Robert T. Ladd
About Robert T. Ladd
Robert T. Ladd (age 68) is Chairman of the Board, President, and Chief Executive Officer of Stellus Capital Investment Corporation (SCM) and has served in these roles since 2012, making his tenure ~13 years as of 2025 . He is Managing Partner and Chief Investment Officer of Stellus Capital Management (the external adviser), and also serves as Chairman, CEO, and President of Stellus Private Credit BDC; he holds a B.A. in managerial studies and economics from Rice University and an MBA from The University of Texas at Austin . SCM’s shares have historically traded around NAV; for context, the last reported price on April 17, 2025 was $12.75 (about a 5.27% discount to 12/31/2024 NAV), while on April 22, 2024 it was $13.98 (about a 5.50% premium to 12/31/2023 NAV) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| D. E. Shaw group (Direct Capital Group) | Led Direct Capital Group | Feb 2004 – Jan 2012 | Led a principal investing platform within a global investment/technology firm . |
| Duke Energy North America, LLC | President | Sep 2000 – Feb 2004 | Led merchant energy subsidiary operations . |
| Duke Capital Partners, LLC | President & CEO | Sep 2000 – Feb 2004 | Ran merchant banking subsidiary focused on financing and investments . |
| Arthur Andersen LLP | Partner; Worldwide Managing Partner (Corporate Restructuring), U.S. Managing Partner (Corporate Finance) | Feb 1993 – Sep 2000 | Led global restructuring practice and U.S. corporate finance, deepening restructuring and finance expertise . |
| First City Bancorporation of Texas, Inc. (and subs.) | Various roles incl. President, First City Asset Servicing Company; EVP, Texas Banking Division | Jun 1980 – Feb 1993 | Senior leadership in asset management and banking operations . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Stellus Private Credit BDC | Chairman, CEO, President | Since 2021 | Oversees externally managed BDC affiliated with SCM adviser . |
| Rice University | Chairman of the Board of Trustees | Not disclosed | Also serves on Rice University’s Jesse H. Jones Graduate School Council of Overseers . |
| Rice Management Company | Board Member | Not disclosed | Oversees Rice University’s endowment as a board member . |
Fixed Compensation
- SCM is externally managed and “none of our executive officers is compensated by us”; executives (including Mr. Ladd) are employees of Stellus Capital Management under advisory/administration agreements .
- As an “interested” director, Mr. Ladd received $0 in director compensation from SCM; only independent directors receive director fees .
| Component | 2024 Amount | Notes |
|---|---|---|
| Director fees to Mr. Ladd (interested director) | $0 | Interested directors (Ladd, D’Angelo) receive no director compensation from SCM . |
| Independent director annual retainer | $100,000 | Plus $2,500 per board meeting; $1,000 per committee meeting . |
| Committee chair fees | Audit $15,000; Comp $5,000; Nominating $5,000 | Paid to independent directors serving as chairs . |
Performance Compensation
- Executives receive no company-paid cash bonuses or equity awards (RSUs/PSUs/options) from SCM; compensation is set and paid by Stellus Capital Management (not disclosed in SCM proxy) .
- SCM has a Compensation Recoupment (clawback) Policy applicable if incentive compensation were erroneously awarded and a restatement is required .
Equity Ownership & Alignment
Mr. Ladd is a significant shareholder, aligning economics with investors. Directors/insiders are subject to SCM’s Insider Trading Policy; the proxy does not disclose pledging/hedging specifics beyond the existence of the policy.
| Metric | Apr 22, 2024 | Apr 17, 2025 |
|---|---|---|
| Robert T. Ladd beneficial ownership (shares) | 632,729 | 632,823 |
| Robert T. Ladd % of shares outstanding | 2.62% (24,125,642 shares o/s) | 2.23% (28,416,148 shares o/s) |
| Execs and directors, group % of o/s | 4.67% | 3.99% |
Additional alignment and controls:
- Insider Trading Policy in place; directors/officers must comply and disclose conflicts; independent directors meet in executive session .
- Related-party oversight: as an “interested person,” Mr. Ladd has a pecuniary interest in the adviser; the Board/independent directors and 1940 Act structures govern conflicts and co-investment via exemptive order and required-majority approvals .
