Lee Hillman
About Lee S. Hillman
Independent director of Franklin BSP Capital Corporation since March 2020 and current Chair of the Audit Committee. Born in 1955; CPA with deep finance and audit credentials, including former audit partner at Ernst & Young, an MBA in Finance and Accounting from University of Chicago Booth, and a B.S. in Finance and Accounting from Wharton. Tenure on FRBP’s board since inception in 2020, with service across FRBP’s related fund complex boards .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Liberation Advisory Group | President | Since 2003 | Private management consulting leadership |
| Performance Health Systems, LLC | Chief Executive Officer | Since 2012 (and predecessor since 2009) | Oversight of Power Plate and bioDensity equipment distribution |
| Power Plate International | Executive Chairman & CEO | Feb 2006–May 2008 | Operational turnaround/execution |
| Power Plate North America | Chief Executive Officer | 2004–2006 | North America business leadership |
| Bally Total Fitness Corporation | Chief Executive Officer | 1996–2002 | Led world’s largest fitness club business; later Chairman of the Board (prior service) |
| Ernst & Young | Audit Partner (prior) | N/A | Audit, accounting expertise |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Franklin BSP Private Credit Fund | Director; Audit Committee Chair (noted in FRBP biography) | Current | Independent director oversight |
| Franklin BSP Real Estate Debt BDC | Director | Current | Board oversight |
| Franklin BSP Multifamily Trust, Inc. | Director | Current | Board oversight |
| Distribution Solutions Group, Inc. (NASDAQ: DSGR; formerly Lawson Products) | Lead Independent Director; Chair of Audit & Compensation Committees | Current | Governance leadership; audit and compensation oversight |
| Prior public boards (selected) | Director/Chair | Prior | HealthSouth, Wyndham International, RCN (Chair), Bally (Chair), HC2 Holdings, Holmes Place, Professional Diversity Network; Trustee, Adelphia Recovery Trust |
Board Governance
- Committee assignments: Audit Committee Chair; member of Compensation Committee .
- Audit Committee composition and qualification: Hillman, Kramer, Michelson; all independent; all designated “audit committee financial experts” .
- Committee activity in 2024: Audit Committee met 4 times; Nominating & Corporate Governance met 1 time; Compensation Committee did not meet .
- Board activity and attendance: Board met 10 times in 2024; all directors attended at least 75% of board and committee meetings; only the CEO (Byrne) attended last year’s annual meeting of stockholders (implies Hillman did not attend) .
- Lead Independent Director: Leslie D. Michelson; presides over executive sessions and independent director communications .
- Independence: Hillman is an independent director under the 1940 Act (not an “interested person”) .
Fixed Compensation
| Component | Amount/Policy | 2024 Actual (Hillman) |
|---|---|---|
| Annual cash retainer (independent directors) | $165,000 per year | $250,887.54 total cash fees |
| Board meeting fees | $2,500 per regular/special board meeting attended | Included in total; breakout not disclosed |
| Committee meeting fees | $1,000 per committee meeting attended | Included in total; breakout not disclosed |
| Audit Committee Chair fee | $25,000 per year | Included in total |
| Nominating & Governance Chair fee | $15,000 per year (not applicable to Hillman) | N/A |
| Compensation Committee Chair fee | $15,000 per year (not applicable to Hillman) | N/A |
| Lead Independent Director fee | $30,000 per year (not applicable to Hillman) | N/A |
| Equity/Options/Pension plans for directors | None; company does not maintain stock or option plan, non‑equity incentive plan or pension plan for directors | None |
Performance Compensation
| Instrument/Metrics | Terms | 2024 Detail |
|---|---|---|
| Equity awards (RSUs/PSUs) | Not granted to directors; no stock plan | None |
| Option awards | Not granted to directors | None |
| Performance metrics (revenue, EBITDA, TSR, ESG) | Not applicable to director comp structure | N/A |
| Clawback, severance, CoC, gross‑ups | Not applicable for directors per proxy disclosure; no director equity plans | Not disclosed |
Emphasis: All director compensation is cash-based; absence of equity-based incentives weakens ownership alignment for independent directors .
Other Directorships & Interlocks
- BSP-affiliated boards: Hillman serves on boards of Franklin BSP Private Credit Fund, Franklin BSP Real Estate Debt BDC, and Franklin BSP Multifamily Trust—affiliates within FRBP’s fund complex, which may create perceived interlocks though independence is defined under the 1940 Act .
- Public company board: Distribution Solutions Group, Inc. (NASDAQ: DSGR), where Hillman is lead independent director and chairs Audit and Compensation, reinforcing governance expertise .
- No family relationships disclosed among directors/executives .
Expertise & Qualifications
- Audit and financial expertise: CPA; former Ernst & Young audit partner; designated audit committee financial expert by FRBP .
- Operating leadership: Former CEO of Bally Total Fitness; CEO roles at Performance Health Systems and Power Plate entities; consulting firm president .
- Education: Wharton B.S. (Finance & Accounting); University of Chicago Booth MBA (Finance & Accounting) .
- Multi-board governance exposure across public and private entities .
Equity Ownership
| Holder | Shares Beneficially Owned | % of Common | Dollar Range (Company) | Notes |
|---|---|---|---|---|
| Lee S. Hillman | 0 | 0% | None (per NAV-based categorization) | No preferred shares; no director holds preferred; NAV $14.10/share used for dollar range |
No reported pledging or hedging by directors; not disclosed in proxy. Stock ownership guidelines for directors not disclosed .
Governance Assessment
-
Positives:
- Chair of Audit Committee with formal “financial expert” designation; strong oversight of financial reporting, controls, and enterprise risk, including IT/cyber risk .
- Independent director under 1940 Act with no family relationships; participates in executive sessions led by the Lead Independent Director .
- Extensive governance experience and committee leadership at DSGR and other boards, contributing to committee effectiveness .
-
Concerns/RED FLAGS:
- Ownership alignment: Hillman holds no FRBP common shares; dollar range “None,” and the company does not grant equity to directors—reducing skin‑in‑the‑game .
- Annual meeting attendance: only the CEO attended last year’s annual meeting; Hillman did not attend, which can be perceived as lower engagement with shareholders .
- Interlocks: Multiple roles across BSP-affiliated vehicles (FRBP fund complex) may raise perceived conflicts or time‑commitment risks, albeit independence standards under the 1940 Act are met and related party transactions are subject to independent director approval processes .
-
Committee cadence:
- Compensation Committee did not meet in 2024; ensure compensation policy reviews occur despite execs being paid by Adviser; directors’ cash compensation reviewed per charter .
-
Overall: Strong audit and governance credentials, but weak ownership alignment due to an all‑cash director compensation model and zero share ownership. Monitoring of attendance at shareholder meetings and continued vigilance around cross‑fund interlocks is warranted .