Michael McCabe
About Michael McCabe
Michael I. McCabe, age 56, is StepStone’s Head of Strategy (since November 2019), a Partner (since October 2010), and a director (since September 2020). He previously served as Head of Strategy of StepStone Group LP starting May 2017 and was Vice President at Hamilton Lane Advisors L.L.C., co-head of secondary and co-investment funds (2005–2008). Education: BA from Drexel University; MBA from Columbia University . Company performance metrics that inform pay-for-performance include Total Shareholder Return (TSR), Net Income and Fee-Related Earnings (FRE); recent three-year figures are summarized below .
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Company TSR ($100 initial investment) | $101.29 | $155.14 | $231.39 |
| Peer Group TSR (Dow Jones US Asset Managers Index) | $138.32 | $182.85 | $206.80 |
| Net Income ($000s) | $(45,275) | $167,820 | $(172,827) |
| Fee-Related Earnings (FRE, $000s) | $156,158 | $189,793 | $312,204 |
Notable initiative: McCabe highlighted StepStone’s expansion into Riyadh (first Middle East office) to deepen client relationships and regional opportunities, consistent with Vision 2030 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| StepStone Group LP | Head of Strategy | 2017–present | Involved with private equity investment and risk management activities; leads strategic initiatives |
| StepStone Group Inc. | Head of Strategy | Nov 2019–present | Senior strategy leadership across the Company; board-level oversight as director |
| StepStone Group LP | Partner | Oct 2010–present | Partner-level alignment with carried interest and equity participation |
| Hamilton Lane Advisors L.L.C. | Vice President; co-head of secondary and co-investment funds | 2005–2008 | Led secondary/co-investment fund activities |
External Roles
No public company directorships or external board roles disclosed for McCabe beyond StepStone .
Fixed Compensation
| Year | Salary ($) | Notes |
|---|---|---|
| FY 2023 | $294,231 | 2023 salary as reported |
| FY 2024 | $450,000 | 2024 salary as reported |
| FY 2025 | $500,000 | Base salary for all NEOs maintained at $500,000 for FY 2025 |
Target bonus percentage not disclosed for McCabe; annual incentives determined by Compensation Committee based on performance considerations .
Performance Compensation
| Component (FY 2025) | Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|---|
| Annual Incentive – Cash | Committee assessment of individual/company performance (specific weightings not disclosed) | Not disclosed | Not disclosed | Not disclosed | $377,500 | N/A |
| Annual Incentive – RSUs | Same basis as above; RSUs = 80% of equity incentive | Not disclosed | Not disclosed | Not disclosed | $258,000 | Grant 3/14/2025; vests 25% on 2/14 of 2026–2029 |
| Annual Incentive – Evergreen Fund Units (SPRIM) | Same basis; Evergreen = 20% of equity incentive | Not disclosed | Not disclosed | Not disclosed | $64,500 | Grant 3/14/2025; vests 25% on 2/14 of 2026–2029 |
| Carried Interest & Incentive Fee Distributions | Long-term performance-based allocations to align with clients | N/A | N/A | N/A | $4,228,450 cash paid in FY 2025 | Vesting 5–8 years; accelerated vest on death/disability; continues vesting upon Retirement (age ≥50; 15 yrs) subject to non-compete/non-solicit |
Multi-Year Total Compensation
| Year | Salary ($) | Bonus ($) | Stock Awards ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|---|---|
| FY 2023 | $294,231 | $900,000 | $100,004 | $3,049,343 | $4,343,578 |
| FY 2024 | $450,000 | $677,500 | $322,488 | $911,998 | $2,361,986 |
| FY 2025 | $500,000 | $377,500 | $257,992 | $4,244,909 | $5,380,401 |
Breakdown of FY 2025 “All Other Compensation”: Carried interest & incentive fee cash payments $4,228,450; insurance premiums $7,761; 401(k) contribution $8,698 .
