Stephen Sypherd
About Stephen Sypherd
Stephen S. Sypherd, age 48, is General Counsel (since April 2018) and Secretary (since October 2022) of FS KKR Capital Corp. (FSK); he previously served as FSK’s Secretary and Vice President from 2013 to February 2022 and has been General Counsel at FS Investments since January 2013, after eight years practicing corporate and securities law at Skadden, Arps, Slate, Meagher & Flom LLP . He holds a B.A. in Economics from Villanova University and a J.D. from Georgetown University Law Center, where he was an executive editor of the Georgetown Law Journal . FSK is an externally managed BDC; executive officers (including Mr. Sypherd) receive no direct compensation from FSK, with services provided by the external advisor under the Investment Advisory and Administration Agreements . FSK prohibits hedging, short sales, and pledging of company stock by officers and directors absent advance approval; trades are subject to window-periods and pre-clearance, reducing insider selling pressure risk from margin/pledge dynamics .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| FS Investments (and affiliated advisers) | Senior Vice President (Dec 2011–Aug 2014); General Counsel (since Jan 2013); Managing Director (since Aug 2014) | 2011–present | Leads legal and compliance across FS Investments’ entities and products . |
| FS KKR Capital Corp. (FSK) | Secretary & Vice President; later General Counsel and Secretary | Secretary/VP 2013–Feb 2022; GC since Apr 2018; Secretary since Oct 2022 | Oversees FSK legal/compliance, executive officer and corporate secretary functions . |
| Skadden, Arps, Slate, Meagher & Flom LLP | Attorney (Corporate & Securities) | Eight years prior to joining FS Investments | Corporate and securities law practice; transactional and governance experience . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| University of the Arts | Trustee; Chair, Audit Committee; Executive and Governance Committee member | Current | Board-level oversight; audit leadership in higher-education nonprofit governance . |
Fixed Compensation
FSK is externally managed; executive officers are employees of FS/KKR Advisor, LLC or affiliates and receive no direct compensation from FSK.
| Component | FSK-paid in 2024? | Amount | Notes |
|---|---|---|---|
| Base salary (Mr. Sypherd) | No | — | Executive officers “do not receive any direct compensation from the Company” . |
| Annual bonus (Mr. Sypherd) | No | — | Paid, if any, by the Advisor; not disclosed by FSK . |
| Equity awards (RSUs/PSUs/options) at FSK | No | — | No company-level grants disclosed; see ownership for shares held . |
| Benefits/perquisites (Mr. Sypherd) | No | — | Not paid directly by FSK; not disclosed by FSK . |
| Administrative expense reimbursements (company-level) | Yes (to Advisor) | $10 million | Company reimbursed Advisor for administrative services costs in 2024; not executive-specific . |
Executive-specific compensation amounts are not disclosed by FSK because compensation is paid by the external Advisor (not the Company) .
Performance Compensation
While FSK does not pay executive incentive compensation, the external Advisor’s incentive fees are tied to FSK’s performance, creating indirect economic levers for senior personnel at the Advisor.
| Metric (Advisor fee basis) | Weighting | Target/threshold | Payout mechanics | Vesting/Timing |
|---|---|---|---|---|
| Pre-incentive fee Net Investment Income (NII) | 100% of income-based fee | Quarterly hurdle: 1.75% of NAV (7.0% annualized) | 17.5% of pre-incentive fee NII above hurdle; with “catch-up” from 1.75% to 2.12% of NAV, then 17.5% thereafter . | Calculated and payable quarterly in arrears . |
| Capital gains (net of losses/depreciation) | 100% of capital gains fee | Cumulative since inception | 20.0% of cumulative realized capital gains, net of realized losses/unrealized depreciation; accrued quarterly, paid at year-end/termination . | Determined and payable in arrears as of each calendar year-end . |
Implication: Advisor’s fees increase with sustained NII above the hurdle and realization of net gains—potentially influencing resource allocation, risk posture, and incentive pools at the Advisor level .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 9,623 shares (as of March 31, 2025) . |
| Ownership as % of shares outstanding | Less than 1% . |
| Vested vs unvested shares | Not disclosed. |
| Stock options | Company states there were no shares subject to options currently exercisable within 60 days of March 31, 2025 (company-wide) . |
| Shares pledged as collateral | Pledging company securities is prohibited absent advance approval; holding in margin accounts prohibited per Insider Trading Policy . |
| Stock ownership guidelines | Not disclosed for executive officers. |
| Trading windows and 10b5-1 | Trading permitted only in window periods; all trades require pre-clearance unless under pre-approved 10b5-1 plans . |
Employment Terms
| Term | Disclosure |
|---|---|
| Employment start/tenure | With FSK since 2013 (Secretary & VP); General Counsel since April 2018; Secretary since October 2022 . |
| Employer of record | FS/KKR Advisor, LLC or affiliates (external manager) . |
| Contract term/expiration | Not disclosed by FSK; executives are Advisor employees . |
| Severance/Change-in-control | Not disclosed for executives; company discloses Advisor indemnification and fee arrangements, not individual severance . |
| Non-compete / non-solicit | Not disclosed by FSK. |
| Garden leave / consulting | Not disclosed by FSK. |
| Clawback provisions | Not disclosed for individual executives; company maintains code of ethics and Insider Trading Policy . |
| Hedging/pledging policy | Prohibits short sales, options on FSK stock, hedging/monetization, margin accounts, and pledging without approval . |
Additional Disclosures Relevant to Alignment and Trading Signals
- Beneficial ownership table confirms Mr. Sypherd’s holdings (9,623 shares; <1%) as of March 31, 2025 .
- Insider trading controls: window-periods, mandatory pre-clearance, and prohibition on hedging/pledging reduce risk of forced selling and opportunistic trading by insiders .
- Mr. Sypherd signs company 8-Ks in his capacity as General Counsel and Secretary, underscoring legal/compliance oversight (e.g., Feb 7, 2025 8-K) .
Investment Implications
- Pay-for-performance visibility is limited: As an externally managed BDC, FSK does not disclose individual executive compensation; incentives operate at the Advisor level via income and capital gains fees (17.5% over a 1.75% quarterly NII hurdle and 20% of cumulative net gains), which can influence portfolio risk/reward decisions and resource allocation but do not translate into transparent, executive-specific targets or payouts .
- Alignment via equity appears modest for the General Counsel: Mr. Sypherd’s ownership is 9,623 shares (<1%); however, FSK’s policy bans hedging and pledging, which supports alignment and reduces selling pressure risk tied to collateral calls .
- Retention risk likely sits with the Advisor, not FSK: Employment, severance, and change-in-control economics for Mr. Sypherd are not disclosed by FSK because he is employed by the external Advisor, making retention and compensation levers opaque to public investors .
- Trading signals: Due to stringent pre-clearance and window policies, watch for Rule 10b5-1 plan disclosures and Form 4s to infer sentiment; absent those, insider selling pressure risk is muted by anti-pledging rules .
- Governance/compliance strength: Centralized legal/compliance oversight and regular signatory role on filings indicate process discipline; nonetheless, investors should monitor Advisor fee accruals versus NII and NAV trends for potential incentive-driven behavior at the platform level .
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