Ryan Paylor
About Ryan Paylor
Ryan M. Paylor is a Portfolio Manager of The Herzfeld Caribbean Basin Fund, Inc. (CUBA), serving as an officer of the Fund since 2019 and a portfolio manager at Thomas J. Herzfeld Advisors, Inc. since 2012 . He was 43 years old as of the 2024 proxy and continues to serve as an officer of the Fund . As of April 30, 2025, he beneficially owned 46,144 CUBA shares (<1% of outstanding), indicating increased personal alignment versus prior years . CUBA is externally managed; compensation for investment professionals is borne by the Adviser, while the Fund pays a base management fee (1.25% of Managed Assets) and an incentive fee tied to quarterly pre‑incentive fee net investment income, so the Fund’s pay-for-performance lever operates via the advisory fee structure rather than individual NEO pay .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Thomas J. Herzfeld Advisors, Inc. | Portfolio Manager | 2012–present | Portfolio management responsibilities at the Adviser that manages CUBA . |
| The Herzfeld Caribbean Basin Fund, Inc. (CUBA) | Portfolio Manager (Officer) | 2019–present | Fund officer and portfolio manager for CUBA . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | No other directorships or external roles for Mr. Paylor are disclosed in the Fund’s proxy officer table (officer entry shows “NA” for other directorships) . |
Fixed Compensation
- Officers’ compensation and routine overhead for “investment professionals of the Adviser and its staff” are borne by Thomas J. Herzfeld Advisors, not by the Fund .
- The Fund pays the Adviser a base management fee of 1.25% per year of Managed Assets, calculated and payable quarterly in arrears; Managed Assets include leverage used for investment purposes .
| Item | Terms | Source |
|---|---|---|
| Employer of record for officers | Thomas J. Herzfeld Advisors, Inc. (Adviser) | |
| Who bears officer compensation | Adviser bears compensation and routine overhead of investment professionals | |
| Fund base management fee | 1.25% of Managed Assets, paid quarterly in arrears | |
| Definition of Managed Assets | Gross assets less liabilities incurred for non‑investment purposes; leverage for investment purposes included |
Performance Compensation
CUBA’s performance compensation is implemented at the Fund level via the advisory incentive fee; the proxy provides no individual performance pay details for Mr. Paylor. The incentive fee framework:
| Metric | Weighting | Target/Hurdle | Payout (Catch-up/Above Hurdle) | Measurement Period | Other Terms |
|---|---|---|---|---|---|
| Pre‑Incentive Fee Net Investment Income (NII) as % of quarter‑end Net Assets | Not stated (single metric) | 2.25% per quarter hurdle | 100% of NII between 2.25%–2.5% (catch‑up); 10% of NII above 2.5% | Quarterly, payable in arrears | Deferred interest (e.g., PIK/OID) only paid when received in cash; accrual reversed if written off . |
Definitions and mechanics, including NII components, hurdle, catch‑up band, and pro‑rata adjustments for partial periods, are specified in the advisory agreement exhibit to the 2025 proxy .
Equity Ownership & Alignment
Beneficial ownership for Ryan M. Paylor has increased over the last three reported years, which reduces near‑term selling pressure risk and improves alignment.
| Metric | FY 2023 (Record date FY23 proxy) | 2024 (Sept 18, 2024) | 2025 (Apr 30, 2025) |
|---|---|---|---|
| Shares Outstanding (reference for % of class) | — | 16,548,313 | 15,720,897 |
| Ryan M. Paylor – Shares | 4,033 | 25,134 | 46,144 |
| % of Class | <1% | <1% | <1% |
- Other alignment context: As of April 30, 2025, executive officers and directors as a group owned 6,571,085 shares (41.8%) including 5,725,475 shares beneficially owned with shared power by T. Herzfeld and E. Herzfeld in their capacity as portfolio managers of advisory accounts, reflecting significant insider exposure to Fund outcomes .
Employment Terms
- Role and tenure: Portfolio Manager of CUBA since 2019; Portfolio Manager at Thomas J. Herzfeld Advisors since 2012 .
- Employment structure: Officers are employees of the Adviser; the advisory agreement specifies the Adviser provides services and bears compensation/overhead for investment professionals .
- Advisory agreement terms impacting incentives:
- Term: Effective upon shareholder approval; initial effectiveness through the second anniversary, then automatic annual renewals with required approvals .
- Termination: Without penalty by the Board or a majority of outstanding voting securities on 45 days’ notice; by the Adviser on 90 days’ notice .
- Compensation: Base management fee 1.25% of Managed Assets; incentive fee based on quarterly pre‑incentive fee NII with a 2.25% hurdle, catch-up, and 10% rate above 2.5% .
- Change in Fund strategy/name: 2025 proxy sought shareholder approval to change the Fund’s name to Herzfeld Credit Income Fund, Inc. and refocus on CLO equity and junior debt; the advisory agreement was amended and restated in connection with this transition .
Investment Implications
- Pay-for-performance alignment: Individual officer compensation is borne by the Adviser and not disclosed; investor‑relevant incentives come through the Fund’s advisory fee design, which ties incremental compensation to quarterly NII above a 2.25% hurdle with a catch-up and 10% participation beyond 2.5%. This can bias portfolio construction toward yield/NII generation, especially in a CLO equity strategy, but also aligns manager economics with distributable income levels .
- Retention risk: No Fund‑level employment agreement or severance/change‑of‑control economics are disclosed for Mr. Paylor; retention hinges on employment with the Adviser and the advisory agreement’s continuity, which is board/shareholder renewable and terminable on relatively short notice (45/90 days) .
- Insider trading/selling pressure: Mr. Paylor’s holdings increased from 4,033 (FY23 proxy) to 46,144 shares as of April 30, 2025, signaling accumulation rather than distribution and lowering near‑term selling pressure risk at the individual level .
- Concentration of control/alignment: Substantial insider and affiliated advisory account ownership (over 40% as a group; 36.4% via advisory accounts by Messrs. T. and E. Herzfeld) creates strong alignment but may also concentrate influence over Fund policies and capital allocation decisions .