Dwayne L. Hyzak
About Dwayne L. Hyzak
Dwayne L. Hyzak (age 52) is Chairman of the Board and Chief Executive Officer of MSC Income Fund, Inc. (MSIF) and has served as CEO and Chairman since October 2020; he has been a director since June 2020 . He is also CEO and a director of Main Street Capital Corporation (MAIN) since 2018 and serves on Main Street’s executive and investment committees, with earlier roles as President (2015–2018), COO (2014–2018), and CFO (2011–2014) . Under his leadership, MSIF listed on the NYSE on January 29, 2025 and completed a follow-on equity offering (net cash proceeds of $90.5 million), and has continued quarterly and supplemental dividends, indicating a focus on income distribution and balance sheet access to public capital markets .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Main Street Capital Corporation | Chief Executive Officer; Director | 2018–present | Leads MAIN and its Adviser; membership on executive and investment committees drives origination, underwriting, and portfolio allocation impacting MSIF co-investments and advisory platform capacity . |
| Main Street Capital Corporation | President | 2015–Nov 2018 | Oversaw platform growth and investment strategy prior to CEO transition, supporting lower middle market (LMM) and private loan franchises that feed MSIF’s opportunity set . |
| Main Street Capital Corporation | Chief Operating Officer | 2014–Nov 2018 | Operational leadership across investment processes and portfolio monitoring, reinforcing risk controls and execution . |
| Main Street Capital Corporation | Chief Financial Officer | 2011–2014 | Finance leadership across valuation, reporting, and capital markets, directly relevant to MSIF’s BDC financial stewardship . |
| Main Street predecessor funds/entities | Senior Managing Director, other executive roles | Pre-2011 | Founding member (joined 2002), built investment platform and processes used by MSIF’s Adviser . |
| Quanta Services, Inc. | Director of Acquisitions and Integration | Pre-2002 | Led M&A and corporate finance, deepening transaction execution skills . |
| Arthur Andersen | Manager, Transaction Advisory Services | Pre-Quanta | Transaction diligence and advisory foundation . |
External Roles
| Organization | Role | Years |
|---|---|---|
| Child Advocates (Houston area non-profit) | Director | Current |
Board Governance
- Structure and independence: Board has four members; three are independent, with Hyzak classified as an “interested person” due to his officer roles at MSIF and its Adviser; a Lead Independent Director (John O. Niemann, Jr.) presides over executive sessions and coordinates with management .
- Committees (all independent): Audit (Chair: Jeffrey B. Walker), Nominating & Corporate Governance (Chair: Robert L. Kay), Compensation (Chair: John O. Niemann, Jr.); Hyzak is not a committee member .
- Attendance: Board met eight times and acted by unanimous written consent 33 times in 2024; all incumbent directors attended at least 75% of Board and committee meetings .
- Dual role implications: CEO/Chairman structure is retained, with a Lead Independent Director and fully independent committees to mitigate concentration of authority; the Board cites Hyzak’s firm-specific knowledge as rationale for the combined role .
Fixed Compensation
- Executive compensation paid by Adviser: MSIF’s executive officers receive no direct compensation from MSIF; the Adviser pays executive compensation and MSIF reimburses a capped portion of internal administrative services costs (no markup) subject to quarterly caps by asset tier .
- Director compensation: Interested directors (including Hyzak) receive no director fees; independent director cash retainers increased to $125,000 effective upon listing, with additional fees for Lead Independent Director and committee chairs .
2024 Director Compensation
| Name | Fees Earned or Paid in Cash ($) | All Other Compensation | Total ($) |
|---|---|---|---|
| Dwayne L. Hyzak (Interested) | — | — | — |
| Robert L. Kay | 130,000 | — | 130,000 |
| John O. Niemann, Jr. | 130,000 | — | 130,000 |
| Jeffrey B. Walker | 135,000 | — | 135,000 |
Performance Compensation
MSIF executives receive no company-paid bonuses or equity; instead, incentives are embedded in the Advisory Agreement paid to the Adviser (which Hyzak leads as CEO of MAIN), creating firm-level performance linkages:
- Base management fee: 1.50% of average total assets (cash included), payable quarterly; step-downs to 1.25% and 1.00% if the LMM portfolio falls below 20% and 7.5% of total portfolio fair value, respectively .
