Daniel Pietrzak

About Daniel Pietrzak

Daniel Pietrzak is FSK’s Co‑President (since 2019), Chief Investment Officer (since April 2018), and an “interested” director (Class B; director since 2022). He is age 50, a Certified Public Accountant, and serves as Global Head of Private Credit at KKR Credit; he holds an MBA from The Wharton School and a B.S. in Accounting from Lehigh University . FSK is externally managed; none of FSK’s executive officers receive direct compensation from the company, and the Compensation Committee does not produce executive compensation reports, which has implications for pay transparency and alignment analysis . As context for shareholder value, FSK’s shares traded at persistent discounts to NAV across 2023–2024 (e.g., 2024 high/low discounts of roughly 6% to 25%) while maintaining quarterly distributions of $0.70–$0.75 per share; the 4/1/2025 closing price was $21.36 .

Past Roles

External Roles

Fixed Compensation

FSK does not directly compensate executive officers (including Pietrzak). As an externally managed BDC, services are provided by FS/KKR Advisor, LLC; therefore, the Compensation Committee does not produce executive pay reports and there is no company‑level salary/bonus/equity disclosure for executive officers . Interested directors (including Pietrzak) receive no director fees from the Company .

Performance Compensation

FS/KKR Advisor’s fee structure (the primary economic incentive driving the platform that Pietrzak helps lead) is as follows:

• Base management fee: 1.50% of average weekly gross assets excluding cash; reduced to 1.0% on assets financed with leverage over 1.0x debt‑to‑equity (waiver mechanism) .
• Income incentive fee: 17.5% of pre‑incentive fee net investment income (quarterly), subject to a 1.75% quarterly (7% annualized) hurdle and “catch‑up” to 2.12% of NAV, then 17.5% thereafter .
• Capital gains incentive fee: 20% of cumulative realized capital gains net of losses/depreciation, determined annually (with quarterly accruals) .

2024 fees and reimbursements (dollars in millions):

Implications:

• Performance pay emphasizes NII generation and realized gains at the adviser level, not executive‑specific targets (e.g., TSR/ESG), which can create alignment to distributable earnings but may differ from shareholder TSR alignment .

Equity Ownership & Alignment

• Policy restrictions: Directors/officers are prohibited from short sales, options/derivatives on company stock, holding shares in margin accounts or pledging as collateral; hedging/monetization transactions require prior CCO approval; only pre‑approved Rule 10b5‑1 plans are permitted .
• Ownership guidelines: No executive or director stock ownership guidelines are disclosed; directors report a dollar‑range “over $100,000” for equity holdings (includes Pietrzak) .

Note: FSK reports no options outstanding exercisable within 60 days for insiders; there are no company‑level option/RSU/PSU grants to executives (external management) .

Employment Terms

• Relationship: Executive officers are employees of FS/KKR Advisor, LLC or affiliates; FSK reimburses the adviser for allocable administrative costs, not executive compensation .
• Contracts/Severance/CoC: No FSK‑level employment agreements, severance, change‑of‑control provisions, clawbacks, or tax gross‑up disclosures for executive officers (pay is not Company‑level) .
• Tenure: CIO since April 2018; Co‑President since 2019; director since 2022 .
• 2025 operating note: Co‑President Brian Gerson took a leave of absence effective Feb 3, 2025; Pietrzak and other officers assumed his responsibilities during leave .

Board Governance

• Status: “Interested director” (not independent), Class B; term to expire 2027; director since 2022 .
• Independence framework: 9 of 11 directors are independent; committees (Audit, Valuation, Nominating/Corporate Governance, Compensation) are composed of independent directors .
• Board leadership: CEO Michael C. Forman is Chair; Michael J. Hagan serves as Lead Independent Director .
• Meetings/attendance: The Board met 9 times in 2024; each director attended at least 75% of meetings of the Board/committees they served .
• Executive sessions/compliance: CCO reports quarterly and meets separately with independent directors at least annually .
• Director compensation (independent only): Effective Aug 1, 2024, annual board retainer $200,000; lead independent $30,000; Audit/Valuation chair $35,000; Nominating chair $15,000; committee member retainers as disclosed; Pietrzak receives $0 as an interested director .

Director Compensation (for directors)

Say‑on‑Pay & Shareholder Feedback

• Recent annual meeting agendas (2024, 2025) included director elections and authorization to sell shares below NAV; no “say‑on‑pay” items were presented (consistent with no direct executive pay at Company level) .

