Lewis W. Solimene, Jr.
Chief Financial Officer, Chief Investment Officer and Corporate Secretary at MONROE CAPITAL
Executive
About Lewis W. Solimene, Jr.
Chief Financial Officer, Chief Investment Officer, and Corporate Secretary of Monroe Capital Corporation (MRCC). Age 65; tenure since June 2022. Prior roles span opportunistic and special situations investing and restructuring across Allstate Investments (Head of Opportunistic Investments), Macquarie Capital, Giuliani Capital Advisors, Ernst & Young Corporate Finance, and Bank of America/Continental Illinois; board experience includes Runway Growth Finance Corp (NASDAQ: RWAY) from January 2017 to June 2022 . Education: B.S. in Finance (Western Illinois University); M.B.A. (University of Chicago). MRCC is externally managed by Monroe Capital BDC Advisors (MC Advisors), so executive officers receive no direct compensation from MRCC; compensation levers flow through the advisory fee structure (base AUM fee + incentive fees) rather than company payroll .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| MRCC | CFO, CIO, Corporate Secretary | Jun 2022–Present | Oversees finance and investment strategy for a lower middle-market BDC . |
| Monroe Capital Income Plus Corp. | CFO, CIO, Corporate Secretary | Jan 2022–Present | Parallel responsibilities at affiliated private BDC . |
| Monroe Capital (platform) | Managing Director | Jul 2021–Present | Senior role within advisor platform supporting MRCC . |
| Allstate Investments, LLC | MD & Head of Opportunistic Investments | 2016–2021 | Managed a strategy deploying debt/equity in dislocated markets and special solutions . |
| Macquarie Capital | Senior Managing Director, Head of Restructuring & Special Situations | 2007–2016 | Led restructuring/special situations group . |
| Giuliani Capital Advisors LLC | Managing Director, Head of Restructuring Advisory Practice | 2004–2007 | Ran restructuring advisory . |
| Ernst & Young Corporate Finance LLC | Managing Director | 2000–2004 | Strategic solutions for underperforming/over-leveraged companies . |
| Bank of America/Continental Illinois | Various leadership roles, MD Global Special Situation Group | 1981–2000 | Managed proprietary stressed/distressed portfolios . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Runway Growth Finance Corp (RWAY) | Director | Jan 2017–Jun 2022 | Public company board oversight of venture lending BDC . |
| Private company (unnamed) | Director | Current | Ongoing board governance (company not disclosed) . |
| Several non-profit organizations | Director/Trustee | Current | Community and nonprofit governance (entities not disclosed) . |
Fixed Compensation
- Executive officers are employees of MC Advisors; MRCC pays no direct salaries, bonuses or stock awards to executive officers .
- MRCC reimburses the administrator (MC Management) for allocable administrative costs (e.g., office, staff), but not direct executive compensation .
Performance Compensation
MRCC’s advisor fee framework (the primary pay-for-performance lever affecting executive incentives) is:
| Metric | Weighting | Target/Terms | Actual/Payout Mechanics | Vesting/Timing |
|---|---|---|---|---|
| Base Management Fee | N/A | 1.75% of average invested assets (ex-cash); reduced to 1.00% on assets above 200% of average net assets (effectively above 1:1 regulatory leverage) | Paid quarterly in arrears; incentivizes AUM growth and leverage utilization within regulatory limits | Quarterly |
| Income-based Incentive Fee | 20% | Hurdle: 2% per quarter (8% annualized); catch-up to 2.5% quarterly return on net assets; subject to 12-quarter total return requirement (caps fee by cumulative net increase less cumulative prior fees) | Paid quarterly in arrears on pre-incentive fee net investment income above hurdle and total return constraint; aligns to NII generation, fee limited by multi-quarter total return | Quarterly (with 12-quarter lookback limitation) |
| Capital Gains Incentive Fee | 20% | 20% of realized capital gains on a cumulative basis, net of cumulative realized losses and unrealized depreciation; paid annually or upon agreement termination | Payable annually in arrears; encourages realization of gains over time | Annual |
Advisor fee outcomes (context for pay-for-performance):
- 2023 fees earned by MC Advisors: Base $8.6m; Incentive $5.8m .