- Subordinated incentive fee on income: 17.5% of pre-incentive fee net investment income above a 1.5% quarterly hurdle (6% annualized), with a “catch-up” between 1.5% and 2.307692% quarterly to achieve the 17.5% rate .
- Incentive fee on capital gains: 17.5% of cumulative realized capital gains since listing, net of realized losses and unrealized depreciation, less prior capital gains fees; cost basis for pre-listing assets set to fair value as of the quarter-end immediately before listing .
Advisory Economics Summary
| Component | Measure |
|---|---|
| Base Management Fee | 1.50% of average total assets (quarterly in arrears); potential step-downs to 1.25%/1.00% based on LMM mix . |
| Income Incentive Fee | 17.5% above 1.5% quarterly hurdle with catch-up to full 17.5% rate above 2.307692% quarterly . |
| Capital Gains Incentive Fee | 17.5% of cumulative realized capital gains since listing, net of losses/depreciation, less prior fees . |
Implication: Adviser incentives emphasize asset scale (AUM) and net investment income (NII) growth, which can diverge from shareholder NAV per share outcomes if growth is dilutive; Board recognized the management-fee conflict when seeking below-NAV issuance authority but deemed access to capital beneficial overall .
Equity Ownership & Alignment
- Beneficial ownership: Hyzak beneficially owns 51,755 shares; directors and officers as a group own 189,976 shares (each under 1% individually) .
- Ownership percentage: Hyzak’s holdings are approximately 0.11% of shares outstanding (51,755 / 47,148,802), consistent with the “<1%” disclosure .
- Dollar range disclosure: Hyzak’s director ownership is in the “Over $100,000” category based on a $15.73 per share closing price on the record date .
- Options/awards: No shares subject to options exercisable within 60 days; no equity/option awards granted to directors in 2024 .
- Hedging/pledging: Company policy prohibits hedging and speculative trading and prohibits pledging MSIF securities except in limited pre-approved circumstances; short sales and certain derivatives are prohibited .
- 10b5-1 and pre-clearance: Strict pre-clearance for directors/officers; Rule 10b5-1 plans allowed with cooling-off periods and certifications; quarterly and event-specific blackout periods enforced .
Ownership Snapshot
| Holder | Shares | % of Class |
|---|---|---|
| Dwayne L. Hyzak | 51,755 | <1% (approx. 0.11%) |
| Total shares outstanding (Record Date) | 47,148,802 | — |
Employment Terms
- Executives (including Hyzak) are not paid by MSIF and have no disclosed MSIF employment contracts, severance, or change-of-control terms; administrative personnel costs reimbursed to the Adviser are capped quarterly by asset tiers .
- Clawback: MSIF adopted a clawback policy in line with NYSE and Rule 10D-1 to recoup incentive-based compensation after restatements; covers named executive officers if any are directly compensated by MSIF in the future .
- Insider trading and codes of ethics: Joint code of ethics and insider trading policy for MSIF/MAIN/Adviser; comprehensive restrictions and reporting obligations .
Performance & Track Record
- Public listing and capital access: MSIF listed on NYSE (MSIF) on Jan 29, 2025 and completed a follow-on equity offering at $15.53 per share, yielding approximately $91 million in net proceeds to support portfolio growth and balance sheet flexibility .
- Dividends: Regular quarterly dividend of $0.35 and supplemental $0.01 declared for August 1, 2025; subsequent regular $0.35 and supplemental $0.01 declared for January 30, 2026, reflecting distributable income and RIC status .
- Strategy focus: Shifted new platform investments exclusively to Private Loan strategy upon listing; LMM and Middle Market legacy portfolios expected to decline as repaid/sold, concentrating on PE-backed first-lien private loans .
- Asset coverage: Board approved reducing BDC asset coverage requirement from 200% to 150% effective Jan 29, 2026 (or earlier with stockholder approval), potentially increasing leverage capacity .
Related Party Transactions (and Conflicts)
- Advisory Agreement: Amended and Restated Advisory Agreement effective with listing; fee schedule reduced from prior 1.75% gross assets to 1.50% total assets base fee and 17.5% incentive rates; expense waiver framework memorialized via quarterly caps on internal administrative expenses .
