Thomas Lauer
About Thomas C. Lauer
Thomas C. Lauer, 57, is President of Fidus Investment Corporation (since September 2016), a director (since IPO in June 2011), a manager of Fidus Investment Advisors, LLC (the external advisor), and a member of the advisor’s investment committees. He holds a BBA and an MBA from the University of Notre Dame’s Mendoza College of Business . FDUS delivered a 12.4% total return on NAV and 20.1% market total return in 2024; portfolio fair value reached $1.09B with a 13.3% weighted average yield on debt investments, providing context for performance during Lauer’s tenure as President since 2016 .
- Board status: “Interested Director” due to his advisor role; not independent .
- Governance context: Board chaired by CEO Edward H. Ross; no Lead Independent Director; independent directors meet in executive session each meeting .
- Education: University of Notre Dame (BBA, MBA) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Fidus Partners, LLC | Managing Partner | 2008–Jun 2011 | Built lower middle-market investment banking platform; predecessor to advisor; informs sourcing and underwriting . |
| Allied Capital Corporation | Managing Director; member of Management Committee (2006–2008), Private Finance IC (2005–2008), Senior Debt Fund IC (2007–2008) | 2004–2008 | Direct lending and mezzanine investing experience; committee roles signal portfolio and risk governance depth . |
| GE Capital | Global Sponsor Finance Group | — | Sponsor finance execution and underwriting foundation . |
| Wachovia/First Union Securities | Leveraged Capital Group | — | Leveraged finance and capital markets expertise . |
| Intel Corporation | Platform Components Division | — | Operating exposure in technology/manufacturing . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Fidus Investment Advisors, LLC | Manager; Investment Committee member | 2011–present | Advisor responsible for origination, underwriting, monitoring and valuation processes . |
| Fidus Mezzanine Capital, L.P. (Fund I) Board | Director (board includes all Company directors) | — | Subsidiary board oversight; BDC-level governance extends to Fund I . |
Fixed Compensation
Executives do not receive direct compensation from FDUS; they are employees/affiliates of the external advisor. Interested directors (including Lauer) receive no director fees .
| Person | Base Salary | Target Bonus % | Actual Bonus | Director Cash Fees | Notes |
|---|---|---|---|---|---|
| Thomas C. Lauer | — | — | — | $0 | No direct Company comp; interested directors not paid by FDUS . |
FDUS paid its advisor $37.1M in 2024 (base management fee $18.6M net of waiver, income incentive fee $18.5M) and reimbursed $2.6M of administrative expenses; $0.7M of capital gains incentive fee was accrued GAAP but none payable .
Performance Compensation
Company-level performance pay to executives is not applicable. However, the advisory fee construct drives incentives for the platform Lauer helps manage.
| Incentive Element | Metric | Hurdle/Structure | Rate | Vesting/When Paid |
|---|---|---|---|---|
| Income Incentive Fee | Pre-incentive fee Net Investment Income (NII) | 2.0% quarterly hurdle on prior-quarter weighted average net assets; 100% catch-up between 2.0%–2.5%; 20% above 2.5% | 20% | Quarterly, in arrears . |
| Capital Gains Incentive Fee | Cumulative realized gains net of realized losses and unrealized depreciation | No hurdle; cumulative “since-inception” construct | 20% | Annually, in arrears; accruals on unrealized gains possible . |
| Base Management Fee | Average total assets (ex cash) | Quarterly calc | 1.75% annualized | Quarterly, in arrears . |
Key implications:
- Rising base rates can more easily clear the 2% quarterly hurdle, potentially increasing income fees without proportional gains to common shareholders .
- Incentives can favor structures with PIK/deferred interest and asset growth via leverage, creating alignment risks if not actively overseen by independent directors .
Equity Ownership & Alignment
| Holder | Shares Beneficially Owned | % of Shares Outstanding | Ownership Dollar Range | Options/RSUs Outstanding |
|---|---|---|---|---|
| Thomas C. Lauer | 81,600 | 0.24% (calc: 81,600 / 34,731,661) | Over $1,000,000 | None exercisable within 60 days . |
Additional alignment factors:
- No company stock options outstanding within 60 days; reduces near-term forced exercises/selling .
- Hedging: The Code of Business Conduct does not expressly prohibit hedging by insiders, a governance softness; pledging policy not disclosed in the proxy .
- Advisor IC members (incl. Lauer) also report dollar ranges of FDUS stock ownership; Lauer reported “Over $1,000,000” .
Employment Terms
- Employment status: Employee/manager of the external advisor; not employed by FDUS. No Company-level employment agreement, severance, or change-of-control (CoC) terms disclosed for Lauer .
- Advisory/Administration agreements: Board renewed both to June 20, 2025; fees, services, and termination rights governed by these contracts (60-day termination for admin) .
- Non-compete/non-solicit/garden leave: Not disclosed at Company level; would sit with the advisor, not FDUS.
Board Governance (service history, committees, independence)
- Board class/tenure: Class II director since June 2011; up for re-election in 2025 to serve through 2028 .
