on technology initiatives ($2.8 million).

Nonoperating Income (Expenses). Nonoperating Income (Expenses), net increased $7.1 million for the three-month period ended September 30, 2023, as compared to the same period in 2022. The increase is primarily due to a $3.6 million increase in Investment Income, net primarily due to an increase in investment yields due to rising interest rates and a $3.4 million increase in Gain (Loss) on Securities, net from a larger decrease in the market value of investments during the third quarter 2022, as compared to the decrease in market value of investments during the third quarter 2023.

Nonoperating Income (Expenses), net increased $51.0 million for the nine-month period ended September 30, 2023, as compared to the same period in 2022. The increase is primarily due to (1) a $41.5 million increase in Gain (Loss) on Securities, net from an increase in the market value of investments in the first nine months of 2023 as opposed to a decrease in the market value of investments during the same period in 2022 and (2) an $11.0 million increase in Investment Income, net primarily due to an increase in investment yields due to rising interest rates.

Income Taxes. The income tax provision was $26.7 million for the three-month period ended September 30, 2023, as compared to $21.6 million for the same period in 2022. The increase in the income tax provision was primarily due to higher income before income taxes. The effective tax rate was 26.5% for the three-month period ended September 30, 2023, as compared to 24.3% for the same period in 2022. The increase in the effective tax rate was primarily due to a revaluation of certain foreign deferred tax amounts during the third quarter 2022 (1.5%) and an increase in state income tax related to a change in tax law effective in the third quarter 2023 (1.1%).

51

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

The income tax provision was $75.3 million for the nine-month period ended September 30, 2023, as compared to $58.1 million for the same period in 2022. The increase in the income tax provision was primarily due to higher income before income taxes. The effective tax rate was 25.6% for the nine-month period ended September 30, 2023, as compared to 25.2% for the same period in 2022.

Net Income Attributable to Federated Hermes, Inc. Net income increased $5.5 million for the three-month period ended September 30, 2023, as compared to the same period in 2022, primarily as a result of the changes in revenues, expenses, nonoperating income (expenses) and income taxes noted above. Diluted earnings per share for the three-month period ended September 30, 2023 increased $0.08, as compared to the same period in 2022, primarily due to increased net income ($0.07) and a decrease in shares outstanding resulting from share repurchases ($0.01).

Net income increased $33.8 million for the nine-month period ended September 30, 2023, as compared to the same period in 2022, primarily as a result of the changes in revenues, expenses, nonoperating income (expenses) and income taxes noted above. Diluted earnings per share for the nine-month period ended September 30, 2023 increased $0.42, as compared to the same period in 2022, primarily due to increased net income ($0.38) and a decrease in shares outstanding resulting from share repurchases ($0.04).

Liquidity and Capital Resources

Liquid Assets. At September 30, 2023, liquid assets, net of noncontrolling interests, consisting of cash and cash equivalents, investments and receivables, totaled $599.3 million, as compared to $559.5 million at December 31, 2022. The change in liquid assets is discussed below.

At September 30, 2023, Federated Hermes’ liquid assets included investments in certain money market and fluctuating-value Federated Hermes Funds that may have direct and/or indirect exposures to international sovereign debt and currency risks. Federated Hermes continues to actively monitor its investment portfolios to manage sovereign debt and currency risks with respect to certain European countries (such as the UK in light of Brexit), Russia, China and certain other countries subject to economic sanctions. Federated Hermes’ experienced portfolio managers and analysts work to evaluate credit risk through quantitative and fundamental analysis. Further, regarding international exposure, certain money market funds (representing approximately $321.0 million in AUM) that meet the requirements of Rule 2a-7 or operate in accordance with requirements similar to those in Rule 2a-7, include holdings with indirect short-term exposures invested primarily in high-quality international bank names that are subject to Federated Hermes’ credit analysis process.

Cash Provided by Operating Activities. Net cash provided by operating activities totaled $182.2 million for the nine months ended September 30, 2023, as compared to $191.5 million for the same period in 2022. The decrease in cash provided was primarily due to (1) an increase in cash paid related to the $56.4 million increase in Distribution expense previously discussed, (2) an increase of $19.5 million in cash paid for taxes, (3) a $17.9 million payment representing a settlement with affected shareholders related to an administrative error (see Note (17) to the Consolidated Financial Statements for additional information), (4) a net increase of $10.1 million in cash paid for trading securities for the nine months ended September 30, 2023, as compared to the same period in 2022, (5) an increase of $4.5 million in cash paid for interest primarily related to the $350 million Notes issued in March 2022 and (6) an increase in cash paid of $4.0 million related to a fund restructuring. These decreases in cash were partially offset by an increase in cash received related to the $146.2 million increase in revenue previously discussed (excluding $16.7 million related to Receivables—Affiliates discussed in Financial Position below) and a decrease of $5.2 million in cash paid for incentive compensation.

Cash Provided by Investing Activities. During the nine-month period ended September 30, 2023, net cash provided by investing activities was $8.6 million, which represented $28.0 million in cash received from redemptions of Investments—Affiliates and Other, partially offset by $13.6 million paid for purchases of Investments—Affiliates and Other and $5.8 million paid for property and equipment.

Cash Used by Financing Activities. During the nine-month period ended September 30, 2023, net cash used by financing activities was $151.6 million due primarily to $112.0 million of treasury stock purchases, $74.0 million or $0.83 per share of dividends paid to holders of Federated Hermes common shares and $32.6 million of distributions to noncontrolling interests in subsidiaries. These decreases in cash were partially offset by $67.8 million of contributions from noncontrolling interests in subsidiaries.

Long-term Debt. On March 17, 2022, pursuant to a Note Purchase Agreement, Federated Hermes issued unsecured senior Notes in the aggregate amount of $350 million at a fixed interest rate of 3.29% per annum, payable semiannually in arrears in

52

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

March and September in each year of the agreement. The entire principal amount of the $350 million Notes will become due March 17, 2032. Citigroup Global Markets Inc. and PNC Capital Markets LLC acted as lead placement agents in relation to the $350 million Notes and certain subsidiaries of Federated Hermes are guarantors of the obligations owed under the Note Purchase Agreement. As of September 30, 2023, the outstanding balance of the $350 million Notes, net of unamortized issuance costs in the amount of $2.2 million, was $347.8 million and was recorded in Long-Term Debt on the Consolidated Balance Sheets. The proceeds were, or will be, used to supplement cash flow from operations, to fund share repurchases and potential acquisitions, to pay down debt outstanding under the Credit Agreement and for other general corporate purposes. See Note (11) to the Consolidated Financial Statements for additional information on the Note Purchase Agreement.

As of September 30, 2023, Federated Hermes’ Credit Agreement consists of a $350 million revolving credit facility with an additional $200 million available via an optional increase (or accordion) feature. Borrowings under the Credit Agreement may be used for general corporate purposes including cash payments related to acquisitions, dividends, investments and share repurchases. As of September 30, 2023, Federated Hermes has $350 million available to borrow under the Credit Agreement. See Note (11) to the Consolidated Financial Statements for additional information.

Both the Note Purchase Agreement and Credit Agreement include an interest coverage ratio covenant (consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) to consolidated interest expense) and a leverage ratio covenant (consolidated debt to consolidated EBITDA) as well as other customary terms and conditions. Federated Hermes was in compliance with all of its covenants, including its interest coverage and leverage ratios at and during the nine months ended September 30, 2023. An interest coverage ratio of at least 4 to 1 is required and, as of September 30, 2023, Federated Hermes’ interest coverage ratio was 37 to 1. A leverage ratio of no more than 3 to 1 is required and, as of September 30, 2023, Federated Hermes’ leverage ratio was 0.78 to 1.

Both the Note Purchase Agreement and the Credit Agreement have certain stated events of default and cross default provisions which would permit the lenders/counterparties to accelerate the repayment of debt outstanding if not cured within the applicable grace periods. The events of default generally include breaches of contract, failure to make required loan payments, insolvency, cessation of business, notice of lien or assessment, and other proceedings, whether voluntary or involuntary, that would require the repayment of amounts borrowed.

Future Cash Needs. Management expects that principal uses of cash will include funding business acquisitions and global expansion, funding distribution expenditures, paying incentive and base compensation, paying shareholder dividends, paying debt obligations, paying taxes, repurchasing company stock, developing and seeding new products and strategies, modifying existing products, strategies and relationships, maintaining regulatory liquidity and capital requirements and funding property and equipment (including technology). Any number of factors may cause Federated Hermes’ future cash needs to increase. As a result of the highly regulated nature of the investment management business, management anticipates that aggregate expenditures for compliance and investment management personnel, compliance systems and technology and related professional and consulting fees may continue to increase.

On October 26, 2023, Federated Hermes’ board of directors declared a $0.28 per share dividend to Federated Hermes’ Class A and Class B common stock shareholders of record as of November 8, 2023 to be paid on November 15, 2023.

After evaluating Federated Hermes’ existing liquid assets, expected continuing cash flow from operations, its borrowing capacity under the Credit Agreement and its ability to obtain additional financing arrangements and issue debt or stock, management believes it will have sufficient liquidity to meet both its short-term and reasonably foreseeable long-term cash needs.

Financial Position

The following discussion summarizes significant changes in assets and liabilities that are not discussed elsewhere in Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Receivables, net at September 30, 2023 increased $14.5 million from December 31, 2022 primarily due to an insurance receivable excluding Federated Hermes' retention under the policy. See Note (17) to the Consolidated Financial Statements for additional information.

Receivables—Affiliates at September 30, 2023 increased $16.7 million from December 31, 2022 primarily due to the accrual for carried interest earned in September 2023 and received in October 2023.

53

Management's Discussion and Analysis (continued)

of Financial Condition and Results of Operations (unaudited)

Investments—Consolidated Investment Companies at September 30, 2023 increased $9.8 million from December 31, 2022, primarily due to an increase of $21.6 million related to the consolidation of two VIEs during the nine-month period ended September 30, 2023, partially offset by a decrease of $13.0 million of net redemptions from investments during the same period.

Investments—Affiliates and Other at September 30, 2023 decreased $17.3 million from December 31, 2022 due to a decrease of $18.2 million from net redemptions during the nine-month period ended September 30, 2023, partially offset by an increase of approximately $1.0 million from net appreciation on existing investments during the same period.

Accrued Compensation and Benefits at September 30, 2023 decreased $25.2 million from December 31, 2022 primarily due to the 2022 accrued annual incentive compensation being paid in the first half of 2023 ($120.3 million), partially offset by 2023 incentive compensation accruals recorded at September 30, 2023 ($91.4 million).

Other Current Liabilities at September 30, 2023 increased $20.0 million from December 31, 2022 and primarily represents carried interest payable as of September 30, 2023.

Legal Proceedings    

Federated Hermes has claims asserted against it from time to time. See Note (17) to the Consolidated Financial Statements for additional information.

Critical Accounting Policies

Federated Hermes’ Consolidated Financial Statements have been prepared in accordance with GAAP. In preparing the financial statements, management is required to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Management continually evaluates the accounting policies and estimates it uses to prepare the Consolidated Financial Statements. In general, management’s estimates are based on historical experience, information from third-party professionals and various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results may differ from those estimates made by management and those differences may be material.

Of the significant accounting policies described in Federated Hermes’ Annual Report on Form 10-K for the year ended December 31, 2022, management believes that indefinite-lived intangible assets included in its Goodwill and Intangible Assets policy involves a higher degree of judgment and complexity. See Federated Hermes’ Annual Report on Form 10-K for the year ended December 31, 2022, Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations under the section Critical Accounting Policies for a complete discussion of this policy.

Increases in market interest rates and a decrease in near-term projected cash flows resulted in management determining that an indicator of potential impairment existed as of December 31, 2022 for the FHL right to manage public fund assets which totaled £150.3 million acquired in connection with the 2018 FHL acquisition. Management used an income-based approach to valuation, the discounted cash flow method, in valuing the asset. A discounted cash flow analysis prepared as of December 31, 2022 resulted in a non-cash impairment charge of $31.5 million. This method resulted in no impairment for the first two quarters of 2023 as the estimated fair value of this intangible asset exceeded the carrying value. As a result of continued increases in market interest rates and a decrease in projected cash flows, a discounted cash flow analysis was prepared as of September 30, 2023 which resulted in the estimated fair value exceeding the carrying value by less than 10%. The key assumptions in the discounted cash flow analysis include revenue growth rates, pre-tax profit margins and the discount rate applied to the projected cash flows. The risk of future impairment increases with a decrease in projected cash flows and/or an increase in the discount rate.

As of September 30, 2023, assuming all other assumptions remain static, an increase or decrease of 10% in projected revenue growth rates would result in a corresponding change to estimated fair value of approximately 7%. An increase or decrease of 10% in pre-tax profit margins would result in a corresponding change to estimated fair value of approximately 12%. An increase or decrease in the discount rate of 25 basis points would result in an inverse change to estimated fair value of approximately 2%. Any market volatility and other events related to geopolitical or other unexpected events could further reduce the AUM, revenues and earnings associated with this intangible asset and can result in subsequent impairment tests being based upon updated assumptions and future cash flow projections, which can result in an impairment. For additional information on risks, see Item 1A - Risk Factors included in Federated Hermes’ Annual Report on Form 10-K for the year ended December 31, 2022.

54

Part I, Item 3. Quantitative and Qualitative Disclosures About Market Risk

As of September 30, 2023, there were no material changes to Federated Hermes’ exposures to market risk that would require an update to the disclosures provided in Federated Hermes’ Annual Report on Form 10-K for the year ended December 31, 2022.

Part I, Item 4. Controls and Procedures

(a)Federated Hermes carried out an evaluation, under the supervision and with the participation of management, including Federated Hermes’ President and Chief Executive Officer and Chief Financial Officer, of the effectiveness of Federated Hermes’ disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2023. Based upon that evaluation, the President and Chief Executive Officer and the Chief Financial Officer concluded that Federated Hermes’ disclosure controls and procedures were effective at September 30, 2023.

(b)There has been no change in Federated Hermes’ internal control over financial reporting that occurred during the quarter ended September 30, 2023 that has materially affected, or is reasonably likely to materially affect, Federated Hermes’ internal control over financial reporting.

Part II, Item 1. Legal Proceedings 

Information regarding this Item is contained in Note (17) to the Consolidated Financial Statements.

Part II, Item 1A. Risk Factors 

There are no material changes to the risk factors included in Federated Hermes’ Annual Report on Form 10-K for the year ended December 31, 2022.

Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) not applicable.

(b) not applicable.

(c) The following table summarizes stock repurchases under Federated Hermes’ share repurchase program during the third quarter 2023.

	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs1	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs1
July2	54,024	$	31.44	50,000	3,372,415
August2	1,077,500	33.49		1,075,000	2,297,415
September2	915,266	34.00		900,000	1,397,415
Total	2,046,790	$	33.66	2,025,000	1,397,415

1    In June 2022, the board of directors authorized a share repurchase program with no stated expiration date that allows the repurchase of up to 5.0 million shares of Class B common stock. No other program existed as of September 30, 2023. See Note (13) to the Consolidated Financial Statements for additional information on this program. See Note (19) to the Consolidated Financial Statements for information regarding a new share repurchase program approved on October 26, 2023.

2    In July, August and September 2023, 4,024, 2,500, and 15,266 shares, respectively, of Class B common stock with a weighted-average price of $0.00, $0.00, and $2.42 per share, respectively, were repurchased as employees forfeited restricted stock.

Part II, Item 5. Other Information

Insider Trading Arrangements

While certain officers have elected in advance to satisfy tax obligations arising from the vesting of awards of periodic and bonus restricted Federated Hermes Class B Common Stock through the sale of sufficient shares of such stock necessary to satisfy such tax obligations in the open-market, no director or officer adopted, modified or terminated a Rule 10b5-1(c) or a non-Rule 10b5-1(c) trading arrangement during the fiscal quarter ended September 30, 2023.

55

Part II, Item 6. Exhibits

The following exhibits required to be filed or furnished by Item 601 of Regulation S-K are filed or furnished herewith and incorporated by reference herein:

Exhibit 10.1 – Federated Hermes, Inc. Annual Incentive Plan, as amended October 26, 2023 (filed herewith)

Exhibit 10.2 – Federated Hermes, Inc. Stock Incentive Plan, as amended October 26, 2023 (filed herewith)

Exhibit 10.3 – Form of 2023 Restricted Stock Award Agreement for Federated Hermes, Inc. Stock Incentive Plan (filed herewith)

Exhibit 10.4 – UK Sub-Plan to the Federated Hermes, Inc. Stock Incentive Plan, as amended as of October 26, 2023 (filed herewith)

Exhibit 10.5 – Form of 2023 Restricted Stock Award Agreement for UK Sub-Plan (filed herewith)

Exhibit 10.6 – Form of Cash Award Agreement for Non-U.S. Employee for Federated Hermes, Inc. Stock Incentive Plan (filed herewith)

Exhibit 31.1 – Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

Exhibit 31.2 – Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

Exhibit 32 – Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

Exhibit 101.INS – Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

Exhibit 101.SCH – Inline XBRL Taxonomy Extension Schema Document

Exhibit 101.CAL – Inline XBRL Taxonomy Extension Calculation Linkbase Document

Exhibit 101.DEF – Inline XBRL Taxonomy Extension Definition Linkbase Document

Exhibit 101.LAB – Inline XBRL Taxonomy Extension Label Linkbase Document

Exhibit 101.PRE – Inline XBRL Taxonomy Extension Presentation Linkbase Document

Exhibit 104 – Cover Page Interactive Data File (embedded within the Inline XBRL document)

56

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			Federated Hermes, Inc.
			(Registrant)
Date	October 27, 2023	By:	/s/ J. Christopher Donahue
			J. Christopher Donahue
			President and Chief Executive Officer
Date	October 27, 2023	By:	/s/ Thomas R. Donahue
			Thomas R. Donahue
			Chief Financial Officer

57

EX-10.1

Exhibit 10.1

FEDERATED HERMES, INC.

ANNUAL INCENTIVE PLAN

Approved by Shareholders April 24, 2002

Amended as of May 13, 2002

Amended as of July 23, 2002

Amended as of February 5, 2004
Amended as of January 25, 2007

Approved by Shareholders April 26, 2012

Approved by Shareholders April 27, 2017
Amended as of February 22, 2019
Amended as of January 31, 2020

Amended as of October 26, 2023

ARTICLE I - GENERAL PROVISIONS

1.1    Purpose

The purpose of the Federated Hermes, Inc. Annual Incentive Plan (the "Plan") is to advance the success of Federated Hermes, Inc. and to thereby increase shareholder value by promoting the attainment of significant business objectives by the Company and basing a portion of the annual compensation of selected officers on the attainment of such objectives. The Plan is designed to: (i) further align the interests of Participants with the interests of the Company's shareholders, (ii) reward Participants for creating shareholder value as measured by objectively determinable performance goals, and (iii) assist in the attraction and retention of employees vital to the Company's long-term success.

1.2    Definitions

For the purpose of the Plan, the following terms shall have the meanings indicated:

(a)    "Board" means the Board of Directors of the Company.

(b)    "Code" means the Internal Revenue Code of 1986, as amended, including any successor law thereto.

(c)    "Company," means Federated Hermes, Inc. and solely for purposes of determining (i) eligibility for participation in the Plan, (ii) employment, and (iii) the calculation of any Performance Goal or establishment of any Performance Measure, any subsidiary entity or affiliate thereof, including subsidiaries or affiliates which become such after adoption of the Plan. For purposes of this Plan, the term "Company" shall also include any successor to Federated Hermes, Inc.

(d)    "Committee" means the Compensation Committee of the Board, or such other committee as is appointed or designated by the Board to administer the Plan, in each case which shall be comprised solely of two or more "outside directors" (as defined under Section 162(m) of the Code and the regulations promulgated thereunder).

(e)    "Common Stock" means the Company's Class B Common Stock, no par value per share.

(f)    "Fair Market Value" means, on any date, the closing sale price of one share of Common Stock, as reported on the New York Stock Exchange or any national securities exchange on which the Common Stock is then listed or on the NASDAQ Stock Market's National Market ("NNM") if the Common Stock is then quoted thereon, as published in the Wall Street Journal or another newspaper of general circulation, as of such date or, if there were no sales reported as of such date, as of the last date preceding such date as of which a sale was reported. In the event that the Common Stock is not listed for trading on a national securities exchange or authorized for quotation on NNM, Fair Market Value shall be the closing bid price as reported by the NASDAQ Stock Market or The NASDAQ Small Cap Market (if applicable), or if no such prices shall have been so reported for such date, on the next preceding date for which such prices were so reported. In the event that the Common Stock is not listed on the New York Stock Exchange, a national securities exchange or NNM, and is not listed for quotation on The NASDAQ Stock Market or The NASDAQ Small Cap Market, Fair Market Value shall be determined in good faith by the Committee in its sole discretion, and for this purpose the Committee shall be entitled to rely on the opinion of a qualified appraisal firm with respect to such Fair Market Value, but the Committee shall in no event be obligated to obtain such an opinion in order to determine Fair Market Value.

(g)    "Forfeit" means the loss by a Participant of any and all rights to an award granted under the Plan, including the loss of any opportunity to earn compensation, or the loss of any payment of compensation by the Company under the Plan or any award granted thereunder.

(h)    "Operating Profits" means for the applicable Performance Period, the Company's total revenue less distributions to minority interests and less total expenses (excluding amortization of intangible assets, impairment losses and debt expenses, including, without limitation, interest and loan fees) as reflected in the Company's audited or unaudited financial statements as filed with the Securities and Exchange Commission.

(i)    "Participant" means any person: (1) who has satisfied the eligibility requirements set forth in Section 1.4; (2) to whom an award has been made under the Plan; and (3) whose award remains outstanding under the Plan.

(j)    "Performance Goal" means, in relation to any Performance Period, the level of performance that must be achieved with respect to a Performance Measure.

(k)    "Performance Measures" means any one or more of the following performance criteria, either individually, alternatively or in any combination, and subject to such modifications or variations as specified by the Committee, applied to either the Company as a whole or to a business unit or subsidiary entity thereof, either individually, alternatively or in any combination, and measured over a period of time including any portion of a year, annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years' results or to a designated comparison group, in each case as specified by the Committee: (i) revenues; (ii) operating income; (iii) net income; (iv) earnings per share; (v) operating expenses; (vi) assets under management; (vii) product sales or market share; (viii) the performance of the Common Stock; (ix) the investment performance of Company products; (x) Operating Profits; (xi) identification of business opportunities; (xii) product completion; and (xiii) satisfaction of operational and/or management performance objectives including completion and/or integration of acquisitions, dispositions, business expansion, product diversification, new or expanded market penetration and other non-financial operating and management performance objectives.

    To the extent consistent with Section 162(m) of the Code and the regulations promulgated thereunder and unless otherwise determined by the Committee at the time the Performance Goals are established, the Committee, in applying the Performance Goals, shall exclude the effect of any of the following events that occur during a Performance Period: the impairment of tangible or intangible assets; litigation or claim judgments or settlements; changes in tax law, accounting principles or other such laws or provisions affecting reported results; business combinations, reorganizations and/or restructuring programs that have been approved by the Board; reductions in force and early retirement incentives; and any extraordinary, unusual, infrequent or non-recurring items separately identified in the financial statements and/or notes thereto in accordance with generally accepted accounting principles.

(l)    "Performance Period" means, in relation to any award, the calendar year, or other period of 12 months or less for which a Participant's performance is being calculated with each such period constituting a separate Performance Period.

1.3    Administration

(a)     The Plan shall be administered by the Committee. Subject to the terms of the Plan, the Committee shall, among other things, have full authority and discretion to determine eligibility for participation in the Plan, make awards under the Plan, establish the terms and conditions of such awards (including the Performance Goal(s) and Performance Measure(s) to be utilized) and determine whether the Performance Goals applicable to any Performance Measures for any award have been achieved. The Committee’s determinations under the Plan need not be uniform among all Participants, or classes or categories of Participants, and may be applied to such Participants, or classes or categories of Participants, as the Committee, in its sole and absolute discretion, considers necessary, appropriate or desirable. The Committee is authorized to interpret the Plan, to adopt administrative rules, regulations, and guidelines for the Plan, and may correct any defect, supply any omission or reconcile any inconsistency or conflict in the Plan or in any award. All determinations by the Committee shall be final, conclusive and binding on the Company, the Participant and any and all interested parties.

(b)    Subject to the provisions of the Plan, the Committee will have the authority and discretion to determine the extent to which awards under the Plan will be structured to conform to the requirements applicable to performance-based compensation as described in Section 162(m) of the Code, and to take such action, establish such procedures, and impose such restrictions at the time such awards are granted as the Committee determines to be necessary or appropriate to conform to such requirements. The Committee may, with respect to Participants whom the Committee determines are not likely to be subject to Section 162(m) of the Code, delegate such of its powers and authority under the Plan to the Company's Chairman, President or Chief Executive Officer as it deems appropriate. In the event of such delegation, all references to the Committee in this Plan shall be deemed references to such officers as it relates to those aspects of the Plan that have been delegated.

(c)    Notwithstanding any provision of the Plan to the contrary, if any benefit provided under this Plan is subject to the provisions of Section 409A of the Code and the regulations issued thereunder, the provisions of the Plan shall be administered, interpreted and construed in a manner necessary to comply with Section 409A, the regulations issued thereunder or an exception thereto (or disregarded to the extent such provision cannot be so administered, interpreted, or construed.) In no event shall any member of the Board, the Committee or the Company (or its employees, officers or directors) have any liability to any Participant (or any other Person) due to the failure of an Award to satisfy the requirements of Section 409A.

1.4    Eligibility and Participation

Participation in the Plan shall be limited to officers (who may also be members of the Board) who are determined by the Committee to be eligible for participation in the Plan and, unless otherwise determined by the Committee, the Chairman of the Board, the Chief Executive Officer and any executive who is a member of the Board or is designated as a member of the Chief Executive Officer's senior staff shall be eligible to participate in the Plan.

ARTICLE II - AWARD TERMS

2.1    Granting of Awards

The Committee may, in its discretion, from time to time make awards to persons eligible for participation in the Plan pursuant to which the Participant may earn compensation. The amount of a Participant’s award may be based on such methods as may be established by the Committee. Each award shall be communicated to the Participant, and shall specify, among other things, the terms and conditions of the award and the Performance Goals to be achieved. To the extent a maximum award amount is required under the Code, including without limitation Section 162(m), the maximum amount of an award that may be earned under the Plan by any Participant for any Performance Period shall not exceed USD $6,000,000 (it being understood that, as of February 22, 2019, no maximum award amount is required).

2.2    Establishment of Performance Goals

With respect to awards that are intended to be performance-based compensation under Section 162(m) of the Code, each award shall be conditioned upon the Company's achievement of one or more Performance Goals with respect to the Performance Measure(s) established by the Committee. No later than ninety (90) days after the beginning of the applicable Performance Period, the Committee shall establish in writing the Performance Goals, Performance Measures and the method(s) for computing the amount of compensation which will be payable under the Plan to each Participant if the Performance Goals established by the Committee are attained; provided, however, that for a Performance Period of less than one year, the Performance Measure must be established prior to the lapse of 25% of the Performance Period. In addition to establishing a minimum performance level below which no compensation shall be payable pursuant to an award, the Committee, in its discretion, may create a performance schedule under which an amount less than or more than a target award may be paid so long as the Performance Goals have been exceeded.

2.3    Other Award Terms

The Committee, in its sole discretion, may also establish such additional restrictions or conditions that must be satisfied as a condition precedent to the payment of all or a portion of any awards. Such additional restrictions or conditions need not be performance-based and may include, among other things, the receipt by a Participant of a specified annual performance rating, the continued employment by the Participant and/or the achievement of specified performance goals by the Company, business unit or Participant. Furthermore and notwithstanding any provision of this Plan to the contrary, the Committee, in its sole discretion, may reduce the amount of any award to a Participant if it concludes that such reduction is necessary or appropriate based upon: (i) an evaluation of such Participant's performance; (ii) comparisons with compensation received by other similarly situated individuals working within the Company's industry; (iii) the Company's financial results and conditions; or (iv) such other factors or conditions that the Committee deems relevant. Notwithstanding any provision of this

Plan to the contrary, the Committee shall not use its discretionary authority to increase any award that is intended to be performance-based compensation under Section 162(m) of the Code.

2.4    Certification of Achievement of Performance Goals

The Committee shall, prior to any payment under the Plan, certify in writing the extent, if any, that the Performance Goal(s) and any other material terms have been achieved. For purposes of this provision, and for so long as the Code permits, the approved minutes of the Committee meeting in which the certification is made may be treated as written certification.

2.5    Distribution of Awards

Awards shall be paid as promptly as practicable (but in no event later than 2½months after the close of the fiscal year in which the Performance Period ends)after the Committee has certified in writing the extent to which the applicable Performance Goals and any other material terms have been achieved. Notwithstanding the foregoing, the Committee may, in its sole discretion: (i) determine whether, to what extent, and under what additional circumstances amounts payable with respect to an award under the Plan shall be deferred either automatically, at the election of the Participant, or by the Committee; (ii) permit a Participant to elect to receive, in lieu of receiving cash, all or a portion of the total award value in the form of Common Stock, restricted Common Stock, non-qualified stock options to purchase Common Stock, or such other stock-based award as maybe authorized by the Committee; and (iii) satisfy the payment of all or a portion of the total award value in the form of Common Stock, restricted Common Stock, non-qualified stock options to purchase Common Stock, or such other stock-based award as may be authorized by the Committee. Any stock-based award granted as payment of an award shall be granted pursuant to the Federated Hermes, Inc. Stock Incentive Plan or any successor thereto; provided, however, that any non-qualified stock option to purchase Common Stock shall have an exercise price equal to the Fair Market Value of the Common Stock on the date of grant. The number of stock options to be granted shall be determined by the Committee and shall be based upon the value of the options as determined under the Black-Scholes option-pricing model or such other option valuation model or calculation that the Committee, in its sole discretion, shall determine is appropriate. The number of any other stock-based awards to be granted shall be determined by such methods or procedures as the Committee, in its sole discretion, shall determine is appropriate.

2.6    Termination of Employment

Unless otherwise determined by the Committee, Participants who have terminated employment with the Company for any reason prior to the actual payment of an award, shall Forfeit any and all rights to payment under any awards then outstanding under the terms of the Plan and the award. Because such a Participant will not be employed on the payment date, such Participant shall not have earned the award or fulfilled a condition precedent to the receipt of the award.

ARTICLE III - OTHER PROVISIONS

3.1    Withholding Taxes

Whenever the Company is required to satisfy income or employment tax withholding requirements with respect to an award under the Plan, the Company shall have the right to withhold from the payment of any such award, or require the Participant to remit to the Company prior to or contemporaneous with the payment of any such award, an amount sufficient to satisfy

any applicable governmental withholding tax requirements related thereto and such other deductions as may be authorized by the Participant or as required by applicable law.

3.2    Adjustments

Awards may be adjusted by the Committee in the manner and to the extent it determines to be appropriate to reflect stock dividends, stock splits, recapitalizations, reorganizations, mergers, consolidations, combinations, exchanges, reclassifications or other relevant changes in capitalization occurring after the date of the award; provided, however, that the Committee may not make any such adjustment with respect to any award to an individual who is then a "covered employee" as such term is defined in Regulation 1.162-27(c)(2) promulgated under Section 162(m) of the Code, or any successor provision , if such adjustment would cause compensation pursuant to such award to cease to be performance-based compensation under Section 162(m).

3.3    No Right to Employment

Nothing contained in the Plan or in any award shall confer upon any Participant any right with respect to continued employment with the Company or its subsidiaries or affiliates, nor interfere in any way with the right of the Company or its subsidiaries or affiliates to at any time reassign the Participant to a different job, change the compensation of the Participant or terminate the Participant's employment for any reason.

