John R. Kline
About John R. Kline
John R. Kline is President and Chief Executive Officer of New Mountain Finance Corporation (NMFC) and a Class I director. He became CEO effective January 1, 2023 and has served as President since 2016; he joined New Mountain Capital in 2008 and has held senior roles across the firm’s credit platform . He is 49 years old . NMFC’s proxy does not disclose education or company-level TSR/revenue/EBITDA growth tied to his compensation; importantly, NMFC does not directly compensate executive officers (external management model), so granular pay-for-performance metrics for Kline are not reported at the company level .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| NMFC | Chief Operating Officer | 2013–2022 | Scaled BDC operations, led portfolio and platform build-out |
| NMFC | Executive Vice President | 2013–2016 | Senior leadership in investment management and operations |
| New Mountain Capital, L.L.C. | Managing Director | 2008–present | Senior executive within New Mountain’s credit effort since inception |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| New Mountain Private Credit Fund (BDC) | CEO; Director | 2024–present | Leads newly launched private credit BDC; governance oversight |
| New Mountain Guardian IV BDC, L.L.C. (BDC) | CEO (2023–2024); President (since 2022); Director | 2022–present | Leadership and governance for affiliate BDCs |
| New Mountain Guardian III BDC, L.L.C. (BDC) | CEO (2023–2024); President (2019–2024); Director | 2019–2024 | Portfolio oversight; board responsibilities |
| NMF SLF I, Inc. (BDC) | CEO (since 2023); President (since 2019); Director | 2019–present | Senior leadership and governance of BDC affiliate |
| New Mountain Guardian IV Income Fund, L.L.C. (BDC) | Director | Since 2022 | Board oversight |
| Unitek Global Services, Inc. | Director | Since Jan 2015 | Board oversight at business services company |
Fixed Compensation
- NMFC does not directly compensate executive officers; compensation of investment professionals (including Kline in his adviser capacity) is paid by the external Investment Adviser. Interested directors (including Kline) receive no director compensation from NMFC .
| Item | NMFC Disclosure | Note |
|---|---|---|
| Base salary | Not disclosed | Executives compensated by Investment Adviser, not NMFC |
| Cash bonus | Not disclosed | Same as above |
| Director fees (Kline) | — | No compensation for “interested persons” |
Performance Compensation
NMFC does not report executive incentive plan metrics for Kline. However, the external management agreement economics drive platform incentives:
| Metric/Provision | Description | Effective Dates |
|---|---|---|
| Base management fee | Reduced from 1.40% to 1.25% of gross assets (ex-cash) payable quarterly in arrears; average of two most recent quarter-end gross assets with pro rata adjustments | |
| Fee waiver | Adviser waived amounts to target 1.25% through Dec 31, 2024; continued waiver Jan 1–28, 2025 to align with 1.25%; non-recoupable | |
| Incentive fee on NII | 20% of Pre-Incentive Fee Adjusted Net Investment Income, subject to preferred return (“hurdle”) and catch-up features; payable quarterly | |
| Capital gains component | Incentive fee excludes realized/unrealized gains/losses in NII calculation |
Implication: While Kline’s personal incentive details aren’t disclosed, the advisory fee structure increases alignment to sustainable net investment income generation and capital discipline at NMFC’s platform level .
Equity Ownership & Alignment
| Metric | As of Record Date | 2024 | 2025 |
|---|---|---|---|
| Shares beneficially owned | Shares | 248,981 | 319,008 |
| Ownership % of outstanding | Percent | <1.0% | <1.0% |
- Hedging/derivatives: NMFC’s Code of Ethics does not prohibit hedging outright; pre-clearance by the Chief Compliance Officer is required for transactions in derivative securities of NMFC stock (ETFs/ETNs options exempt from pre-clearance) .
- Pledging: No specific pledging disclosure in proxy; insider trading policy in place .
- Director stock/option plans: NMFC does not maintain stock or option plans for directors .