Equity Ownership & Alignment
- Beneficial Ownership (as of June 30, 2025):
- Class A: 606,159 shares (409,736 directly; 196,423 via Benzy LLC)
- Class B: 2,843,558 units (1,906,142 directly; 937,416 via Benzy LLC)
- Total voting power: 5.4%
- Note: Family trusts controlled by spouse have sole voting power for Benzy LLC holdings
- Outstanding Unvested RSUs (as of March 31, 2025):
- 3/14/2025 grant: 4,807 units; market value $251,070
- 2/14/2024 grant: 6,869 units; market value $358,768
- 2/14/2023 grant: 1,726 units; market value $90,149
- 2/14/2022 grant: 726 units; market value $37,919
- 2025 Grants and Vesting:
- RSUs granted: 4,807 units; vest 25% annually on 2/14/2026–2029
- Evergreen Fund Units (SPRIM): 1,162 units; vest 25% annually on 2/14/2026–2029
- Vested in FY 2025:
- RSUs vested: 3,879 units; value realized $202,600
- Hedging/Pledging: Directors/officers prohibited from hedging and pledging StepStone securities; exemptions limited and subject to approval .
- Stock ownership guidelines for executives not disclosed .
Employment Terms
| Term | Provision |
|---|---|
| Employment Agreement / Severance | No employment, severance, or change-in-control agreement for McCabe; only CFO has CIC agreement . |
| RSU/ Evergreen CIC Treatment | Double-trigger: full vesting upon termination without Cause or resignation for Good Reason within 13 months post-Change in Control; full vest on death/disability; Retirement (≥50 years; 15 years service) continues vesting . |
| Carried Interest Vesting | Full vest on death/disability; continues vesting on Retirement subject to non-compete and non-solicit; partial forfeiture on termination for Cause . |
| Clawback | Company will recover excess incentive-based compensation for three prior fiscal years in event of accounting restatement under Nasdaq Rule 5608/SEC Rule 10D-1 . |
| Non-Compete/Non-Solicit | Applies to continued vesting of carried interest upon Retirement . |
| Deferred Compensation | Evergreen Fund Units paid upon vesting in value of SPRIM; RSU deferral elections available starting calendar 2025; McCabe deferral status not disclosed . |
Board Governance
- Role: Director since 2020; not classified as independent (executive officer) .
- Committee Memberships: McCabe not listed as a member of Audit, Compensation, or Nominating & Corporate Governance Committees; current/transition committees composed of Brem/Hart (Compensation & NCGC) and Brown/Hoffmeister/Raymond (Audit) .
- Controlled Company Transition: STEP was a controlled company through September 18, 2025; loss of controlled status triggers phase-in to majority independent board by September 18, 2026; Compensation/NCGC committees to become majority independent from Sept 18, 2025 and fully independent by Sept 18, 2026 .
- Board Meeting Attendance: All incumbent directors attended at least 75% of board/committee meetings in FY 2025; board met 7 times; Audit 4; Compensation 4; NCGC 3 .
- Independent Director Executive Sessions: At least quarterly .
- Director Compensation: Executives (including McCabe) receive no separate director compensation .
Director & Related Party Economics
- Director fees: Not applicable (executives not paid director fees) .
- Tax Receivable Agreements (TRA): McCabe received $456,630 in FY 2025; $477,877 to date in FY 2026; TRA obligations may be substantial (company-wide expected future payments ~$313.7M as of March 31, 2025) .
Say-on-Pay & Compensation Committee
- 2024 Say-on-Pay: ~99% approval of executive compensation .
- Compensation Committee: Brem (Chair) and Hart; as a controlled company, committee not fully independent; Company engaged Johnson Associates for market data/analysis; committee did not retain a compensation consultant in FY 2025 .
Compensation Structure Analysis
- Mix shift: FY 2025 shows higher “All Other Compensation” for McCabe driven by carried interest/incentive fee cash payments ($4.23M), while cash bonus declined vs FY 2024, indicating strong alignment to fund performance economics vs salary/RSUs .