3.4    Nontransferability

A Participant's rights under the Plan, including the right to amounts payable may not be assigned, pledged, or otherwise transferred except, in the event of a Participant's death, to the Participant's designated beneficiary or, in the absence of such a designation, by will or by the laws of descent and distribution.

3.5    Unfunded Plan

The Plan is not funded and all awards payable hereunder shall be paid from the general assets of the Company. No provision contained in this Plan and no action taken pursuant to the provisions of this Plan shall create a trust of any kind or require the Company to maintain or set aside any specific funds to pay benefits hereunder. To the extent a Participant acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of any unsecured general creditor of the Company.

3.6    Foreign Jurisdictions

The Committee shall have the authority to adopt, amend, or terminate such arrangements, not inconsistent with the intent of the Plan, as it may deem necessary or desirable to make available tax or other benefits of the laws of foreign countries in order to promote achievement of the purposes of the Plan.

3.7    Other Compensation Plans

Nothing contained in this Plan shall prevent the Company from adopting other or additional compensation arrangements for employees of the Company, including arrangements that are not intended to comply with Section 162(m) of the Code.

3.8    Governing Law

The Plan shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to its conflict of law provisions.

3.9    Incentive Compensation Recovery

An Award granted under the Plan will be subject to the Company’s Incentive Compensation Recovery Policy, and the provisions of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Section 10D to the Securities Exchange Act of 1934 (“Exchange Act”), Rule 10D-1 under the Exchange Act, and Section 303A.14 of the NYSE Listed Company Manual, as well as any similar policy of the Company, law, regulation or listing standard regarding incentive compensation recovery, in each case as in effect from time to time and to the extent such policy, law, regulation or listing standard applies to the Award in accordance with its terms.

ARTICLE IV - AMENDMENT AND TERMINATION

The Board of Directors may modify, amend, or terminate the Plan at any time; provided, however, that no such modification, amendment or termination shall, without the consent of the Participant, materially adversely affect the rights of such Participant to any payment that has been determined by the Committee to be due and owing to the Participant under the Plan but not yet paid.

Notwithstanding the foregoing or any provision of the Plan to the contrary, the Committee may at any time (without the consent of the Participant) modify, amend or terminate any or all of the provisions of this Plan to the extent necessary to conform the provisions of the Plan with Section 409A or Section 162(m) of the Code or the regulations promulgated thereunder regardless of whether such modification, amendment, or termination of the Plan shall adversely affect the rights of a Participant under the Plan.

ARTICLE V - EFFECTIVE DATE

The Plan, as amended, shall become effective immediately upon the approval and adoption thereof by the Board; provided, however, that no award intended to qualify as performance-based compensation within the meaning of Section 162(m) of the Code shall be payable prior to approval of the Plan's material terms by the Company's shareholders.

EX-10.2

Exhibit 10.2

FEDERATED HERMES, INC.

STOCK INCENTIVE PLAN

(Adopted as of February 20, 1998)

(Amended as of August 26, 1998)

(Amended as of August 31, 1998)

(Amended as of January 26, 1999)

(Amended as of May 17, 1999)

(Amended as of July 20, 1999)

(Amended as of January 29, 2002)

(Approved by Shareholders April 24, 2002)

(Amended as of February 5, 2004)

(Amended as of April 19, 2004)

(Amended as of April 27, 2006)

(Amended as of April 22, 2010)

(Amended as of April 28, 2011)

(Approved by Shareholders April 28, 2016)

(Amended and Approved by Shareholders as of April 26, 2018)
(Amended as of January 31, 2020)

(Amended and Approved by Shareholders as of January 7, 2022)

(Amended as of October 26, 2023)

1.    Purpose

    The purpose of the Federated Hermes, Inc. Stock Incentive Plan (the “Plan”) is to:

(a)    Facilitate the assumption by Federated Hermes, Inc. (formerly Federated Investors, Inc.), as the surviving corporation of a merger with its parent corporation, Federated Investors, of certain stock incentive awards previously made by Federated Investors to its employees; and

(b)    Continue to promote the long-term growth and performance of Federated Hermes, Inc. and its affiliates and to attract and retain outstanding individuals by awarding directors, executive officers and key employees stock options, stock appreciation rights, performance awards, restricted stock and/or other stock-based awards.

2.    Definitions

    The following definitions are applicable to the Plan:

    “Award” means the grant of Options, SARs, Performance Awards, Restricted Stock or other stock-based award or cash-based award under the Plan.

    “Board” means the Board of Directors of the Company.

    “Board Committee” means the committee of the Board appointed in accordance with Section 4 to administer the Plan.

    “Code” means the Internal Revenue Code of 1986, as amended.

    “Commission” means the Securities and Exchange Commission.

    “Common Stock” means the Class B Common Stock of the Company, no par value per share.

    “Company” means Federated Hermes, Inc., a Pennsylvania corporation, and its successors and assigns.

    “Exchange Act” means the Securities Exchange Act of 1934, as amended.

    “Fair Market Value” means, on any date, the closing sale price of one share of Common Stock, as reported on the New York Stock Exchange or any national securities exchange on which the Common Stock is then listed or on The NASDAQ Stock Market’s National Market (“NNM”) if the Common Stock is then quoted thereon, as published in the Wall Street Journal or another newspaper of general circulation, as of such date or, if there were no sales reported as of such date, as of the last date preceding such date as of which a sale was reported. In the event that the Common Stock is not listed for trading on a national securities exchange or authorized for quotation on NNM, Fair Market Value shall be the closing bid price as reported by The NASDAQ Stock Market or The NASDAQ SmallCap Market (if applicable), or if no such prices shall have been so reported for such date, on the next preceding date for which such prices were so reported. In the event that the Common Stock is not listed on the New York Stock Exchange, a national securities exchange or NNM, and is not listed for quotation on The NASDAQ Stock Market or The NASDAQ SmallCap Market, Fair Market Value shall be determined in good faith by the Board Committee in its sole discretion, and for this purpose the Board Committee shall be entitled to rely on the opinion of a qualified appraisal firm with respect to such Fair Market Value, but the Board Committee shall in no event be obligated to obtain such an opinion in order to determine Fair Market Value.

    “Grant Date” means the date on which the grant of an Option under Section 5.1 hereof or a SAR under Section 6.1 hereof becomes effective pursuant to the terms of the Stock Option Agreement or Stock Appreciation Rights Agreement, as the case may be, relating thereto.

    “Incentive Stock Option” means an option to purchase shares of Common Stock designated as an incentive stock option and which complies with Section 422 of the Code.

    “Non-Statutory Stock Option” means an option to purchase shares of Common Stock which is not an Incentive Stock Option.

    “Offering” means the initial public offering of Class B Common Stock by United States and international underwriters.

    “Option” means any option to purchase shares of Common Stock granted under Sections 5.1 hereof.

    “Option Price” means the purchase price of each share of Common Stock under an Option.

    “Outside Director” means a member of the Board who is not an employee of the Company or any Subsidiary.

    “Participant” means any Outside Director and any salaried employee of the Company and its affiliates designated by the Board Committee to receive an Award under the Plan.

    -2-

    “Performance Award” means an Award of shares of Common Stock granted under Section 7.

    “Performance Period” means the period of time established by the Board Committee for achievement of certain objectives under Section 7.1 hereof.

    “Restriction Period” means the period of time specified in a Performance Share Award Agreement or a Restricted Stock Award Agreement, as the case may be, between the Participant and the Company during which the following conditions remain in effect: (i) certain restrictions on the sale or other disposition of shares of Common Stock awarded under the Plan, and (ii) subject to the terms of the applicable agreement, a requirement of continued employment of the Participant in order to prevent forfeiture of the Award.

    “Stock Appreciation Rights” or “SARs” means the right to receive a cash payment from the Company equal to the excess of the Fair Market Value of a stated number of shares of Common Stock at the exercise date over a fixed price for such shares.

    “Subsidiary” means any corporation, business trust or partnership (other than the Company) in an unbroken chain of corporations, business trusts or partnerships beginning with the Company if each of the corporations, business trusts or partnerships (other than the last corporation, business trust or partnership in the chain) owns stock, beneficial interests or partnership interests possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations, business trusts or partnerships in the chain.

    “Ten Percent Holder” means a person who owns (within the meaning of Section 424(d) of the Code) more than ten percent of the voting power of all classes of stock of the Company or of its parent corporation or Subsidiary.

3.    Shares Subject to Plan

3.1    Shares Reserved under the Plan. Subject to adjustment as provided in Section 3.2, the number of shares of Common Stock cumulatively available under the Plan shall equal 36,050,000 shares. All of such authorized shares of Common Stock shall be available for the grant of Incentive Stock Options under the Plan. No Participant shall receive Awards in respect of more than 900,000 shares of Common Stock in any fiscal year of the Company. In addition, the aggregate Fair Market Value (determined on the Grant Date) of Common Stock with respect to which Incentive Stock Options granted a Participant become exercisable for the first time in any single calendar year shall not exceed $100,000. Any Common Stock issued by the Company through the assumption or substitution of outstanding grants from an acquired corporation or entity shall not reduce the shares available for grants under the Plan. Shares of Common Stock to be issued pursuant to the Plan may be authorized and unissued shares, treasury shares, shares held by the Company’s or a Subsidiary’s employee benefit trust or any combination thereof. Subject to Section 6.2 hereof, if any shares of Common Stock subject to an Award hereunder are forfeited or any such Award otherwise terminates without the issuance of such shares of Common Stock to a Participant, or if any shares of Common Stock are surrendered by a Participant in full or partial payment of the Option Price of an Option, such shares, to the extent of any such forfeiture, termination or surrender, shall again be available for grant under the Plan.

    -3-

3.2    Adjustments. The aggregate number of shares of Common Stock which may be awarded under the Plan and the terms of outstanding Awards shall be adjusted by the Board Committee to reflect a change in the capitalization of the Company, including but not limited to, a stock dividend or split, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, spin-off, spin-out or other distribution of assets to shareholders.

3.3    Merger With Federated Investors. Notwithstanding the foregoing, the Company’s merger with Federated Investors and assumption of its outstanding stock incentive awards will not result in any adjustment to the number of shares available under the Plan and will reduce the number of shares available under this Plan accordingly. For purposes of this Plan, after the merger all such stock incentive awards shall be treated as Awards under this Plan, except that any Grant Date, Performance Period or Restricted Period shall relate back to the date on which the awards were made by Federated Investors.

4.    Administration of Plan

4.1    Administration by the Board Committee. The Plan shall be administered as follows.

(a)    Prior to an Offering, the Plan shall be administered by either the full Board or by the Board Committee if one is established by the Board. Prior to an Offering, any member of the Board may serve on the Board Committee.

(b)    After an Offering, the Plan shall be administered by the Board Committee, which shall consist of no fewer than two members of the Board who are (i) “Non-Employee Directors” for purposes of Rule 16b-3 of the Commission under the Exchange Act and (ii) to the extent required to ensure that awards under the Plan are exempt for purposes of Section 162(m) of the Code, “outside directors” for purposes of prior Section 162(m) or a successor provision; provided, however, that the Board Committee may delegate some or all of its authority and responsibility under the Plan with respect to Awards to Participants who are not subject to Section 16 of the Exchange Act to the Chief Executive Officer of the Company, one or more of its members or to one or more officers of the Company and/or its Subsidiaries or to one or more agents or advisors such administrative duties or powers as it may deem advisable, and the Committee or any individuals to whom it has delegated duties or powers as aforesaid may employ one or more individuals to render advice with respect to any responsibility the Committee or such individuals may have under the Plan. In the event that, after an Offering, the Board does not have two members who qualify as “Non-Employee Directors” for purposes of Rule 16b-3, the Plan shall be administered by the full Board.

(c)    The Board Committee shall have authority to interpret the Plan, to establish, amend, and rescind any rules and regulations relating to the Plan, to prescribe the form of any agreement or instrument executed in connection herewith, and to make all other determinations necessary or advisable for the administration of the Plan. All such interpretations, rules, regulations and determinations shall be conclusive and binding on all persons and for all purposes. In addition, the Board Committee or its designee shall have authority, without amending the Plan, to grant Awards hereunder to Participants who are foreign nationals or employed outside

    -4-

the United States or both, on terms and conditions different from those specified herein as may, in the sole judgment and discretion of the Board Committee or its designee, be necessary or desirable to further the purpose of the Plan.

(d)    In the event that the Board does not establish a Board Committee for any reason, any reference in this Plan to the Board Committee shall be deemed to refer to the full Board.

4.2    Designation of Participants. Participants shall be selected, from time to time, by the Board Committee, from the Outside Directors and from those executive officers and key employees of the Company and its affiliates who, in the opinion of the Board Committee, have the capacity to contribute materially to the continued growth and successful performance of the Company.

5.    Stock Options

5.1    Grants. Options may be granted, from time to time, to such Participants as may be selected by the Board Committee on such terms, not inconsistent with this Plan, as the Board Committee shall determine; provided, however, that, unless permitted by the Code, Incentive Stock Options may not be granted to a Participant who is an Outside Director. The Option Price shall be determined by the Board Committee effective on the Grant Date; provided, however, that (i) in the case of Incentive Stock Options granted to a Participant who on the Grant Date is not a Ten Percent Holder, such price shall not be less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock on the Grant Date, (ii) in the case of an Incentive Stock Option granted to a Participant who on the Grant Date is a Ten Percent Holder, such price shall be not less than one hundred and ten percent (110%) of the Fair Market Value of a share of Common Stock on the Grant Date, and (iii) in the case of Non-Statutory Stock Options, such price shall be not less than eighty-five percent (85%) of the Fair Market Value of a share of Common Stock on the Grant Date. The number of shares of Common Stock subject to each Option granted to each Participant, the terms of each Option, and any other terms and conditions of an Option granted hereunder shall be determined by the Board Committee, in its sole discretion, effective on the Grant Date;provided, however, that no Incentive Stock Option shall be exercisable any later than ten (10) years from the Grant Date. Each Option shall be evidenced by a Stock Option Agreement between the Participant and the Company which shall specify the type of Option granted, the Option Price, the term of the Option, the number of shares of Common Stock to which the Option pertains, the conditions upon which the Option becomes exercisable and such other terms and conditions as the Board Committee shall determine.

5.2    Payment of Option Price. No shares of Common Stock shall be issued upon exercise of an Option until full payment of the Option Price therefor by the Participant. Upon exercise, the Option Price may be paid in cash, and, subject to approval by the Board Committee, in shares of Common Stock having a Fair Market Value equal to the Option Price, or in any combination thereof, or in any other manner approved by the Board Committee.

5.3    Rights as Shareholders. Participants shall not have any of the rights of a shareholder with respect to any shares subject to an Option until such shares have been issued upon the proper exercise of such Option.

5.4    Transferability of Options. Options granted under the Plan may not be sold, transferred, pledged, assigned, hypothecated or otherwise disposed of except by will

    -5-

or by the laws of descent and distribution;provided, however, that, if authorized in the applicable Award agreement, a Participant may make one or more gifts of Options granted hereunder to members of the Participant’s immediate family or trusts or partnerships for the benefit of such family members. All Options granted to a Participant under the Plan shall be exercisable during the lifetime of such Participant only by such Participant, such Participant’s agent, guardian or attorney-in-fact; provided, however, that all Options transferred in a manner consistent with the terms of an Award agreement may be exercised by the transferee.

5.5    Termination of Employment/Directorship. If a Participant ceases to be an employee of either the Company or of any of its affiliates, any Options granted hereunder to such Participant as an employee shall be exercisable in accordance with the Stock Option Agreement between the Participant and the Company. If a Participant ceases to be an Outside Director, any Options granted hereunder to such Participant as an Outside Director shall be exercisable in accordance with the Stock Option Agreement between the Participant and the Company.

5.6    Designation of Incentive Stock Options. Except as otherwise expressly provided in the Plan, the Board Committee may, at the time of the grant of an Option, designate such Option as an Incentive Stock Option under Section 422 of the Code.

5.7    Certain Incentive Stock Option Terms. In the case of any grant of an Incentive Stock Option, whenever possible, each provision in the Plan and in any related agreement shall be interpreted in such a manner as to entitle the Option holder to the tax treatment afforded by Section 422 of the Code, and if any provision of this Plan or such agreement shall be held not to comply with requirements necessary to entitle such Option to such tax treatment, then (i) such provision shall be deemed to have contained from the outset such language as shall be necessary to entitle the Option to the tax treatment afforded under Section 422 of the Code, and (ii) all other provisions of this Plan and the agreement relating to such Option shall remain in full force and effect. If any agreement covering an Option designated by the Board Committee to be an Incentive Stock Option under this Plan shall not explicitly include any terms required to entitle such Incentive Stock Option to the tax treatment afforded by Section 422 of the Code, all such terms shall be deemed implicit in the designation of such Option and the Option shall be deemed to have been granted subject to all such terms.

6.    Stock Appreciation Rights

6.1    Grants. Stock Appreciation Rights may be granted, from time to time, to such Participants as may be selected by the Board Committee. SARs may be granted at the discretion of the Board Committee either (i) in connection with an Option or (ii) independent of an Option. The price from which appreciation shall be computed shall be established by the Board Committee at the Grant Date;provided, however, that such price shall not be less than one-hundred percent (100%) of the Fair Market Value of the number of shares of Common Stock subject of the grant on the Grant Date. In the event the SAR is granted in connection with an Option, the fixed price from which appreciation shall be computed shall be the Option Price. Each grant of a SAR shall be evidenced by a Stock Appreciation Rights Agreement between the Participant and the Company which shall specify the type of SAR granted, the number of SARs, the conditions upon which the SARs vest and such other terms and conditions as the Board Committee shall determine.

6.2    Exercise of SARs. SARs may be exercised upon such terms and conditions as the Board Committee shall determine;provided, however, that SARs granted in

    -6-

connection with Options may be exercised only to the extent the related Options are then exercisable. Notwithstanding Section 3.1 hereof, upon exercise of a SAR granted in connection with an Option as to all or some of the shares subject of such Award, the related Option shall be automatically canceled to the extent of the number of shares subject of the exercise, and such shares shall no longer be available for grant hereunder. Conversely, if the related Option is exercised as to some or all of the shares subject of such Award, the related SAR shall automatically be canceled to the extent of the number of shares of the exercise, and such shares shall no longer be available for grant hereunder.

6.3    Payment of Exercise. Upon exercise of a SAR, the holder shall be paid in cash the excess of the Fair Market Value of the number of shares subject of the exercise over the fixed price, which in the case of a SAR granted in connection with an Option shall be the Option Price for such, shares.

6.4    Rights of Shareholders. Participants shall not have any of the rights of a shareholder with respect to any Options granted in connection with a SAR until shares have been issued upon the proper exercise of an Option.

6.5    Transferability of SARs. SARs granted under the Plan may not be sold, transferred, pledged, assigned, hypothecated or otherwise disposed of except by will or by the laws of descent and distribution. All SARs granted to a Participant under the Plan shall be exercisable during the lifetime of such Participant only by such Participant, such Participant’s agent, guardian, or attorney-in-fact.

6.6    Termination of Employment/Directorship. If a Participant ceases to be an employee of either the Company or of any of its affiliates, any SARs granted hereunder to such Participant as an employee shall be exercisable in accordance with the Stock Appreciation Rights Agreement between the Participant and the Company. If a Participant ceases to be an Outside Director, any SARs granted hereunder to such Participant as an Outside Director shall be exercisable in accordance with the Stock Appreciation Rights Agreement between the Participant and the Company.

7.    Performance Awards

7.1    Awards. Awards of shares of Common Stock may be made, from time to time, to such Participants as may be selected by the Board Committee. Such shares shall be delivered to the Participant only upon (i) achievement of such corporate, sector, division, individual or any other objectives or criteria during the Performance Period as shall be established by the Board Committee and (ii) the expiration of the Restriction Period. Except as provided in the Performance Share Award Agreement between the Participant and the Company, shares subject to such Awards under this Section 7.1 shall be released to the Participant only after the expiration of the relevant Restriction Period. Each Award under this Section 7.1 shall be evidenced by a Performance Share Award Agreement between the Participant and the Company which shall specify the applicable performance objectives, the Performance Period, the Restriction Period, any forfeiture conditions and such other terms and conditions as the Board Committee shall determine.

7.2    Stock Certificates. Upon an Award of shares of Common Stock under Section 7.1 of the Plan, the Company shall issue a certificate registered in the name of the Participant bearing the following legend and any other legend required by any federal or state securities laws or by the Pennsylvania Business Corporation Law:

        “The sale or other transfer of the shares of stock represented by this certificate is subject to certain

    -7-

restrictions set forth in the Federated Hermes, Inc. Stock Incentive Plan, administrative rules adopted pursuant to such Plan and a Performance Share Award Agreement between the registered owner and Federated Hermes, Inc. A copy of the Plan, such rules and such Agreement may be obtained from the Secretary of Federated Hermes, Inc.”

Unless otherwise provided in the Performance Share Award Agreement between the Participant and the Company, such certificates shall be retained by the Company until the expiration of the Restriction Period. Upon the expiration of the Restriction Period, the Company shall (i) cause the removal of the legend from the certificates for such shares as to which a Participant is entitled in accordance with the Performance Share Award Agreement between the Participant and the Company and (ii) release such shares to the custody of the Participant.

7.3    Rights as Shareholders. Subject to the provisions of the Performance Share Award Agreement between the Participant and the Company, during the Performance Period, dividends and other distributions paid with respect to all shares awarded thereto under Section 7.1 hereof shall, in the discretion of the Board Committee, either be paid to Participants or held in escrow by the Company and paid to Participants only at such time and to such extent as the related Performance Award is earned. During the period between the completion of the Performance Period and the expiration of the Restriction Period, Participants shall be entitled to receive dividends and other distributions only as to the number of shares determined in accordance with the Performance Share Award Agreement between the Participant and the Company.

7.4    Transferability of Shares. Certificates evidencing the shares of Common Stock awarded under the Plan shall not be sold, exchanged, assigned, transferred, pledged, hypothecated or otherwise disposed of until the expiration of the Restriction Period.

7.5    Termination of Employment/Directorship. If a Participant ceases to be an employee of either the Company or of any of its affiliates, the number of shares, if any, to which the Participant shall be entitled pursuant to any Award granted to such Participant as an employee under this Section 7 shall be determined in accordance with the Performance Share Award Agreement between the Participant and the Company. If a Participant ceases to be an Outside Director, the number of shares, if any, to which the Participant shall be entitled pursuant to any Award granted to such Participant as an Outside Director under this Section 7 shall be determined in accordance with the Performance Share Award Agreement between the Participant and the Company.

7.6    Transfer of Employment. If a Participant transfers employment from one business unit of the Company or any of its affiliates to another business unit during a Performance Period, such Participant shall be eligible to receive such number of shares of Common Stock as the Board Committee may determine based upon such factors as the Board Committee in its sole discretion may deem appropriate.

8.    Restricted Stock Awards

8.1    Awards. Awards of shares of Common Stock subject to such restrictions as to vesting and otherwise as the Board Committee shall determine, may be made, from time to time, to Participants as may be selected by the Board Committee. The Board

    -8-

Committee may in its sole discretion at the time of the Award or at any time thereafter provide for the early vesting of such Award prior to the expiration of the Restriction Period. Each Award under this Section 8.1 shall be evidenced by a Restricted Stock Award Agreement between the Participant and the Company which shall specify the vesting schedule, any rights of acceleration, any forfeiture conditions, and such other terms and conditions as the Board Committee shall determine.

8.2    Stock Certificates. Upon an Award of shares of Common Stock under Section 8.1 of the Plan, the Company may issue a certificate registered in the name of the Participant bearing the following legend and any other legend required by any federal or state securities laws or by the Pennsylvania Business Corporation Law.

        “The sale or other transfer of the shares of stock represented by this certificate is subject to certain restrictions set forth in the Federated Hermes, Inc. Stock Incentive Plan, administrative rules adopted pursuant to such Plan and a Restricted Stock Award Agreement between the registered owner and Federated Hermes, Inc. A copy of the Plan, such rules and such agreement may be obtained from the Secretary of Federated Hermes, Inc.”

Unless otherwise provided in the Restricted Stock Award Agreement between the Participant and the Company, such certificates shall be retained in custody by the Company until the expiration of the Restriction Period. Upon the expiration of the Restriction Period, the Company shall (i) cause the removal of the legend from the certificates for such shares as to which a Participant is entitled in accordance with the Restricted Stock Award Agreement between the Participant and the Company and (ii) release such shares to the custody of the Participant.

8.3    Rights as Shareholders. During the Restriction Period, Participants shall be entitled to receive dividends and other distributions paid with respect to all shares awarded thereto under Section 8.1 hereof.

8.4    Transferability of Shares. Certificates evidencing the shares of Common Stock awarded under the Plan shall not be sold, exchanged, assigned, transferred, pledged, hypothecated or otherwise disposed of until the expiration of the Restriction Period.

8.5    Termination of Employment/Directorship. If a Participant ceases to be an employee of either the Company or of any of its affiliates, the number of shares, if any, to which the Participant shall be entitled pursuant to any Award granted to such Participant as an employee under this Section 8 shall be determined in accordance with the Restricted Stock Award Agreement between the Participant and the Company. If a Participant ceases to be an Outside Director, the number of shares, if any, to which the Participant shall be entitled pursuant to any Award granted to such Participant as an Outside Director under this Section 8 shall be determined in accordance with the Restricted Stock Award Agreement between the Participant and the Company. All remaining shares as to which restrictions apply at the date of termination of employment shall be forfeited subject to such exceptions, if any, authorized by the Board Committee.

9.    Other Stock-Based Awards

    Awards of shares of Common Stock and other awards that are valued in whole or in part by reference to, or are otherwise based on, Common Stock, may be made, from

    -9-

time to time, to Participants as may be selected by the Board Committee. Such Awards may be made alone or in addition to or in connection with any other Award hereunder. The Board Committee may in its sole discretion determine the terms and conditions, if any, of any such Award. Each such Award, other than an Award of shares of Common Stock without any terms or conditions such as an Award of immediately-vested shares of Common Stock, shall be evidenced by an agreement between the Participant and the Company which shall specify the number of shares of Common Stock subject of the Award, any consideration therefor, any vesting or performance requirements and such other terms and conditions as the Board Committee shall determine.

10.    Reserved

11.    Amendment or Termination of Plan

    The Board may amend, suspend or terminate the Plan or any part thereof from time to time, provided that no change may be made which would impair the rights of a Participant to whom shares of Common Stock have theretofore been awarded without the consent of said Participant.

12.    Miscellaneous

12.1    Rights of Employees. Nothing in the Plan shall interfere with or limit in any way the right of the Company or any affiliate to terminate any Participant’s employment at any time, nor confer upon any Participant any right to continued employment with the Company or any affiliate.

12.2    Tax Withholding. The Company shall have the authority to withhold, or to require a Participant to remit to the Company, prior to issuance or delivery of any shares or cash hereunder, an amount sufficient to satisfy federal, state and a local tax withholding requirements associated with any Award. In addition, the Company may, in its sole discretion, permit a Participant to satisfy any tax withholding requirements, in whole or in part, by (i) delivering to the Company shares of Common Stock held by such Participant having a Fair Market Value equal to the amount of the tax; (ii) directing the Company to retain shares of Common stock otherwise issuable to the Participant under the Plan; or (iii) any other method approved by the Board Committee.

12.3    Status of Awards. Awards hereunder shall not be deemed compensation for purposes of computing benefits under any retirement plan of the Company or affiliate and shall not affect any benefits under any other benefit plan now or hereafter in effect under which the availability or amount of benefits is related to the level of compensation.

12.4    Waiver of Restrictions. The Board Committee may, in its sole discretion, based on such factors as the Board Committee may deem appropriate, waive in whole or in part, any remaining restrictions or vesting requirements in connection with any Award hereunder.

12.5    Adjustment of Awards. Subject to Section 11, the Board Committee shall be authorized to make adjustments in performance award criteria or in the terms and conditions of other Awards in recognition of unusual or nonrecurring events affecting the Company or its financial statements or changes in applicable laws, regulations or accounting principles; provided however, that no such adjustment shall impair the rights of any Participant without such Participant’s consent. The Board Committee may also make Awards hereunder in replacement of, or as alternatives to, Awards previously granted to Participants, including without limitation, previously granted Options having

    -10-

higher Option Prices and grants or rights under any other plan of the Company or of any acquired entity. The Board Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry it into effect. In the event the Company shall assume outstanding employee benefit awards or the right or obligation to make future such awards in connection with the acquisition of another corporation or business entity, the Board Committee may, in its discretion, make such adjustments in the terms of Awards under the Plan as it shall deem appropriate.

12.6    Consideration for Awards. Except as otherwise required in any applicable agreement or by the terms of the Plan, Participants under the Plan shall not be required to make any payment or provide consideration for an Award other than the rendering of services.

12.7    Special Forfeiture Rule. Notwithstanding any other provision of this Plan to the contrary, the Board Committee shall be authorized to impose additional forfeiture restrictions with respect to Awards granted under the Plan, including, without limitation, provisions for forfeiture in the event the Participant shall engage in competition with the Company or in any other circumstance the Board Committee may determine.

12.8    Effective Date and Term of Plan. The Plan shall be effective as of the date it is approved by the Board, subject to the approval thereof by the shareholders of the Company. Unless terminated under the provisions of Section 11 hereof, the Plan shall continue in effect indefinitely; provided, however, that no Incentive Stock Options shall be granted after the tenth anniversary of the effective date of the Plan.

12.9    Compliance with Section 162(m). To the extent available or applicable, compensation payable pursuant to Awards (other than Awards of Restricted Stock which vest based solely on continued employment) to “covered employees” as such term is defined in any relevant regulations promulgated under Section 162(m) of the Code, or any successor provision (“Section 162(m)”), can qualify as “performance-based compensation” as defined in any relevant regulations under Section 162(m) or any successor provision. If any provision of this Plan or an Award is later found to make compensation intended to be performance-based compensation ineligible for any such available or applicable treatment, the provision shall be deemed null and void, unless otherwise determined by a committee of the Board comprised solely of “outside directors” as such term is defined under prior Regulation 1.162-27(e)(3) under Section 162(m) or any successor provision.

12.10    Transferability of Awards. Notwithstanding anything to the contrary contained in this Plan, any Award may be transferred to a “family member” as defined in and pursuant to the terms and conditions set forth in Section A.1.a.5 of the General Instructions to Form S-8 promulgated under the Securities Act of 1933, as amended, as such provision may be amended from time to time, on such terms and conditions as may be determined by the Board Committee.

12.11    Compliance with Laws. Notwithstanding anything to the contrary contained in this Plan or in any Award agreement, each Award shall be subject to the requirement, if at any time the Board Committee shall determine, in its sole discretion, that such requirement shall apply, that the listing, registration or qualification of any Award under this Plan, or of the Common Stock, or property or other forms of payment issuable pursuant to any Award under this Plan, on any stock exchange or other market quotation system or under any federal or state law, or the consent or approval of any government regulatory body, is necessary or desirable as a condition of, or in connection

    -11-

with, the granting of such Award or the exercise or settlement thereof, such Award shall not be granted, exercised or settled, in whole or in part, until such listing, registration, qualification, consent or approval shall have been effected, obtained and maintained free of any conditions not acceptable to the Board Committee. Notwithstanding anything to the contrary contained in this Plan or in any Award agreement, no shares of Common Stock or property or other forms of payment shall be issued under this Plan with respect to any Award unless the Board Committee shall be satisfied that such issuance will be in compliance with applicable laws and any applicable rules of any stock exchange or other market quotation system on which such shares of Common Stock are listed. If the Board Committee determines that the exercise of any Option or Stock Appreciation Right would fail to comply with any applicable law or any applicable rules of any stock exchange or other market quotation system on which the shares of Common Stock are listed, the Participant holding such Option or Stock Appreciation Right shall have no right to exercise such Option or Stock Appreciation Right until such time as the Board Committee shall have determined that such exercise will not violate any applicable law or any such applicable rule, provided that such Option or Stock Appreciation Right shall not have expired prior to such time.

