Charles M. Royce
About Charles M. Royce
Charles M. Royce (age 85) has served on the Oxford Square Capital Corp. (OXSQ) Board since 2003 and is classified as an “interested” director due to his minority, non‑controlling ownership interest in OXSQ’s investment adviser, Oxford Square Management, LLC . He founded Royce & Associates, LP, serving as CEO from 1972–2016, Chairman from 2016–2024, and currently as Senior Advisor, bringing deep financial services and valuation expertise . His long tenure provides continuity and knowledge of OXSQ’s investment platform .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Oxford Square Capital Corp. | Director (Interested) | 2003–present | Not on board committees (all committees comprised solely of Independent Directors) |
| Royce & Associates, LP | Chief Executive Officer | 1972–2016 | Built investment platform and valuation expertise |
| Royce & Associates, LP | Chairman of the Board | 2016–2024 | Oversight of investment franchise |
| Royce & Associates, LP | Senior Advisor | 2024–present | Ongoing advisory role |
External Roles
| Organization | Role | Tenure | Note |
|---|---|---|---|
| Royce & Associates, LP | Senior Advisor | 2024–present | Previously CEO and Chairman; long-standing investment leadership |
| Royce & Associates, LP funds | Manager/co‑manager of funds | Current per 2024 proxy | Manages/co‑manages six open/closed‑end funds (as of 2024 disclosure) |
Board Governance
- Independence: Not independent; deemed “interested person” due to minority, non‑controlling ownership interest in Oxford Square Management, OXSQ’s adviser .
- Committee assignments: Audit, Valuation, Nominating & Corporate Governance, and Compensation Committees are composed solely of Independent Directors; chairs are Osherow (Audit), Stelljes (Nominating & Corporate Governance; Valuation), Novak (Compensation); Novak is Board Chairman .
- Attendance and engagement: In 2024, the Board held five meetings; Audit four; Valuation four; Nominating & Corporate Governance one; Compensation one; each incumbent director attended at least 75% of meetings of the Board and committees on which he served .
- Lead independent role: Steven P. Novak serves as Chairman of the Board, fostering open dialogue between management and directors .
- Executive sessions and risk oversight: Independent Directors meet regularly in executive session; Chief Compliance Officer meets separately with them at least quarterly; Board risk oversight is conducted via its four independent committees and compliance program .
Fixed Compensation
- As an “interested” director, Mr. Royce receives no director fees or equity compensation from OXSQ .
| Director Compensation (FY 2024) | Amount ($) |
|---|---|
| Fees Earned or Paid in Cash – Charles M. Royce | $0 |
| All Other Compensation – Charles M. Royce | $0 |
- Independent Director fee schedule (context): Annual retainer $90,000; Board meeting fee $4,000; Audit $1,500; Valuation $1,500; Nominating & Corporate Governance $1,000; Compensation $1,000; Chair premiums: Board $30,000, Audit $10,000, Valuation $7,500, Nominating & Corporate Governance $5,000, Compensation $5,000 .
Performance Compensation
| Equity/Options Program | Grants/Options | Vesting | Performance Metrics |
|---|---|---|---|
| Director equity or option plans | None maintained; no stock/options plan for directors | N/A | N/A |
| Option grants (FY 2024) | None granted | N/A | N/A |
Other Directorships & Interlocks
| Relationship | Nature | Potential Impact |
|---|---|---|
| Minority, non‑controlling interest in Oxford Square Management, LLC (OXSQ’s investment adviser) | Related‑party link; interested director status | Structural conflict risk; mitigated by annual advisory agreement review by Independent Directors and co‑investment exemptive order procedures |
Expertise & Qualifications
- Founder and long‑tenured leader at Royce & Associates, with extensive knowledge of financial services and investment valuation processes—core skill set aligned with BDC fair value oversight .
- History with OXSQ’s platform provides continuity and institutional knowledge for valuation and investment practices .
Equity Ownership
| Metric | FY 2024 | FY 2025 |
|---|---|---|
| Shares Beneficially Owned | 2,119,795 | 2,127,470 |
| Percent of Class | 3.4% (62,705,628 shares outstanding) | 2.8% (76,027,372 shares outstanding) |
| Breakdown (Entities) | Royce Family Investments, LLC: 1,727,510; Royce Family Fund, Inc.: 392,285; Royce disclaims beneficial ownership of shares directly held by Royce Family Fund, Inc. | Royce Family Investments, LLC: 1,267,324; Royce Family Fund, Inc.: 860,146; Royce disclaims beneficial ownership of shares directly held by Royce Family Fund, Inc. |
| Director Dollar Range | Over $100,000 | Over $100,000 |
| Hedging/Pledging | Hedging prohibited except covered call writing; pre‑clearance required; no pledging policy disclosed |
Insider Trades
| Item | Detail |
|---|---|
| Section 16(a) compliance note | One transaction reported late in 2023 for Charles M. Royce; subsequently reported via Form 4 |
Governance Assessment
- Strengths:
- Deep valuation expertise and long tenure support fair‑value oversight in a BDC where many assets lack observable market prices .
- Strong independent committee structure; all committees comprised solely of Independent Directors, with experienced chairs and designated audit committee financial experts .
- Documented compliance program with quarterly executive sessions with the Chief Compliance Officer and comprehensive risk oversight narratives .
- Risks/RED FLAGS:
- Related‑party exposure: Royce’s minority ownership in the external adviser creates a structural conflict; while the Board (Independent Directors) re‑approves the advisory agreement annually and applies co‑investment order safeguards, this linkage remains a governance risk that investors should monitor .
- Director is not on committees; while typical for interested directors, it limits direct participation in committee‑level oversight (mitigated by independent-only committee membership) .
- Prior late Section 16 filing (2023) indicates an administrative lapse—subsequently corrected; continued monitoring of timely filings is warranted .
- Alignment:
- Meaningful share ownership (≈2.8% in 2025; ≈3.4% in 2024) aligns interests with shareholders; company prohibits hedging (except covered calls) enhancing alignment .
- Overall:
- Governance quality benefits from a robust independent committee framework and annual advisory agreement scrutiny; principal concern is the adviser interlock, a common feature in externally managed BDCs but one that warrants ongoing attention from investors, particularly around related‑party transactions and co‑investment allocations .