Scott Lem
About Scott Lem
Scott Lem (born 1977) is Chief Financial Officer and Treasurer of Ares Dynamic Credit Allocation Fund, Inc. (ARDC). He is a Partner and Chief Financial Officer of the Public Credit Funds within Ares’ Finance and Accounting department, and also serves as CFO and Treasurer of Ares Capital Corporation (ARCC), Ares Strategic Income Fund (ASIF), and CION Ares Diversified Credit Fund (CADC). He joined Ares in 2003 and previously served as Assistant Treasurer of ARCC (May 2009–May 2013) and Treasurer of ARDC (October 2016–September 2017), before being appointed CFO of ARDC effective July 1, 2017. The fund’s proxies do not disclose individual executive TSR, revenue growth, or EBITDA growth metrics for officers.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| ARDC | Treasurer | Oct 2016 – Sep 2017 | Oversaw treasury responsibilities for the closed-end fund prior to CFO appointment. |
| ARDC | Chief Financial Officer | Appointed Jul 1, 2017 | Transitioned financial leadership from Treasurer to CFO to lead fund finance; replaced Penni F. Roll as CFO. |
| ARCC | Assistant Treasurer | May 2009 – May 2013 | Supported finance and accounting for a large BDC, enhancing reporting and controls. |
| Ares Finance & Accounting | Chief Accounting Officer, Credit (Direct Lending) [historical] | Pre-2023 | Senior finance leadership role supporting direct lending credit activities at Ares. |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| ARCC | Chief Financial Officer & Treasurer | Current (disclosed) | Executive stewardship over finance, treasury, and reporting for ARCC. |
| ASIF | Chief Financial Officer & Treasurer | Current (disclosed) | Finance leadership for Ares Strategic Income Fund. |
| CADC | Chief Financial Officer & Treasurer | Current (disclosed) | Finance leadership for a diversified credit interval fund. |
| Ares Management | Partner; CFO of Public Credit Funds | Current | Oversees finance across public credit funds within Ares; central to multi-fund coordination. |
Fixed Compensation
Officers of the Fund do not receive compensation from ARDC. Compensation and benefits for officers are set and paid by Ares (the Investment Manager), which may seek reimbursement from ARDC for certain administrative service costs; ARDC’s proxy does not disclose Scott Lem’s base salary, bonus targets, or cash compensation.
Performance Compensation
The Fund does not disclose any officer performance-based pay plans, metrics, or payouts; officers are not compensated by ARDC. No RSU/PSU awards, option grants, or vesting schedules tied to ARDC compensation are disclosed for Scott Lem.
Equity Ownership & Alignment
- As of April 1, 2024, Directors and officers of ARDC as a group beneficially owned less than 1% of the Fund’s outstanding common shares; individual officer holdings are not itemized in the proxy.
- As of March 20, 2023, Directors and officers of the Fund as a group beneficially owned less than 1% of outstanding common shares; individual officer holdings are not itemized.
- Earlier proxies show similar group ownership levels (e.g., ~2.5% as of April 28, 2017; ~2.4% as of April 29, 2016).
- Section 16(a) compliance note: Scott Lem filed one late Form 3 for FY 2016, indicating insider reporting obligations; no pledging or hedging policies specific to officers are disclosed in the proxies.
| Ownership Disclosure | As-of Date | Measure | Value |
|---|---|---|---|
| Directors & Officers (group) | Apr 1, 2024 | % of common shares outstanding | <1% |
| Directors & Officers (group) | Mar 20, 2023 | % of common shares outstanding | <1% |
| Directors & Officers (group) | Apr 28, 2017 | % of common shares outstanding | ~2.5% |
| Directors & Officers (group) | Apr 29, 2016 | % of common shares outstanding | ~2.4% |
| Scott Lem – Section 16 note | FY 2016 | Late Form 3 filing | 1 late Form 3 |
Notes:
- The proxies do not disclose Scott Lem’s individual share count, vested/unvested breakdown, or any shares pledged as collateral.
- The proxies focus on Director ownership ranges; officer-level detail is not provided.
Employment Terms
| Item | Disclosure |
|---|---|
| Appointment | Appointed CFO of ARDC effective July 1, 2017 (transition from Treasurer). |
| Contract Term & Auto-Renewal | Not disclosed in ARDC filings. |
| Severance / Change of Control | Not disclosed for officers; no ARDC-specific severance multiples or triggers for officers. |
| Clawbacks / Tax Gross-ups | Not disclosed for officers in ARDC filings. |
| Non-compete / Non-solicit | Not disclosed. |
| Post-termination arrangements | Not disclosed. |
Investment Implications
- Pay-for-performance visibility at the Fund level is limited: officers do not receive compensation from ARDC, and the proxy does not disclose Ares-level cash/equity compensation details or performance metrics for Scott Lem, constraining direct alignment analysis to ARDC outcomes.
- Alignment via equity ownership appears minimal at the ARDC level given less than 1% group ownership and absence of individual officer breakdowns or ownership guidelines; pledging/hedging policies for officers are not disclosed, leaving potential alignment gaps opaque.
- Retention risk looks contained by long-tenured, multi-fund responsibilities within Ares (joined 2003; roles across ARCC, ASIF, CADC), suggesting institutional reliance on his finance leadership across public credit funds; however, the absence of disclosed employment protections or severance terms at ARDC offers limited insight into change-of-control economics.
- Trading signals are limited; only a historical late Form 3 is noted, with no granular Form 4 data in the proxies—monitor ongoing Section 16 filings for activity.