Kort Schnabel
About Kort Schnabel
Kort Schnabel, 48, has served as Co‑President of Ares Capital Corporation since October 2022 and will become Chief Executive Officer effective April 30, 2025; he joined Ares in 2001, was a founding member of Ares’ U.S. Direct Lending strategy in 2004, is a Partner and Co‑Head of U.S. Direct Lending, serves on the USDL Investment Committee and the Ares Operating Committee, and co‑leads the Ares Sports, Media & Entertainment strategy; he holds a B.A. in Economics from the University of Pennsylvania, cum laude . As an ARCC executive officer, he will not receive compensation from ARCC (ARCC is externally managed; executives are compensated by Ares), and portfolio managers’ pay consists of fixed draw plus variable incentive compensation tied to ARCC performance .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Ares Capital Corporation (ARCC) | Co‑President | Oct 2022 – Apr 30, 2025 | Corporate and administrative leadership alongside deal origination/execution responsibilities . |
| Ares Capital Corporation (ARCC) | Chief Executive Officer | Effective Apr 30, 2025 (indefinite term) | CEO transition to continue growth and differentiation of ARCC under established leadership . |
| Ares Management | Partner; Co‑Head, U.S. Direct Lending; Member, USDL Investment Committee; Member, Operating Committee | Since joining Ares in 2001; USDL founded 2004 | Co‑leads Ares’ flagship direct lending strategy and investment decisions; firm‑level operating leadership . |
| Walker Digital Corporation | Corporate Development (M&A/strategic planning/corporate finance) | Prior to 2001 | Led finance, M&A, and strategic planning activities pre‑Ares . |
| Morgan Stanley | Corporate Finance Group (M&A/LBOs/capital markets analyses) | Prior to Walker Digital | Executed financial analyses for M&A, LBOs, and offerings . |
External Roles
| Organization/Committee | Role | Years | Strategic impact |
|---|---|---|---|
| Ares USDL Investment Committee | Member | Current | Investment decision‑making for U.S. direct lending . |
| Ares Operating Committee | Member | Current | Firm‑level operating leadership and governance . |
| Ares Sports, Media & Entertainment | Investment Committee co‑lead / Portfolio strategy co‑lead | Current | Strategy leadership and capital allocation in SME vertical . |
Fixed Compensation
| Component | Paid by ARCC? | Notes |
|---|---|---|
| Base salary | No | ARCC executive officers do not receive direct compensation from ARCC; they are compensated by Ares . |
| Target bonus | No | Compensation structure is set by Ares, not ARCC . |
| Actual bonus | No | Not applicable at ARCC level . |
| Equity awards (RSUs/PSUs) | No | No ARCC equity awards to executives; compensation is via Ares . |
| Option awards | No | No ARCC option awards to executives . |
| Perquisites | No | ARCC reimburses administrator allocable costs; no direct executive perqs disclosed . |
Performance Compensation
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Variable incentive compensation determined by Ares | Not disclosed | Not disclosed | Not disclosed | Not disclosed | Not disclosed |
| Notes | Portfolio managers (incl. Schnabel) receive fixed draw plus variable incentive comp based on ARCC performance; none receive direct compensation from ARCC . |
Equity Ownership & Alignment
| Metric | Mar 5, 2025 | May 13, 2025 |
|---|---|---|
| Shares beneficially owned (Kort Schnabel) | 15,000 | 15,000 |
| Percent of class | <1% (based on 681,588,467 shares outstanding) | <1% (based on 694,181,754 shares outstanding) |
Additional ownership/alignment details:
- Aggregate dollar range of ARCC equity held (portfolio manager table): $100,001–$500,000 for Kort Schnabel .
- Pledging: ARCC policy prohibits executive officers and directors (and adviser/administrator personnel) from holding ARCC securities in margin accounts or pledging them as loan collateral (reduces hedging/pledging risk) .
- Stock ownership guidelines: Apply to directors (2.5x annual cash retainer); all directors were in compliance as of March 5, 2025; guidelines exclude pledged shares; no similar guideline disclosed for executive officers .
Employment Terms
| Term | Status |
|---|---|
| Role/tenure | Co‑President since Oct 2022; CEO effective Apr 30, 2025; indefinite term . |
| Employer | ARCC is externally managed; executive officers are employees/affiliates of Ares; Schnabel will not receive ARCC compensation . |
| Severance / Change‑of‑control | Not disclosed at ARCC level (executive compensation/contracts reside with Ares) . |
| Clawback | ARCC Board adopted Nasdaq‑compliant clawback policy for incentive‑based compensation “received from the Company” by current/former executive officers, tied to restatements (3‑year lookback) . |
| Indemnification | ARCC has indemnification agreements with directors, officers, and USDL Investment Committee members (expense advancement; maximum permitted under Maryland law/ICA) . |
| Non‑compete / non‑solicit / garden leave | Not disclosed by ARCC (would be governed by Ares employment terms) . |
| Section 16 compliance | Company reports compliance for 2024 with one exception unrelated to Schnabel (Jim Miller initial Form 3 later amended) . |
Investment Implications
- Incentive alignment and transparency: As an externally managed BDC, ARCC does not directly compensate executive officers; portfolio managers (including Schnabel) receive fixed draw plus variable incentive compensation based on ARCC performance from Ares, and ARCC pays base and performance fees to the adviser ($374m base management fee and $364m income‑based fee accrued for 2024), implying incentives are tied to net investment income/performance but with limited disclosure of individual weightings/targets .
- Insider selling pressure: No ARCC equity grants or vesting schedules for executives; Schnabel’s beneficial ownership was 15,000 shares as of March 5 and May 13, 2025 (<1%), with a firm‑level prohibition on pledging/margin, reducing mechanical selling pressure from company‑granted awards .
- Governance and risk controls: Clawback policy and indemnification agreements are in place; stock ownership guidelines apply to directors (all compliant), though no analogous executive‑officer guideline is disclosed at ARCC .
- Transition/retention: CEO transition effective April 30, 2025 keeps leadership within Ares’ direct‑lending core, suggesting continuity of strategy and origination discipline; compensation and retention levers reside at Ares rather than ARCC, which reduces ARCC‑level pay‑for‑performance control and disclosure but preserves economic linkage through adviser performance fees .