Theodore L. Koenig
About Theodore L. Koenig
Theodore L. Koenig (66) is Chairman and Chief Executive Officer of Monroe Capital Corporation (MRCC), serving since the company’s formation in February 2011. He is also Chief Executive Officer of Monroe Capital BDC Advisors, LLC (MC Advisors) and previously chaired its investment committee through July 2024; he has approximately 40 years’ deal experience, with a J.D. (Honors) from Chicago-Kent and a B.S. in Accounting (High Honors) from Indiana University’s Kelley School of Business . He has also led Monroe Capital Income Plus Corporation (since formation in 2018) and served as CEO and Chairman of MCAP Acquisition Corporation (Dec 2020–Dec 2021) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Hilco Capital LP | President & CEO | 1999–2004 | Led debt investment activities across diverse transactions |
| Holleb & Coff (law firm) | Senior Partner | 1986–1999 | Corporate law leadership underpinning finance/transactions expertise |
| Winston & Strawn | Associate | 1983–1986 | Early legal practice supporting finance background |
| Monroe Capital, LLC (affiliate of MC Advisors) | Founder (of affiliate) | 2004– | Built the Monroe Capital platform underlying MRCC’s advisory franchise |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Monroe Capital Income Plus Corporation | Chairman, Director, CEO | Since 2018 | Parallel BDC leadership |
| MCAP Acquisition Corporation (NASDAQ: MACQU) | Chairman, CEO | Dec 2020–Dec 2021 | SPAC leadership tenure |
| Commercial Finance Association | Director | n/a | Industry involvement |
| Turnaround Management Association; Association for Corporate Growth | Member | n/a | Professional network roles |
| MC Advisors | Chief Executive Officer | Current | External manager to MRCC |
Fixed Compensation
MRCC is externally managed; executive officers (including Mr. Koenig) are employees of MC Advisors and do not receive direct compensation from MRCC. Interested directors employed by MC Advisors receive no MRCC board fees; independent directors receive a $50,000 annual retainer, $1,000 per meeting, plus $15,000 (Audit Chair) and $5,000 (Nominating Chair) retainers .
| Pay element (MRCC) | 2024 value | Notes |
|---|---|---|
| CEO base salary from MRCC | $0 | Executives paid by MC Advisors, not MRCC |
| Director fees (Koenig) | $0 | Interested director employed by MC Advisors; no fees |
| Independent director cash schedule | $50,000 retainer; $1,000 per meeting; $15,000 Audit Chair; $5,000 Nominating Chair | Policy framework |
Performance Compensation
MRCC pays MC Advisors under an Investment Advisory Agreement; these fees drive economic incentives for the management platform led by Mr. Koenig.
| Incentive component | Structure | Details |
|---|---|---|
| Base management fee | 1.75% of average invested assets (ex-cash); 1.00% on assets above 200% of average net assets (i.e., above 1:1 debt/equity) | Payable quarterly in arrears; example and mechanics disclosed |
| Income incentive fee | 20% of pre-incentive fee net investment income above 2% quarterly (8% annualized) hurdle with catch-up | Subject to an 11-quarter total return requirement (Incentive Fee Limitation) capping fees based on cumulative net increase in net assets vs cumulative incentive fees |
| Capital gains incentive fee | 20% of realized capital gains on a cumulative basis from inception | Determined annually; none accrued for 2024 |
| 2024 fees paid by MRCC | Base management ~$8.1M; Incentive fees ~$2.4M; Incentive fees limited by ~$2.9M; Capital gains fee $0 accrued | Disclosed totals and limitation impact |
Disclosure note on incentive alignment: “This fee structure may create an incentive for MC Advisors to invest in certain types of securities that may have a high degree of risk.”
Equity Ownership & Alignment
| Holder | Shares beneficially owned | % of Class | Record date | Shares outstanding |
|---|---|---|---|---|
| Theodore L. Koenig | 690,025 | 3.2% | April 7, 2025 | 21,666,340 |
- Proxy states there is no common stock subject to options or warrants currently exercisable or exercisable within 60 days of April 7, 2025 .
- Hedging/derivatives and short sales in MRCC stock require pre-clearance by the Chief Compliance Officer under a joint Code of Ethics; insider trading policy in place .
- Clawback Policy (Nasdaq Rule 10D compliant): recoupment of incentive-based compensation following a restatement for the prior three completed fiscal years and applicable transition periods .
Employment Terms
- Executives (including Mr. Koenig) are not MRCC employees; services provided by personnel of an affiliate of MC Advisors under the advisory and administration agreements. MRCC reimburses allocable administrative expenses to MC Management (administrator) and certain advisor expenses; in 2024, MRCC reimbursed ~$1.0M to MC Management .
