Scott C. Lem
About Scott C. Lem
Scott C. Lem, 47, is Chief Financial Officer and Treasurer of Ares Capital Corporation (ARCC) since February 2024, after serving as Chief Accounting Officer and Vice President (2013–2024) and Assistant Treasurer (2009–2013) . He graduated summa cum laude with B.S. degrees in Accounting and Business Administration from USC and holds an MBA in Finance from UCLA Anderson; he is a Certified Public Accountant (inactive) . During his tenure as CFO, ARCC reported Q3 2025 GAAP EPS of $0.57 and Core EPS of $0.50, net assets per share rose to a record $20.01 (from $19.89 at year‑end 2024), and total assets increased to $30.806B, reflecting balanced growth and capital markets execution .
ARCC Operating Highlights during Lem’s CFO tenure
| Metric | Dec 31, 2024 | Sep 30, 2025 |
|---|---|---|
| Net assets per share ($) | $19.89 | $20.01 |
| Total assets ($MM) | $28,254 | $30,806 |
| Stockholders’ equity ($MM) | $13,355 | $14,322 |
| Debt/equity ratio (x) | 1.03x | 1.09x |
| GAAP EPS (Q3) ($) | $0.62 (Q3’24) | $0.57 (Q3’25) |
| Core EPS (Q3) ($) | $0.58 (Q3’24) | $0.50 (Q3’25) |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ares Capital Corporation (ARCC) | Chief Financial Officer and Treasurer | CFO since Feb 2024; Treasurer since May 2013 | Principal financial officer; oversight of reporting, capital markets and treasury for BDC |
| Ares Capital Corporation (ARCC) | Chief Accounting Officer and Vice President | May 2013 – Feb 2024 | Led financial reporting and accounting; continuity in BDC finance function |
| Ares Capital Corporation (ARCC) | Assistant Treasurer | May 2009 – May 2013 | Supported treasury and liquidity operations |
| Ares Management | Controller | Jul 2003 – Dec 2008 | Corporate controller responsibilities at parent asset manager |
| Ernst & Young LLP; Arthur Andersen LLP | Senior Associate (Audit) | Pre‑2003 | Audit across entertainment, hospitality and real estate sectors |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ares Strategic Income Fund | Chief Financial Officer and Treasurer | Current | Finance leadership for registered credit fund |
| Ares Dynamic Credit Allocation Fund, Inc. (ARDC) | Chief Financial Officer and Treasurer | Current | CFO/Treasurer for closed‑end fund under Ares platform |
| CION Ares Diversified Credit Fund | Chief Financial Officer and Treasurer | Current | Finance oversight for diversified credit interval fund |
| IHAM GP (Ivy Hill Asset Management) | Board of Managers | Current | Governance role at affiliated manager |
Fixed Compensation
- ARCC is externally managed; under the administration agreement, ARCC reimburses Ares Operations at cost for the Company’s allocable portion of overhead and expenses including compensation of certain officers such as the CFO and their staffs, but not investment professionals. The proxy does not disclose Lem’s base salary or bonus amounts .
- No disclosure found of base salary, target bonus percentage, or actual cash bonus paid for Lem in the proxies and 8‑Ks reviewed. If disclosed elsewhere, it was not in the available filings .
Performance Compensation
- Clawback Policy: The Board adopted a clawback policy compliant with NASDAQ Section 10D. It covers current and former executive officers; triggers on required accounting restatements; looks back three completed fiscal years; applies to incentive‑based compensation tied to financial reporting measures; and requires recovery of “Overpayment” computed without regard to taxes .
| Clawback Policy Term | Disclosure |
|---|---|
| Covered persons | Current and former executive officers |
| Trigger | Company required to prepare an accounting restatement due to material noncompliance |
| Lookback period | Three completed fiscal years immediately preceding restatement and applicable transition periods |
| Compensation covered | Incentive‑based compensation based wholly or partly on a financial reporting measure |
| Recovery amount | Excess over restated‑basis amounts; computed without regard to taxes |
| Adoption scope | Applies to incentive‑based comp received on or after adoption date |
- No metrics/weightings (e.g., revenue growth, TSR percentiles) tied to Lem’s annual or long‑term incentives are disclosed in the proxy materials reviewed .