Employment Terms
- Employment agreements, severance, change-in-control terms for Mr. Ladd are not disclosed at SCM because executives are employed by the external adviser, Stellus Capital Management .
- SCM adopted a Compensation Recoupment Policy (clawback) for erroneously awarded incentive-based compensation tied to restated results .
- Insider Trading Policy and Codes of Ethics/Conduct are maintained and overseen by the board and CCO .
Board Governance
- Dual role: Mr. Ladd is Chairman and CEO/President; the Board has no Lead Independent Director, with mitigations including independent committee structures and executive sessions of independent directors .
- Independence: Mr. Ladd is an “interested person” under the 1940 Act due to affiliation with SCM’s adviser; independent directors (Arnoult, Bilger, Repko) chair committees .
- Committees/chairs: Audit (Arnoult, chair; also audit committee financial expert), Compensation (Repko, chair), Nominating/Governance (Bilger, chair); committees comprised solely of independent directors .
- Board structure/activity: Classified board; five directors; six board meetings in 2024; each director attended at least 75% of meetings .
- Director compensation: Independent directors receive cash retainers/meeting fees; interested directors (including Mr. Ladd) receive no fees .
Director Compensation (context)
| Director | SCM cash comp (2024) | Fund Complex total (2024) |
|---|---|---|
| Robert T. Ladd (interested) | $0 | $0 |
| Dean D’Angelo (interested) | $0 | $0 |
| J. Tim Arnoult (independent) | $127,844 | $187,844 |
| Bruce R. Bilger (independent) | $144,156 | $194,156 |
| William C. Repko (independent) | $134,000 | $184,000 |
Related Party Transactions (conflict controls)
- SCM pays a management and incentive fee to Stellus Capital Management; Mr. Ladd has a direct/indirect pecuniary interest in the adviser; transactions with affiliates are restricted under the 1940 Act and monitored via policies .
- SEC exemptive order allows co-investments with affiliated funds subject to required-majority independent director findings (fairness, alignment, non-overreach) and allocation policies .
Performance & Track Record
- Background: >40 years investing, finance, and restructuring experience; career includes leadership at D. E. Shaw’s Direct Capital Group, Duke Energy’s merchant platforms, Arthur Andersen restructuring/corporate finance, and First City Bancorporation .
- Trading/NAV context: SCM’s stock has traded at both premium and discount to NAV; e.g., 5.50% premium as of 4/22/2024 and 5.27% discount as of 4/17/2025 (based on prior quarter-end NAV) .
- Section 16 compliance: Company reports all Section 16(a) filing requirements were timely satisfied for 2024 .
Board Service History, Committees, and Dual-Role Implications
- Board service: Director since 2012; current term expires in 2027 (Class III director) .
- Committees: Mr. Ladd is not listed as a member of Audit, Compensation, or Nominating/Governance Committees (independent-only membership) .
- Independence/dual-role: Mr. Ladd is “interested” and also serves as Chairman and CEO; the Board has no Lead Independent Director but uses independent-only committees and executive sessions to mitigate conflicts .
Investment Implications
- Alignment: Mr. Ladd’s ~2.23% ownership (632,823 shares) is meaningful for a BDC CEO and aligns his incentives with long-term NAV and dividend outcomes .
- External management conflicts: As an “interested” executive with a pecuniary interest in the adviser receiving management and incentive fees, governance relies on independent committees, codes/policies, and SEC exemptive orders to manage conflicts—key areas for investor scrutiny .
- Dilution/issuance risk: The Board regularly seeks authorization to issue up to 25% of shares below NAV; while potentially beneficial for growth and asset coverage, this is explicitly dilutive and can pressure market price—monitor approvals and usage cadence for trading signals .
- Governance structure: Combined CEO/Chair and no Lead Independent Director heighten the importance of independent committee oversight, executive sessions, and the CCO role in maintaining investor protections within the 1940 Act framework .
- Disclosure limits on pay-for-performance: SCM pays no executive compensation directly and provides no executive equity awards, limiting transparency into Mr. Ladd’s adviser-level pay metrics; equity ownership and governance process thus become primary indicators of alignment .