Employment Terms
| Term | Disclosure |
|---|---|
| Employment start at NM platform | Joined New Mountain Capital in 2008 |
| CEO effective date | Jan 1, 2023 |
| Board service class/term | Class I Director since 2019; term expires 2027 |
| Independence status | “Interested person” due to CEO role; not eligible for board committees (committees are Independent Directors only) |
| Committee roles | None (audit, valuation, nominating & governance, compensation committees comprised solely of Independent Directors) |
| Meeting attendance | In 2024, other than Mr. Hamwee, all directors attended at least 75% of aggregate board/committee meetings (Kline presumed included) |
| Indemnification | NMFC provides indemnification agreements to directors with advancement of expenses to the maximum extent permitted by Delaware law and the 1940 Act |
| Severance / change-of-control | Not disclosed at NMFC level (executives compensated by Adviser); no company severance/CIC terms for Kline in proxy |
Board Governance
- Leadership: Board chaired by Steven B. Klinsky, an “interested person”; NMFC has no designated Lead Independent Director. Independent Directors meet regularly in executive session, and all four committees are comprised solely of Independent Directors .
- Committee Chairs: Audit—Rome G. Arnold III; Compensation—Alfred F. Hurley, Jr.; Valuation—David Ogens; Nominating & Governance—Alfred F. Hurley, Jr. .
- Director Compensation Schedule (independent directors only): Annual retainer $120,000; Board meeting fees $2,500 regular/$1,000 special/consent; committee chair retainers—Audit $12,500; Valuation $7,500; Compensation $2,500; Nominating & Governance $2,500; no compensation for interested directors (including Kline) .
Risk Indicators & Related Party Considerations
- External management and related-party fees: Base management fee reduced to 1.25% as of Jan 29, 2025; incentive fee remains at 20% of Pre-Incentive Fee NII with hurdle/catch-up, aligning adviser economics with income generation but also introducing potential conflicts that are mitigated through independent director oversight and exemptive co-investment framework .
- Section 16 compliance: For FY 2024, all insiders met filing requirements timely; no Kline-specific delinquencies noted .
- Hedging permitted with controls; pledging not addressed explicitly .
- Co-investment: SEC exemptive order allows co-investment with affiliates under strict independent director oversight; amended Aug 30, 2022 to expand permissible co-investments with certain private funds .
Compensation Structure Analysis
- Cash vs equity mix: NMFC does not report executive cash/equity comp; director equity programs do not exist, and interested directors are unpaid by NMFC .
- Shift in fee economics: Reduction of base management fee from 1.40% to 1.25% lowers expenses borne by shareholders and reduces potential pay inflation at the platform level .
- Discretionary bonuses / metric changes: Not disclosed at NMFC level; executive pay decisions reside at the Adviser .
- Option repricing/modification: No company director/option plans; none reported .
Say-on-Pay & Shareholder Feedback
- NMFC does not include say-on-pay in the proxy and does not directly compensate executive officers; no historical say-on-pay vote statistics disclosed .
Expertise & Qualifications
- Core credentials: Multi-year executive leadership across BDCs and New Mountain’s credit platform; principal executive authorizations and certifications on SEC filings underscore internal control and disclosure oversight .
Investment Implications
- Transparency gap: As an externally managed BDC, NMFC does not disclose Kline’s personal salary/bonus/equity or severance/CIC terms, limiting direct pay-for-performance analysis at the company level .
- Alignment signals: Kline’s beneficial ownership increased from 248,981 to 319,008 shares year-over-year, with ownership <1% of outstanding, providing some alignment though not a controlling stake; hedging allowed with preclearance and no pledging disclosure is a mild governance caution .
- Governance balance: Board chaired by an interested person and no lead independent director elevates independence considerations; mitigants include fully independent committees and routine executive sessions .
- Fee economics: The reduction of base management fee to 1.25% improves shareholder cost alignment; incentive fee tied to NII focuses platform behavior on income stability, which, while not a direct proxy for Kline’s comp, suggests broader income-driven incentives across the advisory platform .
Net: For trading and stewardship, focus on NMFC’s NII generation/coverage, fee structure improvements, and any Form 4 activity by Kline; governance structure warrants monitoring, but independent committee oversight and indemnification standards are in place .