Deborah DeCotis

About Deborah A. DeCotis

Independent Chair of the Board and Trustee of PIMCO Income Strategy Fund II (PFN). Year of birth: 1952. Trustee of PFN since 2011; Independent Chair of the Boards of the PIMCO-Managed Funds since 2019. Background includes senior investment banking experience (Advisory Director, Morgan Stanley & Co., Inc. since 1996). Current outside roles include Trustee of Virtus Funds (2021–present), Director of Watford Re (since 2017), and Director of Cadre Inc. (since 2022). Member, Council on Foreign Relations (since 2013). Education not disclosed in the proxy.

Past Roles

External Roles

Board Governance

• Classification and tenure: PFN has a classified board. DeCotis is a Class II Trustee; nominated for re-election at the 2025 meeting, with term to expire at the annual meeting held during PFN’s 2027–2028 fiscal year if re-elected. Trustee of PFN since 2011; Independent Chair since 2019.
• Independence: The Audit Oversight Committee and Governance & Nominating Committee are composed solely of Independent Trustees per NYSE standards; DeCotis is an Independent Trustee.
• Committee assignments: Member, Audit Oversight Committee; Chair, Governance & Nominating Committee. Audit Committee Chair is E. Grace Vandecruze.
• Meeting cadence and attendance (PFN, FY ended June 30, 2024): Board held 4 regular and 4 special meetings; Audit Oversight (4), Governance & Nominating (4), Valuation Oversight (4), Contracts (3), Performance (5). Each Trustee attended at least 75% of Board and applicable committee meetings.

Fixed Compensation

• Compensation structure (PIMCO-Managed Funds): Independent Trustees receive $275,000 annual cash retainer, payable quarterly. Independent Chair of the Boards receives an additional $100,000 per year. Additional annual chair fees: Audit Oversight ($35,000), Performance ($15,000), Valuation Oversight ($10,000), Contracts ($30,000). Trustees are reimbursed for meeting-related expenses. No pension or retirement benefits.

Allocation notes: Trustee compensation is allocated across funds; PFN’s portion reflects asset-based allocation within the complex.

Performance Compensation

• Structure: No equity-based compensation (no RSUs/PSUs/options) is disclosed for Independent Trustees; compensation consists of cash retainers and chair fees. No meeting fees disclosed.
• Performance metrics: None disclosed for Trustee compensation (no revenue/EBITDA/TSR or ESG-linked metrics).

Other Directorships & Interlocks

• Related-party safeguards: The Audit Committee pre-approves audit and permitted non-audit services for the Funds and certain affiliates (including the Manager) and monitors auditor independence.

Expertise & Qualifications

• Board-identified skills: Substantial senior executive experience in the investment banking industry (former Morgan Stanley Managing Director), extensive board experience, and oversight of investment management functions.
• Governance leadership: Independent Chair of the Boards since 2019; Chair of Governance & Nominating Committee.

Equity Ownership

• Beneficial ownership ranges (Record Date: April 28, 2025): For DeCotis, holdings disclosed in PDI ($10,001–$50,000). No PFN position is listed for DeCotis in the dollar-range table. Aggregate family-of-funds ownership range for DeCotis: $10,001–$50,000.

• Independence and advisor securities: Independent Trustees did not knowingly own beneficially securities of an investment adviser or principal underwriter of the Funds or their control affiliates, as of the Record Date.

Governance Assessment

• Strengths

  • Independent Board leadership: DeCotis serves as Independent Chair, reinforcing board independence and oversight over the Manager; key committees are solely Independent Trustees.
  • Active governance remit: As Chair of Governance & Nominating, she leads on board composition, trustee compensation review, and governance policy refresh cycles.
  • Engagement: PFN’s Board and committees maintained a regular cadence of meetings, and Trustees achieved at least 75% attendance in FY 2024.
  • Audit oversight: Member of an independent Audit Oversight Committee; committee provides robust pre-approval of auditor services and independence evaluations.

• Potential concerns / investor watch items

  • Classified board: PFN’s staggered board structure makes changing control more difficult and can entrench incumbents, potentially constraining shareholder influence.
  • Compensation-setting optics: Governance & Nominating (which DeCotis chairs) periodically reviews Independent Trustee compensation; while standard in funds, it means the committee she chairs influences her own pay levels (as part of a committee decision). No separate fee disclosed for Governance Chair (unlike other chair roles).
  • Ownership alignment: No PFN share ownership disclosed for DeCotis; ownership is reported only in PDI within the $10,001–$50,000 range. Some investors may prefer direct PFN ownership for tighter alignment.

• Independence safeguards and related parties

  • Audit Committee independence conforming to NYSE; pre-approval structure for audit and permitted non-audit services, including affiliates, with explicit consideration of auditor independence.
  • Statement that Independent Trustees did not knowingly own securities of the adviser/underwriter or their control affiliates as of Record Date.

Director Compensation (Detail)

Compensation framework summary: Independent Trustee $275,000 annual cash retainer; Independent Chair additional $100,000; chair fees for Audit/Performance/Valuation/Contracts committees as disclosed; no pensions.

Attendance & Meeting Activity (PFN, FY ended June 30, 2024)

Election Status and Terms (PFN)

• 2025 Joint Annual Meeting: PFN shareholders vote to re-elect DeCotis (Class II), and to elect Cogan and Rappaport (and Flattum, an Interested Trustee) per proxy card.
• Term if re-elected: Class II term runs through annual meeting during the 2027–2028 fiscal year.

Notes on Say-on-Pay and Compensation Committee

• Closed-end funds do not have executive “say-on-pay” votes; director compensation is set via the independent Governance & Nominating Committee, which reviews structure/levels for approval by the Board; independent compensation consultants are permitted but not specifically disclosed here.

Signals for Investors

• Independent leadership and committee structure plus documented audit independence oversight are positives for governance quality.
• Classified board and limited PFN-specific ownership for DeCotis are typical in the fund industry but may be viewed as alignment headwinds by some governance-focused investors.