12.12    Section 409A. Notwithstanding any provision of the Plan or an Award agreement to the contrary, if any Award or benefit provided under this Plan is subject to the provisions of Section 409A of the Code, the provisions of the Plan and any applicable Award agreement shall be administered, interpreted and construed in a manner necessary to comply with Section 409A of the Code or an exception thereto (or disregarded to the extent such provision cannot be so administered, interpreted or construed). In no event shall any member of the Board, the Board Committee or the Company (or its employees, officers or directors) have any liability to any Participant (or any other person) due to the failure of an Award to satisfy the requirements of Section 409A of the Code.

12.13    Incentive Compensation Recovery.An Award granted under the Plan will be subject to the Company’s Incentive Compensation Recovery Policy, and the provisions of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Section 10D to the Exchange Act, Rule 10D-1 under the Exchange Act, and Section 303A.14 of the NYSE Listed Company Manual, as well as any similar policy of the Company, law, regulation or listing standard regarding incentive compensation recovery, in each case as in effect from time to time and to the extent such policy, law, regulation or listing standard applies to the Award in accordance with its terms.

Share numbers adjusted for stock splits as of April 19, 2004.

Shares reserved for issuance reflect April 2006, April 2011, April 2018 and January 2022 increase.

    -12-

EX-10.3

Exhibit 10.3

FEDERATED HERMES, INC.

Stock Incentive Plan

2023 RESTRICTED STOCK AWARD AGREEMENT

        THIS AGREEMENT, is made and effective as of the 17th day of November,2023by and between Federated Hermes, Inc. (including its successors and assigns, the "Company"), a Pennsylvania corporation having its principal place of business in Pittsburgh, Pennsylvania

AND

«Display_Name», an employee of the Company (the "Participant"). Capitalized terms used in this Agreement shall, unless specifically defined herein, have the respective meanings given to such terms in the Federated Hermes, Inc. Stock Incentive Plan (the "Stock Incentive Plan").

    WITNESSETH THAT:

        WHEREAS, in order to provide incentives to its employees, the Company has adopted the Stock Incentive Plan under which, among other things, Awards of Class B Common Stock of the Company, no par value (the "Class B Common Stock"), can be made to salaried employees; and

        WHEREAS, the Company desires to have Participant continue in its employ and to provide Participant with an incentive to put forth maximum effort for the success of the business; and

        WHEREAS, Participant holds a position of trust and confidence within Federated (as hereafter defined), and Federated has entrusted and will continue to entrust Participant with its trade secrets and confidential, proprietary business information and knowledge about and relationships with Federated employees and Federated Clients (as hereafter defined). Because such information and relationships could be used by Federated’s competitors to gain an unfair advantage against Federated, this Agreement and the Confidentiality Agreement (as hereafter defined) contain noncompetition provisions to protect Federated’s confidential information, employee and client relationships, and goodwill; and

        WHEREAS, subject to the terms and conditions hereafter set forth, by action of the Board Committee, the Company hereby grants an Award of Class B Common Stock to Participant.

        NOW, THEREFORE, in consideration of the mutual covenants and representations herein contained, and intending to be legally bound, the parties hereto agree as follows:

2023 RSA E/NONS

ARTICLE I

Definitions

        As used herein:

        1.1    "Federated" shall mean Federated Hermes, Inc. or any corporate parent, affiliate, or direct or indirect subsidiary thereof, or any successor to Federated, for which Participant performs services, regardless of whether this Agreement has been expressly assigned to such corporate parent, affiliate, or direct or indirect subsidiary, or successor.

        1.2    "Federated Client" shall mean each client or customer of Federated which Federated or any of its employees handled, serviced, or solicited at any time during the Participant’s employment with Federated or, where such employment has been terminated or has ceased, during the two (2) year period immediately preceding such termination or cessation.

        1.3    "Federated Services" shall mean any services the same as, similar to, or in competition with the type of services offered by Federated at any time during the Participant’s employment with Federated or, where such employment has been terminated or has ceased, during the two (2) year period immediately preceding such termination or cessation, including, without limitation, offering mutual funds for sale, providing investment advice, providing administrative or distribution services to mutual funds and/or providing retirement plan services, mutual fund clearing services, or mutual fund account administration services; provided, however, that, in the discretion of the Company exercised by notice to the Participant, Federated Services may not include business lines abandoned by Federated.

        1.4    "Restriction Period" shall mean the period beginning on the date of this Agreement and ending on (i) November 16, 2028 with respect to the Shares that would be Vested Shares as of November 16, 2028 pursuant to Section 3.1 and November 17, 2033 with respect to the remaining Shares pursuant to Section 3.1, (ii) in the event of Participant’s Disability, November 16, 2028 with respect to the Shares that would be Vested Shares pursuant to Section 3.2(a) and November 17, 2033 with respect to all Shares pursuant to Section 3.2(b), and (iii) in the event of Participant’s death, the date of Participant’s death with respect to the Shares that are then Vested Shares if such event shall occur prior to November 16, 2028 and with respect to all Shares if Participant’s death shall occur on or after November 16, 2028.

        1.5    "Unvested Shares" shall mean all Shares other than Vested Shares.

        1.6    "Vested Shares" means Shares that have vested in accordance with Section 3.1 or Section 3.2.

ARTICLE II

Grant of Restricted Stock

        2.1    Subject to the conditions set forth in Section 2.2 hereof and the other terms and conditions of this Agreement, the Company hereby grants, effective November 17, 2023, to Participant an Award (the "2023 Award") to purchase «Award_in_Words» («Award_in_Numbers») shares (the "Shares") of Class B Common Stock at a purchase price of $3.00 per share (the "Purchase Price"). At the discretion of the Company, certificates for the Shares may not be issued. In lieu of certificates, the Company will establish a

-2-

2023 RSA E/NONS

book entry account for the Shares in the name of the Participant with the Company's transfer agent and registrar for the Class B Common Stock.

        2.2    Notwithstanding Section 2.1 or any other provision of this Agreement to the contrary, this Agreement shall become effective only if Participant executes and delivers to the Company two counterparts of this Agreement along with the Purchase Price for the Shares by November 10, 2023, time being of the essence.

ARTICLE III

Terms of the Award

        3.1    During the continuation of Participant's employment by Federated, a portion of the 2023 Award shall vest in Participant in accordance with the schedule of vesting as follows:

Date	Portion Vested	Cumulative Percentage
November 18, 2024	5%	5%
November 18, 2025	5%	10%
November 18, 2026	5%	15%
November 18, 2027	5%	20%
November 16, 2028	30%	50% (restrictions lapse)
November 16, 2029	5%	55%
November 18, 2030	5%	60%
November 18, 2031	5%	65%
November 18, 2032	5%	70%
November 17, 2033	30%	100% (restrictions lapse)

            3.2    In the event of the Disability or death of Participant after the effective date of this Agreement:

        (a) Prior to November 16, 2028, any portion of the Shares that are not then Vested Shares as of the date of such Disability or death shall be forfeited and sold back to the Company in accordance with Section 3.3 below. The Restriction Period on said Vested Shares shall end on the date of Participant's death, or in the case of Participant’s Disability, the Restriction Period shall end on November 16, 2028.

        (b) On or after November 16, 2028, any portion of the Shares that are not then Vested Shares as of the date of such Disability or death shall become Vested Shares upon such Disability or death. The Restriction Period on said Vested Shares shall end on the date of Participant's death, or in the case of Participant’s Disability, the Restriction Period shall end on November 17, 2033.

        (c) For purposes of this Agreement, "Disability" shall be deemed to have occurred as of the first day following Participant's termination of employment by Federated as a result of a mental or physical condition that prevents Participant from engaging in the principal duties of Participant's employment with Federated as determined in accordance with the Rules and Regulations Establishing Formal Review Procedures under the Stock Incentive Plan.

-3-

2023 RSA E/NONS

        3.3    Upon the termination or cessation of Participant's employment with Federated for any reason whatsoever, including an involuntary termination without cause, Participant shall immediately sell to the Company, and the Company shall purchase from Participant, all Shares that are Unvested Shares as of the date of termination or cessation of employment, in each case at the Purchase Price per Share.

        3.4    Participant acknowledges that Participant has previously entered into or simultaneously herewith is entering into an "Agreement Regarding Confidential Information" with Federated (the "Confidentiality Agreement"). Participant acknowledges that Federated would not enter into this Agreement without the Confidentiality Agreement. In the event that, during the course of Participant's employment with Federated, Participant (i) engages in "competition" with Federated as defined but excluding the temporal limitations contained in Section 3.6 of this Agreement or (ii)  breaches any provision of the Confidentiality Agreement, then Participant shall immediately sell to the Company and the Company shall purchase from Participant, at the Purchase Price per Share, all Shares, whether Vested Shares or Unvested Shares, then owned by the Participant. If Participant chooses to engage in competition with Federated as defined in this section or chooses to breach the Confidentiality Agreement, Participant will knowingly be forfeiting Participant’s 2023 Award, whether Vested Shares or Unvested Shares, granted under this Agreement and will have considered the loss of such a potential benefit in Participant's decision to engage in competition with Federated during the course of Participant’s employment or to breach the Confidentiality Agreement. In the event of a breach of the Confidentiality Agreement, Federated also shall have the rights and remedies provided under that agreement.

        3.5    Participant acknowledges that in the event that Participant engages in competition with Federated as defined and within the temporal limitations contained in Section 3.6 of this Agreement, then Federated shall be entitled, in addition to any other remedies and damages available, to an injunction to restrain such breach or threatened breach thereof by Participant, Participant’s partners, agents, servants, employers, and employees, and any other persons acting for or with Participant. Participant further agrees that any corporate parent, direct or indirect subsidiary, affiliate, or successor of Federated for which Participant performs services may enforce this Agreement without need for any assignment of this Agreement.

        3.6    Participant shall be deemed to have engaged in "competition" with Federated in the event that, during the period of Participant's employment by Federated and thereafter until twelve (12) months after the last date for which compensation (including any pay beyond the last day actively worked, if any) is received by Participant from Federated, Participant, directly or indirectly, in any capacity whatsoever (either as an employee, officer, director, stockholder, proprietor, partner, joint venturer, consultant or otherwise for any person other than Federated) (i) solicits, contacts, calls upon, communicates with, or attempts to communicate with any Federated Client for the purpose of providing Federated Services to such Federated Client or (ii) sells any Federated Services to any Federated Client. Notwithstanding the foregoing, Participant's ownership of not more than five percent (5%) of the total shares of all classes of stock of any publicly-held corporation or other business organization shall not constitute Participant's competition with the Company or any Subsidiary hereunder. Further, for the avoidance of doubt, nothing in this Agreement or the Confidentiality Agreement prevents reporting (or receiving financial awards from the government resulting from reporting) possible violations of federal law or regulation to any governmental agency or entity, or making other disclosures, protected under the whistleblower provisions of federal law or regulation, including, without limitation, good faith disclosure on a confidential basis of Confidential Information (as defined in the Confidentiality Agreement) constituting “Trade Secrets” as defined in 18 U.S.C. § 1839, and so long as such disclosures are consistent with 18 U.S.C. § 1833.

-4-

2023 RSA E/NONS

        3.7    Participant hereby acknowledges and agrees that:

        (a)    This Agreement and the Confidentiality Agreement are necessary for the protection of the legitimate business interests, trade secrets, proprietary information, and goodwill of Federated;

        (b)    The restrictions contained in this Agreement and the Confidentiality Agreement regarding scope, length of term and types of activities restricted are reasonable;

        (c)    Participant has received adequate and valuable consideration for entering into this Agreement and the Confidentiality Agreement;

        (d)    Participant’s covenants in Sections 3.4 to 3.7 of this Agreement and those in the Confidentiality Agreement shall be construed as independent of any other provisions and the existence of any claim or cause of action Participant may have against Federated, whether predicated on this Agreement or not, shall not constitute a defense to the enforcement by Federated of these covenants;

        (e)    Neither this Agreement nor the Confidentiality Agreement prevents Participant from earning a livelihood after termination or cessation of employment with Federated; and

        (f)    Participant has an obligation to notify prospective employers of the covenants in Sections 3.4 to 3.7 of this Agreement and of those in the Confidentiality Agreement.

ARTICLE IV

Withholding Taxes; Section 83(b) Election

        4.1    The Company shall have the authority to withhold, or to require a Participant to remit to the Company, prior to issuance or delivery of any Shares or the removal of any stop order or transfer restrictions on the Shares or any restrictive legends on the Certificates representing the Shares hereunder, an amount in cash sufficient to satisfy minimum federal, state and local tax withholding requirements associated with the 2023 Award (each a "Withholding Obligation"). Notwithstanding any other provision of this Agreement to the contrary, including but not limited to Section 5.1 hereof, in the event of any minimum federal, state or local tax Withholding Obligation (other than pursuant to an election under Section 83(b) as described in Section 4.2 below), the Company has the right to permit the Participant to sell, or to have sold on Participant's behalf, Shares, to a third party, in an amount and under such terms and conditions as the Company shall establish in its sole discretion. Additionally, the Company, in its sole discretion, shall have the right to withhold from the Participant Shares with a Fair Market Value (as defined in the Stock Incentive Plan) equal to the Company's minimum federal, state and local tax withholding requirements associated with the 2023 Award. For this purpose, Fair Market Value shall be determined as of the day that the Withholding Obligation arises.

        4.2    The Participant acknowledges that (a) the Participant has been informed of the availability of making an election in accordance with Section 83(b) of the Code; (b) that such election must be filed with the Internal Revenue Service within thirty (30) days of the date of grant of this 2023 Award; and (c) that the Participant is solely responsible for making such election. Participants who do not make the election under Section 83(b) acknowledge that dividends on the Unvested Shares will be treated as compensation and subject to tax withholding in accordance with the Company's practices and policies.

-5-

2023 RSA E/NONS

ARTICLE V

Restrictions on Transfer

        5.1    Participant hereby acknowledges that none of the Shares, whether Vested Shares or Unvested Shares, may be sold, exchanged, assigned, transferred, pledged, hypothecated, gifted or otherwise disposed of (collectively, "disposed of") until the expiration of the Restriction Period applicable to those Shares and the payment of any minimum withholding tax. Participant further acknowledges that there may be a period of administrative delay between the date on which the Restriction Period expires and the date on which the Shares may be disposed of by the Participant. The Board Committee may, in its sole discretion, permit the Shares to be transferred to a "family member" as defined in and pursuant to the terms and conditions set forth in Section A.1.a.5 of the General Instructions to Form S-8 promulgated under the Securities Act of 1933, as amended, as such provision may be amended from time to time under terms and conditions as may be determined by the Human Resources Department.

        5.2    Participant shall not dispose of the Shares acquired, or any portion thereof, at any time, unless Participant shall comply with the Securities Act of 1933, as amended, and the regulations of the Securities and Exchange Commission thereunder, any other applicable securities law, and the terms of this Agreement and the Stock Incentive Plan. Participant further agrees that the Company may direct its transfer agent to refuse to register the transfer of any Shares underlying the 2023 Award which, in the opinion of the Company's counsel, constitutes a violation of any applicable securities laws then in effect or the terms of this Agreement.

        5.3    Any certificate representing the Shares issued during the Restriction Period shall, unless the Board Committee determines otherwise, bear a legend substantially as follows:

        "The sale or other transfer of the shares of stock represented by this certificate is subject to certain restrictions set forth in the Federated Hermes, Inc. Stock Incentive Plan, administrative rules adopted pursuant to such Plan and a Restricted Stock Award Agreement between the registered owner and Federated Hermes, Inc. A copy of the Plan, such rules and such agreement may be obtained from the Secretary of Federated Hermes, Inc."

The Participant further acknowledges and understands that the certificates representing the Shares issued hereunder may bear such additional legend or legends as the Company deems appropriate in order to assure compliance with applicable securities laws.

Any book entry for the Shares will be restricted and subject to stop orders during the Restriction Period.

        5.4    If certificates representing the Shares underlying the 2023 Award are issued during the Restriction Period, they shall be retained in custody by the Company. Within a reasonable time after Vested Shares may be disposed of by the Participant in accordance with Section 5.1 hereof, all restrictions or stop orders applicable to the Shares shall be removed and, in the event that certificates have been issued, legends shall be removed upon the Participant's written request to the transfer agent.

-6-

2023 RSA E/NONS

ARTICLE VI

Miscellaneous

        6.1    In the event of any change or changes in the outstanding Class B Common Stock of the Company by reason of any stock dividend, recapitalization, reorganization, merger, consolidation, splitup, combination or exchange of shares, or any similar change affecting the Class B Common Stock, any of which takes effect after the effective date of this Agreement, then in any such event the number and kind of shares subject to the 2023 Award, the Purchase Price and any other similar provisions, shall be equitably adjusted consistent with such change in such manner as the Board Committee, in its discretion, may deem appropriate to prevent dilution or enlargement of the rights granted to Participant hereunder. Any adjustment so made shall be final and binding upon Participant and all other interested parties.

        6.2    Whenever the word "Participant" is used in any provision of this Agreement under circumstances where the provision should logically be construed to apply to the executors, the administrators, or the person or persons to whom the 2023 Award may be transferred by will or by the laws of descent and distribution, the word "Participant" shall be deemed to include such person or persons.

        6.3    After the effective date of this Agreement: (a) the Participant shall be entitled to vote the Shares, whether Vested Shares or Unvested Shares, on all matters presented to the holders of Class B Common Stock of the Company and (b) the Shares, whether Vested Shares or Unvested Shares, shall be deemed to be issued and outstanding for all purposes, including, without limitation, the payment of dividends and distributions and any determination of any stockholder's or stockholders' percentage equity interest in the Company.

        6.4    Nothing in this Agreement or the Stock Incentive Plan shall confer upon Participant any right to continue in the employ of the Company or shall affect the right of the Company to terminate the employment of Participant with or without cause.

        6.5    The 2023 Award received by Participant pursuant to this Agreement shall not be considered compensation for purposes of any pension or retirement plan, insurance plan or any other employee benefit plan of the Company unless otherwise provided in such plan.

        6.6    Every notice or other communication relating to this Agreement shall be in writing and shall be mailed or delivered to the party for whom it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided; provided, however, that unless and until some other address be so designated, all notices or communications by Participant to the Company shall be mailed or delivered to the Secretary of the Company at its office at 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222, and all notices or communications by the Company to Participant may be given to Participant personally or may be mailed to the Participant.

        6.7    This Agreement and its validity, interpretation, performance and enforcement shall be governed by the laws of the Commonwealth of Pennsylvania.

        6.8    The 2023 Award shall be subject to the terms and conditions set forth in the Stock Incentive Plan, and in the event of any conflict between the provisions of this Agreement and those of the Stock Incentive Plan, the Stock Incentive Plan provisions shall govern.

        6.9    This Agreement will be binding upon and inure to the benefit of Participant's heirs and representatives and the assigns and successors of the Company and may

-7-

2023 RSA E/NONS

be assigned by the Company to any third party, but neither this Agreement nor any rights hereunder will be assignable or otherwise subject to hypothecation by Participant.

        6.10    Except as stated hereafter, this Agreement represents the entire agreement of the parties with respect to the subject matter hereof. To the extent Participant has entered into an agreement with Federated that contains provisions pertaining to non-competition or non-solicitation of clients, non-solicitation or non-hiring of employees and/or non-disclosure or non-use of confidential information, including but not limited to the Confidentiality Agreement, the terms of this Agreement shall not supersede, but shall be in addition to, any other such agreement. This Agreement may be amended or terminated at any time by written agreement of the parties hereto. Notwithstanding the foregoing or any provision of this Agreement to the contrary, the Company may at any time (without the consent of the Participant) modify, amend or terminate any or all of the provisions of this Agreement to the extent necessary to conform the provisions of this Agreement with Section 409A of the Code and the regulations promulgated thereunder ("Section 409A") or an exception thereto.

        6.11    Whenever possible, each provision in this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement will be held to be prohibited by or invalid under applicable law, then (a) such provisions will be deemed amended to accomplish the objectives of the provisions as originally written to the fullest extent permitted by law and (b) all other provisions of this Agreement will remain in full force and effect.

        6.12    Any dispute or litigation arising out of or relating to this Agreement will be resolved in the courts of Allegheny County or the Western District of Pennsylvania and Participant hereby consents to jurisdiction in Pennsylvania.

        6.13    No rule of strict construction will be implied against the Company, or any other person in the interpretation of any of the terms of this Agreement or any rule or procedure established by the Board Committee.

        6.14    Participant agrees, upon demand of the Company, to do all acts and execute, deliver and perform all additional documents, instruments and agreements that may be required by the Company to implement the provisions and purposes of this Agreement.

        6.15    The Participant hereby grants to the Company an irrevocable power of attorney and declares that the Company shall be the attorney-in-fact to act for and on behalf of the Participant, to act in the Participant's name, place and stead, in connection with (i) any and all transfers of Shares, whether Vested Shares or Unvested Shares, to the Company pursuant to this Agreement, including pursuant to Sections 3.3, 3.4 and 4.1 hereof, or (ii) any sale of Vested Shares to a third party pursuant to Section 4.1 hereof.

        6.16    The 2023 Award is intended to be excepted from coverage under Section 409A and shall be interpreted and construed accordingly. The Company may, in its sole discretion and without the Participant's consent, modify or amend the terms of this 2023 Award, impose conditions on the timing and effectiveness of the issuance of the Shares, or take any other action it deems necessary or advisable to cause this 2023 Award to be excepted from Section 409A (or to comply therewith to the extent that Company determines it is not excepted). Notwithstanding the foregoing, Participant recognizes and acknowledges that Section 409A may impose upon the Participant certain taxes or interest charges for which the Participant is and shall remain solely responsible.

    6.17 Incentive Compensation Recovery.Shares issuedpursuant to this Award Agreement will be subject to the terms and conditions of the Company’s Incentive Compensation

-8-

2023 RSA E/NONS

Recovery Policy, Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Section 10D and Rule 10D-1 under the Securities Exchange Act of 1934, as amended, and Section 303A.14 of the New York Stock Exchange (NYSE) Listed Company Manual, as well as any similar, modified or subsequent policy of the Company, law, regulation or listing standard regarding the potential recovery or “claw back” of incentive compensation, in each case as in effect from time to time and to the extent such policy, law, regulation or listing standard applies to this Award Agreement and the Shares issued pursuant hereto in accordance with its terms.

THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

-9-

2023 RSA E/NONS

IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the day and year first above written.

                        FEDERATED HERMES, INC.

                        By ___________________________

                         Chief Financial Officer

                        PARTICIPANT

                        ______________________________

                        Print Name: ____________________

-10-

2023 RSA E/NONS

EX-10.4

Exhibit 10.4

UK SUB PLAN TO FEDERATED HERMES, INC. STOCK INCENTIVE PLAN

(Adopted as of October 25, 2018)

(Amended as of January 27, 2022)

(Amended as of October 26, 2023)

Neither this document, nor any stock award agreement connected with it, is an approved prospectus for the purposes of section 85(1) of the Financial Services and Markets Act 2000 (“FSMA”) and no offer of transferable securities to the public (for the purposes of section 102B of FSMA) is being made in connection with the UK Sub-Plan to the Federated Hermes, Inc. Stock Incentive Plan (the “Sub-Plan”). The Sub-Plan is exclusively available to bona fide UK employees and former employees of Federated Hermes, Inc. or any of its subsidiaries.

UK SUB-PLAN TO THE

FEDERATED HERMES, INC.

STOCK INCENTIVE PLAN

Additional terms and conditions for Awards received by Participants tax resident in the UK, pursuant to Section 4.1(c) of the Federated Hermes, Inc. Stock Incentive Plan as amended (the “Federated Plan”).

1.    The purpose of this Sub-Plan is to provide incentives for UK Participants (as defined below) through the grant of Awards over shares of Class B Common Stock of Federated Hermes, Inc. (the “Company”).

2.    This Sub-Plan shall apply to all UK Participants. In the event that a Participant becomes a UK Participant subsequent to the grant of an Award under the Plan, then such Award shall immediately and automatically be amended in a manner consistent with this Sub-Plan unless otherwise determined by the Board Committee.

3.    Capitalized terms used in this Sub-Plan are defined in the Plan, subject to the provisions of this Sub-Plan.

4.    References to Incentive Stock Options and Non-qualified Stock Options shall not apply to Options granted under the Sub-Plan.

5.    Any Options granted under this Sub-Plan shall be designated as Non-tax advantaged Options.

6.    This Sub-Plan is governed by the Plan and all its provisions shall be identical to those of the Plan SAVE THAT (i) “Sub-Plan” shall be substituted for “Plan” where applicable and (ii) the following provisions shall be as stated in this Sub-Plan in order to accommodate the specific requirements of the laws of England and Wales:

7.    SECTION 2. Definitions.

The following definition shall be amended to read:

“Plan” means the Federated Plan as modified by this UK Sub-Plan.

The following definitions shall be added for the purposes of the UK Sub-Plan:

“Award Agreement” means the agreement under which an Award is made or granted.

Exhibit 10.4

“Award Shares” means the Shares subject to or comprised in an Award.

“Clawback Amount” means the amount determined under Section 14.3.

“Employee” means an employee or full-time director of the Company or any Group Company.

“Group Company” shall mean the Company and its subsidiaries (within the meaning of that term in section 1159 of the UK Companies Act 2006).

“HMRC” means HM Revenue & Customs.

“ITEPA” means the Income Tax (Earnings and Pensions) Act 2003.

“JointElection” means an election (in such terms and such form as provided in paragraphs 3A and 3B of Schedule 1 to the Social Security Contributions and Benefits Act 1992), which has been approved by HMRC for the transfer of the whole of or any liability of the Secondary Contributor for any Secondary NIC Liability.

“Non-tax advantaged Option” shall mean an Option over Shares that is neither an option granted pursuant to a CSOP scheme under Schedule 4 ITEPA nor an enterprise management incentive (EMI) option which meets the requirements of Schedule 5 ITEPA.

“Personal Representative” shall mean the personal representative(s) of a UK Participant (being either the executors of his or her will or if he or she dies intestate the duly appointed administrator(s) of his or her estate) who have provided to the Board Committee evidence of their appointment as such.

“Restriction Period” shall, in relation to an Award, have the meaning given to that expression in the relevant Award Agreement.

“Secondary Contributor” shall mean a person or company who has a liability to account (or pay) the Secondary NIC Liability to HMRC.

“Secondary NIC Liability” shall mean any liability to employer’s Class 1 National Insurance contributions to the extent arising from the grant, vesting, exercise, release or cancellation of an Award or arising out of the acquisition, vesting, retention and/or disposal of the Shares acquired pursuant to an Award, where such liability may be recovered from the Participant by the Secondary Contributor under paragraph 3A of Schedule 1 to the Social Security Contributions and Benefits Act 1992 or transferred to the Participant under paragraph 3B of Schedule 1 to the Social Security Contributions and Benefits Act 1992.

“Section 431 Election” shall mean an election made under section 431 of ITEPA.

“Share” shall mean share of Class B Common Stock of the Company.

“Taxable Event” shall mean any occasion on which a UK Tax Liability and/or Secondary NIC Liability arises in connection with an Award or any Shares acquired under it, including but not limited to the grant, vesting, exercise, assignment, release, cancellation or other disposal of an

Exhibit 10.4

Award or arising out of the acquisition, vesting, retention and/or disposal of the Shares acquired pursuant to an Award or otherwise pursuant to an award of Shares under the Plan.

“UK Participant” means a Participant resident in the United Kingdom for United Kingdom tax purposes, or otherwise within the scope of United Kingdom taxation on employment income as a result of duties performed in the United Kingdom.

“UK Group Company” shall mean a Group Company which is incorporated in the UK.

“UK Tax Liability” shall mean any liability or obligation of the Company and/or any Group Company, including any UK Group Company, to account (or pay) for income tax (under the United Kingdom withholding system of PAYE (pay as you earn)) or any other taxation provisions and primary class 1 National Insurance contributions in the United Kingdom to the extent arising from the grant, exercise, vesting, assignment, release, cancellation or any other disposal of an Award or arising out of the acquisition, retention and disposal of the Shares acquired under this Plan.

8.    SECTION 4.2 Designation of Participants.

For the purposes of the UK Sub-Plan, Section 4.2 of the Federated Plan shall read as follows:

“Participants shall be selected, from time to time, by the Board Committee, from those Employees of the Company and any Group Company who, in the opinion of the Board Committee, have the capacity to contribute materially to the continued growth and successful performance of the Company. Outside Directors and any other person who is not an Employee may not be granted Awards under this Sub-Plan.”

9.    SECTION 5.4 Transferability of Options.

For the purposes of the UK Sub-Plan, Section 5.4 of the Federated Plan shall read as follows:

“Options granted under the Sub-Plan may not be sold, transferred, pledged, assigned, hypothecated or otherwise disposed of in any manner other than on the UK Participant’s death to the UK Participant’s Personal Representative, and may be exercised during the lifetime of the UK Participant, only by the UK Participant.”

10.    SECTION 6.5 Transferability of SARs.

For the purposes of the UK Sub-Plan, Section 6.5 of the Federated Plan shall read as follows:

“SARs granted under the Sub-Plan may not be sold, transferred, pledged, assigned, hypothecated or otherwise disposed of in any manner other than on the UK Participant’s death to the UK Participant’s Personal Representative, and may be exercised during the lifetime of the UK Participant, only by the UK Participant.”

11.    SECTION 12.1 Rights of Employees.

For the purposes of the UK Sub-Plan, Section 12.1 of the Federated Plan shall read as follows:

Exhibit 10.4

“The rights and obligations of any individual under the terms of his or her office or employment with the Company or any Group Company shall not be affected by his or her participation in the Plan or any right which he or she may have to participate in it. Nothing in the Plan shall interfere with or limit in any way the right of the Company or any Group Company to terminate any Participant’s employment at any time, nor confer upon any Participant any right to continued employment with the Company or any affiliate. An individual who participates in the Plan waives any and all rights to compensation or damages in consequences of the termination of his or her office or employment for any reason whatsoever (whether or not such termination is wrongful or unfair) insofar as those rights arise or may arise from his or her ceasing to have rights under an Award as a result of such termination. The grant of an Award does not imply that any further Award will be granted or that a Participant has any right to receive any further Award.”

12.    SECTION 12.2 Tax Withholding.

For the purposes of the UK Sub-Plan, the words “tax withholding requirements” shall be generally understood to include any sums due pursuant to any UK Tax Liability and (if applicable) Secondary NIC Liability.

13.    SECTION 12.10 Transferability of Awards.

For the purposes of the UK Sub-Plan, Section 12.10 of the Federated Plan shall read as follows:

“Notwithstanding anything to the contrary contained in this Plan, Shares subject to any Performance Share Award or Restricted Stock Award may be transferred to a “family member” as defined in and pursuant to the terms and conditions set forth in Section A.1.a.5 of the General Instructions to Form S-8 promulgated under the Securities Act of 1933, as amended, as such provision may be amended from time to time, on such terms and conditions as may be determined by the Board Committee. For the avoidance of doubt, Stock Options and Stock Appreciation Rights may not be transferred.”

14.    SECTION 12. Miscellaneous.

For the purposes of the UK Sub-Plan, a new Section 12.13 shall be added as follows:

“No term of the Plan or any Award Agreement shall be construed so as to require the Company or the Board Committee to grant, or alter the terms of, any Option to a UK Participant so as to confer any “tax-advantaged” status on that Option for United Kingdom tax purposes.”

For the purposes of the UK Sub-Plan, a new Section 12.14 shall be added as follows:

“The Board Committee may provide in an Award Agreement that the grant, satisfaction, vesting or exercise of an Award (or any portion thereof) or the purchase of Shares, is conditional upon the UK Participant making or refraining from making a Section 431 Election with respect to the Shares acquired pursuant to the grant, satisfaction, vesting or exercise of such Award or otherwise. If a UK Participant makes a Section 431 Election in respect of any Shares so acquired, such election shall be made no later than fourteen (14) days from the date of acquisition of the Shares.”

