Steven Lilly
About Steven Lilly
Steven Lilly, 55, has served as Chief Financial Officer of FS KKR Capital Corp. (FSK) since November 2019, bringing extensive BDC and public company finance experience; he holds a B.A. from Davidson College and completed executive education at UNC Chapel Hill . He is an externally managed executive (employee of FS/KKR Advisor, LLC), certifying FSK’s financials in periodic filings, and has remained in role since appointment on October 30, 2019 (effective November 8, 2019) . He also serves as CFO for affiliated KKR FS Income Trusts and is Audit Committee Chair at America First Multifamily Investors, LP (public REIT) . As a BDC, FSK does not disclose executive pay details; platform incentives are primarily embedded in the Adviser’s fee structure (base fee on gross assets; income and capital gains incentive fees) rather than company-level salary/bonus .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Triangle Capital Corporation (public BDC) | CFO & Secretary; Director (from 2006); Chief Compliance Officer (from 2007) | 2006–2018 | Built financial/operating infrastructure; led Nasdaq and NYSE listings (2007, 2010); led M&A/strategic processes through sale to Benefit Street Partners and Barings in 2018 . |
| Triangle Capital Partners, LLC | CFO | 2005–2006 | Pre-IPO/private platform finance leadership ahead of public listings . |
| SpectraSite Communications (public wireless tower company) | SVP Finance & Treasurer | ~1998–2005 | Public company treasury/finance leadership through sale to American Tower in 2005 . |
| First Union (now Wells Fargo) | Media & communications capital markets (early career) | — | Capital markets foundation . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| America First Multifamily Investors, LP (public REIT) | Director; Audit Committee Chair | Current | Public company governance and audit oversight . |
| UNC/Rex Healthcare; Episcopal High School; Saint Mary’s School; Historic Oakwood Cemetery (Raleigh, NC) | Trustee/Board roles | Current/Previous | Community and nonprofit board service . |
| KKR FS Income Trust (K-FIT); KKR FS Income Trust Select (K-FITS) | Chief Financial Officer | Since inception | Parallel CFO roles for affiliated vehicles . |
Fixed Compensation
- FSK’s executive officers, including the CFO, “do not receive any direct compensation from the Company”; FSK has no employees and executives are employees of FS/KKR Advisor, LLC (the Adviser). The Compensation Committee therefore does not produce or review executive compensation reports, and it only reviews FSK’s reimbursement of the Adviser’s allocable administrative expenses under the Administration Agreement .
- 2019 appointment disclosure reaffirmed no direct compensation from FSK for Mr. Lilly upon becoming CFO .
Implication: Salary, bonus and benefits for Mr. Lilly are set and paid by the Adviser (not disclosed in FSK filings), limiting pay transparency and direct company-level say-on-pay analysis .
Performance Compensation
Advisor fee constructs that indirectly influence executive incentives at the platform level:
| Metric | Structure | Target/Hurdle | Payout / Economics | Vesting |
|---|---|---|---|---|
| Base Management Fee | 1.50% of average weekly gross assets excluding cash; reduced to 1.0% on leverage over 1.0x debt-to-equity (permanent waiver on excess leverage) | N/A | Quarterly in arrears | N/A . |
| Subordinated Incentive Fee on Income | 17.5% of pre-incentive fee NII | 1.75% per quarter (7.0% annualized) hurdle; 100% catch-up to 2.12% (8.48% annualized), then 17.5% | Quarterly in arrears | N/A . |
| Capital Gains Incentive Fee | 20.0% of cumulative realized capital gains, net of realized losses and unrealized depreciation, less fees previously paid | N/A | Determined and paid in arrears annually (or upon termination); accrued quarterly with fair value assumptions | N/A . |
- Historical waivers: Adviser waived $15mm/quarter of income incentive fees for six quarters post-merger (total $90mm), expired Dec 31, 2022 .
- FY 2024 fees accrued/paid: $216mm base management; $167mm subordinated income incentive; $10mm administrative services — illustrating scale of platform economics .