- Equity awards: RSUs and Evergreen Fund Units granted on 3/14/2025, vesting over four years, reinforcing retention; no stock options granted to NEOs in FY 2025 and none outstanding .
- Performance metrics: Company uses FEAUM, management & advisory fees, FRE, FRE margin, and adjusted net income per share for CEO; other NEO payouts approved based on performance assessments without disclosed weightings/targets .
- Clawback and hedging/pledging prohibitions suggest governance focus on alignment and risk control .
Equity Ownership & Alignment Table (Beneficial Ownership as of 6/30/2025)
| Holder | Class A Owned | Class B Owned | Total Voting Power |
|---|---|---|---|
| Michael I. McCabe | 606,159 shares (196,423 via Benzy LLC) | 2,843,558 units (937,416 via Benzy LLC) | 5.4% |
Policy prohibits hedging and pledging of StepStone securities by directors/officers .
Outstanding Equity Awards (as of 3/31/2025)
| Grant Date | Unvested RSUs (#) | Market Value ($) |
|---|---|---|
| 3/14/2025 | 4,807 | $251,070 |
| 2/14/2024 | 6,869 | $358,768 |
| 2/14/2023 | 1,726 | $90,149 |
| 2/14/2022 | 726 | $37,919 |
Vesting Schedules (FY 2025 Grants)
| Award Type | Grant Date | Units | Vesting Dates |
|---|---|---|---|
| RSUs | 3/14/2025 | 4,807 | 25% on 2/14/2026, 2/14/2027, 2/14/2028, 2/14/2029 |
| Evergreen Fund Units (SPRIM) | 3/14/2025 | 1,162 | 25% on 2/14/2026, 2/14/2027, 2/14/2028, 2/14/2029 |
Performance & Track Record
- Strategic initiatives: Expansion to Riyadh office, reinforcing Middle East presence and client relationships; public remarks by McCabe emphasize regional engagement and client service .
- Company performance context: FY 2025 TSR outperformed peer index; FRE increased to $312.2M; Net Income negative due to broader firm factors; executive pay program ties equity and carried interest to long-term value creation .
Board Governance Considerations (Dual-role implications)
- McCabe’s dual role (executive officer + director) occurs amidst controlled company status ending on 9/18/2025; committees were not fully independent under controlled company exemptions, transitioning to majority/all independent over phase-in, which may mitigate independence concerns over time .
- He is not on the Compensation or NCGC committees; independent directors lead Audit and executive sessions are held quarterly .
Risk Indicators & Red Flags
- Controlled company exemptions (pre-9/18/2025) for Compensation and NCGC committees; executive participation (Brem/Hart) on comp/nomination .
- Related party economics via TRA payments to McCabe; aggregate TRA obligations may impact liquidity and strategic flexibility .
- No hedging/pledging allowed (mitigates misalignment risk) .
- No severance/CIC agreement for McCabe; retention relies on multi-year vesting and carried interest .
Investment Implications
- Alignment: Significant ownership (5.4% voting power), large carried interest/incentive fee participation and multi-year vesting of RSUs/Evergreen units indicate strong alignment with long-term performance and client outcomes .
- Retention risk: Four-year vest schedules into 2029 and carried interest vesting (5–8 years) with Retirement non-compete/non-solicit reduce near-term departure risk; monitor vest dates around mid-February for potential Form 4 activity and liquidity events .
- Governance: Dual-role concerns tempered by lack of committee memberships and planned transition to majority/all independent committees post-September 2025; continued monitoring of board independence and committee composition is warranted .
- Cash flows: TRA payments to McCabe and others represent meaningful personal cash flows and firm obligations; assess implications for insider liquidity and corporate capital allocation under varying tax scenarios .
- Performance linkage: Executive incentive design emphasizes FRE, FEAUM, margins and adjusted EPS; although specific weightings for McCabe aren’t disclosed, equity-heavy structure and carried interest suggest sensitivity to sustained AUM growth and fee profitability .