Exhibit 10.4

For the purposes of the UK Sub-Plan, a new Section 12.15 shall be added as follows:

“The Board Committee may provide in an Award Agreement that the grant, satisfaction, vesting or exercise of an Award (or any portion thereof) or the purchase of Shares, is conditional upon the UK Participant either making a Joint Election, or indemnifying the Company and/or any Group Company in respect of any Secondary NIC Liability, with respect to the Shares acquired pursuant to the grant, satisfaction, vesting or exercise of such Award or otherwise.”

15.    SECTION 13. Malus and Clawback.

For the purposes of the UK Sub-Plan, a new Section 13 shall be added as follows:

“13Malus and Clawback

“13.1This Section 13 applies in relation to an Award if (a) either or both of Sections 13.2 and/or 13.3 apply, and (b) Section 13.4 applies.

“13.2This Section 13.2 applies in relation to an Award if the Board Committee, at its discretion, determines that any of the following circumstances exist:

(a)the Participant has participated in or was responsible for conduct which resulted in significant losses to a Group Company,

(b)the Participant has failed to meet appropriate standards of fitness and propriety,

(c)the Company has reasonable evidence of fraud or material dishonesty by the Participant,

(d)the Company has become aware of any material wrongdoing on the part of the Participant,

(e)    there is reasonable evidence that the Participant committed acts of mis-behaviour or was responsible for a material error,

(f)the Participant has acted in a manner which in the opinion of the Board Committee has brought or is likely to bring any Group Company into material disrepute or is materially adverse to the interests of any Group Company,

(g)there is a breach of the Participant’s employment contract that is a potentially fair reason for dismissal,

(h)the Participant is in breach of a fiduciary duty owed to any Group Company or any client or customer of a Group Company,

(i)the Participant participates in a ‘lift out’ of a team or group of employees, or whether alone or with others entices or otherwise encourages a team or group of employees to move to another firm,

Exhibit 10.4

(j)a Participant who has ceased to be an Employee was in breach of his or her employment contact or fiduciary duties in a manner that would have prevented the grant, vesting or exercise of the Award had the Company been aware (or fully aware) of that breach, and which the Company was not aware (or fully aware) until after either (1) both the Participant’s ceasing to be an employee and the time the Award Shares were acquired by the Participant pursuant to the Award, or (2) there was a material error in determining whether the Award should be granted or determining the size and nature of the Award,

(k)    a Group Company or the business unit in which the Participant is employed suffers a material downturn in its financial performance, or

(l)    a Group Company or the business unit in which the Participant is employed suffers a material failure of risk management.

“13.3This Section 13.3 applies in relation to an Award if the Board Committee, at its discretion, determines that either of the following circumstances exist:

(a)a Group Company mis-stated any financial information (whether or not audited) for any part of a financial year that was taken into account in (i) determining whether the Award should be made, or (ii) determining the size and nature of the Award, or

(b)a Group Company or business unit that employs or employed the Participant, or for which the Participant is responsible, has suffered a material failure of risk management.

“13.4This Section 13.4 applies in relation to an Award if the Board Committee, at its discretion, determines that, if the circumstances mentioned in Section 13.2 or 13.3 had existed, and the Board Committee had been fully aware that they existed at the date on which the Award was granted, then either (a) the Board Committee would not have granted the Award, or (b) the Board Committee would have granted the Award in relation to a smaller number of Shares.

“13.5    The Board Committee may make a determination in relation to an Award under this Section 13 at any time before the later of (i) the time an Award vests, (ii) the end of any Restriction Period applicable to an Award as specified in the relevant Award Agreement, and (iii) the end of the period of three years following the Board Committee becoming aware of the circumstances mentioned in Sections 13.2 or 13.3.”

16.    SECTION 14. Operation of Malus and Clawback.

For the purposes of the UK Sub-Plan, a new Section 14 shall be added as follows:

“14.1This Section 14 applies to an Award if Section 13 applies to the Award.

“14.2If at the date of the determination under Section 13.4, Award Shares (or some of the Award Shares) have not yet been issued or transferred to the Participant, the Board Committee may determine to cancel the Award to the extent that Award Shares have not yet been issued or transferred to the Participant, or to reduce it by such number of Shares as the Board Committee

Exhibit 10.4

considers to be fair and reasonable, taking into account all circumstances that the Board Committee considers to be relevant.

“14.3If at the end of the determination under Section 13.4, Award Shares (or some of the Award Shares) have been issued or transferred to the Participant, the Board Committee may determine a Clawback Amount in relation to the Award.

“14.4The Clawback Amount shall be such amount as the Board Committee considers to be fair and reasonable, taking account of all circumstances that the Board Committee considers to be relevant, but shall not be more than either (a) the Fair Market Value of the Award Shares measured on the date or dates of the Taxable Event or Taxable Events in relation to the relevant Award Shares, or (b) the Fair Market Value of the Award Shares measured on the date of the determination.

“14.5If the Participant has paid or is liable to pay any amount of a UK Tax Liability which cannot be recovered from or repaid by any relevant tax authority (whether directly or indirectly), the Board Committee may in its discretion decide to reduce the Clawback Amount to take account of this amount. In deciding whether to reduce the Clawback Amount, the Board Committee shall take account of such factors as it thinks fit, which may include market practice, corporate governance rules and guidelines, and the expectations of shareholders.

“14.6For the avoidance of doubt, the Board Committee is not obliged to determine a Clawback Amount in relation to any particular Award, even if the Board Committee does determine a Clawback Amount in relation to other Awards to the same or other Participants which were granted or which vested on the same date or dates.

“14.7The Participant shall reimburse the Company for the Clawback Amount, in any way acceptable to the Board Committee, on or as soon as possible after the Board Committee determines a Clawback Amount in relation to the Award. If the Participant fails to reimburse the Company within 30 days after the determination, the Company shall obtain reimbursement from the Participant in any (or a combination of) the following ways:

(a)by reducing or cancelling any Options that the Participant has not exercised,

(b)by reducing or cancelling any Award (other than an Option) where the Award Shares have not yet been issued or transferred to the Participant,

(c)by reducing or cancelling any cash bonus payable to the Participant by any Group Company,

(d)by reducing or cancelling any future or existing Award made or granted to the Participant under any other share incentive plan or bonus plan operated by any Group Company (other than a Schedule 2 SIP or a Schedule 3 SAYE option plan, as those terms are defined in ITEPA),

(e)by requiring the Participant to transfer any Shares acquired by the Participant under any Award to the Company or such other person as the Company may direct for no consideration,

Exhibit 10.4

(f)by requiring the Participant to make a cash payment to a Group Company, or

(g)by reducing the Participant’s salary.

“14.8If the Participant participates in another share incentive plan or bonus plan operated by a Group Company, and that other plan contains a provision that has similar effect to this Section 14, the Board Committee may give effect to that provision in any of the following ways:

(a)by reducing or cancelling any Options that the Participant has not exercised, or

(b)by reducing or cancelling any Award (other than an Option) where the Award Shares have not yet been issued or transferred to the Participant.

“14.9It is a condition of the issue or transfer of Award Shares to a Participant that the Participant, if requested to do so by the Board Committee, sign an acceptance notice (which may form part of the Award Agreement in relation to the relevant Award) declaring an irrevocable agreement to the terms of this Section 14.”

17.    SECTION 15. Incentive Compensation Recovery.

For the purposes of the UK Sub-Plan, a new Section 15 shall be added as follows:

“15.1    An Award granted under the Plan shall also be subject to Section 12.13 of the Stock Incentive Plan (Incentive Compensation Recovery) to the extent such Section 12.13 applies to the Award in accordance with its terms.”

EX-10.5

Exhibit 10.5

FEDERATED HERMES, INC.

Stock Incentive Plan

2023 RESTRICTED STOCK AWARD AGREEMENT

FOR AWARDS TO EMPLOYEES IN THE UNITED KINGDOM

        THIS AGREEMENT, is made and effective as of the 17th day of November,2023by and between Federated Hermes, Inc. (including its successors and assigns, the "Company"), a Pennsylvania corporation having its principal place of business in Pittsburgh, Pennsylvania

AND

«Display_Name», an Employee of the Company or a Group Company (the "Participant"). Capitalized terms used in this Agreement shall, unless specifically defined herein, have the respective meanings given to such terms in the UK Sub-Plan (the “UK Sub-Plan”) to the Federated Hermes, Inc. Stock Incentive Plan, as amended (the "Stock Incentive Plan").

    WITNESSETH THAT:

        WHEREAS, in order to provide incentives to Federated employees, the Company has adopted the Stock Incentive Plan under which, among other things, Awards of Class B Common Stock of the Company, no par value (the "Class B Common Stock"), can be made to Employees; and

        WHEREAS, the Company desires to have Participant continue in Federated’s employ and to provide Participant with an incentive to put forth maximum effort for the success of the business; and

        WHEREAS, Participant holds a position of trust and confidence within Federated (as hereafter defined), and Federated has entrusted and will continue to entrust Participant with its trade secrets and confidential, proprietary business information and knowledge about and relationships with Federated employees and Federated Clients (as hereafter defined). Because such information and relationships could be used by Federated’s competitors to gain an unfair advantage against Federated, this Agreement and the Confidentiality Agreement (as hereafter defined) contain noncompetition provisions to protect Federated’s confidential information, employee and client relationships, and goodwill; and

        WHEREAS, subject to the terms and conditions hereafter set forth, by action of the Board Committee, the Company hereby grants an Award of Class B Common Stock to Participant.

        NOW, THEREFORE, in consideration of the mutual covenants and representations herein contained, and intending to be legally bound, the parties hereto agree as follows:

KLG1_55_1033490_1

ARTICLE I

Definitions

        As used herein:

        1.1    "Federated" shall mean Federated Hermes, Inc. or any corporate parent, affiliate, or direct or indirect subsidiary thereof (including any Group Company), or any successor to Federated, for which Participant performs services, regardless of whether this Agreement has been expressly assigned to such corporate parent, affiliate, or direct or indirect subsidiary, or successor.

        1.2    "Federated Client" shall mean each client or customer of Federated which Federated or any of its employees handled, serviced, or solicited at any time during the Participant’s employment with Federated or, where such employment has been terminated or has ceased, during the two (2) year period immediately preceding such termination or cessation.

        1.3    "Federated Services" shall mean any services the same as, similar to, or in competition with the type of services offered by Federated at any time during the Participant’s employment with Federated or, where such employment has been terminated or has ceased, during the two (2) year period immediately preceding such termination or cessation, including, without limitation, offering mutual funds (which term includes for the purposes of this Agreement any investment company, fund or collective investment scheme) for sale, providing investment advice and/or investment management, providing administrative or distribution services to mutual funds and/or providing retirement plan services, mutual fund clearing services, or mutual fund account administration services; provided, however, that, in the discretion of the Company exercised by notice to the Participant, Federated Services may not include business lines abandoned by Federated.

        1.4    "Restriction Period" shall mean the period beginning on the date of this Agreement and ending on (i) November 16, 2028 with respect to the Shares that would be Vested Shares as of November 16, 2028 pursuant to Section 3.1 and (ii) in the event of Participant’s Disability, November 16, 2028 with respect to the Shares that would be Vested Shares pursuant to Section 3.2(b) and (iii) in the event of the Participant’s death on or after November 18, 2026, the date of the Participant’s death.

        1.5    "Unvested Shares" shall mean all Shares other than Vested Shares.

        1.6    "Vested Shares" means Shares that have vested in accordance with Section 3.1 or Section 3.2.

ARTICLE II

Grant of Restricted Stock

        2.1    Subject to the conditions set forth in Section 2.2 hereof and the other terms and conditions of this Agreement, the Company hereby grants, effective November 17, 2023, to Participant an Award (the "2023 Award") to purchase «Award_in_Words» («Award_in_Numbers») shares (the "Shares") of Class B Common Stock at a purchase price of $3.00 per share (the "Purchase Price"). At the discretion of the Company, certificates for the Shares may not be issued. In lieu of certificates, the Company will establish a book entry account for the Shares in the name of the Participant with the Company's transfer agent and registrar for the Class B Common Stock.

-2-

KLG1_55_1033490_1

        2.2    Notwithstanding Section 2.1 or any other provision of this Agreement to the contrary, this Agreement shall become effective only if Participant executes and delivers to the Company (a) two counterparts of this Agreement along with the Purchase Price for the Shares by November 10, 2023 and (b) a signed copy of an election under either (i) section 431(1) of the Income Tax (Earnings and Pensions) Act 2003 in the form attached hereto as Exhibit A or (ii) section 431(2) of the Income Tax (Earnings and Pensions) Act 2003 attached hereto as Exhibit B, time being of the essence.

ARTICLE III

Terms of the Award

        3.1    During the continuation of Participant's employment by Federated, the 2023 Award shall vest in Participant in accordance with the schedule of vesting as follows:

Date	Portion Vested	Cumulative Percentage
November 16, 2028	100%	100% (restrictions lapse)

        3.2    In the event of the Disability or death of Participant after the effective date of this Agreement:

        (a)     Prior to November 18, 2026, all Unvested Shares as of the date of such Disability or death shall be forfeited and sold back to the Company in accordance with Section 3.3 below.

        (b)     On or after November 18, 2026, all Shares not then Vested Shares as of the date of such Disability or death shall become Vested Shares upon such Disability or death. The Restriction Period shall end on the date of Participant's death, or in the case of Participant’s Disability, the Restriction Period shall end on November 16, 2028.

        (c)     For purposes of this Agreement, "Disability" shall be deemed to have occurred as of the first day following Participant's termination of employment by Federated as a result of a mental or physical condition that prevents Participant from engaging in the principal duties of Participant's employment with Federated as determined in accordance with the Rules and Regulations Establishing Formal Review Procedures under the Stock Incentive Plan.

        3.3    Upon the termination or cessation of Participant's employment with Federated for any reason whatsoever, including an involuntary termination without cause, Participant shall immediately sell to the Company, and the Company shall purchase from Participant, all Shares that are Unvested Shares as of the date of termination or cessation of employment, in each case at the Purchase Price per Share.

        3.4    Participant acknowledges that Participant has previously entered into (whether as part of Participant’s contract of employment or by separate agreement) or simultaneously herewith is entering into an "Agreement Regarding Confidential Information" with Federated (the "Confidentiality Agreement"). Participant acknowledges that Federated would not enter into this Agreement without the Confidentiality Agreement. In the event that, during the course of Participant's employment with Federated, Participant shall (i) engage in "competition" with Federated as defined but excluding the temporal limitations contained in Section 3.6 of this Agreement or (ii) shall breach any provision of the Confidentiality

-3-

KLG1_55_1033490_1

Agreement, then Participant shall immediately sell to the Company and the Company shall purchase from Participant, at the Purchase Price per Share, all Shares, whether Vested Shares or Unvested Shares, then owned by the Participant. If Participant chooses to engage in competition with Federated as defined above or chooses to breach the Confidentiality Agreement, Participant will knowingly be forfeiting Participant’s 2023 Award, whether Vested Shares or Unvested Shares, granted under this Agreement and will have considered the loss of such a potential benefit in Participant's decision to engage in competition with Federated or to breach the Confidentiality Agreement. In the event of a breach of the Confidentiality Agreement, Federated also shall have the rights and remedies provided under that agreement.

        3.5    Participant acknowledges that in the event that Participant engages in competition with Federated as defined and within the temporal limitations contained in Section 3.6 of this Agreement, then Federated shall be entitled, in addition to any other remedies and damages available, to an injunction to restrain such breach or threatened breach thereof by Participant, Participant’s partners, agents, servants, employers, and employees, and any other persons acting for or with Participant. Participant further agrees that any corporate parent, direct or indirect subsidiary, affiliate, or successor of Federated for which Participant performs services may enforce this Agreement without need for any assignment of this Agreement.

        3.6    Participant shall be deemed to have engaged in "competition" with Federated in the event that, during the period of Participant's employment by Federated and thereafter until twelve (12) months after the last date for which compensation (including any pay beyond the last day actively worked, if any) is received by Participant from Federated, Participant, directly or indirectly, in any capacity whatsoever (either as an employee, officer, director, stockholder, proprietor, partner, joint venturer, consultant or otherwise for any person other than Federated) (i) solicits, contacts, calls upon, communicates with, or attempts to communicate with any Federated Client for the purpose of providing Federated Services to such Federated Client or (ii) sells any Federated Services to any Federated Client. Notwithstanding the foregoing, Participant's ownership of not more than five percent (5%) of the total shares of all classes of stock of any publicly-held corporation or other business organization shall not constitute Participant's competition with the Company or any Subsidiary hereunder. Further, for the avoidance of doubt, nothing in this Agreement or the Confidentiality Agreement prevents reporting (or receiving financial awards from the government resulting from reporting) possible violations of federal law or regulation to any governmental agency or entity, or making other disclosures, protected under the whistleblower provisions of federal law or regulation (or similar foreign law), including, without limitation, good faith disclosure on a confidential basis of Confidential Information (as defined in the Confidentiality Agreement) constituting “Trade Secrets” as defined in 18 U.S.C. § 1839 (or similar foreign law), and so long as such disclosures are consistent with 18 U.S.C. § 1833 (or similar foreign law).

        3.7    Participant hereby acknowledges and agrees that:

        (a)    This Agreement and the Confidentiality Agreement are necessary for the protection of the legitimate business interests of Federated;

        (b)    The restrictions contained in this Agreement and the Confidentiality Agreement regarding scope, length of term and types of activities restricted are reasonable;

        (c)    Participant has received adequate and valuable consideration for entering into this Agreement and the Confidentiality Agreement;

        (d)    Participant’s covenants in Sections 3.4 to 3.7 of this Agreement and those in the Confidentiality Agreement shall be construed as independent of any other provisions and the existence of any claim or cause of action Participant may have against Federated, whether

-4-

KLG1_55_1033490_1

predicated on this Agreement or not, shall not constitute a defense to the enforcement by Federated of these covenants;

        (e)    Neither this Agreement nor the Confidentiality Agreement prevents Participant from earning a livelihood after termination or cessation of employment with Federated; and

        (f)    Participant has an obligation to notify prospective employers of the covenants in Sections 3.4 to 3.7 of this Agreement and of those in the Confidentiality Agreement.

ARTICLE IV

Withholding Taxes; Section 431 Election

        4.1    The Company shall have the authority to withhold, or to require a Participant to remit to the Company, prior to issuance or delivery of any Shares or the removal of any stop order or transfer restrictions on the Shares or any restrictive legends on the Certificates representing the Shares hereunder, an amount in cash sufficient to satisfy minimum federal, state and local tax withholding requirements and/or any UK Tax Liability associated with the 2023 Award (each a "Withholding Obligation"). Notwithstanding any other provision of this Agreement to the contrary, including but not limited to Section 5.1 hereof, in the event of any minimum federal, state or local tax or UK Tax Liability Withholding Obligation (other than pursuant to an election under Section 431(1) as described in Section 4.2 below), the Company has the right to permit the Participant to sell, or to have sold on Participant's behalf, Shares, to a third party, in an amount and under such terms and conditions as the Company shall establish in its sole discretion. Additionally, the Company, in its sole discretion, shall have the right to withhold from the Participant Shares with a Fair Market Value (as defined in the Stock Incentive Plan) equal to the Company's minimum federal, state and local tax withholding requirements and/or equal to the amount of the UK Tax Liability associated with the 2023 Award. For this purpose, Fair Market Value shall be determined as of the day that the Withholding Obligation arises.

        4.2    The Participant acknowledges that (a) the Participant has been informed of the availability of making an election in accordance with Section 431(1) of the Income Tax (Earnings and Pensions) Act 2003; and (b) that such election must be made within fourteen (14) days of the date on which the Participant acquires Shares pursuant to the 2023 Award. The form of the Section 431(1) election the Participant may elect to make is set out in Exhibit A to this 2023 Restricted Stock Award Agreement.

        4.3    In the event that the Participant does not enter into an election under Section 431(1) of the Income Tax (Earnings and Pensions) Act 2003, the Participant shall enter into an election under Section 431(2) of the Income Tax (Earnings and Pensions) Act 2003 within fourteen (14) days of the date on which the Participant acquires Shares pursuant to the 2023 Award. The form of the Section 431(2) election the Participant shall make is attached hereto as Exhibit B.

ARTICLE V

Restrictions on Transfer

        5.1    Participant hereby acknowledges that none of the Shares, whether Vested Shares or Unvested Shares, may be sold, exchanged, assigned, transferred, pledged, hypothecated, gifted or otherwise disposed of (collectively, "disposed of") until the expiration of the Restriction Period applicable to those Shares and the payment of any minimum withholding

-5-

KLG1_55_1033490_1

tax. Participant further acknowledges that there may be a period of administrative delay between the date on which the Restriction Period expires and the date on which the Shares may be disposed of by the Participant. The Board Committee may, in its sole discretion, permit the Shares to be transferred to a "family member" as defined in and pursuant to the terms and conditions set forth in Section A.1.a.5 of the General Instructions to Form S-8 promulgated under the Securities Act of 1933, as amended, as such provision may be amended from time to time under terms and conditions as may be determined by the Human Resources Department.

        5.2    Participant shall not dispose of the Shares acquired, or any portion thereof, at any time, unless Participant shall comply with the Securities Act of 1933, as amended, and the regulations of the Securities and Exchange Commission thereunder, any other applicable securities law, and the terms of this Agreement, the Stock Incentive Plan and the UK Sub-Plan. Participant further agrees that the Company may direct its transfer agent to refuse to register the transfer of any Shares underlying the 2023 Award which, in the opinion of the Company's counsel, constitutes a violation of any applicable securities laws then in effect or the terms of this Agreement.

        5.3    Any certificate representing the Shares issued during the Restriction Period shall, unless the Board Committee determines otherwise, bear a legend substantially as follows:

        "The sale or other transfer of the shares of stock represented by this certificate is subject to certain restrictions set forth in the Federated Hermes, Inc. Stock Incentive Plan, administrative rules adopted pursuant to such Plan and a Restricted Stock Award Agreement between the registered owner and Federated Hermes, Inc. A copy of the Plan, such rules and such agreement may be obtained from the Secretary of Federated Hermes, Inc."

The Participant further acknowledges and understands that the certificates representing the Shares issued hereunder may bear such additional legend or legends as the Company deems appropriate in order to assure compliance with applicable securities laws.

Any book entry for the Shares will be restricted and subject to stop orders during the Restriction Period.

        5.4    If certificates representing the Shares underlying the 2023 Award are issued during the Restriction Period, they shall be retained in custody by the Company. Within a reasonable time after Vested Shares may be disposed of by the Participant in accordance with Section 5.1 hereof, all restrictions or stop orders applicable to the Shares shall be removed and, in the event that certificates have been issued, legends shall be removed upon the Participant's written request to the transfer agent.

ARTICLE VI

Miscellaneous

        6.1    In the event of any change or changes in the outstanding Class B Common Stock of the Company by reason of any stock dividend, recapitalization, reorganization, merger, consolidation, splitup, combination or exchange of shares, or any similar change affecting the Class B Common Stock, any of which takes effect after the effective date of this Agreement, then in any such event the number and kind of shares subject to the 2023 Award, the Purchase Price and any other similar provisions, shall be equitably adjusted consistent with such change in such manner as the Board Committee, in its discretion, may deem appropriate to prevent dilution

-6-

KLG1_55_1033490_1

or enlargement of the rights granted to Participant hereunder. Any adjustment so made shall be final and binding upon Participant and all other interested parties.

        6.2    Whenever the word "Participant" is used in any provision of this Agreement under circumstances where the provision should logically be construed to apply to the Participant’s Personal Representatives, the word "Participant" shall be deemed to include the Participant’s Personal Representatives.

        6.3    After the effective date of this Agreement: (a) the Participant shall be entitled to vote the Shares, whether Vested Shares or Unvested Shares, on all matters presented to the holders of Class B Common Stock of the Company and (b) the Shares, whether Vested Shares or Unvested Shares, shall be deemed to be issued and outstanding for all purposes, including, without limitation, the payment of dividends and distributions and any determination of any stockholder's or stockholders' percentage equity interest in the Company.

        6.4    Nothing in this Agreement or the Stock Incentive Plan (including the UK Sub-Plan) shall confer upon Participant any right to continue in the employ of Federated or shall affect the right of Federated to terminate the employment of Participant with or without cause. Nothing in this Agreement or the Stock Incentive Plan (including the UK Sub-Plan) shall affect the rights and obligations of the Participant under the terms of the Participant’s office or employment with Federated or any Group Company. The Participant waives any and all rights to compensation or damages in consequences of the termination of the Participant’s office or employment for any reason whatsoever (whether or not such termination is wrongful or unfair) insofar as those rights arise or may arise from the Participant ceasing to have rights under the 2023 Award as a result of such termination. The grant of the 2023 Award does not imply that any further Award will be granted or that the Participant has any right to receive any further Award under the Stock Incentive Plan (including the UK Sub-Plan).

        6.5    The 2023 Award received by Participant pursuant to this Agreement shall not be considered compensation for purposes of any pension or retirement plan, insurance plan or any other employee benefit plan of the Company unless otherwise provided in such plan.

        6.6    Every notice or other communication relating to this Agreement shall be in writing and shall be mailed or delivered to the party for whom it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided; provided, however, that unless and until some other address be so designated, all notices or communications by Participant to the Company shall be mailed or delivered to the Secretary of the Company at its office at 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222, and all notices or communications by the Company to Participant may be given to Participant personally or may be mailed to the Participant.

        6.7    This Agreement and its validity, interpretation, performance and enforcement shall be governed by the laws of the Commonwealth of Pennsylvania.

        6.8    The 2023 Award shall be subject to the terms and conditions set forth in the Stock Incentive Plan (including the UK Sub-Plan), and in the event of any conflict between the provisions of this Agreement and those of the Stock Incentive Plan (including the UK Sub-Plan), the Stock Incentive Plan (including the UK Sub-Plan) provisions shall govern.

        6.9    This Agreement will be binding upon and inure to the benefit of Participant's heirs and representatives and the assigns and successors of the Company and may be assigned by the Company to any third party, but neither this Agreement nor any rights hereunder will be assignable or otherwise subject to hypothecation by Participant.

-7-

KLG1_55_1033490_1

        6.10    Except as stated hereafter, this Agreement represents the entire agreement of the parties with respect to the subject matter hereof. To the extent Participant has entered into an agreement with Federated that contains provisions pertaining to non-competition or non-solicitation of clients, non-solicitation or non-hiring of employees and/or non-disclosure or non-use of confidential information, including but not limited to the Confidentiality Agreement, the terms of this Agreement shall not supersede, but shall be in addition to, any other such agreement. This Agreement may be amended or terminated at any time by written agreement of the parties hereto. Notwithstanding the foregoing or any provision of this Agreement to the contrary, the Company may at any time (without the consent of the Participant) modify, amend or terminate any or all of the provisions of this Agreement to the extent necessary to conform the provisions of this Agreement with Section 409A of the Code and the regulations promulgated thereunder ("Section 409A") or an exception thereto.

        6.11    Whenever possible, each provision in this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement will be held to be prohibited by or invalid under applicable law, then (a) such provisions will be deemed amended to accomplish the objectives of the provisions as originally written to the fullest extent permitted by law and (b) all other provisions of this Agreement will remain in full force and effect.

        6.12    Any dispute or litigation arising out of or relating to this Agreement will be resolved in the courts of Allegheny County or the Western District of Pennsylvania and Participant hereby consents to jurisdiction in Pennsylvania.

        6.13    No rule of strict construction will be implied against the Company, or any other person in the interpretation of any of the terms of this Agreement or any rule or procedure established by the Board Committee.

        6.14    Participant irrevocably agrees to the terms of Section 14 of the Stock Incentive Plan (including the UK Sub-Plan) (Operation of Malus and Clawback), and agrees and acknowledges that this 2023 Restricted Stock Award Agreement constitutes an acceptance notice for the purposes of Section 14.9 of the Stock Incentive Plan as modified by the UK Sub-Plan.

        6.15    Participant agrees, upon demand of the Company, to do all acts and execute, deliver and perform all additional documents, instruments and agreements that may be required by the Company to implement the provisions and purposes of this Agreement.

        6.16    The Participant hereby grants to the Company an irrevocable power of attorney and declares that the Company shall be the attorney-in-fact to act for and on behalf of the Participant, to act in Participant's name, place and stead, in connection with (i) any and all transfers of Shares, whether Vested Shares or Unvested Shares, to the Company pursuant to this Agreement, including pursuant to Sections 3.3, 3.4 and 4.1 hereof, or (ii) any sale of Vested Shares to a third party pursuant to Section 4.1 hereof, or (iii) any transfers of Shares, whether Vested Shares or Unvested Shares as the Board Committee may require to be made pursuant to Section 14 of the Stock Incentive Plan (including the UK Sub-Plan).

        6.17    The 2023 Award is intended to be excepted from coverage under Section 409A and shall be interpreted and construed accordingly. The Company may, in its sole discretion and without the Participant's consent, modify or amend the terms of this 2002 Award, impose conditions on the timing and effectiveness of the issuance of the Shares, or take any other action it deems necessary or advisable to cause this 2002 Award to be excepted from Section 409A (or to comply therewith to the extent that Company determines it is not excepted). Notwithstanding the foregoing, Participant recognizes and acknowledges that Section 409A may

-8-

KLG1_55_1033490_1

impose upon the Participant certain taxes or interest charges for which the Participant is and shall remain solely responsible.

6.18    Incentive Compensation Recovery. An Award granted under this Agreement will be subject to the Company’s Incentive Compensation Recovery Policy, and the provisions of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Section 10D to the Exchange Act, Rule 10D-1 under the Exchange Act, and Section 303A.14 of the NYSE Listed Company Manual, as well as any similar policy of the Company, law, regulation or listing standard regarding incentive compensation recovery, in each case as in effect from time to time and to the extent such policy, law, regulation or listing standard applies to the Award in accordance with its terms.

THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

-9-

KLG1_55_1033490_1

IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the day and year first above written.

                        FEDERATED HERMES, INC.

                        By ___________________________

                         Chief Financial Officer    

                        PARTICIPANT

                        Print Name:____________________

-10-

KLG1_55_1033490_1

Exhibit A to the 2023 Restricted Stock Award Agreement

Section 431(1) Election

Joint Election under s431 ITEPA 2003 for full or partial disapplication of Chapter 2 Income Tax (Earnings and Pensions) Act 2003

One Part Election

1.    Between

the Employee                         [insert name of employee]

whose National Insurance Number is         [insert NINO]

and

the Company (who is the Employee's employer)     [insert name of company]

of Company Registration Number            [insert CRN]

2.    Purpose of Election

This joint election is made pursuant to section 431(1) or 431(2) Income Tax (Earnings and Pensions) Act 2003 (ITEPA) and applies where employment-related securities, which are restricted securities by reason of section 423 ITEPA, are acquired.

The effect of an election under section 431(1) is that, for the relevant Income Tax and NIC purposes, the employment-related securities and their market value will be treated as if they were not restricted securities and that sections 425 to 430 ITEPA do not apply. An election under section 431(2) will ignore one or more of the restrictions in computing the charge on acquisition. Additional Income Tax will be payable (with PAYE and NIC where the securities are Readily Convertible Assets).

Should the value of the securities fall following the acquisition, it is possible that Income Tax/NIC that would have arisen because of any future chargeable event (in the absence of an election) would have been less than the Income Tax/NIC due by reason of this election. Should this be the case, there is no Income Tax/NIC relief available under Part 7 of ITEPA 2003; nor is it available if the securities acquired are subsequently transferred, forfeited or revert to the original owner.

3.    Application

This joint election is made not later than 14 days after the date of acquisition of the securities by the employee and applies to:

Number of securities                    

Description of securities                Class B Common Stock

Name of issuer of securities                Federated Hermes, Inc.

