BRC Eliminates CEO Holdback Provisions and Equity Award Ban While SEC Investigation Continues
Under investigation
Company Background
BRC Group Holdings (Nasdaq: RILY) is a Los Angeles-based diversified holding company with operations spanning investment banking, wealth management, and communications services. The company renamed itself from B. Riley Financial in January 2026 following a two-year restructuring that included a $772 million net loss in fiscal 2024, a series of Nasdaq delinquency notices for late financial filings, and an auditor replacement in September 2025. A financial turnaround has since taken hold: full-year 2025 net income available to common shareholders reached $299.4 million, and the first six months of 2026 produced another $229.8 million, with Operating Adjusted EBITDA of $66 million in the second quarter—management described it as the company's strongest core operating result since the third quarter of 2023.
Co-CEO Bryant Riley has been the central figure in both the restructuring and the company's ongoing regulatory exposure. BRC disclosed in February 2026 that both the company and Riley personally received SEC subpoenas in July 2024, followed by a second round in November 2024. The subpoenas cover the company's business dealings with Brian Kahn and Franchise Group, transactions in securities of an unrelated public company, and the communications and compliance procedures of certain regulated subsidiaries. The company has said Riley is fully cooperating with the SEC. No resolution has been publicly disclosed.
What Was Disclosed
The Compensation Committee approved Amendment No. 1 to Riley's employment agreement on August 25, 2026, effective the same date. The amendment makes three changes. First, the Incentive Program—under which Riley earns compensation tied to investment banking revenue generated at the broker-dealer subsidiary B. Riley Securities—is extended through the earlier of the end of fiscal year 2027 or an earlier Committee-directed termination, one year beyond the original FY2026 cap. Second, the holdback mechanism is eliminated in its entirety: the amendment states that "no amounts earned by the Executive will be subject to holdback and all references to 'Holdback Amount' have been removed in their entirety from the Employment Agreement." Third, a sentence in Section 3.3 of the original agreement that prohibited Riley from receiving equity awards while participating in the Incentive Program has been deleted.