- Co-investment relief: SEC exemptive order permits co-investments among MSIF, MAIN, and other clients, with independent director oversight of allocations, mitigating conflicts from shared adviser .
- Share transactions with MAIN: 2024 and early 2025 purchases by Main Street (e.g., $2.5M on Jan 31, 2024; $2.5M on May 1, 2024; $2.0M on Aug 1, 2024; $4.5M in the Jan 29, 2025 offering); MAIN also adopted a Rule 10b5-1 share purchase plan up to $20M when MSIF trades below NAV; MSIF adopted a $65M buyback plan with similar terms .
- Board acknowledgement of fee conflicts: When seeking authority to issue below NAV, Board considered that added assets increase advisory fees but concluded benefits from capital access outweighed detriment .
Say-on-Pay & Shareholder Feedback
- 2025 Annual Meeting outcomes: All four directors re-elected; Below-NAV share issuance authorization approved by both all stockholders and non-affiliates as required .
Voting Results (Sept 9, 2025)
| Proposal | For | Against | Abstain |
|---|---|---|---|
| Elect Directors – D. L. Hyzak | 23,663,521 | 1,382,973 | — |
| Below-NAV Share Issuance (All Stockholders) | 19,079,318 | 4,177,869 | 1,789,307 |
| Below-NAV Share Issuance (Excluding Affiliates) | 17,490,634 | 4,177,869 | 1,789,307 |
Note: No say-on-pay proposal exists because executives receive no direct compensation from MSIF .
Compensation Committee Analysis
- Composition and activity: Compensation Committee formed upon listing; did not meet in 2024; oversees non-management director compensation and CEO/key executive succession planning; executives receive no direct compensation from MSIF, and therefore no CD&A on executive pay is produced by the committee .
- Consultants: Committee has authority to engage external advisors .
Risk Indicators & Red Flags
- CEO/Chair combination offset by Lead Independent Director and independent committees .
- Adviser fee alignment risk: Asset-based fee and NII/capital gains incentive could encourage asset growth and issuance below NAV; Board explicitly evaluated this trade-off and obtained annual authorization with limits (≤25% of outstanding shares per issuance period) .
- Hedging/pledging prohibited (limited pre-approval), reducing misalignment/forced selling risk .
- Strong compliance posture: robust insider trading policy, blackout windows, and clawback adoption .
Equity Ownership & Director Compensation (For Directors)
- MSIF’s stock ownership table shows each director’s holdings and “Over $100,000” dollar range for Hyzak and each independent director; no director equity grants in 2024 .
- Director stock ownership guidelines are not disclosed; pledging/hedging restrictions apply to directors .
Expertise & Qualifications
- Hyzak’s experience spans investing in LMM companies, private equity-backed private loans, M&A, corporate finance, tax, and accounting, supporting his roles on investment and executive committees and as CEO/Chairman .
Employment Terms (Non-Compete/Severance/CoC)
- MSIF documents do not disclose personal employment contracts, severance multiples, or change-of-control provisions for Hyzak at MSIF; as an externally managed BDC, such terms (if any) would exist at the Adviser or MAIN and are not disclosed in MSIF’s proxy .
Investment Implications
- Alignment: Hyzak’s MSIF equity stake is modest (<1%), but hedging/pledging prohibitions and continued dividends reinforce investor alignment; lack of MSIF-paid executive equity or bonus plans concentrates alignment via reputation and overall platform performance .
- Incentives: Advisory Agreement’s asset/NII/capital gains fee design encourages scale and income; combined with shareholder-approved below-NAV issuance capacity, this can be accretive if deployed into high-spread private loans but dilutive if misused—monitor issuance pace vs. NAV trajectory and NII per share .
- Governance: CEO/Chair dual role is mitigated by a Lead Independent Director and fully independent committees with strong meeting cadence; voting outcomes indicate shareholder support for capital flexibility and the current board slate .
- Trading signals: Regular and supplemental dividends, buyback plan ($65M) and MAIN’s separate $20M 10b5-1 purchase plan below NAV can provide downside technical support; authorizations for below-NAV issuance introduce episodic dilution risk—track execution and Board approvals .