Steven B. Klinsky

About Steven B. Klinsky

Steven B. Klinsky (age 68) is Chairman of the Board at New Mountain Finance Corporation (NMFC), serving since 2010 and currently a Class III director with a term expiring in 2026 . He is classified as an “interested person” under the Investment Company Act due to his role as Founder and Chief Executive Officer of New Mountain Capital, L.L.C. (the investment adviser) . The Board held 9 meetings in 2024; other than Mr. Hamwee, all directors (including Mr. Klinsky) attended at least 75% of Board and committee meetings . Mr. Klinsky beneficially owns 10,706,834 NMFC shares, representing 9.93% of shares outstanding, largely via personal and family trusts .

Past Roles

External Roles

Board Governance

• Role: Chairman of NMFC’s Board; NMFC does not designate a lead independent director .
• Independence: Not independent (“interested person”) due to Founder/CEO role at New Mountain Capital and connection to the investment adviser .
• Committee memberships: None; all Board committees (Audit, Valuation, Nominating & Corporate Governance, Compensation) are comprised solely of Independent Directors .
• Committee chairs: Audit – Rome G. Arnold III; Valuation – David Ogens; Compensation – Alfred F. Hurley, Jr.; Nominating & Corporate Governance – Alfred F. Hurley, Jr. .
• Executive sessions: Independent Directors meet in executive session at the conclusion of each regular Board meeting, presided over by the Audit Committee chair .
• Attendance: In 2024 there were 9 Board meetings, 8 Audit, 8 Valuation, 4 Compensation, 2 Nominating; all directors except Mr. Hamwee attended at least 75% (Mr. Klinsky met the threshold) .

Fixed Compensation

Context: Independent Directors receive $120,000 annual retainer plus meeting/chair fees; interested directors (including Mr. Klinsky) receive no director compensation from NMFC .

Performance Compensation

NMFC does not directly compensate executive officers; compensation of adviser personnel is paid by the Investment Adviser, and CFO/CCO compensation is reimbursed via the Administrator per agreements .

Other Directorships & Interlocks

Expertise & Qualifications

• Financial advisory and investment management expertise from founding and leading New Mountain Capital; extensive experience with valuation and BDC operations .
• Governance experience across industry bodies (American Investment Council) and multiple boards in private funds and non-profits, indicating broad oversight credentials .
• NMFC Board cites his history with New Mountain Capital and familiarity with NMFC strategy as rationale for chair role .

Equity Ownership

Notes: Dollar range of equity beneficially owned in NMFC and across the fund complex is “Over $100,000” . Hedging transactions in NMFC stock are not expressly prohibited but require pre-clearance by the Chief Compliance Officer; ETF/ETN transactions are exempt from pre-clearance .

Governance Assessment

• Strengths

  • Significant personal ownership (9.93%) aligns incentives with shareholders; deep firm-specific and industry expertise as adviser founder/CEO .
  • Board maintains strong independent-only committee structure, executive sessions, and compliance oversight mitigating chair non-independence .
  • Advisory base fee reduced to 1.25% effective January 29, 2025, suggesting responsiveness to cost alignment; prior waivers targeted the same level .

• Potential Conflicts and Red Flags

  • Non-independent Board Chair with financial interest in adviser profits; related-party advisory and administration agreements require ongoing robust oversight .
  • Co-investments with affiliates permitted under SEC exemptive order; relies on “required majority” of Independent Directors to ensure fairness and no overreaching .
  • Hedging of NMFC stock by directors/officers is permitted with pre-clearance, which is less restrictive than outright bans and may weaken alignment optics if used .
  • No lead independent director designated, increasing reliance on committee structure and executive sessions for independent oversight .

• Independence, Attendance, Engagement

  • Independence: Not independent; “interested person” due to adviser leadership .
  • Attendance: Met ≥75% threshold in 2024; only Mr. Hamwee fell short .
  • Engagement: Board/committee activity levels (9 Board meetings; Audit 8; Valuation 8; Compensation 4; Nominating 2) indicate regular oversight cadence .

• Director Compensation & Ownership Alignment

  • Receives no director cash/equity compensation from NMFC; no director stock/option plans exist .
  • Alignment principally via substantial share ownership and adviser economics; requires vigilant independent oversight to balance dual incentives .

• Related-Party Exposure

  • Advisory agreement re-approved January 29, 2025; base fee reduced; incentive fee includes 20% of quarterly pre-incentive fee NII with hurdle and catch-up; Klinsky benefits through adviser profits .
  • Administrator reimbursement model and trademark license with New Mountain Capital reflect embedded affiliate relationships .

Section 16 compliance: Company reports all Section 16(a) filing requirements were met in a timely manner for FY 2024 .