-11-

KLG1_55_1033490_1

To be acquired by the Employee on or after 17th day of November,2023 under the terms of UK Sub-Plan to the Federated Hermes, Inc. Stock Incentive Plan

4.    Extent of Application

This election disapplies all restrictions attaching to the securities, pursuant to section 431(1) ITEPA.

5.    Declaration

This election will become irrevocable upon the later of its signing or the acquisition of employment-related securities to which this election applies.

In signing this joint election, we agree to be bound by its terms as stated above.

……………………………………….. …./…./……….

Signature (Employee) Date

………………………………………. …./…../………

Signature (for and on behalf of the Company) Date

………………………….………………

Position in company

-12-

KLG1_55_1033490_1

Exhibit B to the 2023 Restricted Stock Award Agreement

Section 431(2) Election

Joint Election under s431 ITEPA 2003 for full or partial disapplication of Chapter 2 Income Tax (Earnings and Pensions) Act 2003

One Part Election

2.    Between

the Employee                         [insert name of employee]

whose National Insurance Number is         [insert NINO]

and

the Company (who is the Employee's employer)     [insert name of company]

of Company Registration Number            [insert CRN]

3.    Purpose of Election

This joint election is made pursuant to section 431(1) or 431(2) Income Tax (Earnings and Pensions) Act 2003 (ITEPA) and applies where employment-related securities, which are restricted securities by reason of section 423 ITEPA, are acquired.

The effect of an election under section 431(1) is that, for the relevant Income Tax and NIC purposes, the employment-related securities and their market value will be treated as if they were not restricted securities and that sections 425 to 430 ITEPA do not apply. An election under section 431(2) will ignore one or more of the restrictions in computing the charge on acquisition. Additional Income Tax will be payable (with PAYE and NIC where the securities are Readily Convertible Assets).

Should the value of the securities fall following the acquisition, it is possible that Income Tax/NIC that would have arisen because of any future chargeable event (in the absence of an election) would have been less than the Income Tax/NIC due by reason of this election. Should this be the case, there is no Income Tax/NIC relief available under Part 7 of ITEPA 2003; nor is it available if the securities acquired are subsequently transferred, forfeited or revert to the original owner.

4.    Application

This joint election is made not later than 14 days after the date of acquisition of the securities by the employee and applies to:

Number of securities                    

Description of securities                Class B Common Stock

Name of issuer of securities                Federated Hermes, Inc.

To be acquired by the Employee on or after 17th day of November,2023 under the terms of UK Sub-Plan to the Federated Hermes, Inc. Stock Incentive Plan

-13-

KLG1_55_1033490_1

5.    Extent of Application

This election disapplies, pursuant to section 431(2) ITEPA;

(a)    the Clawback provisions in Sections 13 and 14 of the Federated Hermes, Inc. Stock Incentive Plan as modified by the UK Sub-Plan to the Federated Hermes, Inc. Stock Incentive Plan, and

(b)    the provisions of Sections 6.14 and 6.18 of this 2023 Restricted Stock Award Agreement.

6.    Declaration

This election will become irrevocable upon the later of its signing or the acquisition of employment-related securities to which this election applies.

In signing this joint election, we agree to be bound by its terms as stated above.

……………………………………….. …./…./……….

Signature (Employee) Date

………………………………………. …./…../………

Signature (for and on behalf of the Company) Date

………………………….………………

Position in company

-14-

KLG1_55_1033490_1

EX-10.6

Exhibit 10.6

FEDERATED HERMES, INC.

Stock Incentive Plan

CASH AWARD AGREEMENT

FOR AN AWARD TO AN EMPLOYEE

        THIS AGREEMENT, is made and effective as of the [date] by and between Federated Hermes, Inc. (including its successors and assigns, the "Company"), a Pennsylvania corporation having its principal place of business in Pittsburgh, Pennsylvania

AND

        [Name], an Employee of the Company or a Group Company (the "Participant"). Capitalized terms used in this Agreement shall, unless specifically defined herein, have the respective meanings given to such terms in the Federated Hermes, Inc. Stock Incentive Plan, as amended (the "Stock Incentive Plan").

    WITNESSETH THAT:

        WHEREAS, in order to provide incentives to Federated employees, the Company has adopted the Stock Incentive Plan under which, among other things, awards settleable in cash can be made to Employees; and

        WHEREAS, the Company desires to have Participant continue in Federated’s employ and to provide Participant with an incentive to put forth maximum effort for the success of the business; and

        WHEREAS, Participant holds a position of trust and confidence within Federated (as hereafter defined), and Federated has entrusted and will continue to entrust Participant with its trade secrets and confidential, proprietary business information and knowledge about and relationships with Federated employees and Federated Clients (as hereafter defined). Because such information and relationships could be used by Federated’s competitors to gain an unfair advantage against Federated, this Agreement and the Confidentiality Agreement (as hereafter defined) contain noncompetition provisions to protect Federated’s confidential information, employee and client relationships, and goodwill; and

        WHEREAS, subject to the terms and conditions hereafter set forth, by action of the Board Committee (or its delegate(s)), the Company hereby grants an award settleable in cash to Participant.

        NOW, THEREFORE, in consideration of the mutual covenants and representations herein contained, and intending to be legally bound, the parties hereto agree as follows:

ARTICLE I

Definitions

        As used herein:

        1.1    "Federated" shall mean Federated Hermes, Inc. or any corporate parent, affiliate, or direct or indirect subsidiary thereof (including any Group Company), or any

Exhibit 10.6

successor to Federated, for which Participant performs services, regardless of whether this Agreement has been expressly assigned to such corporate parent, affiliate, or direct or indirect subsidiary, or successor.

        1.2    "Federated Client" shall mean each client or customer of Federated which Federated or any of its employees handled, serviced, or solicited at any time during the Participant’s employment with Federated or, where such employment has been terminated or has ceased, during the two (2) year period immediately preceding such termination or cessation.

        1.3    "Federated Services" shall mean any services the same as, similar to, or in competition with the type of services offered by Federated at any time during the Participant’s employment with Federated or, where such employment has been terminated or has ceased, during the two (2) year period immediately preceding such termination or cessation, including, without limitation, offering mutual funds (which term includes for the purposes of this Agreement any investment company, fund or collective investment scheme) for sale, providing investment advice and/or investment management, providing administrative or distribution services to mutual funds and/or providing retirement plan services, mutual fund clearing services, or mutual fund account administration services; provided, however, that, in the discretion of the Company exercised by notice to the Participant, Federated Services may not include business lines abandoned by Federated.

ARTICLE II

Grant of Award

        2.1    Subject to the other terms and conditions of this Agreement, the Company hereby grants, effective [date], to Participant an award settleable in cash (the "Award"). The Award shall take the form of an investment by the Company of [amount] on behalf of the Participant under, and in accordance with the terms and conditions of, the Federated Hermes Co-Investment Scheme 2023 Rules (the “Co-Investment Scheme”) and the Stock Incentive Plan. Participant acknowledges that the Award will be funded under the Stock Incentive Plan out of cash held in the Hermes Employee Benefit Trust established by a trust deed dated 2 July 2018.

ARTICLE III

Terms of the Award

        3.1    The Award shall be subject to the rules of the Stock Incentive Plan and the Co-Investment Scheme, as modified by the following terms of this Agreement.

        3.2    For the purposes of this Award the definition of “Good Leaver” in the Co-Investment Scheme shall be amended by the deletion of the words “redundancy, or”.

        3.3    Participant acknowledges that Participant has previously entered into (whether as part of Participant’s contract of employment or by separate agreement) or simultaneously herewith is entering into an "Agreement Regarding Confidential Information" with Federated (the "Confidentiality Agreement"). Participant acknowledges that Federated would not enter into this Agreement without the Confidentiality Agreement. In the event that, during the course of Participant's employment with Federated, Participant shall (i) engage in "competition" with Federated as defined but excluding the temporal limitations contained in Section 3.5 of this Agreement or (ii) shall breach any provision of the Confidentiality Agreement, then the unvested portion of the Award shall be forfeited. If Participant chooses to engage in competition with Federated as defined above or chooses to breach the Confidentiality Agreement, Participant will knowingly be forfeiting Participant’s Award granted under this Agreement and will have considered the loss of such a potential benefit in Participant's decision

Exhibit 10.6

to engage in competition with Federated or to breach the Confidentiality Agreement. In the event of a breach of the Confidentiality Agreement, Federated also shall have the rights and remedies provided under that agreement.

        3.4    Participant acknowledges that in the event that Participant engages in competition with Federated as defined and within the temporal limitations contained in Section 3.5 of this Agreement, then Federated shall be entitled, in addition to any other remedies and damages available, to an injunction to restrain such breach or threatened breach thereof by Participant, Participant’s partners, agents, servants, employers, and employees, and any other persons acting for or with Participant. Participant further agrees that any corporate parent, direct or indirect subsidiary, affiliate, or successor of Federated for which Participant performs services may enforce this Agreement without need for any assignment of this Agreement.

        3.5    Participant shall be deemed to have engaged in "competition" with Federated in the event that, during the period of Participant's employment by Federated and thereafter until twelve (12) months after the last date for which compensation (including any pay beyond the last day actively worked, if any) is received by Participant from Federated, Participant, directly or indirectly, in any capacity whatsoever (either as an employee, officer, director, stockholder, proprietor, partner, joint venturer, consultant or otherwise for any person other than Federated) (i) solicits, contacts, calls upon, communicates with, or attempts to communicate with any Federated Client for the purpose of providing Federated Services to such Federated Client or (ii) sells any Federated Services to any Federated Client. Notwithstanding the foregoing, Participant's ownership of not more than five percent (5%) of the total shares of all classes of stock of any publicly-held corporation or other business organization shall not constitute Participant's competition with the Company or any Subsidiary hereunder. Further, for the avoidance of doubt, nothing in this Agreement or the Confidentiality Agreement prevents reporting (or receiving financial awards from the government resulting from reporting) possible violations of federal law or regulation to any governmental agency or entity, or making other disclosures, protected under the whistleblower provisions of applicable law or regulation (or similar foreign law), including, without limitation, good faith disclosure on a confidential basis of Confidential Information (as defined in the Confidentiality Agreement) constituting “Trade Secrets” as defined in 18 U.S.C. § 1839 (or similar foreign law), and so long as such disclosures are consistent with 18 U.S.C. § 1833 (or similar foreign law).

        3.6    Participant hereby acknowledges and agrees that:

        (a)    This Agreement and the Confidentiality Agreement are necessary for the protection of the legitimate business interests of Federated;

        (b)    The restrictions contained in this Agreement and the Confidentiality Agreement regarding scope, length of term and types of activities restricted are reasonable;

        (c)    Participant has received adequate and valuable consideration for entering into this Agreement and the Confidentiality Agreement;

        (d)    Participant’s covenants in Sections 3.3 to 3.6 of this Agreement and those in the Confidentiality Agreement shall be construed as independent of any other provisions and the existence of any claim or cause of action Participant may have against Federated, whether predicated on this Agreement or not, shall not constitute a defense to the enforcement by Federated of these covenants;

        (e)    Neither this Agreement nor the Confidentiality Agreement prevents Participant from earning a livelihood after termination or cessation of employment with Federated; and

Exhibit 10.6

        (f)    Participant has an obligation to notify prospective employers of the covenants in Sections 3.3 to 3.6 of this Agreement and of those in the Confidentiality Agreement.

ARTICLE IV

Withholding Taxes

        4.1    The Company shall have the authority to withhold from any payments due to the Participant under the Award, or to require a Participant to remit to the Company, an amount in cash sufficient to satisfy minimum federal, state and local tax withholding requirements and/or any tax or social security liability associated with the Award.

ARTICLE V

Restrictions on Transfer

        5.1    Participant hereby acknowledges that the Award, and any rights and entitlements under the Award, may not be sold, exchanged, assigned, transferred, pledged, hypothecated, gifted or otherwise disposed of.

ARTICLE VI

Miscellaneous

        6.1    Whenever the word "Participant" is used in any provision of this Agreement under circumstances where the provision should logically be construed to apply to the Participant’s Personal Representatives, the word "Participant" shall be deemed to include the Participant’s Personal Representatives.

        6.2    Nothing in this Agreement or the Stock Incentive Plan or the Co-Investment Scheme shall confer upon Participant any right to continue in the employ of Federated or shall affect the right of Federated to terminate the employment of Participant with or without cause. Nothing in this Agreement or the Stock Incentive Plan or the Co-Investment Scheme shall affect the rights and obligations of the Participant under the terms of the Participant’s office or employment with Federated or any Group Company. The Participant waives any and all rights to compensation or damages in consequences of the termination of the Participant’s office or employment for any reason whatsoever (whether or not such termination is wrongful or unfair) insofar as those rights arise or may arise from the Participant ceasing to have rights under the Award as a result of such termination. The grant of the Award does not imply that any further awards will be granted or that the Participant has any right to receive any further awards under the Stock Incentive Plan or the Co-Investment Scheme.

        6.3    The Award received by Participant pursuant to this Agreement shall not be considered compensation for purposes of any pension or retirement plan, insurance plan or any other employee benefit plan of the Company unless otherwise provided in such plan.

        6.4    Every notice or other communication relating to this Agreement shall be in writing and shall be mailed or delivered to the party for whom it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided; provided, however, that unless and until some other address be so designated, all notices or communications by Participant to the Company shall be mailed or delivered to the Secretary of the Company at its office at 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222, and all notices or communications by the Company to Participant may be given to Participant personally or may be mailed to the Participant.

Exhibit 10.6

        6.5    This Agreement and its validity, interpretation, performance and enforcement shall be governed by the laws of the Commonwealth of Pennsylvania.

        6.6    The Award shall be subject to the terms and conditions set forth in the Stock Incentive Plan, and in the event of any conflict between the provisions of this Agreement and those of the Stock Incentive Plan, the Stock Incentive Plan provisions shall govern.

        6.7    This Agreement will be binding upon and inure to the benefit of Participant's heirs and representatives and the assigns and successors of the Company and may be assigned by the Company to any third party, but neither this Agreement nor any rights hereunder will be assignable or otherwise subject to hypothecation by Participant.

        6.8    Except as stated hereafter, this Agreement represents the entire agreement of the parties with respect to the subject matter hereof. To the extent Participant has entered into an agreement with Federated that contains provisions pertaining to non-competition or non-solicitation of clients, non-solicitation or non-hiring of employees and/or non-disclosure or non-use of confidential information, including but not limited to the Confidentiality Agreement, the terms of this Agreement shall not supersede, but shall be in addition to, any other such agreement. This Agreement may be amended or terminated at any time by written agreement of the parties hereto. Notwithstanding the foregoing or any provision of this Agreement to the contrary, the Company may at any time (without the consent of the Participant) modify, amend or terminate any or all of the provisions of this Agreement to the extent necessary to conform the provisions of this Agreement with Section 409A of the Code and the regulations promulgated thereunder ("Section 409A") or an exception thereto.

        6.9    Whenever possible, each provision in this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement will be held to be prohibited by or invalid under applicable law, then (a) such provisions will be deemed amended to accomplish the objectives of the provisions as originally written to the fullest extent permitted by law and (b) all other provisions of this Agreement will remain in full force and effect.

        6.10    Any dispute or litigation arising out of or relating to this Agreement will be resolved in the courts of Allegheny County, Pennsylvania, United States of America, or the Western District of Pennsylvania and Participant hereby consents to jurisdiction in Pennsylvania.

        6.11    No rule of strict construction will be implied against the Company, or any other person in the interpretation of any of the terms of this Agreement or any rule or procedure established by the Board Committee.

        6.12    Participant irrevocably agrees to the terms of the Schedule to this Agreement (Operation of Malus and Clawback), and agrees and acknowledges that this Agreement constitutes an acceptance notice for the purposes of paragraph 2.9 of the Schedule.

        6.13    Participant agrees, upon demand of the Company, to do all acts and execute, deliver and perform all additional documents, instruments and agreements that may be required by the Company to implement the provisions and purposes of this Agreement.

        6.14    The Award is intended to be excepted from coverage under Section 409A and shall be interpreted and construed accordingly. The Company may, in its sole discretion and without the Participant's consent, modify or amend the terms of this Award, impose conditions on the timing and effectiveness of the payment of amounts due under the Award, or take any other action it deems necessary or advisable to cause this Award to be excepted from Section 409A (or to comply therewith to the extent that Company determines it is not excepted).

Exhibit 10.6

Notwithstanding the foregoing, Participant recognizes and acknowledges that Section 409A may impose upon the Participant certain taxes or interest charges for which the Participant is and shall remain solely responsible.

THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

Exhibit 10.6

IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the day and year first above written.

                        FEDERATED HERMES, INC.

                        By ___________________________

                        Title __________________________

                        PARTICIPANT

                        Print Name:____________________

Exhibit 10.6

SCHEDULE

OPERATION OF MALUS AND CLAWBACK

1.1This Schedule applies in relation to the Award if (a) either or both of paragraphs 1.2 and/or 1.3 apply, and (b) paragraph 1.4 applies.

1.2This paragraph 1.2 applies in relation to the Award if the Board Committee, at its discretion, determines that any of the following circumstances exist:

(a)the Participant has participated in or was responsible for conduct which resulted in significant losses to a Group Company,

(b)the Participant has failed to meet appropriate standards of fitness and propriety,

(c)the Company has reasonable evidence of fraud or material dishonesty by the Participant,

(d)the Company has become aware of any material wrongdoing on the part of the Participant,

(e)    there is reasonable evidence that the Participant committed acts of mis-behaviour or was responsible for a material error,

(f)the Participant has acted in a manner which in the opinion of the Board Committee has brought or is likely to bring any Group Company into material disrepute or is materially adverse to the interests of any Group Company,

(g)there is a breach of the Participant’s employment contract that is a potentially fair reason for dismissal,

(h)the Participant is in breach of a fiduciary duty owed to any Group Company or any client or customer of a Group Company,

(i)the Participant participates in a ‘lift out’ of a team or group of employees, or whether alone or with others entices or otherwise encourages a team or group of employees to move to another firm,

(j)a Participant who has ceased to be an Employee was in breach of his or her employment contact or fiduciary duties in a manner that would have prevented the grant, vesting or exercise of the Award had the Company been aware (or fully aware) of that breach, and which the Company was not aware (or fully aware) until after either (1) the Participant’s ceasing to be an employee, or (2) there was a material error in determining whether the Award should be granted or determining the size and nature of the Award,

(k)    a Group Company or the business unit in which the Participant is employed suffers a material downturn in its financial performance, or

(l)    a Group Company or the business unit in which the Participant is employed suffers a material failure of risk management.

Exhibit 10.6

1.3This paragraph 1.3 applies in relation to the Award if the Board Committee, at its discretion, determines that either of the following circumstances exist:

(a)a Group Company mis-stated any financial information (whether or not audited) for any part of a financial year that was taken into account in (i) determining whether the Award should be made, or (ii) determining the size and nature of the Award, or

(b)a Group Company or business unit that employs or employed the Participant, or for which the Participant is responsible, has suffered a material failure of risk management.

1.4This paragraph 1.4 applies in relation to the Award if the Board Committee, at its discretion, determines that, if the circumstances mentioned in paragraphs 1.2 or 1.3 had existed, and the Board Committee had been fully aware that they existed at the date on which the Award was granted, then either (a) the Board Committee would not have granted the Award, or (b) the Board Committee would have granted the Award in relation to a smaller value.

1.5    The Board Committee may make a determination in relation to the Award under this paragraph 1 at any time before the later of (i) the time the Award vests, (ii) the end of the period of three years following the Board Committee becoming aware of the circumstances mentioned in paragraphs 1.2 or 1.3.

2.1This paragraph 2 applies to the Award if paragraph 1 applies to the Award.

2.2If at the date of the determination under paragraph 1.4, amounts due under the Award (or a portion of the amounts due under the Award) have not yet been paid to the Participant, the Board Committee may determine to cancel the Award to the extent that amounts due under the Award had not yet been paid to the Participant, or to reduce amounts payable under the Award by such amount as the Board Committee considers to be fair and reasonable, taking into account all circumstances that the Board Committee considers to be relevant.

2.3If at the end of the determination under paragraph 1.4, amounts due under the Award (or a portion of the amounts due under the Award) have been paid to the Participant, the Board Committee may determine a Clawback Amount in relation to the Award.

2.4The Clawback Amount shall be such amount as the Board Committee considers to be fair and reasonable, taking account of all circumstances that the Board Committee considers to be relevant, but shall not be more than the amount paid to the Participant.

2.5If the Participant has paid or is liable to pay any amount of income tax or social security in relation to the Award which cannot be recovered from or repaid by any relevant authority (whether directly or indirectly), the Board Committee may in its discretion decide to reduce the Clawback Amount to take account of this amount. In deciding whether to reduce the Clawback Amount, the Board Committee shall take account of such factors as it thinks fit, which may include market practice, corporate governance rules and guidelines, and the expectations of shareholders.

2.6For the avoidance of doubt, the Board Committee is not obliged to determine a Clawback Amount in relation to any particular Award, even if the Board Committee does determine a Clawback Amount in relation to other Awards to the same or other Participants which were granted or which vested on the same date or dates.

Exhibit 10.6

2.7The Participant shall reimburse the Company for the Clawback Amount, in any way acceptable to the Board Committee, on or as soon as possible after the Board Committee determines a Clawback Amount in relation to the Award. If the Participant fails to reimburse the Company within 30 days after the determination, the Company shall obtain reimbursement from the Participant in any (or a combination of) the following ways:

(a)by reducing or cancelling any Options that the Participant has not exercised,

(b)by reducing or cancelling any stock award (other than an Option) where the award shares have not yet been issued or transferred to the Participant,

(c)by reducing or cancelling any cash bonus payable to the Participant by any Group Company,

(d)by reducing or cancelling any future or existing award made or granted to the Participant under any other share incentive plan or bonus plan operated by any Group Company,

(e)by requiring the Participant to transfer any shares acquired by the Participant under any award to the Company or such other person as the Company may direct for no consideration,

(f)by requiring the Participant to make a cash payment to a Group Company, or

(g)by reducing the Participant’s salary.

2.8If the Participant participates in another share incentive plan or bonus plan operated by a Group Company, and that other plan contains a provision that has similar effect to this paragraph 2, the Board Committee may give effect to that provision in any of the following ways:

(a)by reducing or cancelling any Options that the Participant has not exercised, or

(b)by reducing or cancelling any stock award (other than an Option) where the award shares have not yet been issued or transferred to the Participant.

2.9It is a condition of the payment of amounts due under the Award to the Participant that the Participant, if requested to do so by the Board Committee, sign an acceptance notice (which may form part of the Award Agreement in relation to the Award) declaring an irrevocable agreement to the terms of this paragraph 2.

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, J. Christopher Donahue, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Federated Hermes, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date	October 27, 2023	By:	/s/ J. Christopher Donahue
			J. Christopher Donahue
			President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Thomas R. Donahue, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Federated Hermes, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date	October 27, 2023	By:	/s/ Thomas R. Donahue
			Thomas R. Donahue
			Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Federated Hermes, Inc. (the "Company") on Form 10‑Q for the quarterly period ended September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date	October 27, 2023	By:	/s/ J. Christopher Donahue
			J. Christopher Donahue
			President and Chief Executive Officer
Date	October 27, 2023	By:	/s/ Thomas R. Donahue
			Thomas R. Donahue
			Chief Financial Officer

XML

Cover - shares	9 Months Ended
	Sep. 30, 2023	Oct. 20, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-14818
Entity Registrant Name	Federated Hermes, Inc.
Entity Incorporation, State or Country Code	PA
Entity Tax Identification Number	25-1111467
Entity Address, Address Line One	1001 Liberty Avenue
Entity Address, City or Town	Pittsburgh,
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	15222-3779
City Area Code	412
Local Phone Number	288-1900
Title of 12(b) Security	Class B common stock, no par value
Trading Symbol	FHI
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0001056288
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false
Class A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		9,000
Class B
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		86,245,850

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current Assets
Cash and Cash Equivalents	$ 376,960	$ 336,782
Prepaid Expenses	25,726	27,004
Other Current Assets	6,318	8,264
Total Current Assets	711,660	651,031
Long-Term Assets
Goodwill	801,556	800,417
Intangible Assets, net of accumulated amortization of $58,100 and $47,650, respectively	401,971	409,157
Property and Equipment, net of accumulated depreciation of $117,235 and $119,640, respectively	31,409	35,743
Right-of-Use Assets, net	101,159	92,860
Other Long-Term Assets	32,585	31,271
Total Long-Term Assets	1,368,680	1,369,448
Total Assets	2,080,340	2,020,479
Current Liabilities
Accounts Payable and Accrued Expenses	79,733	73,901
Accrued Compensation and Benefits	124,602	149,760
Lease Liabilities	15,869	18,394
Other Current Liabilities	35,383	15,358
Total Current Liabilities	255,587	257,413
Long-Term Liabilities
Long-Term Debt	347,777	347,581
Long-Term Deferred Tax Liability, net	176,707	180,410
Long-Term Lease Liabilities	95,995	86,809
Other Long-Term Liabilities	33,605	40,753
Total Long-Term Liabilities	654,084	655,553
Total Liabilities	909,671	912,966
Commitments and Contingencies (Note (17))
TEMPORARY EQUITY
Redeemable Noncontrolling Interests in Subsidiaries	70,631	61,821
Federated Hermes, Inc. Shareholders’ Equity
Additional Paid-In Capital from Treasury Stock Transactions	15	0
Retained Earnings	1,148,486	1,015,589
Treasury Stock, at Cost, 13,257,106 and 10,229,521 Shares Class B Common Stock, respectively	(473,332)	(365,363)
Accumulated Other Comprehensive Income (Loss), net of tax	(43,393)	(45,676)
Total Permanent Equity	1,100,038	1,045,692
Total Liabilities, Temporary Equity and Permanent Equity	2,080,340	2,020,479
Consolidated Investment Companies
Current Assets
Investments	118,201	108,448
Affiliates
Current Assets
Investments	59,272	76,524
Receivables	52,659	35,941
Nonrelated Party
Current Assets
Receivables	72,524	58,068
Class A
Federated Hermes, Inc. Shareholders’ Equity
Common Stock	189	189
Class B
Federated Hermes, Inc. Shareholders’ Equity
Common Stock	$ 468,073	$ 440,953

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Receivables, reserve	$ 21	$ 21
Intangible assets, accumulated amortization	58,100	47,650
Property and equipment, accumulated depreciation	$ 117,235	$ 119,640
Treasury stock, shares (in shares)	13,257,106	10,229,521
Class A
Common stock, no par value (usd per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	20,000	20,000
Common stock, shares issued (in shares)	9,000	9,000
Common stock, shares outstanding (in shares)	9,000	9,000
Class B
Common stock, no par value (usd per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	900,000,000	900,000,000
Common stock, shares issued (in shares)	99,505,456	99,505,456
Common stock, shares outstanding (in shares)	86,248,350	89,275,935

XML

Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenue
Total Revenue	$ 402,656	$ 381,143	$ 1,218,077	$ 1,071,915
Operating Expenses
Compensation and Related	139,123	126,668	435,884	388,719
Distribution	89,838	91,032	280,258	223,837
Systems and Communications	21,213	19,294	63,259	57,234
Professional Service Fees	17,561	14,203	52,881	41,647
Office and Occupancy	10,632	10,622	34,910	32,457
Advertising and Promotional	3,857	6,496	13,308	13,965
Travel and Related	4,034	3,421	11,101	8,543
Intangible Asset Related	3,451	2,894	10,194	9,319
Other	11,523	9,733	31,303	23,147
Total Operating Expenses	301,232	284,363	933,098	798,868
Operating Income	101,424	96,780	284,979	273,047
Nonoperating Income (Expenses)
Investment Income, net	6,160	2,599	16,228	5,270
Gain (Loss) on Securities, net	(3,438)	(6,825)	2,094	(39,406)
Debt Expense	(3,133)	(3,302)	(9,377)	(7,873)
Other, net	(8)	(38)	101	31
Total Nonoperating Income (Expenses), net	(419)	(7,566)	9,046	(41,978)
Income Before Income Taxes	101,005	89,214	294,025	231,069
Income Tax Provision	26,739	21,640	75,291	58,140
Net Income Including the Noncontrolling Interests in Subsidiaries	74,266	67,574	218,734	172,929
Less: Net Income (Loss) Attributable to the Noncontrolling Interests in Subsidiaries	(760)	(1,905)	1,932	(10,070)
Net Income	$ 75,026	$ 69,479	$ 216,802	$ 182,999
Amounts Attributable to Federated Hermes, Inc.
Earnings Per Common Share—Basic (usd per share)	$ 0.86	$ 0.78	$ 2.44	$ 2.02
Earnings Per Common Share—Diluted (usd per share)	0.86	0.78	2.44	2.02
Cash Dividends Per Share (usd per share)	$ 0.28	$ 0.27	$ 0.83	$ 0.81
Investment Advisory Fees, net | Affiliates
Revenue
Total Revenue	$ 215,673	$ 206,394	$ 666,983	$ 574,081
Investment Advisory Fees, net | Nonrelated Party
Revenue
Total Revenue	61,098	57,250	184,106	180,600
Administrative Service Fees, net—Affiliates | Affiliates
Revenue
Total Revenue	88,023	75,021	252,402	218,710
Other Service Fees, net | Affiliates
Revenue
Total Revenue	33,507	38,265	102,364	85,120
Other Service Fees, net | Nonrelated Party
Revenue
Total Revenue	$ 4,355	$ 4,213	$ 12,222	$ 13,404

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net Income Including the Noncontrolling Interests in Subsidiaries	$ 74,266	$ 67,574	$ 218,734	$ 172,929
Permanent Equity
Foreign Currency Translation Gain (Loss)	(21,814)	(43,760)	2,283	(103,778)
Temporary Equity
Foreign Currency Translation Gain (Loss)	(454)	(1,713)	106	(3,238)
Other Comprehensive Income (Loss), net of tax	(22,268)	(45,473)	2,389	(107,016)
Comprehensive Income Including the Noncontrolling Interests in Subsidiaries	51,998	22,101	221,123	65,913
Less: Comprehensive Income (Loss) Attributable to Redeemable Noncontrolling Interests in Subsidiaries	(1,214)	(3,618)	2,038	(13,308)
Comprehensive Income Attributable to Federated Hermes, Inc.	$ 53,212	$ 25,719	$ 219,085	$ 79,221

