Philip E. Hughes, Jr.
About Philip E. Hughes, Jr.
Philip E. Hughes, Jr. (age 76) is an independent director of FS Credit Opportunities Corp. (FSCO), serving on the Board since June 2013 and currently a Class II director with a term expiring at the 2027 annual meeting . He is a CPA and attorney admitted in Pennsylvania, with deep financial reporting and controls expertise; the Board designates him as its audit committee financial expert . He earned a B.S. in Accounting from La Salle University and a J.D. from Villanova University School of Law; he has been a CPA since 1976 and admitted to the U.S. Tax Court bar since 1980 .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| LarsonAllen LLP (accounting firm) | Partner; Head of Philadelphia office | 2000–2011 | Led office; built financial reporting/control expertise |
| VIST Financial Corporation | Director | 2007–2012 | Audit Committee; Loan Committee; VIST later acquired by Tompkins Financial; retired from audit committee April 2021 |
| Madison Bank; Leesport Bank | Director | 1989–2012 | Chair, Audit Committee; member, Loan Committee at each institution |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Keystone Industries | Vice Chairman | Since Nov 2011 | International manufacturing/distribution company |
| Sovereign Developers, LP | President | Since 1999 | Real estate development company (founder) |
| Philip E. Hughes, Jr., CPA, Esq. | Principal | Since 2011 | Accounting, tax and business services firm (formed and operates) |
| Fox Park Corporation | President | Since 2005 | Owns a retail shopping center |
| FS Series Trust | Trustee; Chair, Audit Committee | 2017–2022 | Other public directorship (registered investment company) |
| Merakey (nonprofit) | Board member | N/A | Developmental behavioral health provider |
| Inn Dwelling, Inc. (nonprofit) | Board member | N/A | Education for underprivileged youth |
Board Governance
- Independence and classification: The Board (7 directors; 6 independent) determined Hughes is independent under the 1940 Act and NYSE rules .
- Committees: Audit Committee Chair (members: Hughes (Chair), Robert N.C. Nix, III, and Barbara J. Fouss; all independent). Hughes is designated the “audit committee financial expert” .
- Other committees: Nominating and Corporate Governance Committee members are Keith Bethel (Chair), Della Clark, and Robert N.C. Nix, III; Hughes is not a member .
- Attendance and engagement: In 2024 the Board met 6 times; the Audit Committee met 8 times; the Nominating Committee met once. Each director attended at least 75% of Board and committee meetings during 2024 .
- Leadership structure: CEO Michael C. Forman serves as Board Chair; Walter W. Buckley, III is Lead Independent Director, who chairs executive sessions and coordinates governance matters .
- Executive sessions and compliance oversight: The CCO reports quarterly and meets separately in executive session with independent directors at least annually .
Fixed Compensation
- Director fee program (independent directors only):
- Annual Board retainer: $100,000
- Lead Independent Director retainer: $25,000
- Board meeting fee: $2,500 per meeting
- Committee Chair retainers: Audit $20,000; Nominating & Corporate Governance $15,000
- Committee meeting fee: $1,000 per meeting .
| Metric | 2023 | 2024 |
|---|---|---|
| Fees earned or paid in cash by FSCO to Hughes | $134,000 | $134,000 |
Notes: FSCO does not grant director equity awards; independent director compensation is cash-based plus expense reimbursement .
Performance Compensation
- No director stock award, option award, performance units, or incentive plan compensation is disclosed for directors; compensation consists of cash retainers and meeting fees only .
- No performance metrics (e.g., TSR, EBITDA) tie to director pay are disclosed .
Other Directorships & Interlocks
| Company/Entity | Nature | Role | Period |
|---|---|---|---|
| FS Series Trust (Registered Investment Company) | Public/’40 Act | Trustee; Audit Committee Chair | 2017–2022 |
- FSCO Board confirmed no independent director (including Hughes) had a material business/professional relationship with FSCO or the Adviser within the past two years beyond service as director/committee member or as a stockholder .
Expertise & Qualifications
- Credentials: CPA (since 1976); Member of AICPA (since 2000) and Pennsylvania Institute of CPAs (since 1990); Pennsylvania Bar (since 1976); U.S. Tax Court Bar (since 1980) .
- Education: B.S. Accounting, La Salle University; J.D., Villanova University School of Law .
- Board-designated “audit committee financial expert” based on extensive financial reporting, accounting, and controls experience .
Equity Ownership
| Item | Detail |
|---|---|
| Common shares beneficially owned (as of May 1, 2025) | 20,788 shares (<1%) |
| Dollar range of equity owned | Over $100,000 |
| Options/derivatives | No shares subject to options currently exercisable within 60 days of May 1, 2025 |
| Pledging/hedging policy | Directors and officers may not engage in hedging/monetization transactions without prior approval of the CCO |
Governance Assessment
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Strengths
- Independent director since 2013 with deep accounting/audit background; serves as Audit Committee Chair and Board-designated financial expert—critical for valuation, controls, and auditor oversight in a closed-end fund .
- Solid engagement: Board/committee cadence (Board 6x; Audit 8x; Nominating 1x in 2024) with ≥75% attendance for all directors, indicating baseline engagement discipline .
- Clear pay structure and stable cash compensation ($134k in both 2023 and 2024) reduce pay volatility and potential misalignment; no equity awards to directors .
- Policy constraints on hedging/monetization of company securities support alignment and reduce reputational risk (with CCO pre-approval requirement) .
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Potential watch items
- Externally managed structure introduces Adviser-related conflicts (fee incentives, co-investments). While not specific to Hughes, the Board oversees fee arrangements and exemptive relief; Audit Committee independence and expertise help mitigate this risk .
- Leadership structure concentrates Board chair/CEO roles in an interested director (Forman); mitigated by a Lead Independent Director and an independent Audit Committee chaired by Hughes .
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Red flags observed: None specific to Hughes. The company disclosed one delinquent Section 16 filing in 2024 relating to another director (Nix); all other filing requirements were timely, implying no issues disclosed for Hughes .
Overall, Hughes’ deep audit/financial credentials and long-tenured independence, combined with his role as Audit Chair and financial expert, are positives for board effectiveness and investor confidence in FSCO’s financial oversight .