Equity Ownership & Alignment
- Beneficial Ownership: Lem beneficially owned 34,264 shares as of May 13, 2024 (less than 1% of class; 614,518,362 shares outstanding) , and 34,270 shares as of March 5, 2025 (less than 1% of class; 681,588,467 shares outstanding) .
- Hedging and Pledging: The insider trading policy prohibits executive officers and directors from short‑selling, entering into hedging/monetization transactions, or pledging/margining Company securities .
| Ownership Metric | 2024 | 2025 |
|---|---|---|
| Shares beneficially owned (units) | 34,264 | 34,270 |
| Shares outstanding (units) | 614,518,362 | 681,588,467 |
| Ownership as % of outstanding | ~0.0056% (calc. from 34,264/614,518,362) | ~0.0050% (calc. from 34,270/681,588,467) |
| Hedging policy | Hedging and short‑selling prohibited | Hedging and short‑selling prohibited |
| Pledging policy | Pledging/margining prohibited | Pledging/margining prohibited |
- Stock ownership guidelines: The Board maintains stock ownership guidelines for directors (2.5x annual cash retainer); all directors were in compliance as of March 5, 2025. Executive officer ownership guidelines are not specified in the proxy .
Employment Terms
| Term | Disclosure |
|---|---|
| CFO appointment effective date | February 15, 2024 |
| Current roles | Chief Financial Officer since Feb 2024; Treasurer since May 2013; indefinite terms |
| Contract term & expiration | Not disclosed in proxy/8‑Ks reviewed |
| Severance & change‑of‑control | Not disclosed in proxy/8‑Ks reviewed |
| Clawbacks | Clawback policy adopted; applies to incentive‑based compensation as defined |
| Non‑compete / non‑solicit | Not disclosed in proxy/8‑Ks reviewed |
Performance & Track Record
- CFO commentary: In Q3 2025, Lem highlighted raising over $1 billion of new debt capital, strengthening the balance sheet while maintaining prudent investment strategy and sustaining stable or increased quarterly dividends over more than 16 consecutive years .
- Financial progress: Net assets per share reached a record $20.01 in Q3 2025, with total assets of $30.806B and debt/equity of 1.09x; GAAP net income per share was $0.57 and Core EPS was $0.50 in Q3 2025 .
| Indicator | Q3 2024 | Q3 2025 |
|---|---|---|
| GAAP net income per share ($) | $0.62 | $0.57 |
| Core EPS ($) | $0.58 | $0.50 |
| Net assets per share ($) | $19.89 (Dec 31, 2024) | $20.01 (Sep 30, 2025) |
| Total assets ($MM) | $28,254 (Dec 31, 2024) | $30,806 (Sep 30, 2025) |
Governance & Related Party Context
- External management model: ARCC is externally managed by a subsidiary of Ares Management and is party to an investment advisory agreement. Administrative services are provided by Ares Operations, with ARCC reimbursing its allocable portion of certain officer compensation and overhead (including CFO), but not investment professionals .
- Insider trading policy: Prohibitions on hedging, short‑selling, and pledging by executive officers and directors .
Investment Implications
- Alignment: Prohibitions on hedging/pledging and an NASDAQ‑compliant clawback framework reduce misalignment risk; however, absence of disclosed executive pay metrics/targets limits pay‑for‑performance transparency for Lem specifically .
- Ownership: Lem’s direct beneficial ownership is de minimis (~0.005% of shares), typical for externally managed BDCs where compensation is borne via the manager; reliance on policy‑based alignment (clawback, trading restrictions) is higher than equity‑based alignment .
- Execution: Operating outcomes in 2025 show balance sheet growth and record NAV per share alongside active capital raising, supporting a disciplined financial posture under Lem’s CFO leadership; continued monitoring of debt/equity and dividend coverage remains key .
- Signals: No Form 4 trading activity was identified in reviewed filings; insider policy constraints reduce the likelihood of hedging/pledging‑related selling pressure. Future disclosures (proxy/8‑Ks) should be tracked for any compensatory arrangements, severance, or change‑of‑control updates .