- 2024 fees: Base ~$8.1m; Incentive ~$2.4m; incentive fee limited by ~$2.9m due to total return requirement .
Equity Ownership & Alignment
| Holder | Shares | % of Outstanding | Notes |
|---|---|---|---|
| Lewis W. Solimene, Jr. (2023) | 981 | <1% | As of April 6, 2023 . |
| Lewis W. Solimene, Jr. (2024) | 981 | <1% | As of April 5, 2024 . |
| Lewis W. Solimene, Jr. (2025) | 981 | <1% | As of April 7, 2025 . |
- Pledging/Hedging: The joint Code of Ethics requires clearance before options/derivatives and prohibits short selling; hedging oversight exists but pledging is not disclosed .
- Stock ownership guidelines: Not disclosed for executives in MRCC filings.
- Alignment: Executive equity exposure to MRCC appears minimal; main alignment lever is advisor fee structure tied to AUM/NII/realized gains .
Employment Terms
- Role start: MRCC CFO, CIO, Corporate Secretary since June 2022; with Monroe since July 2021 .
- Contract term/Severance/Non-compete: Not disclosed for Solimene; executive employment resides with MC Advisors (not MRCC) .
- Clawback: MRCC adopted a clawback policy complying with Nasdaq rules (recovers incentive-based comp upon restatements for the prior 3 fiscal years) .
- Insider Trading Policy and Hedging Controls: Adopted; requires pre-clearance and prohibits short sales/derivatives without approval .
Track Record and Company Fundamentals
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Net Income ($USD) | -$2,786,000 | $371,000 | $9,704,000* |
| Total Assets ($USD) | $564,995,000 | $513,186,000 | $490,671,000 |
*Values retrieved from S&P Global.
Context:
- MRCC paid base management and incentive fees consistent with advisor performance constraints (2023: $14.4m total; 2024: incentive limited by total return requirement) .
Related Party Transactions and Governance Levers
- Advisory Agreement: Following Wendel SE’s acquisition of 75% of Monroe affiliates (the “Wendel Transaction”), MRCC entered a new Investment Advisory Agreement with identical fee terms; the prior agreement was deemed “assigned” under the 1940 Act upon change in control .
- Co-investment & Conflicts: MC Advisors operates under SEC exemptive relief (amended Jan 10, 2023) enabling negotiated co-investments with board oversight; allocation policies seek fairness across affiliated accounts; valuation conflicts noted due to fee basis on portfolio value .
- Board Independence: Post-transaction conditions require ≥75% independent directors for 3 years; MRCC’s board meets independence thresholds .
Compensation Committee Analysis
- MRCC compensation committee is independent; however, executive officers are paid by MC Advisors; the committee approves the advisory agreement rather than executive pay .
Investment Implications
- Alignment: As CIO/CFO, Solimene’s influence over portfolio construction and NII directly impacts advisor incentive fees (20% above the 2% quarterly hurdle with a strict 12-quarter total return cap) and capital gains fees; the reduction to a 1.00% base fee above regulatory leverage indicates some mitigation of pure AUM growth incentives .
- Retention/Pressure: Minimal personal MRCC shareholding (<1%, 981 shares 2023–2025) suggests limited direct equity-alignment; however, executive economics are tied to MC Advisors’ platform success, which Wendel’s capital backing (up to ~$1B) and fundraising network aim to strengthen—potentially improving investment sourcing and performance durability .
- Risk Controls: Clawback, insider trading, and hedging policies exist; co-investment exemptive framework and valuation oversight mitigate, but do not eliminate, related-party risks where advisory fees depend on asset values .
- Change-of-Control: The advisory agreement stability post-Wendel reduces operational disruption risk; fees unchanged, with ongoing board approval requirements—a neutral-to-positive signal for continuity .
Appendix: Advisor Fee Outcomes (Quant)
| Year | Base Fee ($USD) | Incentive Fee ($USD) | Notes |
|---|---|---|---|
| 2023 | $8.6m | $5.8m | Total $14.4m . |
| 2024 | ~$8.1m | ~$2.4m | Incentive fee limited by ~$2.9m total return requirement . |