- Independence: “Interested Director” due to advisor roles (manager and IC member) .
- Committees: Audit and Nominating committees consist solely of independent directors; Lauer is not a member .
- Attendance: In 2024, Board met 6 times; Audit 9; Nominating 3; all directors attended 100% and attended the 2024 annual meeting .
- Leadership: CEO Edward H. Ross is Chairman; Board has no Lead Independent Director; independent directors meet in executive session each Board meeting; Audit Chair (Anstiss) acts as liaison .
Dual-role implications:
- CEO is also Chair; Lauer is an interested director and President. The Board cites mitigants: fully independent committees, executive sessions, CCO access, and liaison role for the Audit Chair .
Related Party and Conflicts (trading signals and governance risk)
- Lauer is a manager of the advisor; advisor fee structure (base + income + capital gains fees) creates potential conflicts (incentives to grow assets/fees, favor PIK, and leverage). The Board reviews/renews the advisory agreement annually and independent directors oversee valuations and fees .
- Co-investment and allocations governed by SEC exemptive order and allocation policy; independent “required majority” must approve co-investment decisions .
- “Fidus” name is licensed from Fidus Partners; certain advisor personnel are also members of Fidus Partners, creating additional related-party touchpoints .
Performance & Track Record (context for pay-for-performance)
| Metric | 2023 | 2024 |
|---|---|---|
| Portfolio Fair Value ($mm) | 957.9 | 1,090.5 |
| Total Return (NAV basis) | 15.1% | 12.4% |
| Total Return (Market basis) | 17.8% | 20.1% |
| Weighted Avg Debt Yield | — | 13.3% (as of 12/31/24) |
Additional market reference:
- NAV per-share premium/discount ranged from -3.4% to +11.2% across 2024 quarters; last close on Mar 20, 2025 was $20.47 .
Director Compensation (for comparison)
| Director Type | Annual Cash Retainer | Meeting Fees | Committee Chair Fees |
|---|---|---|---|
| Independent Directors | $60,000 | $5,000 per regular Board mtg; $2,500 per additional Audit mtg | Audit Chair +$10,000; Nominating Chair +$5,000 |
| Interested Directors (incl. Lauer) | $0 | $0 | $0 |
Compensation Structure Analysis (alignment, retention, and red flags)
- Shift in mix: Company pays no executive comp; compensation is via advisor economics. Equity grants, options, vesting schedules, and CoC severance for Lauer at the Company are not applicable/not disclosed .
- Incentive metrics: Advisor compensation tied to NII (quarterly hurdle/catch-up) and realized gains; risk factors note potential preference for PIK and asset growth to maximize fees—important for trading and payout modeling .
- Clawbacks/tax gross-ups: Not disclosed at Company level given no exec pay; none cited for director cash fees .
- Hedging/pledging: Hedging not expressly prohibited for insiders; pledging not addressed—soft spot relative to best practices .
Say-on-Pay & Shareholder Feedback
No say-on-pay proposal in 2025; proposals were director elections and authorization to issue shares below NAV (subject to limits and conditions) .
Expertise & Qualifications
- 30+ years investing debt/equity in lower middle market; extensive IC experience at Allied Capital and the advisor; Notre Dame BBA/MBA .
- Board deems Lauer’s experience valuable for investment oversight and strategy .
Equity Ownership & Insider Activity Notes
- Beneficial ownership: 81,600 shares; less than 1% of outstanding (Over $1,000,000 value range) .
- Options/RSUs: None exercisable within 60 days across the Company’s common stock, limiting mechanical exercise-related selling .
- Insider trading policy exists; no explicit prohibition on hedging .
Employment & Contracts (Retention/Transition)
- No Company employment agreement, severance, or CoC provisions for Lauer; retention linked to advisor economics and governance continuity (annual advisory agreement renewal) .
- Advisor agreements can be terminated per terms; admin agreement has 60-day termination right .
Investment Implications
- Alignment: Lauer’s personal stock ownership and long role as President support alignment, but the advisor fee structure (1.75% base, 20% NII over hurdle with catch-up, 20% capital gains) can create incentives toward asset growth, leverage, and PIK-heavy structures—monitoring NII quality (cash vs PIK), leverage, and fee capture is critical for payout sustainability .
- Governance: As an “interested” director and President under a Chair/CEO structure, independence relies on the efficacy of the independent Audit and Nominating Committees, executive sessions, and valuation oversight. The absence of a Lead Independent Director and a permissive hedging stance are modest governance drawbacks to factor into risk premia .
- Retention risk: With no Company-level employment or severance economics (comp paid by the advisor), retention hinges on advisor health and incentives; annual advisory agreement renewals and independent oversight mitigate but do not eliminate platform-dependence risk .
- Trading signals: Watch for shifts in income mix (PIK vs cash), NAV vs price premium/discount dynamics around below-NAV issuance authorizations, and any changes in advisory fee waivers. Director/insider Form 4 activity analysis would further calibrate selling pressure, but was not disclosed in the proxy; rely on ongoing filings for updates .