XML

Consolidated Statements of Changes in Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital from Treasury Stock Transactions	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Income (Loss), net of tax	Redeemable Noncontrolling Interests in Subsidiaries/ Temporary Equity
Balance, beginning of period at Dec. 31, 2021	$ 1,114,017	$ 449,118	$ 0	$ 1,187,001	$ (538,464)	$ 16,362
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	55,863			55,863
Other Comprehensive Income (Loss), net of tax	(17,134)					(17,134)
Stock Award Activity	9,319	9,288		(12,116)	12,147
Dividends Declared	(24,952)			(24,952)
Change in Estimated Redemption Value of Redeemable Noncontrolling Interests	(14,221)			(14,221)
Acquisition of Additional Equity of FHL	37,566		3,518		34,048
Purchase of Treasury Stock	(102,537)				(102,537)
Balance, end of period at Mar. 31, 2022	1,057,921	458,406	3,518	1,191,575	(594,806)	(772)
Temporary equity, beginning balance at Dec. 31, 2021	63,202						$ 63,202
Increase (Decrease) in Temporary Equity [Roll Forward]
Net Income (Loss)	(1,266)						(1,266)
Other Comprehensive Income (Loss), net of tax	(457)						(457)
Subscriptions—Redeemable Noncontrolling Interest Holders	30,340						30,340
Consolidation (Deconsolidation)	(16,034)						(16,034)
Stock Award Activity	707						707
Distributions to Noncontrolling Interests in Subsidiaries	(4,339)						(4,339)
Change in Estimated Redemption Value of Redeemable Noncontrolling Interests in FHL	14,221						14,221
Acquisition of Additional Equity of FHL	(37,805)						(37,805)
Temporary equity, ending balance at Mar. 31, 2022	48,569						48,569
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	57,657			57,657
Other Comprehensive Income (Loss), net of tax	(42,884)					(42,884)
Stock Award Activity	9,446	9,430	(46)		62
Dividends Declared	(24,705)			(24,705)
Purchase of Treasury Stock	(89,542)				(89,542)
Balance, end of period at Jun. 30, 2022	967,893	467,836	3,472	1,224,527	(684,286)	(43,656)
Increase (Decrease) in Temporary Equity [Roll Forward]
Net Income (Loss)	(6,899)						(6,899)
Other Comprehensive Income (Loss), net of tax	(1,068)						(1,068)
Subscriptions—Redeemable Noncontrolling Interest Holders	15,314						15,314
Distributions to Noncontrolling Interests in Subsidiaries	(1,185)						(1,185)
Temporary equity, ending balance at Jun. 30, 2022	54,731						54,731
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	69,479			69,479
Other Comprehensive Income (Loss), net of tax	(43,760)					(43,760)
Stock Award Activity	8,895	8,895
Dividends Declared	(24,141)			(24,141)
Retirement of Treasury Stock		(42,700)	(3,472)	(267,664)	313,836
Purchase of Treasury Stock	(6,937)				(6,937)
Balance, end of period at Sep. 30, 2022	971,429	434,031	0	1,002,201	(377,387)	(87,416)
Increase (Decrease) in Temporary Equity [Roll Forward]
Net Income (Loss)	(1,905)						(1,905)
Other Comprehensive Income (Loss), net of tax	(1,713)						(1,713)
Subscriptions—Redeemable Noncontrolling Interest Holders	4,494						4,494
Consolidation (Deconsolidation)	15,599						15,599
Distributions to Noncontrolling Interests in Subsidiaries	(16,620)						(16,620)
Temporary equity, ending balance at Sep. 30, 2022	54,586						54,586
Balance, beginning of period at Dec. 31, 2022	1,045,692	441,142	0	1,015,589	(365,363)	(45,676)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	69,601			69,601
Other Comprehensive Income (Loss), net of tax	9,620					9,620
Stock Award Activity	10,677	10,677		(9,950)	9,950
Dividends Declared	(24,145)			(24,145)
Purchase of Treasury Stock	(4,742)				(4,742)
Balance, end of period at Mar. 31, 2023	1,106,703	451,819	0	1,051,095	(360,155)	(36,056)
Temporary equity, beginning balance at Dec. 31, 2022	61,821						61,821
Increase (Decrease) in Temporary Equity [Roll Forward]
Net Income (Loss)	1,865						1,865
Other Comprehensive Income (Loss), net of tax	232						232
Subscriptions—Redeemable Noncontrolling Interest Holders	12,776						12,776
Consolidation (Deconsolidation)	(33,962)						(33,962)
Distributions to Noncontrolling Interests in Subsidiaries	(3,224)						(3,224)
Temporary equity, ending balance at Mar. 31, 2023	39,508						39,508
Balance, beginning of period at Dec. 31, 2022	1,045,692	441,142	0	1,015,589	(365,363)	(45,676)
Balance, end of period at Sep. 30, 2023	1,100,038	468,262	15	1,148,486	(473,332)	(43,393)
Temporary equity, beginning balance at Dec. 31, 2022	61,821						61,821
Temporary equity, ending balance at Sep. 30, 2023	70,631						70,631
Balance, beginning of period at Mar. 31, 2023	1,106,703	451,819	0	1,051,095	(360,155)	(36,056)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	72,175			72,175
Other Comprehensive Income (Loss), net of tax	14,477					14,477
Stock Award Activity	8,951	8,970		(39)	20
Dividends Declared	(25,084)			(25,084)
Purchase of Treasury Stock	(43,366)				(43,366)
Balance, end of period at Jun. 30, 2023	1,133,856	460,789	0	1,098,147	(403,501)	(21,579)
Temporary equity, beginning balance at Mar. 31, 2023	39,508						39,508
Increase (Decrease) in Temporary Equity [Roll Forward]
Net Income (Loss)	827						827
Other Comprehensive Income (Loss), net of tax	328						328
Subscriptions—Redeemable Noncontrolling Interest Holders	19,684						19,684
Consolidation (Deconsolidation)	12,119						12,119
Distributions to Noncontrolling Interests in Subsidiaries	(14,454)						(14,454)
Temporary equity, ending balance at Jun. 30, 2023	58,012						58,012
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	75,026			75,026
Other Comprehensive Income (Loss), net of tax	(21,814)					(21,814)
Stock Award Activity	7,488	7,473	15
Dividends Declared	(24,687)			(24,687)
Retirement of Treasury Stock	0
Purchase of Treasury Stock	(69,831)				(69,831)
Balance, end of period at Sep. 30, 2023	1,100,038	$ 468,262	$ 15	$ 1,148,486	$ (473,332)	$ (43,393)
Increase (Decrease) in Temporary Equity [Roll Forward]
Net Income (Loss)	(760)						(760)
Other Comprehensive Income (Loss), net of tax	(454)						(454)
Subscriptions—Redeemable Noncontrolling Interest Holders	35,323						35,323
Consolidation (Deconsolidation)	(6,601)						(6,601)
Distributions to Noncontrolling Interests in Subsidiaries	(14,889)						(14,889)
Temporary equity, ending balance at Sep. 30, 2023	$ 70,631						$ 70,631

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Operating Activities
Net Income Including the Noncontrolling Interests in Subsidiaries	$ 218,734	$ 172,929
Adjustments to Reconcile Net Income to Net Cash Provided (Used) by Operating Activities
Depreciation and Amortization	20,817	21,197
Share-Based Compensation Expense	27,165	27,619
Subsidiary Share-Based Compensation Expense	0	707
(Gain) Loss on Disposal of Assets	(157)	3,986
Provision (Benefit) for Deferred Income Taxes	(3,984)	(6,969)
Consolidation/(Deconsolidation) of Other Entities	3,490	(20)
Net Unrealized (Gain) Loss on Investments	(1,920)	35,425
Net Sales (Purchases) of Investments—Consolidated Investment Companies	(36,311)	(26,216)
Other Changes in Assets and Liabilities:
(Increase) Decrease in Receivables, net	(30,981)	4,537
(Increase) Decrease in Prepaid Expenses and Other Assets	19,389	(23,734)
Increase (Decrease) in Accounts Payable and Accrued Expenses	(23,942)	(22,984)
Increase (Decrease) in Other Liabilities	(10,101)	5,058
Net Cash Provided (Used) by Operating Activities	182,199	191,535
Investing Activities
Purchases of Investments—Affiliates and Other	(13,600)	(18,606)
Proceeds from Redemptions of Investments—Affiliates and Other	27,967	21,389
Cash Paid for Property and Equipment	(5,803)	(4,094)
Net Cash Provided (Used) by Investing Activities	8,564	(1,311)
Financing Activities
Dividends Paid	(73,963)	(73,804)
Purchases of Treasury Stock	(112,013)	(211,216)
Distributions to Noncontrolling Interests in Subsidiaries	(32,567)	(22,144)
Contributions from Noncontrolling Interests in Subsidiaries	67,783	50,148
Cash paid for Business Acquisitions	(857)	(7,053)
Proceeds from New Borrowings	0	488,300
Payments on Debt	0	(311,650)
Other Financing Activities	15	(2,571)
Net Cash Provided (Used) by Financing Activities	(151,602)	(89,990)
Effect of Exchange Rates on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	1,120	(29,980)
Net Increase (Decrease) in Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	40,281	70,254
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Beginning of Period	340,955	238,052
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, End of Period	381,236	308,306
Less: Restricted Cash Recorded in Other Current Assets	3,886	3,516
Less: Restricted Cash and Restricted Cash Equivalents Recorded in Other Long-Term Assets	390	270
Cash and Cash Equivalents	$ 376,960	$ 304,520

XML

Basis of Presentation

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

Federated Hermes, Inc. and its consolidated subsidiaries (collectively, Federated Hermes) provide investment advisory, administrative, distribution and other services to various investment products, including sponsored investment companies, collective funds and other funds (Federated Hermes Funds) and separate accounts (which include separately managed accounts, institutional accounts, certain sub-advised funds and other managed products, collectively Separate Accounts) in both domestic and international markets. In addition, Federated Hermes markets and provides stewardship and real estate development services to various domestic and international companies. The interim consolidated financial statements of Federated Hermes included herein (Consolidated Financial Statements) have been prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP). In the opinion of management, the financial statements reflect all adjustments that are of a normal recurring nature and necessary for a fair presentation of the results for the interim periods presented.

In preparing the Consolidated Financial Statements, management is required to make estimates and assumptions that affect the amounts reported therein and in the accompanying notes. Actual results may differ from those estimates, and such differences may be material to the Consolidated Financial Statements.

The Consolidated Financial Statements should be read in conjunction with Federated Hermes’ Annual Report on Form 10-K for the year ended December 31, 2022. Certain items reported in previous periods have been reclassified to conform to the current period’s presentation.

XML

Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

For a complete listing of Federated Hermes’ significant accounting policies, please refer to Federated Hermes’ Annual Report on Form 10-K for the year ended December 31, 2022. The following previously disclosed significant accounting policy has been updated.

Principles of Consolidation

Consolidation of Variable Interest Entities

Federated Hermes has a controlling financial interest in variable interest entities (VIEs) and is, therefore, deemed to be the primary beneficiary of a VIE if it has (1) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and (2) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Federated Hermes manages carried interest vehicles (CIVs), whose primary purpose is to collect and distribute carried interest paid by foreign private equity and infrastructure funds, that have been determined to be VIEs. As the primary beneficiary, Federated Hermes consolidates certain CIVs. As a result, when carried interest is recognized as revenue, a portion of this revenue is allocated to current and former employee limited partners and is recorded to Compensation and Related expense. Financial information for the CIVs is not available timely and is therefore consolidated on a one quarter lag, adjusted for any known material carried interest revenue and compensation transactions occurring through the balance sheet date.

XML

Business Combination

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Business Combination

Business Combination

CWH Acquisition

Effective October 1, 2022, Federated Hermes completed the acquisition of substantially all of the assets of C.W. Henderson and Associates, Inc. (CWH), a Chicago-based registered investment advisor specializing in the management of tax-exempt municipal securities (CWH Acquisition). This acquisition enhanced Federated Hermes’ existing separately managed accounts business. The CWH Acquisition included an upfront cash payment of $28.1 million. The purchase agreement also provides for a series of contingent purchase price payments, which can total as much as $17.6 million in the aggregate and is payable annually over the first five years if certain levels of net revenue growth are achieved.

Federated Hermes performed a valuation of the fair value of the CWH Acquisition. The accounting for this acquisition was finalized in the third quarter 2023. There were no changes to provisional amounts for the acquired assets and assumed liabilities.

The following table summarizes the final purchase price allocation determined as of the acquisition date:

(in millions)
Right-of-Use Asset	$	0.8
Intangible Assets1	15.4
Goodwill2	16.4
Less: Lease Liability Assumed	0.8
Less: Fair Value of Contingent Consideration	3.7
Total Upfront Purchase Price Consideration	$	28.1

1    Includes $14.8 million for customer relationships with an estimated useful life of 12 years and $0.6 million for a trade name with an estimated useful life of five years, all of which are recorded in Intangibles Assets, net on the Consolidated Balance Sheets.

2    The goodwill recognized is attributable to enhanced revenue and AUM growth opportunities from future investors and the assembled workforce of the CWH business and is deductible for tax purposes.

XML

Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

Revenue from Contracts with Customers

The following table presents Federated Hermes’ revenue disaggregated by asset class:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Money market	$	186,760	$	170,542	$	559,622	$	402,639
Equity	123,485		127,183		371,282		406,642
Fixed-income	47,142		49,197		142,590		159,025
Other1	45,269		34,221		144,583		103,609
Total Revenue	$	402,656	$	381,143	$	1,218,077	$	1,071,915

1    Primarily includes Alternative / Private Markets (including but not limited to private equity, real estate and infrastructure), multi-asset and stewardship services revenue.

The following table presents Federated Hermes’ revenue disaggregated by performance obligation:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Asset Management1	$	276,771	$	263,644	$	851,089	$	754,681
Administrative Services	88,023		75,021		252,402		218,710
Distribution2	31,466		36,026		96,360		78,285
Other3	6,396		6,452		18,226		20,239
Total Revenue	$	402,656	$	381,143	$	1,218,077	$	1,071,915

1    The performance obligation can include administrative, distribution and other services recorded as a single asset management fee under Topic 606, as it is part of a unitary fee arrangement with a single performance obligation.

2    The performance obligation is satisfied at a point in time. A portion of this revenue relates to a performance obligation that has been satisfied in a prior period.

3    Primarily includes shareholder service fees and stewardship services revenue.

The following table presents Federated Hermes’ revenue disaggregated by geographical market:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Domestic	$	322,028	$	311,254	$	971,077	$	849,570
Foreign1	80,628		69,889		247,000		222,345
Total Revenue	$	402,656	$	381,143	$	1,218,077	$	1,071,915

1    This represents revenue earned by non-U.S. domiciled subsidiaries.

The following table presents Federated Hermes’ revenue disaggregated by product type:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Federated Hermes Funds	$	337,203	$	319,680	$	1,021,748	$	877,910
Separate Accounts	61,098		57,250		184,106		180,600
Other1	4,355		4,213		12,223		13,405
Total Revenue	$	402,656	$	381,143	$	1,218,077	$	1,071,915

1    Primarily includes stewardship services revenue.

For nearly all revenue, Federated Hermes is not required to disclose certain estimates of revenue expected to be recorded in future periods as a result of applying the following exemptions: (1) contract terms are short-term in nature (i.e., expected duration of one year or less due to termination provisions) and (2) the expected variable consideration would be allocated entirely to future service periods.

Federated Hermes expects to recognize revenue in the future related to the unsatisfied portion of the stewardship services and real estate development performance obligations at September 30, 2023. Generally, contracts are billed in arrears on a quarterly basis and have a three-year duration, after which the customer can terminate the agreement with notice, generally from three to twelve months. Based on existing contracts and the applicable foreign exchange rates as of September 30, 2023, Federated Hermes may recognize future fixed revenue from these services as presented in the following table:

(in thousands)
Remainder of 2023	$	3,454
2024	7,243
2025	2,225
2026 and Thereafter	1,121
Total Remaining Unsatisfied Performance Obligations	$	14,043

XML

Concentration Risk

9 Months Ended

Sep. 30, 2023

Risks and Uncertainties [Abstract]

Concentration Risk

Concentration Risk

(a) Revenue Concentration by Asset Class

The following table presents Federated Hermes’ significant revenue concentration by asset class:

	Nine Months Ended
	September 30,
	2023		2022
Money Market Assets	46	%	37	%
Equity Assets	30	%	38	%
Fixed-Income Assets	12	%	15	%

The change in the relative proportion of Federated Hermes’ revenue attributable to money market assets for the nine months ended September 30, 2023, as compared to the same period in 2022, was primarily the result of an increase in money market revenue due to the elimination of fee waivers in order for certain money market funds to maintain positive or zero net yields (Voluntary Yield-related Fee Waivers) and higher average assets. See section below entitled Low Short-Term Interest Rates.

The change in the relative proportion of Federated Hermes’ revenue attributable to equity and fixed-income assets for the nine months ended September 30, 2023, as compared to the same period in 2022, was primarily the result of increased money market revenue described above, as well as decreased equity revenue from lower average equity assets and decreased fixed-income revenue from lower average fixed-income assets and asset mix in 2023.

Low Short-Term Interest Rates

In March 2020, in response to disrupted economic activity as a result of the outbreak of a novel coronavirus (the Pandemic), the Federal Open Market Committee (FOMC) of the Federal Reserve Board (Fed) decreased the federal funds target rate range to 0% - 0.25%. The federal funds target rate drives short-term interest rates. As a result of the near-zero interest-rate environment, the gross yield earned by certain money market funds was not sufficient to cover all of the fund’s operating expenses. Beginning in the first quarter 2020, Federated Hermes had implemented Voluntary Yield-related Fee Waivers. These waivers

had been partially offset by related reductions in distribution expense as a result of Federated Hermes’ mutual understanding and agreement with third-party intermediaries to share the impact of the Voluntary Yield-related Fee Waivers. In response to global economic activity and elevated inflation levels, the FOMC raised the federal funds target rate multiple times in 2022 and 2023. The range is currently at 5.25% - 5.50% as of the September 2023 FOMC meeting. These rate increases eliminated the net negative pre-tax impact of the Voluntary Yield-related Fee Waivers in the second half of 2022.

There were no Voluntary Yield-related Fee Waivers during the three and nine months ended September 30, 2023. There were no material Voluntary Yield-related Fee Waivers during the three months ended September 30, 2022. During the nine months ended September 30, 2022, Voluntary Yield-related Fee Waivers totaled $85.3 million. These fee waivers were partially offset by related reductions in distribution expenses of $66.5 million, such that the net negative pre-tax impact to Federated Hermes was $18.8 million for the nine months ended September 30, 2022.

(b) Revenue Concentration by Investment Fund Strategy

Federated Hermes’ revenue concentration in the investment fund, Federated Hermes Government Obligations Fund, was 14% for both the three- and nine-month periods ended September 30, 2023, and 14% and 11% for the three- and nine-month periods ended September 30, 2022, respectively. A significant and prolonged decline in the AUM in this fund could have a material adverse effect on Federated Hermes’ future revenues and, to a lesser extent, net income, due to a related reduction in distribution expenses associated with these funds.

(c) Revenue Concentration by Intermediary

Approximately 11% of Federated Hermes’ total revenue for both the three- and nine-month periods ended September 30, 2023, and 14% and 11% for the three- and nine-month periods ended September 30, 2022, respectively, was derived from services provided to one intermediary, The Bank of New York Mellon Corporation, including its Pershing subsidiary. Significant negative changes in Federated Hermes’ relationship with this intermediary could have a material adverse effect on Federated Hermes’ future revenues and, to a lesser extent, net income due to a related reduction in distribution expenses associated with this intermediary.

XML

Consolidation

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidation

Consolidation

The Consolidated Financial Statements include the accounts of Federated Hermes, certain Federated Hermes Funds and other entities in which Federated Hermes holds a controlling financial interest. Federated Hermes is involved with various entities in the normal course of business that may be deemed to be voting rights entities (VREs) or VIEs. From time to time, Federated Hermes invests in Federated Hermes Funds for general corporate investment purposes or, in the case of newly launched products, in order to provide investable cash to establish a performance history. Federated Hermes’ investment in, and/or receivables from, these Federated Hermes Funds represents its maximum exposure to loss. The assets of each consolidated Federated Hermes Fund are restricted for use by that Federated Hermes Fund. Generally, neither creditors of, nor equity investors in, the Federated Hermes Funds have any recourse to Federated Hermes’ general credit. Given that the entities consolidated by Federated Hermes generally follow investment company accounting, which prescribes fair-value accounting, a deconsolidation generally does not result in the recognition of gains or losses for Federated Hermes.

In the ordinary course of business, Federated Hermes could implement fee waivers, rebates or expense reimbursements for various Federated Hermes Funds for competitive reasons (such as Voluntary Yield-related Fee Waivers or to maintain certain fund expense ratios/yields), to meet regulatory requirements or to meet contractual requirements (collectively, Fee Waivers). For the three and nine months ended September 30, 2023, Fee Waivers totaled $142.4 million and $398.8 million, respectively, of which $114.0 million and $313.5 million, respectively, related to money market funds which meet the scope exception of the consolidation guidance. For the three and nine months ended September 30, 2022, Fee Waivers totaled $118.2 million and $444.7 million, respectively, of which $89.1 million and $351.0 million, respectively, related to money market funds which meet the scope exception of the consolidation guidance.

Like other sponsors of investment companies, Federated Hermes in the ordinary course of business could make capital contributions to certain affiliated money market Federated Hermes Funds in connection with the reorganization of such funds into certain other affiliated money market Federated Hermes Funds or in connection with the liquidation of money market Federated Hermes Funds. In these instances, such capital contributions typically are intended to either offset realized losses or other permanent impairments to a fund’s net asset value (NAV), increase the market-based NAV per share of the fund’s portfolio that is being reorganized to equal the market-based NAV per share of the acquiring fund or to bear a portion of expenses relating to a fund liquidation. Under current money market fund regulations and Securities and Exchange Commission

(SEC) guidance, Federated Hermes is required to report these types of capital contributions to U.S. money market mutual funds to the SEC as financial support to the investment company that is being reorganized or liquidated. There were no contributions for the nine months ended September 30, 2023 and 2022.

In accordance with Federated Hermes’ consolidation accounting policy, Federated Hermes first determines whether the entity being evaluated is a VRE or a VIE. Once this determination is made, Federated Hermes proceeds with its evaluation of whether to consolidate the entity. The disclosures below represent the results of such evaluations as of September 30, 2023 and December 31, 2022.

(a) Consolidated Voting Rights Entities

Although most of the Federated Hermes Funds meet the definition of a VRE, Federated Hermes consolidates VREs only when it is deemed to have control. Consolidated VREs are reported on Federated Hermes’ Consolidated Balance Sheets primarily in Investments—Consolidated Investment Companies and Redeemable Noncontrolling Interests in Subsidiaries.

(b) Consolidated Variable Interest Entities

As of the periods ended September 30, 2023 and December 31, 2022, Federated Hermes was deemed to be the primary beneficiary of, and therefore consolidated, certain entities as a result of its controlling financial interest. The following table presents the balances related to the consolidated VIEs that were included on the Consolidated Balance Sheets as well as Federated Hermes’ net interest in the consolidated VIEs for each period presented:

(in millions)	September 30, 2023		December 31, 2022
Cash and Cash Equivalents	$	10.8	$	8.0
Investments—Consolidated Investment Companies	61.2		50.1
Receivables-Affiliates	11.6		0.3
Other Current Assets	0.4		0.4
Other Long-Term Assets	12.4		13.4
Less: Liabilities	19.7		5.7
Less: Accumulated Other Comprehensive Income (Loss), net of tax	0.4		1.2
Less: Redeemable Noncontrolling Interests in Subsidiaries	56.3		49.5
Federated Hermes’ Net Interest in VIEs	$	20.0	$	15.8

Federated Hermes’ net interest in the consolidated VIEs represents the value of Federated Hermes’ economic ownership interest in those VIEs. During the nine months ended September 30, 2023, Federated Hermes consolidated an existing VIE due to Federated Hermes increasing its ownership in this fund. One VIE was deconsolidated in the first quarter 2023 due to an increase in outside investments which briefly reduced Federated Hermes’ ownership below controlling interest level. This VIE was reconsolidated in the third quarter 2023 when Federated Hermes increased its ownership in the VIE. In the second quarter 2023, Federated Hermes consolidated a new fund, which was deconsolidated in the third quarter 2023 due to an increase in outside investments, as well as Federated Hermes redeeming a portion of its investment in the fund, resulting in a decrease in its ownership below controlling interest level. There was no material impact to the Consolidated Statements of Income as a result of these consolidations and deconsolidations on a net basis.

As of September 30, 2023, the consolidation of a certain VIE included a receivable of $9.8 million recorded in Receivables—Affiliates and a corresponding liability of $10.0 million recorded in Other Current Liabilities related to carried interest earned in September 2023. After it was received by the consolidated VIE, the carried interest was dispersed by that VIE to settle the $10.0 million liability in October 2023.

(c) Non-Consolidated Variable Interest Entities

Federated Hermes’ involvement with certain Federated Hermes Funds that are deemed to be VIEs includes serving as investment manager, or, at times, holding a minority interest or both. Federated Hermes’ variable interest is not deemed to absorb losses or receive benefits that could potentially be significant to the VIE. Therefore, Federated Hermes is not the primary beneficiary of these VIEs and has not consolidated these entities.

At September 30, 2023 and December 31, 2022, Federated Hermes’ maximum risk of loss related to investments in variable interests in non-consolidated VIEs was $112.0 million and $101.7 million, respectively, (primarily recorded in Cash and Cash Equivalents on the Consolidated Balance Sheets) and was entirely related to Federated Hermes Funds. AUM for these non-consolidated Federated Hermes Funds totaled $8.6 billion and $5.4 billion at September 30, 2023 and December 31, 2022,

respectively. Of the Receivables—Affiliates at September 30, 2023 and December 31, 2022, $0.8 million and $0.7 million, respectively, was related to non-consolidated VIEs and represented Federated Hermes’ maximum risk of loss from non-consolidated VIE receivables.

XML

Investments

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

At September 30, 2023 and December 31, 2022, Federated Hermes held investments in non-consolidated fluctuating-value Federated Hermes Funds of $52.4 million and $67.0 million, respectively, primarily in mutual funds which represent equity investments for Federated Hermes, and held investments in Separate Accounts of $6.9 million and $9.5 million at September 30, 2023 and December 31, 2022, respectively, that were included in Investments—Affiliates and Other on the Consolidated Balance Sheets. Federated Hermes’ investments held in Separate Accounts as of September 30, 2023 and December 31, 2022 were primarily composed of stocks of large domestic and foreign companies ($3.2 million and $3.4 million, respectively) and domestic debt securities ($2.3 million and $4.6 million, respectively).

Federated Hermes consolidates certain Federated Hermes Funds into its Consolidated Financial Statements as a result of its controlling financial interest in these Federated Hermes Funds (see Note (6)). All investments held by these consolidated Federated Hermes Funds were included in Investments—Consolidated Investment Companies on Federated Hermes’ Consolidated Balance Sheets.

The investments held by consolidated Federated Hermes Funds as of September 30, 2023 and December 31, 2022 were composed of domestic and foreign debt securities ($58.2 million and $57.8 million, respectively), stocks of large domestic and foreign companies ($54.2 million and $45.3 million, respectively), stocks of small and mid-sized domestic and foreign companies ($3.6 million and $3.3 million, respectively) and mutual funds ($2.2 million and $2.1 million, respectively).

The following table presents gains and losses recognized in Gain (Loss) on Securities, net on the Consolidated Statements of Income in connection with Federated Hermes’ investments:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Investments—Consolidated Investment Companies
Net Unrealized Gains (Losses)	$	(1,680)	$	1,137	$	2,582	$	(16,446)
Net Realized Gains (Losses)1	(125)		(4,568)		(1,101)		(6,047)
Net Gains (Losses) on Investments—Consolidated Investment Companies	(1,805)		(3,431)		1,481		(22,493)
Investments—Affiliates and Other
Net Unrealized Gains (Losses)	(1,518)		(3,248)		(662)		(18,979)
Net Realized Gains (Losses)1	(115)		(146)		1,275		2,066
Net Gains (Losses) on Investments—Affiliates and Other	(1,633)		(3,394)		613		(16,913)
Gain (Loss) on Securities, net	$	(3,438)	$	(6,825)	$	2,094	$	(39,406)

1    Realized gains and losses are computed on a specific-identification basis.

XML

Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair value is the price that would be received to sell an asset or the price that would be paid to transfer a liability as of the measurement date. A fair-value reporting hierarchy exists for disclosure of fair value measurements based on the observability of the inputs to the valuation of financial assets and liabilities. The levels are:

Level 1 – Quoted prices for identical instruments in active markets. Level 1 assets can include equity and debt securities that are traded in an active exchange market, including shares of mutual funds.

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 assets and liabilities may include debt and equity securities, purchased loans and over-the-counter derivative contracts whose fair value is determined using a pricing model without significant unobservable market data inputs.

Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable in active markets.

NAV Practical Expedient – Investments that calculate NAV per share (or its equivalent) as a practical expedient. These investments have been excluded from the fair value hierarchy.

(a) Fair Value Measurements on a Recurring Basis

The following table presents fair value measurements for classes of Federated Hermes’ financial assets and liabilities measured at fair value on a recurring basis:

(in thousands)	Level 1		Level 2		Level 3		Total
September 30, 2023
Financial Assets
Cash and Cash Equivalents	$	376,960	$	0	$	0	$	376,960
Investments—Consolidated Investment Companies	60,037		58,164		0		118,201
Investments—Affiliates and Other	56,840		2,407		25		59,272
Other1	6,623		0		0		6,623
Total Financial Assets	$	500,460	$	60,571	$	25	$	561,056
Total Financial Liabilities2	$	48	$	3,467	$	8,180	$	11,695
December 31, 2022
Financial Assets
Cash and Cash Equivalents	$	336,782	$	0	$	0	$	336,782
Investments—Consolidated Investment Companies	49,119		59,329		0		108,448
Investments—Affiliates and Other	71,369		5,130		25		76,524
Other1	6,538		469		0		7,007
Total Financial Assets	$	463,808	$	64,928	$	25	$	528,761
Total Financial Liabilities2	$	27	$	4	$	8,439	$	8,470

1    Amounts primarily consist of restricted cash and security deposits as of September 30, 2023 and December 31, 2022.

2    Amounts primarily consist of acquisition-related future contingent consideration liabilities and unrealized derivative losses as of September 30, 2023 and acquisition-related future contingent consideration liabilities as of December 31, 2022.

The following is a description of the valuation methodologies used for financial assets and liabilities measured at fair value on a recurring basis. Federated Hermes did not hold any nonfinancial assets or liabilities measured at fair value on a recurring basis at September 30, 2023 or December 31, 2022.

Cash and Cash Equivalents

Cash and Cash Equivalents include deposits with banks and investments in money market funds. Investments in money market funds totaled $329.5 million and $289.8 million at September 30, 2023 and December 31, 2022, respectively. Cash investments in publicly available money market funds are valued under the market approach through the use of quoted market prices in an active market, which is the NAV of the funds, and are classified within Level 1 of the valuation hierarchy.

Investments—Consolidated Investment Companies

Investments—Consolidated Investment Companies represent securities held by consolidated Federated Hermes Funds. For publicly traded securities available in an active market, the fair value of these securities is classified as Level 1 when the fair value is based on quoted market prices. The fair values of certain securities held by consolidated Federated Hermes Funds which are determined by third-party pricing services and utilize observable market inputs of comparable investments are classified within Level 2 of the valuation hierarchy.

Investments—Affiliates and Other

Investments—Affiliates and Other primarily represent investments in fluctuating-value Federated Hermes Funds, as well as investments held in Separate Accounts. For investments in fluctuating-value Federated Hermes Funds that are publicly available, the securities are valued under the market approach through the use of quoted market prices available in an active market, which is the NAV of the funds, and are classified within Level 1 of the valuation hierarchy. For publicly traded

securities available in an active market, the fair value of these securities is classified as Level 1 when the fair value is based on quoted market prices. The fair values of certain securities which are determined by third-party pricing services and utilize observable market inputs of comparable investments are classified within Level 2 of the valuation hierarchy.

Acquisition-related future contingent consideration liabilities

From time to time, pursuant to agreements entered into in connection with certain business combinations and asset acquisitions, Federated Hermes could be required to make future consideration payments if certain contingencies are met. In connection with certain business combinations, Federated Hermes records a liability representing the estimated fair value of future consideration payments as of the acquisition date. The liability is subsequently re-measured at fair value on a recurring basis with changes in fair value recorded in earnings. As of September 30, 2023, acquisition-related future consideration liabilities of $8.2 million were primarily related to the CWH Acquisition and a business combination made in 2020 and were recorded in Other Current Liabilities ($1.2 million) and Other Long-Term Liabilities ($7.0 million) on the Consolidated Balance Sheets. Management estimated the fair value of future consideration payments based primarily upon expected future cash flows using an income approach valuation methodology with unobservable market data inputs (Level 3).