Compensation Structure Analysis

• Shift in pay mix: Company does not grant cash/equity to executives; economics are concentrated at the adviser level via base and performance fees (NII and capital gains), potentially aligning to distributable income but not explicitly to TSR .
• Governance mitigants: Independent committees oversee valuation, audit, and reimbursements to the adviser; Compensation Committee reviews reimbursements, not executive pay plans .
• Fee trends: 2024 advisory fees totaled ~$383mm (base + income incentive), highlighting sensitivity to NII and gross assets (and thus potential conflicts around asset growth vs. per‑share value) .

Performance & Track Record

• Trading and distributions context:
  • 2024 quarterly NAVs and trading ranges show persistent discounts; distributions were $0.70–$0.75 per quarter .
  • Example disclosure: for Q4’24, NAV/share $23.64; high/low close $22.22/$19.71 (approx. 6% to 17% discount); distribution $0.70 .
• Portfolio/value creation commentary for Pietrzak’s tenure is not separately disclosed; performance is reported at the Company level and advisory fee structure rewards NII and realized gains .

Related Party Transactions and Conflicts

• Co‑investment and allocation: The adviser and affiliates manage multiple accounts; allocation policies and an SEC exemptive order govern co‑investments (Company relies on Jan 5, 2021 order) .
• Conflicts and mitigants: The Board reviews allocation methodology and administrative reimbursements; acknowledges that raising equity may increase management fees but must be in stockholders’ best interests .
• Advisory economics: See fee structure and 2024 fees above .

Equity Ownership & Trading Signals

• Ownership increased from 57,500 (3/31/2024) to 67,500 shares (3/31/2025); IRA holdings rose (2,700 to 17,700). Exact acquisition method not specified (could include open‑market or DRIP) .
• Insider policy restricts hedging, pledging, and derivative use; transactions generally require pre‑clearance or 10b5‑1 plans, limiting opportunistic trading—often a positive for alignment but limiting flexibility .

Board Service History, Committees, and Dual‑Role Implications

• Board service: Director since 2022; Class B; term to 2027 .
• Committees: No committee memberships disclosed for interested directors; all four standing committees comprise independent directors .
• Dual‑role implications: As an executive and director affiliated with the adviser, Pietrzak is not independent under the 1940 Act; governance mitigants include a majority‑independent board, an independent lead director, and independent committees overseeing valuation, audit, governance, and compensation (reimbursements) .

Risk Indicators & Red Flags

• External management model: Potential incentive to grow AUM/assets (boosting fees) vs. per‑share returns; oversight via independent board/committees and disclosed allocation policies .
• Dilution authorization: Annual stockholder approvals enabling sales below NAV (capped at 25% of outstanding per authorization) can be dilutive but are positioned as capital flexibility; the Board highlights both benefits and dilution considerations .
• Key‑person/coverage: Temporary co‑president leave (Gerson) increased reliance on Pietrzak/other officers in early 2025 .

Data Tables

Ownership (chronological):

Advisory fees (FY 2024):

Trading context (selected periods):

Director fees (FY 2024; interested director receives none):

Investment Implications

• Alignment: Executive pay is not disclosed at FSK; economic incentives flow through FS/KKR Advisor’s NII and capital gains fee structure, aligning management to income generation and realized value but not explicitly to TSR; persistent market discounts to NAV underscore potential misalignment between income focus and shareholder price performance .
• Retention risk: Pietrzak’s senior roles across FSK and KKR’s private credit franchise suggest high platform integration; absence of FSK‑level contracts/severance data is standard for external BDCs but limits visibility into individual retention economics (likely housed at KKR) .
• Governance comfort: Majority‑independent board, independent committees, and a lead independent director temper dual‑role concerns (CEO as Chair; Pietrzak as interested director) and provide oversight of valuation, audit, and adviser reimbursements .
• Trading signals: Pietrzak’s beneficial ownership increased y/y, and insider policies restrict hedging/pledging and require pre‑clearance/10b5‑1 plans—generally supportive of alignment and reduced selling pressure absent disclosed Form 4 activity .
• Dilution/Capital access: Recurring authorization to issue shares below NAV adds capital flexibility but introduces dilution risk; underwriting how that capital is deployed (credit selection, realizations) is key to per‑share value creation under the adviser’s fee structure .