- Advisory change-in-control and continuity: on March 31, 2025, following an affiliate of Wendel SE acquiring 75% of certain Monroe Capital affiliates (including MC Advisors), MRCC entered a new Investment Advisory Agreement with MC Advisors on the same terms as the prior agreement .
Board Governance
- Board leadership: Mr. Koenig serves as Chairman; he is an “interested” director due to positions with MRCC and MC Advisors. The Board has no Lead Independent Director; Thomas J. Allison (independent; Audit Chair) acts as liaison between independent directors and management between meetings .
- Board structure: 5 directors in three staggered classes; Mr. Koenig is a Class III director (term expires 2027) .
- Committee composition (2024):
Director Audit Nominating & Corporate Governance Compensation Thomas J. Allison (I) Chair ✓ ✓ Robert S. Rubin (I) ✓ ✓ Chair Jeffrey A. Golman (I) ✓ Chair ✓ Lynn J. Jerath (I) ✓ ✓ ✓ Theodore L. Koenig (Interested) - Independence: Allison, Golman, Rubin, and Jerath are independent; Koenig is an “interested person” under the 1940 Act .
- Meetings/attendance (2024): Board met 5 times; Audit 7; Nominating and Compensation each met once. All incumbent directors attended at least 75% of applicable meetings .
Related Party Transactions and Conflicts
- Fees paid to MC Advisors (2024): ~$8.1M base management; ~$2.4M incentive; incentive fees limited by ~$2.9M; no capital gains incentive fees accrued .
- Administration reimbursements (2024): ~$1.0M to MC Management; SLF (joint venture) incurred ~$0.2M allocable expenses under its admin agreement with MC Management .
- Valuation designee: Under SEC Rule 2a-5, MC Advisors is MRCC’s valuation designee; disclosure notes potential conflict because fees are based on investment values .
- Co-investment framework: MRCC operates under SEC exemptive relief (amended Jan 10, 2023) enabling broader co-investing with affiliates, with allocation policies overseen by the Board and independent directors .
- Below-NAV issuance proposal: Board recognized potential fee conflict (higher assets can increase advisory fees) but concluded benefits to stockholders outweighed detriments; independent approval thresholds apply .
Performance Compensation – Metrics, Weighting, and Payout Mechanics (Advisory-Level)
| Metric | Weighting/threshold | Payout mechanics | Vesting/Timing |
|---|---|---|---|
| Pre-incentive fee NII | 2% quarterly hurdle (8% annualized) | 20% above hurdle; “catch-up” feature; subject to 11-quarter total return limitation | Paid quarterly in arrears; limited by total return test |
| Realized capital gains (cumulative) | n/a | 20% of realized gains net of cumulative losses/unrealized depreciation | Determined/paid annually; none accrued for 2024 |
Director Compensation (for context)
| Director | 2024 Fees from MRCC |
|---|---|
| Theodore L. Koenig (Interested) | $0 |
(Independent director cash schedule: $50,000 retainer; $1,000 per meeting; $15,000 Audit Chair; $5,000 Nominating Chair) .
Equity Ownership & Alignment – Additional Policy Notes
- Insider compliance: Section 16 filings were timely in 2024 for officers/directors, except one late Form 3 by the Chief Compliance Officer reflecting no ownership at appointment .
- Hedging/short sales: Pre-clearance required; Code of Business Conduct applies to directors and officers (Company and MC Advisors) .
- Clawback: Nasdaq-compliant recoupment policy for incentive-based compensation .
Investment Implications
- Alignment: Koenig’s 3.2% personal stake signals skin-in-the-game; however, as an externally managed BDC, cash compensation flows at the adviser level, not MRCC, making fee structures (not salary/bonus) the predominant incentive lever .
- Incentive risk/guardrails: Income and capital gains fees motivate income generation and realized gains; disclosures acknowledge risk of favoring higher-yield/higher-risk assets. The total-return lookback and hurdle mitigate, but do not eliminate, risk-taking incentives .
- Governance checks: No lead independent director and CEO/Chair dual role heighten independence concerns, partially offset by committee independence and independent chair roles on Audit/Comp/Nominating committees .
- Valuation conflict: MC Advisors as valuation designee plus asset-based fee model creates perceived conflicts; Board oversight and SEC frameworks are in place, but investors should monitor fee accruals versus NAV total return and realized results .
- Adviser continuity: The March 2025 Wendel transaction re-set the advisory agreement with unchanged terms, suggesting continuity but introducing an additional parent-level governance layer; watch for any change in operating priorities or resource allocation at MC Advisors .