The following table presents a reconciliation of the beginning and ending balances for Federated Hermes’ liability for future consideration payments related to these business combinations:

(in thousands)
Balance at December 31, 2022	$	8,439
Changes in Fair Value	598
Contingent Consideration Payments	(857)
Balance at September 30, 2023	$	8,180

Investments using Practical Expedients

For investments in mutual funds that are not publicly available but for which the NAV is calculated monthly and for which there are redemption restrictions, the investments are valued using NAV as a practical expedient and are excluded from the fair value hierarchy. As of September 30, 2023 and December 31, 2022, these investments totaled $18.5 million and $18.3 million, respectively, and were recorded in Other Long-Term Assets.

(b) Fair Value Measurements on a Nonrecurring Basis

Federated Hermes did not hold any assets or liabilities measured at fair value on a nonrecurring basis at September 30, 2023.

(c) Fair Value Measurements of Other Financial Instruments

The fair value of Federated Hermes’ debt is estimated by management using observable market data (Level 2). Based on this fair value estimate, the carrying value of debt appearing on the Consolidated Balance Sheets approximates fair value, net of unamortized issuance costs in the amount of $2.2 million.

XML

Derivatives

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives

Federated Hermes Limited (FHL), a British Pound Sterling-denominated subsidiary of Federated Hermes, enters into foreign currency forward transactions in order to hedge against foreign exchange rate fluctuations. None of these forwards have been designated as hedging instruments for accounting purposes. As of September 30, 2023, FHL held foreign currency forwards with a combined notional amount of £83.8 million with expiration dates ranging from December 2023 through June 2024. Federated Hermes recorded $3.5 million in Other Current Liabilities on the Consolidated Balance Sheets, which represented the fair value of these derivative instruments as of September 30, 2023.

As of December 31, 2022, FHL held foreign currency forward derivative instruments with a combined notional amount of £67.3 million with expiration dates ranging from March 2023 through September 2023. Federated Hermes recorded $0.5 million in Other Current Assets on the Consolidated Balance Sheets, which represented the fair value of these derivative instruments as of December 31, 2022.

XML

Intangible Assets, including Goodwill

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets, including Goodwill

Intangible Assets, including Goodwill

Intangible Assets, net at September 30, 2023 decreased $7.2 million from December 31, 2022 primarily due to amortization expense.

Goodwill at September 30, 2023 increased $1.1 million from December 31, 2022 primarily as a result of foreign exchange rate fluctuations on goodwill denominated in a foreign currency.

XML

Debt

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Debt

Debt

Unsecured Senior Notes

On March 17, 2022, Federated Hermes entered into a Note Purchase Agreement (Note Purchase Agreement) by and among Federated Hermes and the purchasers of certain unsecured senior notes in the aggregate amount of $350 million ($350 million Notes), at a fixed interest rate of 3.29% per annum, payable semiannually in arrears in March and September in each year of the agreement. Citigroup Global Markets Inc. and PNC Capital Markets LLC acted as lead placement agents in relation to the $350 million Notes and certain subsidiaries of Federated Hermes are guarantors of the obligations owed under the Note Purchase Agreement. As of September 30, 2023, $347.8 million, net of unamortized issuance costs in the amount of $2.2 million, was recorded in Long-Term Debt on the Consolidated Balance Sheets.

The entire principal amount of the $350 million Notes will become due March 17, 2032, subject to certain prepayment requirements under limited conditions. Federated Hermes can elect to prepay the $350 million Notes under certain limited circumstances including with a make-whole amount if mandatorily prepaid without the consent of the holders of the $350 million Notes. The Note Purchase Agreement does not feature a facility for the further issuance of additional notes or borrowing of any other amounts and there is no commitment fee payable in connection with the $350 million Notes.

The Note Purchase Agreement includes representations and warranties, affirmative and negative financial covenants, including an interest coverage ratio covenant and a leverage ratio covenant, reporting requirements, other non-financial covenants and other customary terms and conditions. Federated Hermes was in compliance with all of its covenants at and during the period ended September 30, 2023. See the Liquidity and Capital Resources section of Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information.

The Note Purchase Agreement includes certain stated events of default and cross default provisions which would permit the lenders/counterparties to accelerate the repayment of the $350 million Notes if not cured within the applicable grace periods. The events of default generally include breaches of contract, failure to make required payments, insolvency, certain material misrepresentations and other proceedings, whether voluntary or involuntary, that would require repayment of the $350 million Notes prior to their stated date of maturity. Any such accelerated amounts would accrue interest at a default rate and could include an additional make-whole amount upon repayment. The $350 million Notes rank without preference or priority in relation to other unsecured and senior indebtedness of Federated Hermes.

Revolving Credit Facility

On July 30, 2021, Federated Hermes entered into an unsecured Fourth Amended and Restated Credit Agreement by and among Federated Hermes, certain of its subsidiaries as guarantors party thereto, a syndicate of eleven banks as Lenders party thereto, PNC Bank, National Association as administrative agent, PNC Capital Markets LLC, as sole bookrunner and joint lead arranger, Citigroup Global Markets, Inc., as joint lead arranger, Citibank, N.A. as syndication agent, and Toronto-Dominion Bank, New York Branch as documentation agent (Credit Agreement). The Credit Agreement consists of a $350 million revolving credit facility with an additional $200 million available via an optional increase (or accordion) feature. Borrowings under the Credit Agreement may be used for general corporate purposes, including, without limitation, stock repurchases, dividend payments (including any special dividend payments), and acquisitions.

As of September 30, 2023, the interest on borrowings from the revolving credit facility is calculated at the term Secured Overnight Financing Rate (SOFR) which includes a benchmark adjustment based on its historical relationship to the London Interbank Offering Rate (LIBOR). The borrowings under the revolving credit facility may include up to $50 million for which interest is calculated at the daily SOFR plus a spread unless a base rate option is elected (Swing Line). Effective July 1, 2023, Federated Hermes began using SOFR as a replacement to LIBOR in order to calculate interest on borrowings, if any, as permitted by the Credit Agreement. This is only a change to the rate index used for future borrowings under the Credit Agreement due to the discontinuance of LIBOR in the market and is not an amendment to the Credit Agreement.

The Credit Agreement, which expires on July 30, 2026, has no principal payment schedule, but instead requires that any outstanding principal be repaid by the expiration date. Federated Hermes, however, can elect to make discretionary principal payments. There was no activity on the Credit Agreement during the nine months ended September 30, 2023.

As of September 30, 2023 and December 31, 2022, there were no outstanding borrowings under the revolving credit facility. The commitment fee under the Credit Agreement is 0.10% per annum on the daily unused portion of each Lender’s commitment. As of September 30, 2023, Federated Hermes has $350 million available for borrowings under the revolving credit facility and an additional $200 million available via its optional accordion feature.

The Credit Agreement includes representations and warranties, affirmative and negative financial covenants, including an interest coverage ratio covenant and a leverage ratio covenant, reporting requirements, other non-financial covenants and other customary terms and conditions. Federated Hermes was in compliance with all covenants at and during the nine months ended September 30, 2023. See the Liquidity and Capital Resources section of Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information.

The Credit Agreement also has certain stated events of default and cross default provisions which would permit the lenders/counterparties to accelerate the repayment of debt outstanding if not cured within the applicable grace periods. The events of default generally include breaches of contract, failure to make required loan payments, insolvency, cessation of business, notice of lien or assessment, and other proceedings, whether voluntary or involuntary, that would require the repayment of amounts borrowed. The Credit Agreement also requires certain subsidiaries to enter into a Third Amended and Restated Continuing Agreement of Guaranty and Suretyship to guarantee payment of all obligations incurred through the Credit Agreement.

XML

Share-Based Compensation	9 Months Ended
	Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]
Share-Based Compensation	Share-Based Compensation During the nine months ended September 30, 2023, Federated Hermes awarded 380,796 shares of restricted Federated Hermes Class B common stock, the majority of which was granted in connection with a bonus program in which certain key employees received a portion of their bonus in the form of restricted stock under the Plan. This restricted stock, which was granted on the bonus payment date and issued out of treasury, generally vests over a three-year period. During 2022, Federated Hermes awarded 494,043 shares of restricted Class B common stock in connection with a bonus program in which certain key employees received a portion of their bonus in the form of restricted stock under the Plan. This bonus restricted stock, which was granted on the bonus payment date and issued out of treasury, generally vests over a three-year period. Federated Hermes also awarded 474,500 shares of restricted Class B common stock under this same Plan that generally vest over a ten-year period. In addition, Federated Hermes awarded 1,345,999 shares of restricted Class B common stock under the Federated Hermes UK Sub-Plan that generally vest over a five-year period. Of that amount, 1,183,066 shares were granted pursuant to award agreements to certain FHL employees in exchange for their beneficial interests in awards of restricted FHL shares in connection with the acquisition of the remaining FHL noncontrolling interests.

XML

Equity

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Equity

Equity In June 2022, the board of directors authorized a share repurchase program with no stated expiration date that allows the repurchase of up to 5.0 million shares of Class B common stock. No other program existed as of September 30, 2023. The program authorizes executive management to determine the timing and the amount of shares for each purchase. The repurchased stock is to be held in treasury for employee share-based compensation plans, potential acquisitions and other corporate activities, unless Federated Hermes’ board of directors subsequently determines to retire the repurchased stock and restore the shares to authorized but unissued status (rather than holding the shares in treasury). During the nine months ended September 30, 2023, Federated Hermes repurchased approximately 3.4 million shares of its Class B common stock for $117.0 million ($6.8 million of which was accrued in Other Current Liabilities as of September 30, 2023), nearly all of which were repurchased in the open market. At September 30, 2023, approximately 1.4 million shares remain available to be repurchased under this share repurchase program. See Note (19) to the Consolidated Financial Statements for information regarding a new share repurchase program approved on October 26, 2023.The following table presents the activity for the Class B common stock and Treasury stock for the three and nine months ended September 30, 2023 and 2022. Class A shares have been excluded as there was no activity during these same periods.

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2023	2022	2023	2022
Class B Shares
Beginning Balance	88,290,140	89,197,952	89,275,935	93,410,968
Stock Award Activity	5,000	0	387,996	1,704,592
Purchase of Treasury Stock	(2,046,790)	(211,885)	(3,415,581)	(6,129,493)
Ending Balance	86,248,350	88,986,067	86,248,350	88,986,067
Treasury Shares
Beginning Balance	11,215,316	20,307,504	10,229,521	16,094,488
Stock Award Activity	(5,000)	0	(387,996)	(1,704,592)
Purchase of Treasury Stock	2,046,790	211,885	3,415,581	6,129,493
Retirement of Treasury Stock	0	(10,000,000)	0	(10,000,000)
Ending Balance	13,257,106	10,519,389	13,257,106	10,519,389

Redeemable Noncontrolling Interests in Subsidiaries The following table presents the changes in Redeemable Noncontrolling Interests in Subsidiaries:

(in thousands)	Consolidated Investment Companies		Other Entities		Total
Balance at December 31, 2022	$	50,317	$	11,504	$	61,821
Net Income (Loss)	1,925		(60)		1,865
Other Comprehensive Income (Loss), net of tax	0		232		232
Subscriptions—Redeemable Noncontrolling Interest Holders	12,669		107		12,776
Consolidation/(Deconsolidation)	(33,962)		0		(33,962)
Distributions to Noncontrolling Interests in Subsidiaries	(2,499)		(725)		(3,224)
Balance at March 31, 2023	$	28,450	$	11,058	$	39,508
Net Income (Loss)	486		341		827
Other Comprehensive Income (Loss), net of tax	0		328		328
Subscriptions—Redeemable Noncontrolling Interest Holders	19,642		42		19,684
Consolidation/(Deconsolidation)	12,119		0		12,119
Distributions to Noncontrolling Interests in Subsidiaries	(14,017)		(437)		(14,454)
Balance at June 30, 2023	$	46,680	$	11,332	$	58,012
Net Income (Loss)	(804)		44		(760)
Other Comprehensive Income (Loss), net of tax	(8)		(446)		(454)
Subscriptions—Redeemable Noncontrolling Interest Holders	35,323		0		35,323
Consolidation/(Deconsolidation)	(6,601)		0		(6,601)
Distributions to Noncontrolling Interests in Subsidiaries	(14,621)		(268)		(14,889)
Balance at September 30, 2023	$	59,969	$	10,662	$	70,631

(in thousands)	Consolidated Investment Companies		FHL and Other Entities		Total
Balance at December 31, 2021	$	24,659	$	38,543	$	63,202
Net Income (Loss)	(1,744)		478		(1,266)
Other Comprehensive Income (Loss), net of tax	0		(457)		(457)
Subscriptions—Redeemable Noncontrolling Interest Holders	29,577		763		30,340
Consolidation/(Deconsolidation)	(16,034)		0		(16,034)
Stock Award Activity	0		707		707
Distributions to Noncontrolling Interests in Subsidiaries	(771)		(3,568)		(4,339)
Change in Estimated Redemption Value of Redeemable Noncontrolling Interests in FHL	0		14,221		14,221
Acquisition of Additional Equity of FHL	0		(37,805)		(37,805)
Balance at March 31, 2022	$	35,687	$	12,882	$	48,569
Net Income (Loss)	(7,616)		717		(6,899)
Other Comprehensive Income (Loss), net of tax	0		(1,068)		(1,068)
Subscriptions—Redeemable Noncontrolling Interest Holders	14,977		337		15,314
Distributions to Noncontrolling Interests in Subsidiaries	(1,024)		(161)		(1,185)
Balance at June 30, 2022	$	42,024	$	12,707	$	54,731
Net Income (Loss)	(2,104)		199		(1,905)
Other Comprehensive Income (Loss), net of tax	0		(1,713)		(1,713)
Subscriptions—Redeemable Noncontrolling Interest Holders	3,591		903		4,494
Consolidation/(Deconsolidation)	15,599		0		15,599
Distributions to Noncontrolling Interests in Subsidiaries	(15,512)		(1,108)		(16,620)
Balance at September 30, 2022	$	43,598	$	10,988	$	54,586

XML

Earnings Per Share Attributable to Federated Hermes, Inc. Shareholders

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Share Attributable to Federated Hermes, Inc. Shareholders

Earnings Per Share Attributable to Federated Hermes, Inc. Shareholders

The following table sets forth the computation of basic and diluted earnings per share using the two-class method for amounts attributable to Federated Hermes:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands, except per share data)	2023		2022		2023		2022
Numerator
Net Income Attributable to Federated Hermes, Inc.	$	75,026	$	69,479	$	216,802	$	182,999
Less: Total Net Income Available to Participating Unvested Restricted Shareholders1	(3,310)		(3,565)		(10,309)		(9,072)
Total Net Income Attributable to Federated Hermes Common Stock - Basic and Diluted	$	71,716	$	65,914	$	206,493	$	173,927
Denominator
Basic Weighted-Average Federated Hermes Common Stock2	83,710		84,531		84,499		86,109
Dilutive Impact from Non-forfeitable Restricted Stock	0		5		3		2
Diluted Weighted-Average Federated Hermes Common Stock2	83,710		84,536		84,502		86,111
Earnings Per Share
Net Income Attributable to Federated Hermes Common Stock - Basic and Diluted2	$	0.86	$	0.78	$	2.44	$	2.02

1    Includes dividends paid on unvested restricted Federated Hermes Class B common stock and their proportionate share of undistributed earnings attributable to Federated Hermes shareholders.

2    Federated Hermes common stock excludes unvested restricted stock which are deemed participating securities in accordance with the two-class method of computing earnings per share, except for circumstances where shares vest upon retirement and the employee has reached retirement age.

XML

Accumulated Other Comprehensive Income (Loss) Attributable to Federated Hermes, Inc. Shareholders

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss) Attributable to Federated Hermes, Inc. Shareholders

Accumulated Other Comprehensive Income (Loss) Attributable to Federated Hermes, Inc. Shareholders Accumulated Other Comprehensive Income (Loss), net of tax, attributable to Federated Hermes shareholders resulted from foreign currency translation gain (loss):

(in thousands)
Balance at December 31, 2022	$	(45,676)
Other Comprehensive Income (Loss)	2,283
Balance at September 30, 2023	$	(43,393)
Balance at December 31, 2021	$	16,362
Other Comprehensive Income (Loss)	(103,778)
Balance at September 30, 2022	$	(87,416)

XML

Redeemable Noncontrolling Interests in Subsidiaries

9 Months Ended

Sep. 30, 2023

Noncontrolling Interest [Abstract]

Redeemable Noncontrolling Interests in Subsidiaries

Equity In June 2022, the board of directors authorized a share repurchase program with no stated expiration date that allows the repurchase of up to 5.0 million shares of Class B common stock. No other program existed as of September 30, 2023. The program authorizes executive management to determine the timing and the amount of shares for each purchase. The repurchased stock is to be held in treasury for employee share-based compensation plans, potential acquisitions and other corporate activities, unless Federated Hermes’ board of directors subsequently determines to retire the repurchased stock and restore the shares to authorized but unissued status (rather than holding the shares in treasury). During the nine months ended September 30, 2023, Federated Hermes repurchased approximately 3.4 million shares of its Class B common stock for $117.0 million ($6.8 million of which was accrued in Other Current Liabilities as of September 30, 2023), nearly all of which were repurchased in the open market. At September 30, 2023, approximately 1.4 million shares remain available to be repurchased under this share repurchase program. See Note (19) to the Consolidated Financial Statements for information regarding a new share repurchase program approved on October 26, 2023.The following table presents the activity for the Class B common stock and Treasury stock for the three and nine months ended September 30, 2023 and 2022. Class A shares have been excluded as there was no activity during these same periods.

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2023	2022	2023	2022
Class B Shares
Beginning Balance	88,290,140	89,197,952	89,275,935	93,410,968
Stock Award Activity	5,000	0	387,996	1,704,592
Purchase of Treasury Stock	(2,046,790)	(211,885)	(3,415,581)	(6,129,493)
Ending Balance	86,248,350	88,986,067	86,248,350	88,986,067
Treasury Shares
Beginning Balance	11,215,316	20,307,504	10,229,521	16,094,488
Stock Award Activity	(5,000)	0	(387,996)	(1,704,592)
Purchase of Treasury Stock	2,046,790	211,885	3,415,581	6,129,493
Retirement of Treasury Stock	0	(10,000,000)	0	(10,000,000)
Ending Balance	13,257,106	10,519,389	13,257,106	10,519,389

Redeemable Noncontrolling Interests in Subsidiaries The following table presents the changes in Redeemable Noncontrolling Interests in Subsidiaries:

(in thousands)	Consolidated Investment Companies		Other Entities		Total
Balance at December 31, 2022	$	50,317	$	11,504	$	61,821
Net Income (Loss)	1,925		(60)		1,865
Other Comprehensive Income (Loss), net of tax	0		232		232
Subscriptions—Redeemable Noncontrolling Interest Holders	12,669		107		12,776
Consolidation/(Deconsolidation)	(33,962)		0		(33,962)
Distributions to Noncontrolling Interests in Subsidiaries	(2,499)		(725)		(3,224)
Balance at March 31, 2023	$	28,450	$	11,058	$	39,508
Net Income (Loss)	486		341		827
Other Comprehensive Income (Loss), net of tax	0		328		328
Subscriptions—Redeemable Noncontrolling Interest Holders	19,642		42		19,684
Consolidation/(Deconsolidation)	12,119		0		12,119
Distributions to Noncontrolling Interests in Subsidiaries	(14,017)		(437)		(14,454)
Balance at June 30, 2023	$	46,680	$	11,332	$	58,012
Net Income (Loss)	(804)		44		(760)
Other Comprehensive Income (Loss), net of tax	(8)		(446)		(454)
Subscriptions—Redeemable Noncontrolling Interest Holders	35,323		0		35,323
Consolidation/(Deconsolidation)	(6,601)		0		(6,601)
Distributions to Noncontrolling Interests in Subsidiaries	(14,621)		(268)		(14,889)
Balance at September 30, 2023	$	59,969	$	10,662	$	70,631

(in thousands)	Consolidated Investment Companies		FHL and Other Entities		Total
Balance at December 31, 2021	$	24,659	$	38,543	$	63,202
Net Income (Loss)	(1,744)		478		(1,266)
Other Comprehensive Income (Loss), net of tax	0		(457)		(457)
Subscriptions—Redeemable Noncontrolling Interest Holders	29,577		763		30,340
Consolidation/(Deconsolidation)	(16,034)		0		(16,034)
Stock Award Activity	0		707		707
Distributions to Noncontrolling Interests in Subsidiaries	(771)		(3,568)		(4,339)
Change in Estimated Redemption Value of Redeemable Noncontrolling Interests in FHL	0		14,221		14,221
Acquisition of Additional Equity of FHL	0		(37,805)		(37,805)
Balance at March 31, 2022	$	35,687	$	12,882	$	48,569
Net Income (Loss)	(7,616)		717		(6,899)
Other Comprehensive Income (Loss), net of tax	0		(1,068)		(1,068)
Subscriptions—Redeemable Noncontrolling Interest Holders	14,977		337		15,314
Distributions to Noncontrolling Interests in Subsidiaries	(1,024)		(161)		(1,185)
Balance at June 30, 2022	$	42,024	$	12,707	$	54,731
Net Income (Loss)	(2,104)		199		(1,905)
Other Comprehensive Income (Loss), net of tax	0		(1,713)		(1,713)
Subscriptions—Redeemable Noncontrolling Interest Holders	3,591		903		4,494
Consolidation/(Deconsolidation)	15,599		0		15,599
Distributions to Noncontrolling Interests in Subsidiaries	(15,512)		(1,108)		(16,620)
Balance at September 30, 2022	$	43,598	$	10,988	$	54,586

XML

Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

(a) Contractual

From time to time, pursuant to agreements entered into in connection with certain business combinations and asset acquisitions, Federated Hermes is obligated to make future payments under various agreements to which it is a party. See Note (8) for additional information regarding these payments.

(b) Guarantees and Indemnifications

On an intercompany basis, various subsidiaries of Federated Hermes guarantee certain financial obligations of Federated Hermes, Inc. and of other consolidated subsidiaries, and Federated Hermes, Inc. guarantees certain financial and performance-related obligations of various wholly-owned subsidiaries. In addition, in the normal course of business, Federated Hermes has entered into contracts that provide a variety of indemnifications. Typically, obligations to indemnify third parties arise in the context of contracts entered into by Federated Hermes, under which Federated Hermes agrees to hold the other party harmless against losses arising out of the contract, provided the other party’s actions are not deemed to have breached an agreed-upon standard of care. In each of these circumstances, payment by Federated Hermes is contingent on the other party making a claim for indemnity, subject to Federated Hermes’ right to challenge the claim. Further, Federated Hermes’ obligations under these agreements can be limited in terms of time and/or amount. It is not possible to predict the maximum potential amount of future payments under these or similar agreements due to the conditional nature of Federated Hermes’ obligations and the unique facts and circumstances involved in each particular agreement. As of September 30, 2023, management does not believe that a material loss related to any of these matters is reasonably possible.

(c) Legal Proceedings

Like other companies, Federated Hermes has claims asserted and threatened against it in the ordinary course of business. As of September 30, 2023, Federated Hermes does not believe that a material loss related to any of these claims is reasonably possible.

(d) Other

During the first quarter 2023, an administrative error was identified related to a failure to register certain shares of a Federated Hermes closed-end tender fund. Federated Hermes estimated a probable cost of $18.9 million as of September 30, 2023 related to correcting this issue, of which $17.9 million represents a settlement with affected shareholders that was paid during the second quarter 2023. During the first quarter 2023, Federated Hermes recorded $2.5 million to Operating Expenses - Other representing Federated Hermes' retention under the insurance policy. Management believes an insurance reimbursement of $16.4 million is probable based on the contractual terms of the insurance policies. Accordingly, $16.4 million has been recorded to Receivables, net at September 30, 2023. However, the insurance claim is now the subject of litigation with two of Federated Hermes’ insurance carriers. Changes to these estimates, which are contingent upon resolution of the insurance claim with the applicable insurers, could be materially different from the amount Federated Hermes has accrued.

XML

Income Taxes	9 Months Ended
	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes In connection with the restructuring of an infrastructure fund in the second quarter 2023, Federated Hermes purchased certain limited partners’ rights to receive future carried interest at fair value, which was calculated by a third-party, for $9.8 million and was included in Operating Expenses - Other in the second quarter 2023. Due to the restructuring, an existing clawback risk on previously earned carried interest was removed. The purchase of these carried interest rights and related legal and professional fees and other costs are not deductible for tax purposes. Negotiations for additional consideration continue with a subset of limited partners. An additional $2.9 million was recorded in Operating Expenses - Other in the third quarter 2023. The final consideration may be different from the amounts recorded and the difference could be significant, potentially in a material way.

XML

Subsequent Events

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On October 26, 2023, Federated Hermes’ board of directors declared a $0.28 per share dividend to Federated Hermes’ Class A and Class B common stock shareholders of record as of November 8, 2023 to be paid on November 15, 2023.

On October 26, 2023, the board of directors authorized an additional share repurchase program with no stated expiration date that allows the repurchase of up to 5.0 million shares of Class B common stock. This program authorizes executive management to determine the timing and the amount of shares for each purchase. The repurchased stock is to be held in treasury for employee share-based compensation plans, potential acquisitions and other corporate activities, unless Federated Hermes' board of directors subsequently determines to retire the repurchased stock and restore the shares to authorized but unissued status (rather than holding the shares in treasury). See Note (13) for additional information on Federated Hermes' share repurchase programs.

XML

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net Income Attributable to Federated Hermes, Inc.	$ 75,026	$ 69,479	$ 216,802	$ 182,999

XML

Insider Trading Arrangements	3 Months Ended
	Sep. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

XML

Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Federated Hermes, Inc. and its consolidated subsidiaries (collectively, Federated Hermes) provide investment advisory, administrative, distribution and other services to various investment products, including sponsored investment companies, collective funds and other funds (Federated Hermes Funds) and separate accounts (which include separately managed accounts, institutional accounts, certain sub-advised funds and other managed products, collectively Separate Accounts) in both domestic and international markets. In addition, Federated Hermes markets and provides stewardship and real estate development services to various domestic and international companies. The interim consolidated financial statements of Federated Hermes included herein (Consolidated Financial Statements) have been prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP). In the opinion of management, the financial statements reflect all adjustments that are of a normal recurring nature and necessary for a fair presentation of the results for the interim periods presented.

Use of Estimates

In preparing the Consolidated Financial Statements, management is required to make estimates and assumptions that affect the amounts reported therein and in the accompanying notes. Actual results may differ from those estimates, and such differences may be material to the Consolidated Financial Statements.

Principles of Consolidation

Principles of Consolidation

Consolidation of Variable Interest Entities

Federated Hermes has a controlling financial interest in variable interest entities (VIEs) and is, therefore, deemed to be the primary beneficiary of a VIE if it has (1) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and (2) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Federated Hermes manages carried interest vehicles (CIVs), whose primary purpose is to collect and distribute carried interest paid by foreign private equity and infrastructure funds, that have been determined to be VIEs. As the primary beneficiary, Federated Hermes consolidates certain CIVs. As a result, when carried interest is recognized as revenue, a portion of this revenue is allocated to current and former employee limited partners and is recorded to Compensation and Related expense. Financial information for the CIVs is not available timely and is therefore consolidated on a one quarter lag, adjusted for any known material carried interest revenue and compensation transactions occurring through the balance sheet date.

Fair Value Measurements

Fair value is the price that would be received to sell an asset or the price that would be paid to transfer a liability as of the measurement date. A fair-value reporting hierarchy exists for disclosure of fair value measurements based on the observability of the inputs to the valuation of financial assets and liabilities. The levels are:

Level 1 – Quoted prices for identical instruments in active markets. Level 1 assets can include equity and debt securities that are traded in an active exchange market, including shares of mutual funds.

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 assets and liabilities may include debt and equity securities, purchased loans and over-the-counter derivative contracts whose fair value is determined using a pricing model without significant unobservable market data inputs.

Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable in active markets.NAV Practical Expedient – Investments that calculate NAV per share (or its equivalent) as a practical expedient. These investments have been excluded from the fair value hierarchy.

XML

Business Combination (Tables)

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Final Purchase Price Allocation

The following table summarizes the final purchase price allocation determined as of the acquisition date:

(in millions)
Right-of-Use Asset	$	0.8
Intangible Assets1	15.4
Goodwill2	16.4
Less: Lease Liability Assumed	0.8
Less: Fair Value of Contingent Consideration	3.7
Total Upfront Purchase Price Consideration	$	28.1

1    Includes $14.8 million for customer relationships with an estimated useful life of 12 years and $0.6 million for a trade name with an estimated useful life of five years, all of which are recorded in Intangibles Assets, net on the Consolidated Balance Sheets.

2    The goodwill recognized is attributable to enhanced revenue and AUM growth opportunities from future investors and the assembled workforce of the CWH business and is deductible for tax purposes.

XML

Revenue from Contracts with Customers (Tables)

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following table presents Federated Hermes’ revenue disaggregated by asset class:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Money market	$	186,760	$	170,542	$	559,622	$	402,639
Equity	123,485		127,183		371,282		406,642
Fixed-income	47,142		49,197		142,590		159,025
Other1	45,269		34,221		144,583		103,609
Total Revenue	$	402,656	$	381,143	$	1,218,077	$	1,071,915

1    Primarily includes Alternative / Private Markets (including but not limited to private equity, real estate and infrastructure), multi-asset and stewardship services revenue.

The following table presents Federated Hermes’ revenue disaggregated by performance obligation:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Asset Management1	$	276,771	$	263,644	$	851,089	$	754,681
Administrative Services	88,023		75,021		252,402		218,710
Distribution2	31,466		36,026		96,360		78,285
Other3	6,396		6,452		18,226		20,239
Total Revenue	$	402,656	$	381,143	$	1,218,077	$	1,071,915

1    The performance obligation can include administrative, distribution and other services recorded as a single asset management fee under Topic 606, as it is part of a unitary fee arrangement with a single performance obligation.

2    The performance obligation is satisfied at a point in time. A portion of this revenue relates to a performance obligation that has been satisfied in a prior period.

