Michael K. Shields

About Michael K. Shields

Independent Class II Director of Royce Small-Cap Trust (RVT) since 2015; age 67. Nominated to continue as a Class II Director for a term expiring at the 2028 Annual Meeting. Shields is Chief Investment Officer at National Christian Foundation (since April 2024) and has over 30 years of investment management experience, including prior CEO roles at trust and asset managers. He also chairs the UNC Charlotte Investment Fund Board and Halftime Carolinas Board, signaling strong fiduciary and oversight credentials .

Past Roles

External Roles

Board Governance

• Independence and board structure: Shields is a Non-Interested (Independent) Director; the board has six of seven independent directors and a designated Lead Independent Director (Christopher C. Grisanti). The President (an “interested person”) chairs board meetings; Grisanti leads executive sessions of independents .
• Committee assignments: Member, Audit Committee (Independent-only; NYSE independence criteria apply). Member, Nominating Committee (Independent-only). Not identified as chair of either committee (Audit Chair: Julia W. Poston; Nominating Chair served by G. Peter O’Brien in past periods) .
• Attendance: In 2024, the Board met 8 times; the Audit Committee met 4 times; the Nominating Committee held no meetings. Each Director in office attended at least 75% of the aggregate Board and applicable committee meetings .
• Complex oversight: Non-interested directors, including Shields, oversee 15 portfolios within The Royce Funds complex .
• Shareholder meeting attendance policy: No formal policy; one director attended the 2024 annual meeting (identity not disclosed) .

Fixed Compensation

Director pay is standardized across Independent Directors, paid in cash.

• Compensation schedule:
  • 2023 schedule: $20,000 annual retainer + $1,100 per Board meeting; Lead Independent adds $2,951; Audit Chair adds $1,968 .
  • 2024 actual (per 2025 proxy) and 2025 schedule: $18,000 annual retainer + $1,000 per Board meeting; Lead Independent adds $2,656; Audit Chair adds $1,770 .

Shields’ cash compensation (Fund and Complex):

Notes:

• No additional remuneration beyond the standard arrangement was paid to directors for 2023–2024 .
• Shields did not receive Lead Independent or Audit Chair stipends (those were paid to Grisanti and Poston, respectively) .

Performance Compensation

No performance-linked or equity-based director compensation is disclosed (no RSUs/PSUs/options, bonuses, or performance metrics for directors). Director pay consists of cash retainers and meeting fees only; the proxy explicitly states no director received any remuneration beyond the standard arrangement in 2023–2024 .

Other Directorships & Interlocks

Expertise & Qualifications

• 30+ years of investment and business experience; former CEO at multiple asset managers; current CIO at a large philanthropic investment platform .
• Board-level fiduciary leadership as Chair of a university endowment investment board; governance experience across The Royce Funds complex .
• Independent director, Audit and Nominating committee member; the board’s designated Audit Committee Financial Experts are other directors (Chadwick and Poston) .

Equity Ownership

Additional ownership context:

• RVT shares outstanding: 115,346,161 (2024) and 119,627,857 (2025). Directors and officers as a group owned less than 1% as of each record date .
• No Independent Director or immediate family member directly or indirectly owned securities of Franklin Resources, Inc. (Royce’s indirect parent) or its affiliates (other than registered funds), supporting independence from the adviser complex .

Governance Assessment

Strengths

• Independent status; service on key oversight committees (Audit and Nominating), with the board majority independent and a designated Lead Independent Director providing counterweight to the interested President chairing meetings .
• Consistent engagement: each director met the 75%+ attendance threshold for 2024; Shields oversees 15 portfolios across The Royce Funds, indicating broad governance exposure .
• No related-party exposure disclosed for Independent Directors to Franklin Resources or affiliates; Section 16(a) ownership filings in compliance for officers, directors, and 10% holders in the most recent year reviewed .

Watch items

• Alignment via equity is modest: Shields reports 900 RVT shares and a $10,001–$50,000 dollar range in RVT; director pay is entirely cash (no equity-based awards, no performance conditions), which reduces direct pay-for-performance linkage typical in operating companies, though standard for closed-end funds .
• The board has no standing compensation committee; Independent Directors review their own compensation annually (common in the fund industry but reduces specialized compensation oversight optics) .

RED FLAGS

• None material disclosed related to related-party transactions, pledging/hedging, tax gross-ups, or option repricing. Independent Directors (including Shields) and immediate family members held no Franklin-affiliated securities, mitigating adviser-related conflicts .
• No Section 16(a) compliance gaps reported for the most recent period reviewed .

Notes on voting and tenure signals

• Shields is nominated to continue as a Class II Director with a term through the 2028 Annual Meeting, indicating board support and continuity. Independent Directors follow a retirement policy at age 79 (Shields is 67), suggesting long runway for continued service subject to annual re-assessments .