Daniel Penberthy
About Daniel Penberthy
Daniel P. Penberthy is President and Chief Executive Officer of Rand Capital Corporation, appointed effective December 1, 2021; he is age 62 and is not a director of the Corporation . Rand is an externally-managed business development company; following the 2019 externalization, executives (including the CEO) became employees of Rand Capital Management, LLC (RCM), the external investment adviser, with no direct compensation from Rand, which shapes the disclosure and incentives framework . He previously served as Rand’s Treasurer and Chief Financial Officer (August 1997–December 2021) and Executive Vice President (2002–December 2021), began his accounting career at KPMG in 1985, and held various accounting roles from 1990–1997 . Performance context appears in the multi-year revenue and net income table below.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Rand Capital Corporation | Treasurer & Chief Financial Officer | Aug 1997–Dec 2021 | CFO during and after the 2019 externalization; executives transitioned to RCM |
| Rand Capital Corporation | Executive Vice President | 2002–Dec 2021 | Senior finance leadership continuity |
| KPMG | Accountant (career start) | 1985 | Foundation in audit/accounting; career start at KPMG |
| Various organizations | Accounting roles | 1990–1997 | Progression in accounting prior to joining Rand |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Rand Capital Management, LLC (RCM) | President | Dec 2021–present | RCM is Rand’s external investment adviser and administrator |
| Rand Capital Management, LLC (RCM) | Chief Executive Officer (solo) | Dec 2021–2023 | Sole CEO of RCM in 2021–2023 |
| Rand Capital Management, LLC (RCM) | Co-Chief Executive Officer | 2023–present | Co-CEO since 2023 |
| Rand Capital Management, LLC (RCM) | Executive Vice President & Chief Financial Officer | Nov 2019–Dec 2021 | Preceded CEO role; part of RCM leadership |
| RCM Investment Committee | Member | Since 2019 | Responsible for aspects of Rand’s investment process |
Fixed Compensation
| Year | Direct Compensation from Rand |
|---|---|
| 2023 | $0 (CEO/CFP are RCM employees; Rand has no employees) |
| 2024 | $0 (CEO/CFP are RCM employees; Rand has no employees) |
Performance Compensation
RCM’s compensation from Rand consists of a base management fee and an incentive fee with two parts: income-based and capital-gains-based, which drive the adviser’s economics (and indirectly the CEO’s incentives given his leadership of RCM). Actual fees earned:
| Component | FY 2023 ($) | FY 2024 ($) |
|---|---|---|
| Base Management Fee | $1,057,166 | $1,212,160 |
| Income-Based Incentive Fee | $0 (none earned) | $178,218 |
| Capital Gains-Based Incentive Fee | $692,000 | $1,727,000 |
Notes:
- Rand’s proxies do not disclose individual executive performance metrics, targets, weightings, vesting schedules or bonus determinations, as executives are compensated by RCM, not Rand .
- The Advisory Agreement structure is described in the proxy and aligns RCM economics to net investment income and realized capital gains .
Equity Ownership & Alignment
| Metric | 2024 | 2025 |
|---|---|---|
| Shares directly owned (Daniel P. Penberthy) | 16,769 | 19,280 |
| Shares outstanding at Record Date | 2,581,021 | 2,969,814 |
| Ownership as % of shares outstanding | 0.65% (16,769 ÷ 2,581,021) | 0.65% (19,280 ÷ 2,969,814) |
Additional alignment policies and signals:
- Anti-hedging/derivative prohibition: directors and officers are prohibited from short sales, derivatives, hedging or monetization transactions; holding Rand securities in margin accounts requires advance written approval—none requested by directors or officers .
- Section 16 compliance: executives and directors timely filed beneficial ownership reports in 2024 .
Employment Terms
- Appointment and background: Appointed President & CEO of Rand and Rand Capital SBIC effective December 1, 2021; no arrangements/understandings, no family relationships, and no related transactions requiring disclosure under Item 404(a) .
- Governance status: Not a director; governance oversight provided by an independent Board Chair and committees .
- Compensation committee: Rand is a “controlled company” (East Asset Management owns ~64.2%) and does not maintain a standing Compensation Committee; any applicable compensation functions moved to the Governance & Nominating Committee post-externalization .
- Contracts/severance/change-of-control: No employment contract, severance, or change-of-control terms for Penberthy are disclosed in Rand’s proxies; executives are employed and compensated by RCM .
Performance & Track Record
| Metric | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|
| Revenue ($USD) | $156,614* | $155,914* | $320,744* | $533,720* |
| Net Income ($USD) | $15,797,428* | $(881,849)* | $6,526,650* | $8,827,612* |
Values retrieved from S&P Global.*
Investment Implications
- Pay-for-performance visibility is limited: Rand’s CEO receives no direct compensation from the Corporation; compensation is at RCM and undisclosed, constraining traditional pay-for-performance analysis at the corporate level .
- Adviser fee alignment: RCM’s incentive fee structure links economics to net investment income and realized capital gains; in 2024, both income-based and capital-gains fees were significant, aligning adviser incentives to portfolio yield generation and realization activity .
- Ownership and hedging controls: Penberthy’s direct ownership is ~0.65% of shares outstanding; anti-hedging and margin restrictions reduce hedging-related misalignment or pledging risk (no approvals requested), mitigating potential insider selling pressure from hedging or margin calls .
- Governance footprint: Controlled company status (East ~64.2%) and the absence of a standing Compensation Committee mean compensation oversight resides with the Governance & Nominating Committee; East also designates two director nominees, shaping governance and potentially strategic priorities .
- Tenure and continuity: Penberthy’s long tenure (Rand CFO since 1997; CEO since 2021) suggests operational continuity and familiarity with Rand’s BDC and externalization model; the 2021 leadership transition was orderly with no disagreements reported .