L’Sheryl Hudson
About L’Sheryl Hudson
L’Sheryl D. Hudson is Senior Vice President, Chief Financial Officer, and Treasurer of Equus Total Return, Inc., serving in these roles since November 2006; she previously served as Chief Compliance Officer from November 2006 to July 2011 and was Associate Director at WestLB Asset Management (US), LLC from 2002 to 2006 . Ms. Hudson is age 60 per the company’s latest proxy . As CFO, she signs the Company’s Section 302 and 906 certifications, evidencing direct accountability for financial reporting and controls (Q1 2025 and Q2 2025) .
Company performance context (pay-versus-performance table):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Company TSR – $100 initial value | 60.08 | 60.92 | 46.22 |
| NYSE Composite TSR – $100 initial value | 88.47 | 98.19 | 111.26 |
| Net Investment Income ($) | (3,629,000) | (4,035,000) | (3,315,000) |
| Change in Net Asset Value ($) | (1,128,000) | 12,949,000 | (18,777,000) |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Equus Total Return, Inc. | CFO, SVP & Treasurer | Nov 2006–present | Principal financial officer of BDC; oversight of financial reporting, controls; former CCO (2006–2011) |
| Equus Total Return, Inc. | Chief Compliance Officer | Nov 2006–Jul 2011 | Built compliance framework for a registered investment company |
| WestLB Asset Management (US), LLC | Associate Director | 2002–2006 | Asset management role prior to joining Equus |
External Roles
- No external public-company directorships disclosed for Ms. Hudson; she is not a director of Equus .
Fixed Compensation
| Component ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary | 242,308 | 281,875 | 295,969 |
| All Other Compensation (primarily defined contribution plan contributions) | 18,438 | 18,188 | 19,228 |
| Total (SCT) | 325,746 | 321,313 | 339,697 |
Additional fixed terms from Employment Agreement (in effect since 2017):
- Base salary at signing: $275,000 annualized (superseding earlier 2021 disclosure of $209,615); agreement had initial two-month term, then month-to-month .
- Longevity bonus: $5,000 plus $250 for each year employed by or on behalf of the Company .
Performance Compensation
| Incentive Type | Metric | Weighting | Target | Actual/Payout | Vesting |
|---|---|---|---|---|---|
| Annual Cash Bonus | Not specified in proxy CD&A for Ms. Hudson | — | — | Paid: $65,000 (2022), $21,250 (2023), $24,500 (2024) | N/A |
| Long-Term Equity (2016 Plan) | Restricted Stock (time/performance vesting allowed by plan) | Determined at grant | Not disclosed for Ms. Hudson | No grants 2018–2024 to NEOs | 2017 awards vested over 3 years; fully vested prior to 2024 |
Notes:
- The Incentive Plan allows restricted stock and options, with the Company choosing restricted stock for long-term incentives; the Committee granted 750,000 RS shares to NEOs on March 17, 2017 (and 844,500 shares in total to certain directors/executives), with 3-year vesting; no further NEO equity grants 2018–2024 .
- No stock options outstanding/exercised by executives in 2024; all prior awards fully vested before 2024 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (as of Apr 1, 2025) | No shares reported for Ms. Hudson; percent of class “*” (less than 1%) |
| Unvested Outstanding Awards (12/31/2024) | None; all prior awards fully vested |
| Options (Exercisable/Unexercisable) | None outstanding; no options exercised in 2024 |
| Pledging/Hedging | No pledging disclosures specific to Ms. Hudson identified in proxy |
| Ownership Guidelines | Not disclosed in proxy |
Employment Terms
| Term | Provision |
|---|---|
| Employment Agreement Date | Effective April 1, 2017 |
| Term | Two months, then month-to-month |
| Base Salary at Signing | $275,000 annualized (later fixed salary levels reflected in SCT) |
| Longevity Bonus | $5,000 + $250 per year employed |
| Severance (Without Cause / Good Reason) | Lump sum equal to one year’s base salary then in effect |
| Estimated Termination Payment (12/31/2024 scenario) | $295,968; no equity vesting acceleration shown |
| Clawback | Compensation Recoupment Policy effective Dec 1, 2023; recover incentive-based compensation up to 3 years for intentional misconduct, fraud, supervisory failures causing material damage, or if a restatement is required due to material noncompliance |
Additional governance and shareholder feedback:
- Say-on-Pay (2024 meeting for 2023 compensation): 88.5% approval .
- Say-on-Pay (2025 meeting for 2024 compensation): Votes For 7,373,970; Against 2,264,277; Abstain 9,581; proposal passed .
Investment Implications
- Pay-for-performance alignment: Ms. Hudson’s compensation mix is predominantly fixed salary with relatively modest annual cash bonuses and no ongoing equity awards since 2017; pay levels have remained measured while Company TSR lagged the NYSE Composite and NII remained negative over 2022–2024, indicating limited variable upside tied to shareholder returns or operating performance for the CFO role .
- Retention and change-in-control risk: Contract is at-will (month-to-month post-initial term) with a 1x salary severance; no CIC multiple is disclosed for the CFO, implying low parachute risk but also fewer retention hooks versus peers that use multi-year equity or higher severance; estimated termination payment at year-end 2024 was ~$296k .
- Insider selling pressure: With all long-term equity fully vested prior to 2024 and no new grants, near-term forced-selling pressure from vesting events appears minimal; no options outstanding further reduces exercise-driven selling catalysts .
- Ownership alignment: No beneficial ownership reported for Ms. Hudson as of April 1, 2025, and no disclosed ownership guidelines, pointing to low “skin in the game”; while not uncommon for BDC executives without ongoing equity refresh, this weakens alignment signals to public equity holders .
- Governance safeguards: The clawback policy adopted in 2023, combined with CFO Section 302/906 certifications, supports accountability on reporting quality and potential recoupment for misconduct or restatements, which is constructive for risk management .
- Shareholder sentiment: Say-on-pay votes passed comfortably in 2024 (88.5% approval for 2023 pay) and 2025 (proposal passed based on vote tallies), indicating limited investor pushback on current pay design despite underperformance in TSR during 2022–2024 .