Note: These fees are paid to the Adviser, not to Mr. Lilly directly; however, they define performance economics of the externally managed platform that can influence retention and incentive alignment for Adviser employees .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (3/31/2025) | 40,360 shares; “less than one percent” of outstanding . |
| Beneficial ownership (3/31/2023) | 30,270 shares; “less than one percent” of outstanding . |
| Options/derivatives | “There are no Shares subject to options that are currently exercisable or exercisable within 60 days of March 31, 2025” (across named insiders) . |
| Hedging/pledging | Prohibited for officers/directors without prior approval; margin accounts and pledging company securities as collateral are prohibited per Insider Trading Policy . |
| 10b5-1 trading plans | Trades outside blackout require CCO preclearance; Rule 10b5-1 plans are permitted with pre-approval . |
| Ownership guidelines | No director/officer stock ownership multiple disclosed; policy emphasizes trading/hedging restrictions rather than ownership targets . |
Ownership trend (shares):
| Date | Shares Beneficially Owned |
|---|---|
| Mar 31, 2023 | 30,270 |
| Mar 31, 2025 | 40,360 |
Alignment view: Low absolute insider ownership and lack of disclosed ownership guidelines temper “skin-in-the-game,” but strict hedging/pledging prohibitions reduce misalignment/forced-sale risk .
Employment Terms
- Start date/tenure: Appointed October 30, 2019; effective November 8, 2019; serving continuously as CFO since then .
- Employment agreement/severance/CoC: No FSK-level employment agreement disclosed; executives are Adviser employees and “do not receive any direct compensation from the Company,” and filings do not disclose severance or change-of-control benefits at FSK .
- Non-compete/non-solicit/garden leave: Not disclosed in FSK filings for company-level executives .
- Clawback: FSK discloses Insider Trading Policy; no separate executive compensation clawback policy disclosed for company-paid compensation (consistent with no direct company pay) .
- Trading policy: Mandatory preclearance; blackout windows; restrictions on short-term trading, derivatives, hedging, margin/pledging; allowance for pre-approved Rule 10b5-1 plans .
Performance & Track Record
- CFO certifications: Mr. Lilly signs the Sarbanes-Oxley Section 302 certifications for FSK’s 10-Qs (e.g., Q1 2025 and Q2 2025), evidencing responsibility over disclosure controls and internal control over financial reporting .
- Prior execution: Led Triangle Capital through public listings (Nasdaq 2007; NYSE 2010) and strategic transaction in 2018; built public-company finance infrastructure and M&A processes .
Compensation Committee Analysis (context)
- Composition: Independent directors Ford (Chair), Kropp, Imasogie .
- Mandate vs. practice: Responsible for executive compensation “if any,” but currently none is paid directly by FSK; committee reviews the allocable reimbursement of administrative expenses to the Adviser under the Administration Agreement .
Risk Indicators & Policies (relevant to trading signals)
- Insider trading and pledging/hedging are prohibited without approval; margin accounts and pledging are prohibited, reducing leverage-related forced selling risk .
- No say-on-pay proposal historically due to external management structure; director fees disclosed, but not executive pay .
Investment Implications
- Pay-for-performance transparency is limited: As an externally managed BDC, Mr. Lilly’s cash/equity compensation is at the Adviser and not disclosed at FSK; incentives are tied indirectly to Adviser fee structures (base and performance fees on assets/income/capital gains), which can favor AUM/income growth and careful credit outcomes .
- Alignment is policy-driven more than ownership-driven: Beneficial ownership is modest (<1%), but strict prohibitions on hedging/pledging, preclearance, and use of Rule 10b5-1 plans mitigate adverse trading-signal risk; lack of options reduces option-related selling pressure .
- Retention risk resides with the Adviser: With compensation set and paid by FS/KKR Advisor, retention and incentives depend on the Adviser’s policies, not FSK’s; stability since 2019 and ongoing CFO certifications suggest continuity, but company filings do not disclose employment protections or severance at the FSK level .
- Governance and control environment: Regular SOX certifications and an active audit/valuation governance structure support control rigor for a complex credit portfolio, which is constructive for financial reporting quality under Mr. Lilly’s purview .