Peter M. Sherman
About Peter M. Sherman
Peter M. Sherman, 63, has served as an independent director of HG Holdings, Inc. (STLY) since December 2020. He is founder of Sherman Capital Management (since July 2016) with expertise in principal finance, debt capital markets, and special situations restructuring; he was Chief Risk Officer at Capitala Group from February 2018 to March 2024 and previously a partner at Brevet Capital Management from June 2014 to June 2016. His current board term expires at the 2027 annual meeting, and the board cites his risk, restructuring, and capital provision background as qualifications for service .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Capitala Group | Chief Risk Officer | Feb 2018 – Mar 2024 | Risk oversight in lower- to middle-market lending |
| Brevet Capital Management | Partner | Jun 2014 – Jun 2016 | Middle market direct lending experience |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Sherman Capital Management | Founder | Jul 2016 – Present | Special situation investing and restructuring consulting for institutional investors |
Board Governance
- Independence: The board determined Sherman is independent under NASDAQ rules; he serves on all three standing committees .
- Committees:
- Audit Committee: Member; the committee met four times in 2024; Gilliam is Chair; both audit members are independent .
- Compensation & Benefits Committee: Chair; met four times in 2024; all members independent; no delegation of authority .
- Corporate Governance & Nominating Committee: Chair; met four times in 2024; all members independent .
- Attendance and engagement: Board met four times in 2024; each incumbent director attended at least 75% of board and committee meetings, and all directors attended the 2024 annual meeting .
- Board leadership: CEO also serves as Chairman; no separate Lead Independent Director disclosed .
Fixed Compensation
| Metric | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|
| Fees Earned or Paid in Cash ($) | $35,000 | $35,000 | $35,000 | $35,000 |
| Stock Awards ($) | — | — | — | — |
| Total ($) | $35,000 | $35,000 | $35,000 | $35,000 |
- Policy: Non-employee directors receive $35,000 annual cash compensation; no disclosed meeting fees or chair premiums; Mr. Hale serves without director compensation under his election agreement .
Performance Compensation
| Element | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|
| RSUs/Restricted Stock Awards | None disclosed | None disclosed | None disclosed | None disclosed |
| Option Awards | None disclosed | None disclosed | None disclosed | None disclosed |
| Performance-linked metrics (TSR, EBITDA, ESG) | Not disclosed | Not disclosed | Not disclosed | Not disclosed |
- Outstanding awards: At year-end 2024, directors held no stock options or restricted shares; similar disclosure in prior years .
Other Directorships & Interlocks
- Current public company boards: None disclosed in proxy biography for Sherman .
- Interlocks/potential conflicts: No related-party transactions disclosed involving Sherman; board cites his independence .
Expertise & Qualifications
- Core credentials: Principal finance, debt capital markets, special situations restructuring, and chief risk officer experience in lower- to middle-market companies; cited by the board as qualifications for service .
- Audit committee financial expert: Not designated; Gilliam is the audit committee financial expert .
Equity Ownership
| Metric | As of Apr 27, 2022 | As of May 12, 2025 |
|---|---|---|
| Beneficial Ownership (shares) | 3,500 | 8,702 |
| Percent of Class | ≤1% | ≤1% |
| Options (exercisable/unexercisable) | None disclosed | None disclosed |
- Pledging/Hedging: The company has not adopted a hedging policy that restricts hedging by employees/directors; pledging practices are not disclosed .
Say-on-Pay & Shareholder Feedback
| Vote | 2023 Meeting (FY 2022 pay) | 2024 Meeting (FY 2023 pay) |
|---|---|---|
| Approval % | ~99.9% approval | ~99.5% approval |
| Detailed Results | — | For: 2,316,314; Against: 8,149; Abstain: 3,052; Broker Non-Votes: 0 |
- Frequency: Board policy is annual advisory votes; reaffirmed by shareholders previously .
Related Party Transactions (Context for Board Oversight)
- 2024 transactions with entities controlled by CEO Steven A. Hale: $500,000 investment in HP LPT; $250,000/month advisory services to HP Managing Agency for 12 months; $465,000 distributions from HP Holding Co .
- 2025 agreements: Contribution Agreement resulting in Hale-related Assignors increasing ownership to ~73.0%; Master Services Agreement with HP Risk Solutions for $6 million per year over three years .
- Audit committee responsibility: Reviews Item 404 related-person transactions per charter .
Compensation Committee Analysis
- Composition and independence: Sherman (Chair) and Gilliam; both independent; committee met four times in 2024; no delegation of authority .
- Consultant usage: No independent compensation consultant disclosed in proxy materials; committee administers compensation plans directly .
- Shareholder alignment signals: Strong say-on-pay approvals (>99%) in 2023–2024; director pay structure is flat cash retainer without equity, which reduces direct equity alignment .
Governance Assessment
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Strengths:
- Independent director with relevant risk and restructuring expertise; chairs Compensation and Corporate Governance committees; serves on Audit; consistent meeting participation; board deems him independent .
- Strong shareholder support for executive pay (say-on-pay approvals ~99–100%), indicating limited investor concern with compensation governance over the last two cycles .
-
Concerns/RED FLAGS:
- Ownership concentration: Hale and related parties hold ~73% post-2025 Contribution Agreement, effectively creating a controlling shareholder environment—elevating minority shareholder risk and demanding rigorous independent committee oversight .
- Extensive related-party transactions with entities controlled by the CEO (multi-year, multi-million-dollar agreements), requiring vigilant Audit Committee review to mitigate conflicts; Sherman’s committee roles place accountability on governance processes .
- No disclosed director equity grants or ownership guidelines; Sherman’s beneficial ownership is small (≤1%), limiting direct “skin-in-the-game” alignment for an independent director .
- Hedging policy: Company has not adopted restrictions on hedging by employees/directors; absence of anti-hedging policy is a shareholder-unfriendly practice and an alignment risk .
-
Implications for investors:
- Sherman’s leadership of key committees is a positive counterweight in a controlled company, but persistent related-party dealings and lack of equity alignment tools increase reliance on process rigor (charter compliance, disclosure, and recusals). Monitoring committee actions and any evolution in ownership/hedging policies is warranted .