Ethan Powell

About Ethan Powell

Independent Director and Chairman of the Board of NexPoint Capital, Inc. (NXPT); born 1975; Class I Director since 2014. Current roles include Principal and CIO of Brookmont Capital Management (since May 2020) and CEO/Chairman/Founder of Impact Shares LLC (since December 2015). He is up for re‑election at the June 16, 2025 Annual Meeting, with the Board recommending a vote FOR his re‑election .

Past Roles

External Roles

Board Governance

• Independence: Board has five directors, four are independent under the 1940 Act; Powell is listed among Independent Directors and serves as Chairman .
• Committee assignments:
  • Audit & Qualified Legal Compliance Committee: Members Froehlich, Ward (Chair), Powell, McWhorter; all independent; Ward designated “audit committee financial expert”; the Audit Committee also oversees fair valuation as the Board’s valuation designee under Rule 2a‑5 .
  • Governance & Compliance Committee: Members Froehlich (Chair), Powell, Ward, McWhorter; oversees director selection, director compensation, compliance and conflict oversight .
  • Administration & Operations Committee: Members Froehlich, Honis (Chair, Interested Director), Powell, Ward, McWhorter .
• Attendance and engagement: In FY 2024, the Board met eight times; each director then serving attended at least 75% of Board meetings and at least 75% of their committee meetings; directors are encouraged but not required to attend the annual meeting .
• Election: Powell is a Class I nominee for a new three‑year term (to 2028) at the June 16, 2025 Annual Meeting; the Board unanimously recommends FOR .
• Risk oversight and conflict controls: Independent directors meet as needed (with independent counsel) without management; the Board explicitly considers conflicts, noting Powell’s and Honis’s prior roles with NexPoint/historical affiliates as enhancing understanding of Adviser operations; the Governance & Compliance Committee seeks to address potential conflicts with the Adviser .

Fixed Compensation

Performance Compensation

Other Directorships & Interlocks

Expertise & Qualifications

• Significant experience in the financial industry; executive, administrative, and managerial experience; prior service as an officer in funds within the complex .
• As Board Chair and Audit Committee member, participates in oversight of audits, internal controls, compliance, and valuations under Rule 2a‑5 .

Equity Ownership

Insider reporting and trading:

• Section 16(a) compliance: Company reports no known failures to file timely reports by directors/officers or 10% holders during the past fiscal year .

Pledging/Hedging:

• No pledging/hedging policy is specifically disclosed for directors in the proxy; NXPT and the Adviser maintain Rule 17j‑1 Codes of Ethics restricting personal investments in securities that may be purchased or held by the Corporation .

Governance Assessment

• Independence and committee effectiveness: Powell is an independent director and serves as Board Chair, with active roles on Audit and Governance & Compliance committees—structures that support oversight of audit independence, valuations, compliance, and conflicts. The Board met eight times in 2024; directors attended at least 75% of meetings, indicating baseline engagement .
• Pay structure and alignment: Compensation is entirely cash‑based with no equity or incentive components; Powell’s FY 2024 compensation was $170,000 (fund complex) and $4,192 (NXPT allocation). Absence of equity may reduce direct share‑price alignment, but as a BDC with Rule 17j‑1 restrictions, director equity ownership is constrained .
• Ownership “skin in the game”: Powell reported no NXPT share ownership (dollar range “None”); officers and directors as a group also reported no holdings—this is a potential alignment concern for some investors given no equity retainer program for directors .
• Conflicts and related‑party exposure: The corporation’s operations are closely tied to the Adviser and its affiliates; directors and adviser partners may have roles in related entities. The proxy outlines allocation, co‑investment, and conflict‑management policies; the Governance & Compliance Committee explicitly oversees potential conflicts, and independent directors meet without management as needed. Powell’s prior positions with NexPoint/historical affiliates are acknowledged by the Board as enhancing understanding, but represent perceived conflict proximity that warrants continued monitoring by investors .
• RED FLAGS:
  • No NXPT share ownership by Powell and by the officer/director group (0%): alignment risk for shareholders seeking director co‑investment .
  • Presence of an Interested Director (Honis) due to historical affiliations and HCMLP Chapter 11 context; underscores the importance of strong independent oversight on conflicts and valuations .
• Positive signals:
  • Board Chair role held by an independent director (Powell), robust committee coverage, and explicit conflict/valuation oversight frameworks .
  • Timely Section 16 compliance and structured audit oversight, including designation of a financial expert on the Audit Committee .

Implications for investor confidence: Governance frameworks and independent committee leadership support oversight; however, the lack of director equity and the Adviser‑centric operating model raise alignment and conflict optic risks. Monitoring AGM outcomes, any evolution in director compensation (e.g., equity components), and disclosures on co‑investment/conflict resolution practices is prudent .