Robert Zak
About Robert M. Zak
Robert M. Zak (age 67) is an Independent Director and Chair of the Board at Rand Capital Corporation, serving on the Board since 2005, with a background as President and CEO of Merchants Insurance Group (1995–April 2021), earlier finance roles at Merchants (joined 1985), and prior experience in public accounting . He served as Chair of executive sessions of Independent Directors in 2024, reflecting enhanced governance oversight separate from management . He is affirmed independent under Nasdaq and SEC rules .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Merchants Insurance Group | President & CEO | 1995–Apr 2021 | Led insurer; deep finance and public accounting background strengthens audit oversight and governance |
| Merchants Insurance Group | Finance roles | 1985–1995 | Financial leadership positions supporting operating rigor |
| Public Accounting | Accountant | Pre-1985 | Foundational accounting expertise relevant to audit committee matters |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Merchants Mutual Insurance Company | Non-executive Board Chair | Since Apr 2021 | Independent board leadership; no public-company directorships reported |
Board Governance
- Independent Director; affirmed by Board under Nasdaq/SEC standards .
- Board Chair; chaired executive sessions of Independent Directors (held at least twice in 2024) .
- Committee memberships in 2024:
- Audit Committee (member; chair rotated from Kailbourne to Jaroslawsky on May 9, 2024) .
- Governance & Nominating Committee (member; chaired by Godley) .
- Meeting attendance and engagement:
- Board met 8 times; Audit 5; Governance & Nominating 2; Zak attended 100% of Board and committee meetings; all Directors attended the 2024 annual meeting (virtual) .
| Governance Metric | 2024 Value |
|---|---|
| Independence status | Independent (Nasdaq/SEC) |
| Board leadership | Chair of the Board |
| Executive sessions frequency | At least twice in 2024 |
| Board meetings attended | 100% attendance |
| Audit Committee meetings attended | 100% attendance |
| Governance & Nominating meetings attended | 100% attendance |
Fixed Compensation
- Rand pays only cash retainers to Directors; no meeting fees; reimburses travel/out-of-pocket expenses .
- Standard cash retainer: $50,000; Board Chair premium: $10,000; Committee chair premiums: Audit $2,500; Governance & Nominating $1,000 .
| Director | 2024 Fees Earned (Cash) |
|---|---|
| Robert M. Zak | $60,000 |
| Cash Compensation Elements | 2024 Disclosure |
|---|---|
| Annual Director retainer | $50,000 |
| Board Chair premium | $10,000 |
| Audit Chair premium | $2,500 (not applicable to Zak) |
| Governance & Nominating Chair premium | $1,000 (not applicable to Zak) |
| Meeting fees | None |
Performance Compensation
- Equity awards, stock options, non-equity incentives, pension/SERP, and deferred compensation plans for Directors are not maintained by Rand; no equity grants are made to Directors .
- Anti-hedging policy prohibits short sales, derivatives, and hedging/monetization transactions; margin accounts require CCO pre-approval, which none have requested .
| Performance-Based Component | 2024 Status |
|---|---|
| Equity (RSUs/PSUs/options) | None; no director stock/option plan |
| Bonus or incentive plan | None |
| Performance metrics tied to pay (TSR/EBITDA/ESG) | Not applicable |
| Clawbacks, severance, CoC terms for Directors | Not disclosed |
| Anti-hedging/derivative restrictions | Prohibited; margin accounts need written approval; none requested |
Other Directorships & Interlocks
| Category | Details |
|---|---|
| Current public company boards | None for Zak |
| Private/non-profit boards | Non-executive Board Chair at Merchants since Apr 2021 |
| Interlocks/controlled company dynamics | East Asset Management owns ~64.2% of RAND; designates nominees (Gusky, Godley). Gusky is an “interested person” under the 1940 Act; Zak remains independent . |
Expertise & Qualifications
- Executive leadership in insurance; extensive finance and public accounting background, supporting audit and financial oversight .
- Board leadership experience as independent Chair; chaired executive sessions .
- Active participation in Audit and Governance & Nominating Committees .
Equity Ownership
| Metric | Value |
|---|---|
| Shares beneficially owned (Mar 6, 2025) | 23,464 |
| Ownership as % of outstanding | Less than 1% (base outstanding shares: 2,969,814) |
| Dollar range of fund equity | Over $100,000 |
| Shares pledged as collateral | Not disclosed; hedging/derivatives prohibited; margin accounts require approval, none requested |
Governance Assessment
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Strengths:
- Independent Board Chair with direct oversight separate from management; executive sessions of Independent Directors held at least twice in 2024 .
- Full independence affirmed for Zak; 100% attendance across Board and committees; strong engagement .
- Transparent controlled-company disclosures: East’s designation rights and interested director status; independent committees (Audit, Governance & Nominating) .
- Anti-hedging policy and Section 16(a) compliance supported alignment and timely reporting .
-
Considerations/Potential Red Flags:
- Controlled company status (East at 64.2%) concentrates voting power; East-designated nominees may influence board composition; mitigated by independent Chair and committees .
- Absence of a standing Compensation Committee post-externalization; governance functions absorbed by Governance & Nominating Committee (consistent with Nasdaq exemptions for controlled companies) .
- Externalization/advisory model introduces related-party dynamics (RCM advisory and administration fees); requires ongoing robust Audit Committee oversight; 2024 fees totaled $1,212,160 base management, $178,218 income-based, $1,727,000 capital gains, and $178,749 admin reimbursement .
-
Auditor oversight:
- Audit Committee independent; financial experts designated (Jaroslawsky, Kailbourne); annual evaluation of auditor quality and independence; 2024 total audit/tax fees $297,575 .
Overall, Zak’s independence, attendance, and committee participation—combined with his finance/accounting background—support board effectiveness. The controlled-company structure and externalization model require continued vigilance to manage potential conflicts; current governance (independent Chair, independent Audit and Governance & Nominating Committees, executive sessions) is a positive mitigating framework .