3    Primarily includes shareholder service fees and stewardship services revenue.

The following table presents Federated Hermes’ revenue disaggregated by geographical market:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Domestic	$	322,028	$	311,254	$	971,077	$	849,570
Foreign1	80,628		69,889		247,000		222,345
Total Revenue	$	402,656	$	381,143	$	1,218,077	$	1,071,915

1    This represents revenue earned by non-U.S. domiciled subsidiaries.

The following table presents Federated Hermes’ revenue disaggregated by product type:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Federated Hermes Funds	$	337,203	$	319,680	$	1,021,748	$	877,910
Separate Accounts	61,098		57,250		184,106		180,600
Other1	4,355		4,213		12,223		13,405
Total Revenue	$	402,656	$	381,143	$	1,218,077	$	1,071,915

1    Primarily includes stewardship services revenue.

Schedule of Remaining Unsatisfied Performance Obligations

Based on existing contracts and the applicable foreign exchange rates as of September 30, 2023, Federated Hermes may recognize future fixed revenue from these services as presented in the following table:

(in thousands)
Remainder of 2023	$	3,454
2024	7,243
2025	2,225
2026 and Thereafter	1,121
Total Remaining Unsatisfied Performance Obligations	$	14,043

XML

Concentration Risk (Tables)

9 Months Ended

Sep. 30, 2023

Risks and Uncertainties [Abstract]

Schedule of Revenue Concentration

The following table presents Federated Hermes’ significant revenue concentration by asset class:

	Nine Months Ended
	September 30,
	2023		2022
Money Market Assets	46	%	37	%
Equity Assets	30	%	38	%
Fixed-Income Assets	12	%	15	%

XML

Consolidation (Tables)

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Consolidated Federated Funds VIE

The following table presents the balances related to the consolidated VIEs that were included on the Consolidated Balance Sheets as well as Federated Hermes’ net interest in the consolidated VIEs for each period presented:

(in millions)	September 30, 2023		December 31, 2022
Cash and Cash Equivalents	$	10.8	$	8.0
Investments—Consolidated Investment Companies	61.2		50.1
Receivables-Affiliates	11.6		0.3
Other Current Assets	0.4		0.4
Other Long-Term Assets	12.4		13.4
Less: Liabilities	19.7		5.7
Less: Accumulated Other Comprehensive Income (Loss), net of tax	0.4		1.2
Less: Redeemable Noncontrolling Interests in Subsidiaries	56.3		49.5
Federated Hermes’ Net Interest in VIEs	$	20.0	$	15.8

XML

Investments (Tables)

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of Gains and Losses Recognized in Gain (Loss) on Securities, Net

The following table presents gains and losses recognized in Gain (Loss) on Securities, net on the Consolidated Statements of Income in connection with Federated Hermes’ investments:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Investments—Consolidated Investment Companies
Net Unrealized Gains (Losses)	$	(1,680)	$	1,137	$	2,582	$	(16,446)
Net Realized Gains (Losses)1	(125)		(4,568)		(1,101)		(6,047)
Net Gains (Losses) on Investments—Consolidated Investment Companies	(1,805)		(3,431)		1,481		(22,493)
Investments—Affiliates and Other
Net Unrealized Gains (Losses)	(1,518)		(3,248)		(662)		(18,979)
Net Realized Gains (Losses)1	(115)		(146)		1,275		2,066
Net Gains (Losses) on Investments—Affiliates and Other	(1,633)		(3,394)		613		(16,913)
Gain (Loss) on Securities, net	$	(3,438)	$	(6,825)	$	2,094	$	(39,406)

1    Realized gains and losses are computed on a specific-identification basis.

XML

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Classes of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents fair value measurements for classes of Federated Hermes’ financial assets and liabilities measured at fair value on a recurring basis:

(in thousands)	Level 1		Level 2		Level 3		Total
September 30, 2023
Financial Assets
Cash and Cash Equivalents	$	376,960	$	0	$	0	$	376,960
Investments—Consolidated Investment Companies	60,037		58,164		0		118,201
Investments—Affiliates and Other	56,840		2,407		25		59,272
Other1	6,623		0		0		6,623
Total Financial Assets	$	500,460	$	60,571	$	25	$	561,056
Total Financial Liabilities2	$	48	$	3,467	$	8,180	$	11,695
December 31, 2022
Financial Assets
Cash and Cash Equivalents	$	336,782	$	0	$	0	$	336,782
Investments—Consolidated Investment Companies	49,119		59,329		0		108,448
Investments—Affiliates and Other	71,369		5,130		25		76,524
Other1	6,538		469		0		7,007
Total Financial Assets	$	463,808	$	64,928	$	25	$	528,761
Total Financial Liabilities2	$	27	$	4	$	8,439	$	8,470

1    Amounts primarily consist of restricted cash and security deposits as of September 30, 2023 and December 31, 2022.

2    Amounts primarily consist of acquisition-related future contingent consideration liabilities and unrealized derivative losses as of September 30, 2023 and acquisition-related future contingent consideration liabilities as of December 31, 2022.

Schedule of Reconciliation of Liability for Future Consideration Payments

The following table presents a reconciliation of the beginning and ending balances for Federated Hermes’ liability for future consideration payments related to these business combinations:

(in thousands)
Balance at December 31, 2022	$	8,439
Changes in Fair Value	598
Contingent Consideration Payments	(857)
Balance at September 30, 2023	$	8,180

XML

Equity (Tables)

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Schedule of Activity for Class B Common Stock and Treasury Stock

The following table presents the activity for the Class B common stock and Treasury stock for the three and nine months ended September 30, 2023 and 2022. Class A shares have been excluded as there was no activity during these same periods.

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2023	2022	2023	2022
Class B Shares
Beginning Balance	88,290,140	89,197,952	89,275,935	93,410,968
Stock Award Activity	5,000	0	387,996	1,704,592
Purchase of Treasury Stock	(2,046,790)	(211,885)	(3,415,581)	(6,129,493)
Ending Balance	86,248,350	88,986,067	86,248,350	88,986,067
Treasury Shares
Beginning Balance	11,215,316	20,307,504	10,229,521	16,094,488
Stock Award Activity	(5,000)	0	(387,996)	(1,704,592)
Purchase of Treasury Stock	2,046,790	211,885	3,415,581	6,129,493
Retirement of Treasury Stock	0	(10,000,000)	0	(10,000,000)
Ending Balance	13,257,106	10,519,389	13,257,106	10,519,389

XML

Earnings Per Share Attributable to Federated Hermes, Inc. Shareholders (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share using the two-class method for amounts attributable to Federated Hermes:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands, except per share data)	2023		2022		2023		2022
Numerator
Net Income Attributable to Federated Hermes, Inc.	$	75,026	$	69,479	$	216,802	$	182,999
Less: Total Net Income Available to Participating Unvested Restricted Shareholders1	(3,310)		(3,565)		(10,309)		(9,072)
Total Net Income Attributable to Federated Hermes Common Stock - Basic and Diluted	$	71,716	$	65,914	$	206,493	$	173,927
Denominator
Basic Weighted-Average Federated Hermes Common Stock2	83,710		84,531		84,499		86,109
Dilutive Impact from Non-forfeitable Restricted Stock	0		5		3		2
Diluted Weighted-Average Federated Hermes Common Stock2	83,710		84,536		84,502		86,111
Earnings Per Share
Net Income Attributable to Federated Hermes Common Stock - Basic and Diluted2	$	0.86	$	0.78	$	2.44	$	2.02

1    Includes dividends paid on unvested restricted Federated Hermes Class B common stock and their proportionate share of undistributed earnings attributable to Federated Hermes shareholders.

2    Federated Hermes common stock excludes unvested restricted stock which are deemed participating securities in accordance with the two-class method of computing earnings per share, except for circumstances where shares vest upon retirement and the employee has reached retirement age.

XML

Accumulated Other Comprehensive Income (Loss) Attributable to Federated Hermes, Inc. Shareholders (Tables)

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss), net of tax, attributable to Federated Hermes shareholders resulted from foreign currency translation gain (loss):

(in thousands)
Balance at December 31, 2022	$	(45,676)
Other Comprehensive Income (Loss)	2,283
Balance at September 30, 2023	$	(43,393)
Balance at December 31, 2021	$	16,362
Other Comprehensive Income (Loss)	(103,778)
Balance at September 30, 2022	$	(87,416)

XML

Redeemable Noncontrolling Interests in Subsidiaries (Tables)

9 Months Ended

Sep. 30, 2023

Noncontrolling Interest [Abstract]

Schedule of Changes in Redeemable Noncontrolling Interest in Subsidiaries

The following table presents the changes in Redeemable Noncontrolling Interests in Subsidiaries:

(in thousands)	Consolidated Investment Companies		Other Entities		Total
Balance at December 31, 2022	$	50,317	$	11,504	$	61,821
Net Income (Loss)	1,925		(60)		1,865
Other Comprehensive Income (Loss), net of tax	0		232		232
Subscriptions—Redeemable Noncontrolling Interest Holders	12,669		107		12,776
Consolidation/(Deconsolidation)	(33,962)		0		(33,962)
Distributions to Noncontrolling Interests in Subsidiaries	(2,499)		(725)		(3,224)
Balance at March 31, 2023	$	28,450	$	11,058	$	39,508
Net Income (Loss)	486		341		827
Other Comprehensive Income (Loss), net of tax	0		328		328
Subscriptions—Redeemable Noncontrolling Interest Holders	19,642		42		19,684
Consolidation/(Deconsolidation)	12,119		0		12,119
Distributions to Noncontrolling Interests in Subsidiaries	(14,017)		(437)		(14,454)
Balance at June 30, 2023	$	46,680	$	11,332	$	58,012
Net Income (Loss)	(804)		44		(760)
Other Comprehensive Income (Loss), net of tax	(8)		(446)		(454)
Subscriptions—Redeemable Noncontrolling Interest Holders	35,323		0		35,323
Consolidation/(Deconsolidation)	(6,601)		0		(6,601)
Distributions to Noncontrolling Interests in Subsidiaries	(14,621)		(268)		(14,889)
Balance at September 30, 2023	$	59,969	$	10,662	$	70,631

(in thousands)	Consolidated Investment Companies		FHL and Other Entities		Total
Balance at December 31, 2021	$	24,659	$	38,543	$	63,202
Net Income (Loss)	(1,744)		478		(1,266)
Other Comprehensive Income (Loss), net of tax	0		(457)		(457)
Subscriptions—Redeemable Noncontrolling Interest Holders	29,577		763		30,340
Consolidation/(Deconsolidation)	(16,034)		0		(16,034)
Stock Award Activity	0		707		707
Distributions to Noncontrolling Interests in Subsidiaries	(771)		(3,568)		(4,339)
Change in Estimated Redemption Value of Redeemable Noncontrolling Interests in FHL	0		14,221		14,221
Acquisition of Additional Equity of FHL	0		(37,805)		(37,805)
Balance at March 31, 2022	$	35,687	$	12,882	$	48,569
Net Income (Loss)	(7,616)		717		(6,899)
Other Comprehensive Income (Loss), net of tax	0		(1,068)		(1,068)
Subscriptions—Redeemable Noncontrolling Interest Holders	14,977		337		15,314
Distributions to Noncontrolling Interests in Subsidiaries	(1,024)		(161)		(1,185)
Balance at June 30, 2022	$	42,024	$	12,707	$	54,731
Net Income (Loss)	(2,104)		199		(1,905)
Other Comprehensive Income (Loss), net of tax	0		(1,713)		(1,713)
Subscriptions—Redeemable Noncontrolling Interest Holders	3,591		903		4,494
Consolidation/(Deconsolidation)	15,599		0		15,599
Distributions to Noncontrolling Interests in Subsidiaries	(15,512)		(1,108)		(16,620)
Balance at September 30, 2022	$	43,598	$	10,988	$	54,586

XML

Business Combination - Narrative (Details) - C.W. Henderson and Associates $ in Millions	Oct. 01, 2022 USD ($)
Business Acquisition [Line Items]
Payments to acquire business	$ 28.1
Maximum contingent purchase price payments	$ 17.6
Maturity of contingent purchase price payments, term	5 years

XML

Business Combination - Schedule of Final Purchase Price Allocation (Details) - USD ($) $ in Thousands	Oct. 01, 2022	Sep. 30, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Goodwill		$ 801,556	$ 800,417
C.W. Henderson and Associates
Business Acquisition [Line Items]
Right-of-Use Asset	$ 800
Intangible Assets	15,400
Goodwill	16,400
Less: Lease Liability Assumed	800
Less: Fair Value of Contingent Consideration	3,700
Total Upfront Purchase Price Consideration	28,100
C.W. Henderson and Associates | Customer Relationships
Business Acquisition [Line Items]
Intangible assets acquired	$ 14,800
Estimated useful life	12 years
C.W. Henderson and Associates | Trade Names
Business Acquisition [Line Items]
Intangible assets acquired	$ 600
Estimated useful life	5 years

XML

Revenue from Contracts with Customers - Disaggregation of Revenue by Asset Class (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Total Revenue	$ 402,656	$ 381,143	$ 1,218,077	$ 1,071,915
Money market
Disaggregation of Revenue [Line Items]
Total Revenue	186,760	170,542	559,622	402,639
Equity
Disaggregation of Revenue [Line Items]
Total Revenue	123,485	127,183	371,282	406,642
Fixed-income
Disaggregation of Revenue [Line Items]
Total Revenue	47,142	49,197	142,590	159,025
Other
Disaggregation of Revenue [Line Items]
Total Revenue	$ 45,269	$ 34,221	$ 144,583	$ 103,609

XML

Revenue from Contracts with Customers - Disaggregation of Revenue by Performance Obligation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Total Revenue	$ 402,656	$ 381,143	$ 1,218,077	$ 1,071,915
Asset Management
Disaggregation of Revenue [Line Items]
Total Revenue	276,771	263,644	851,089	754,681
Administrative Services
Disaggregation of Revenue [Line Items]
Total Revenue	88,023	75,021	252,402	218,710
Distribution
Disaggregation of Revenue [Line Items]
Total Revenue	31,466	36,026	96,360	78,285
Other
Disaggregation of Revenue [Line Items]
Total Revenue	$ 6,396	$ 6,452	$ 18,226	$ 20,239

XML

Revenue from Contracts with Customers - Disaggregation of Revenue by Geographic Market (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Total Revenue	$ 402,656	$ 381,143	$ 1,218,077	$ 1,071,915
Domestic
Disaggregation of Revenue [Line Items]
Total Revenue	322,028	311,254	971,077	849,570
Foreign
Disaggregation of Revenue [Line Items]
Total Revenue	$ 80,628	$ 69,889	$ 247,000	$ 222,345

XML

Revenue from Contracts with Customers - Disaggregation of Revenue by Product Type (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Total Revenue	$ 402,656	$ 381,143	$ 1,218,077	$ 1,071,915
Federated Hermes Funds
Disaggregation of Revenue [Line Items]
Total Revenue	337,203	319,680	1,021,748	877,910
Separate Accounts
Disaggregation of Revenue [Line Items]
Total Revenue	61,098	57,250	184,106	180,600
Other
Disaggregation of Revenue [Line Items]
Total Revenue	$ 4,355	$ 4,213	$ 12,223	$ 13,405

XML

Revenue from Contracts with Customers - Narrative (Details)	9 Months Ended
	Sep. 30, 2023
Disaggregation of Revenue [Line Items]
Contract terms	Generally, contracts are billed in arrears on a quarterly basis and have a three-year duration, after which the customer can terminate the agreement with notice, generally from three to twelve months.
Minimum
Disaggregation of Revenue [Line Items]
Termination period	3 months
Maximum
Disaggregation of Revenue [Line Items]
Termination period	12 months

XML

Revenue from Contracts with Customers - Future Fixed Revenue from Stewardship and Real Estate Development Services (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Total Remaining Unsatisfied Performance Obligations	$ 14,043
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Total Remaining Unsatisfied Performance Obligations	$ 3,454
Expected timing of satisfaction, period	3 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Total Remaining Unsatisfied Performance Obligations	$ 7,243
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Total Remaining Unsatisfied Performance Obligations	$ 2,225
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Total Remaining Unsatisfied Performance Obligations	$ 1,121
Expected timing of satisfaction, period

XML

Concentration Risk - Schedule of Revenue Concentration (Details) - Product Concentration Risk - Revenue Benchmark	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Money Market Assets
Concentration Risk [Line Items]
Concentration risk	46.00%	37.00%
Equity Assets
Concentration Risk [Line Items]
Concentration risk	30.00%	38.00%
Fixed-Income Assets
Concentration Risk [Line Items]
Concentration risk	12.00%	15.00%

XML

Concentration Risk - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Concentration Risk [Line Items]
Voluntary yield-related fee waivers	$ 0	$ 0	$ 0	$ 85,300,000
Decrease in distribution expenses				66,500,000
Net negative pre-tax impact				$ 18,800,000
Product Concentration Risk | Revenue benchmark | Federated Hermes Government Obligations Fund
Concentration Risk [Line Items]
Concentration risk	14.00%	14.00%	14.00%	11.00%
Customer Concentration Risk | Revenue benchmark | Bank of New York Mellon Corporation
Concentration Risk [Line Items]
Concentration risk	11.00%	14.00%	11.00%	11.00%

XML

Consolidation - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Variable Interest Entities [Line Items]
Fee waivers	$ 142,400,000	$ 118,200,000	$ 398,800,000	$ 444,700,000
Other current liabilities	35,383,000		35,383,000		$ 15,358,000
Affiliates
Variable Interest Entities [Line Items]
Receivables	52,659,000		52,659,000		35,941,000
Variable Interest Entity, Primary Beneficiary
Variable Interest Entities [Line Items]
Other current liabilities	10,000,000		10,000,000
Variable Interest Entity, Primary Beneficiary | Affiliates
Variable Interest Entities [Line Items]
Receivables	9,800,000		9,800,000
Variable Interest Entity Not Primary Beneficiary
Variable Interest Entities [Line Items]
Assets under managed investments	8,600,000,000		8,600,000,000		5,400,000,000
Cash and Cash Equivalents | Variable Interest Entity Not Primary Beneficiary
Variable Interest Entities [Line Items]
Federated Hermes' maximum risk of loss in non-consolidated investment companies	112,000,000		112,000,000		101,700,000
Receivables-Affiliates | Variable Interest Entity Not Primary Beneficiary
Variable Interest Entities [Line Items]
Federated Hermes' maximum risk of loss in non-consolidated investment companies	800,000		800,000		$ 700,000
Financial Support, Fee Waivers
Variable Interest Entities [Line Items]
Money market funds which meet the scope exception of the consolidation guidance	$ 114,000,000	$ 89,100,000	313,500,000	351,000,000
Financial Support, Capital Contributions
Variable Interest Entities [Line Items]
Money market funds which meet the scope exception of the consolidation guidance			$ 0	$ 0

XML

Consolidation - Consolidated Federated Fund VIEs (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Variable Interest Entities [Line Items]
Consolidated VIE assets	$ 2,080,340	$ 2,020,479
Less: Liabilities	909,671	912,966
Less: Accumulated Other Comprehensive Income (Loss), net of tax	(43,393)	(45,676)
Variable Interest Entity, Primary Beneficiary
Variable Interest Entities [Line Items]
Less: Liabilities	19,700	5,700
Less: Accumulated Other Comprehensive Income (Loss), net of tax	400	1,200
Less: Redeemable Noncontrolling Interests in Subsidiaries	56,300	49,500
Federated Hermes’ Net Interest in VIEs	20,000	15,800
Cash and Cash Equivalents | Variable Interest Entity, Primary Beneficiary
Variable Interest Entities [Line Items]
Consolidated VIE assets	10,800	8,000
Investments—Consolidated Investment Companies | Variable Interest Entity, Primary Beneficiary
Variable Interest Entities [Line Items]
Consolidated VIE assets	61,200	50,100
Receivables-Affiliates | Variable Interest Entity, Primary Beneficiary | Affiliates
Variable Interest Entities [Line Items]
Consolidated VIE assets	11,600	300
Other Current Assets | Variable Interest Entity, Primary Beneficiary
Variable Interest Entities [Line Items]
Consolidated VIE assets	400	400
Other Long-Term Assets | Variable Interest Entity, Primary Beneficiary
Variable Interest Entities [Line Items]
Consolidated VIE assets	$ 12,400	$ 13,400

XML

Investments - Narrative (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Affiliates
Schedule of Investments [Line Items]
Investments	$ 59,272	$ 76,524
Consolidated Investment Companies
Schedule of Investments [Line Items]
Investments	118,201	108,448
Stocks of Large Companies | Consolidated Investment Companies
Schedule of Investments [Line Items]
Investments	54,200	45,300
Debt Securities | Consolidated Investment Companies
Schedule of Investments [Line Items]
Investments	58,200	57,800
Stocks of Small and Mid Sized Companies | Consolidated Investment Companies
Schedule of Investments [Line Items]
Investments	3,600	3,300
Mutual Fund | Consolidated Investment Companies
Schedule of Investments [Line Items]
Investments	2,200	2,100
Federated Hermes Funds | Affiliates
Schedule of Investments [Line Items]
Investments	52,400	67,000
Separate Accounts | Affiliates
Schedule of Investments [Line Items]
Investments	6,900	9,500
Separate Accounts | Stocks of Large Companies | Affiliates
Schedule of Investments [Line Items]
Investments	3,200	3,400
Separate Accounts | Debt Securities | Affiliates
Schedule of Investments [Line Items]
Investments	$ 2,300	$ 4,600

XML

Investments - Gains and Losses Recognized in Gain (Loss) on Securities, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
(Loss) Gain on Securities [Line Items]
Net Unrealized Gains (Losses)			$ 1,920	$ (35,425)
Gain (Loss) on Securities, net	$ (3,438)	$ (6,825)	2,094	(39,406)
Investments | Consolidated Investment Companies
(Loss) Gain on Securities [Line Items]
Net Unrealized Gains (Losses)	(1,680)	1,137	2,582	(16,446)
Net Realized Gains (Losses)	(125)	(4,568)	(1,101)	(6,047)
Gain (Loss) on Securities, net	(1,805)	(3,431)	1,481	(22,493)
Investments | Affiliates
(Loss) Gain on Securities [Line Items]
Net Unrealized Gains (Losses)	(1,518)	(3,248)	(662)	(18,979)
Net Realized Gains (Losses)	(115)	(146)	1,275	2,066
Gain (Loss) on Securities, net	$ (1,633)	$ (3,394)	$ 613	$ (16,913)

XML

Fair Value Measurements - Classes of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financial Assets
Cash and Cash Equivalents	$ 376,960	$ 336,782
Other	6,623	7,007
Total Financial Assets	561,056	528,761
Financial Liabilities
Total Financial Liabilities	11,695	8,470
Consolidated Investment Companies
Financial Assets
Investments	118,201	108,448
Affiliates
Financial Assets
Investments	59,272	76,524
Level 1
Financial Assets
Cash and Cash Equivalents	376,960	336,782
Other	6,623	6,538
Total Financial Assets	500,460	463,808
Financial Liabilities
Total Financial Liabilities	48	27
Level 1 | Consolidated Investment Companies
Financial Assets
Investments	60,037	49,119
Level 1 | Affiliates
Financial Assets
Investments	56,840	71,369
Level 2
Financial Assets
Cash and Cash Equivalents	0	0
Other	0	469
Total Financial Assets	60,571	64,928
Financial Liabilities
Total Financial Liabilities	3,467	4
Level 2 | Consolidated Investment Companies
Financial Assets
Investments	58,164	59,329
Level 2 | Affiliates
Financial Assets
Investments	2,407	5,130
Level 3
Financial Assets
Cash and Cash Equivalents	0	0
Other	0	0
Total Financial Assets	25	25
Financial Liabilities
Total Financial Liabilities	8,180	8,439
Level 3 | Consolidated Investment Companies
Financial Assets
Investments	0	0
Level 3 | Affiliates
Financial Assets
Investments	$ 25	$ 25

XML

Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Acquisition-related future consideration liabilities	$ 8.2
Acquisition-related future consideration liabilities recorded in other current liabilities	1.2
Acquisition-related future consideration liabilities recorded in other long-term liabilities	7.0
Unsecured Senior Notes | Senior Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Issuance costs, net	2.2
Money market
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	329.5	$ 289.8
Mutual Fund | NAV
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other financial assets	$ 18.5	$ 18.3

XML

Fair Value Measurements - Reconciliation of Liability for Future Consideration Payments (Details) - Contingent Consideration $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at December 31, 2022	$ 8,439
Changes in Fair Value	598
Contingent Consideration Payments	(857)
Balance at September 30, 2023	$ 8,180

XML

Derivatives (Details) - Foreign Currency Forward £ in Millions, $ in Millions	Sep. 30, 2023 GBP (£)	Sep. 30, 2023 USD ($)	Dec. 31, 2022 GBP (£)	Dec. 31, 2022 USD ($)
Derivative [Line Items]
Derivative asset, notional amount | £	£ 83.8		£ 67.3
Derivative liabilities		$ 3.5
Derivative assets				$ 0.5

XML

Intangible Assets, including Goodwill (Details) $ in Millions	9 Months Ended
	Sep. 30, 2023 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Increase (decrease) in intangible assets	$ (7.2)
Goodwill, period increase	$ 1.1

XML

Debt (Details)		9 Months Ended
	Mar. 17, 2022 USD ($)	Sep. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)	Jul. 30, 2021 USD ($) bank
Debt Instrument [Line Items]
Long-term debt, net of issuance costs		$ 347,777,000	$ 347,581,000
Number of banks as lenders | bank				11
Line of credit facility, maximum borrowing capacity				$ 350,000,000
Optional increase (or an accordion feature)				200,000,000
Amounts outstanding under the revolving credit facility		$ 0	$ 0
Commitment fee		0.10%
Available for borrowings		$ 350,000,000
Accordion feature, available for borrowings		200,000,000
Senior Notes | Unsecured Senior Notes
Debt Instrument [Line Items]
Aggregate amount	$ 350,000,000
Fixed rate	3.29%
Long-term debt, net of issuance costs		347,800,000
Issuance costs, net		$ 2,200,000
Commitment fee amount	$ 0
Swing Line
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity				$ 50,000,000

XML

Share-Based Compensation (Details) - shares	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Class B Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock awarded in period (in shares)		1,183,066
Class B Common Stock Bonus
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock awarded in period (in shares)	380,796	494,043
Vesting period	3 years	3 years
Class B Common Stock Key Employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock awarded in period (in shares)		474,500
Vesting period		10 years
U.K. Subsidiary Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock awarded in period (in shares)		1,345,999
Vesting period		5 years

XML

Equity - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Equity, Class of Treasury Stock [Line Items]
Purchase of treasury stock (in shares)	2,046,790			211,885			3,415,581	6,129,493
Purchase of treasury stock	$ 69,831	$ 43,366	$ 4,742	$ 6,937	$ 89,542	$ 102,537
Class B Shares
Equity, Class of Treasury Stock [Line Items]
Number of shares authorized under share repurchase program (in shares)					5,000,000
Purchase of treasury stock (in shares)							3,400,000
Purchase of treasury stock							$ 117,000
Remaining number of shares authorized to be repurchased (in shares)	1,400,000						1,400,000
Class B Shares | Other Current Liabilities
Equity, Class of Treasury Stock [Line Items]
Purchase of treasury stock							$ 6,800

XML

Equity - Activity for Class B Common Stock and Treasury Stock (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance (in shares)	11,215,316	20,307,504	10,229,521	16,094,488
Stock Award Activity (in shares)	(5,000)	0	(387,996)	(1,704,592)
Purchase of Treasury Stock (in shares)	2,046,790	211,885	3,415,581	6,129,493
Retirement of Treasury Stock (in shares)	0	(10,000,000)	0	(10,000,000)
Ending Balance (in shares)	13,257,106	10,519,389	13,257,106	10,519,389
Class B Shares
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance (in shares)	88,290,140	89,197,952	89,275,935	93,410,968
Stock Award Activity (in shares)	5,000	0	387,996	1,704,592
Purchase of Treasury Stock (in shares)	(2,046,790)	(211,885)	(3,415,581)	(6,129,493)
Ending Balance (in shares)	86,248,350	88,986,067	86,248,350	88,986,067
Purchase of Treasury Stock (in shares)			3,400,000

XML

Earnings Per Share Attributable to Federated Hermes, Inc. Shareholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Numerator
Net Income Attributable to Federated Hermes, Inc.	$ 75,026	$ 69,479	$ 216,802	$ 182,999
Less: Total Net Income Available to Participating Unvested Restricted Shareholders	(3,310)	(3,565)	(10,309)	(9,072)
Total Net Income Attributable to Federated Hermes Common Stock - Basic	71,716	65,914	206,493	173,927
Total Net Income Attributable to Federated Hermes Common Stock - Diluted	$ 71,716	$ 65,914	$ 206,493	$ 173,927
Denominator
Basic Weighted-Average Federated Hermes Common Stock (in shares)	83,710	84,531	84,499	86,109
Dilutive Impact from Non-forfeitable Restricted Stock (in shares)	0	5	3	2
Diluted Weighted-Average Federated Hermes Common Stock (in shares)	83,710	84,536	84,502	86,111
Net Income Attributable to Federated Hermes Common Stock – Basic (usd per share)	$ 0.86	$ 0.78	$ 2.44	$ 2.02
Net Income Attributable to Federated Hermes Common Share—Diluted (usd per share)	$ 0.86	$ 0.78	$ 2.44	$ 2.02

XML

Accumulated Other Comprehensive Income (Loss) Attributable to Federated Hermes, Inc. Shareholders (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Accumulated Other Comprehensive Income (Loss), net of tax [Rollforward]
Balance, beginning of period	$ 1,045,692	$ 1,114,017
Balance, end of period	1,100,038	971,429
Foreign Currency Translation Gain (Loss)
Accumulated Other Comprehensive Income (Loss), net of tax [Rollforward]
Balance, beginning of period	(45,676)	16,362
Other Comprehensive Income (Loss)	2,283	(103,778)
Balance, end of period	$ (43,393)	$ (87,416)

XML

Redeemable Noncontrolling Interests in Subsidiaries (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022
Increase (Decrease) in Temporary Equity [Roll Forward]
Temporary equity, beginning balance	$ 58,012	$ 39,508	$ 61,821	$ 54,731	$ 48,569	$ 63,202
Net Income (Loss)	(760)	827	1,865	(1,905)	(6,899)	(1,266)
Other Comprehensive Income (Loss), net of tax	(454)	328	232	(1,713)	(1,068)	(457)
Subscriptions—Redeemable Noncontrolling Interest Holders	35,323	19,684	12,776	4,494	15,314	30,340
Consolidation/(Deconsolidation)	(6,601)	12,119	(33,962)	15,599		(16,034)
Stock Award Activity						707
Distributions to Noncontrolling Interests in Subsidiaries	(14,889)	(14,454)	(3,224)	(16,620)	(1,185)	(4,339)
Change in Estimated Redemption Value of Redeemable Noncontrolling Interests in FHL						14,221
Acquisition of Additional Equity of FHL						(37,805)
Temporary equity, ending balance	70,631	58,012	39,508	54,586	54,731	48,569
Consolidated Investment Companies
Increase (Decrease) in Temporary Equity [Roll Forward]
Temporary equity, beginning balance	46,680	28,450	50,317	42,024	35,687	24,659
Net Income (Loss)	(804)	486	1,925	(2,104)	(7,616)	(1,744)
Other Comprehensive Income (Loss), net of tax	(8)
Subscriptions—Redeemable Noncontrolling Interest Holders	35,323	19,642	12,669	3,591	14,977	29,577
Consolidation/(Deconsolidation)	(6,601)	12,119	(33,962)	15,599		(16,034)
Distributions to Noncontrolling Interests in Subsidiaries	(14,621)	(14,017)	(2,499)	(15,512)	(1,024)	(771)
Temporary equity, ending balance	59,969	46,680	28,450	43,598	42,024	35,687
Other Entities
Increase (Decrease) in Temporary Equity [Roll Forward]
Temporary equity, beginning balance	11,332	11,058	11,504	12,707	12,882	38,543
Net Income (Loss)	44	341	(60)	199	717	478
Other Comprehensive Income (Loss), net of tax	(446)	328	232	(1,713)	(1,068)	(457)
Subscriptions—Redeemable Noncontrolling Interest Holders		42	107	903	337	763
Stock Award Activity						707
Distributions to Noncontrolling Interests in Subsidiaries	(268)	(437)	(725)	(1,108)	(161)	(3,568)
Change in Estimated Redemption Value of Redeemable Noncontrolling Interests in FHL						14,221
Acquisition of Additional Equity of FHL						(37,805)
Temporary equity, ending balance	$ 10,662	$ 11,332	$ 11,058	$ 10,988	$ 12,707	$ 12,882

XML

Commitments and Contingencies (Details) - Administrative error related to unregistered shares - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2023
Loss Contingencies [Line Items]
Loss contingency estimated probable cost			$ 18.9
Loss contingency settlement paid	$ 17.9
Loss contingency provision		$ 2.5
Insurance reimbursement receivable			$ 16.4

XML

Income Taxes (Details) - USD ($) $ in Millions	Sep. 30, 2023	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Limited partners' carried interest fair value	$ 2.9	$ 9.8

XML

Subsequent Events (Details) - $ / shares	Oct. 26, 2023	Jun. 30, 2022
Class A Shares | Subsequent Event
Subsequent Event [Line Items]
Dividends declared (usd per share)	$ 0.28
Class B Shares
Subsequent Event [Line Items]
Number of shares authorized under share repurchase program (in shares)		5,000,000
Class B Shares | Subsequent Event
Subsequent Event [Line Items]
Dividends declared (usd per share)	$ 0.28
Number of shares authorized under share repurchase program (in shares)	5,000,000