Steven A. Hale II
About Steven A. Hale II
Steven A. Hale II (age 41) is Chairman and Chief Executive Officer of STLY; he has been a director since February 2017, Chairman since November 2017, and CEO since March 2018 . He founded Hale Partnership Capital Management, LLC (HPCM) in 2010; prior roles include Associate Director at Babson Capital (2007–2010) and Leveraged Finance Analyst at Banc of America Securities (2005–2007) . As of March 31, 2025, STLY owned ~28.0% of the voting interest of HC Government Realty Trust, Inc. (HC Realty), where Hale serves as Chairman & CEO (and President during specific periods), and HC Realty is a related party to STLY . Pay-versus-performance: PEO “compensation actually paid” (CAP) was $125,000 in 2024, 2023, and $30,003 in 2022; STLY’s TSR value (initial $100) fell to $40.43 in 2024 (from $53.11 in 2023), with 2024 net loss of $249,000 (vs. 2023 net loss of $953,000 and 2022 net income of $3,659,000) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Hale Partnership Capital Management, LLC (HPCM) | Founder and Sole Manager | 2010–present | Investment manager to privately held partnerships |
| Babson Capital Management, LLC | Associate Director | 2007–2010 | Coverage of distressed debt investments across industries |
| Banc of America Securities | Leveraged Finance Analyst | 2005–2007 | Leveraged finance coverage |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| HC Government Realty Trust, Inc. | Chairman & CEO; also President Aug 2020–Jan 2022 and beginning Aug 2024 | Chairman & CEO since Mar 2019 | STLY owned ~28.0% voting interest as of Mar 31, 2025; related party |
| Hale Partnership Capital Management, LLC (HPCM) | Founder and Sole Manager | 2010–present | Asset manager to private partnerships |
Fixed Compensation
| Year | Base salary ($) | Bonus ($) |
|---|---|---|
| 2021 | 125,000 | — |
| 2022 | 125,000 | — |
| 2023 | 125,000 | — |
| 2024 | 125,000 | — |
Notes:
- Program design emphasizes salary and cash bonus; Hale received salary, with no bonus reported for 2022–2024 .
Performance Compensation
| Instrument / Metric | Grant date | Amount/Target | Vesting/Outcome | Status at FYE | Notes |
|---|---|---|---|---|---|
| Restricted Stock (RSU) | Jun 28, 2019 | 27,777 shares | Vested Jun 28, 2022 | No outstanding awards as of Dec 31, 2023 and 2024 | Market value of unvested shares was $326,380 at 12/31/21 (27,777 × $11.75) |
| Equity awards (2023–2024) | — | — | — | None outstanding | No options outstanding |
- No performance-based equity metrics (TSR, EBITDA, revenue, etc.) are disclosed as compensation determinants for Hale in 2023–2024; the proxy highlights salary and cash bonus as the program’s components, with no LTIs granted .
Equity Ownership & Alignment
| Holder | Beneficial ownership (shares) | % of class | Footnotes / detail |
|---|---|---|---|
| Steven A. Hale II | 3,902,613 | 73.5% | Includes 3,874,836 shares over which Hale shares voting/dispositive power via HPCM; Hale has sole voting power over 27,777 shares |
| Shares outstanding (reference) | 5,310,768 | — | As of May 12, 2025 |
Alignment considerations:
- Hedging policy: Company has not adopted practices/policies regarding hedging by employees/directors, which is atypical and a potential misalignment risk .
- Pledging: No disclosure regarding pledging of Hale’s shares in the 2025 proxy .
- Ownership concentration: Hale personally and via affiliated funds controls ~73% of the common stock after the April 21, 2025 Contribution Agreement and share repurchase .
Employment Terms
| Term | Disclosure status | Notes |
|---|---|---|
| Employment agreement | Not disclosed | Proxies describe salary/bonus programs but do not include Hale-specific employment contract terms . |
| Severance / CIC multiples | Not disclosed | No severance or golden parachute economics disclosed for Hale in the proxies reviewed . |
| Clawback | Not disclosed | No clawback policy disclosure specific to exec compensation; code of ethics disclosed . |
| Non-compete / non-solicit | Not disclosed | No terms disclosed in proxies reviewed . |
| Section 16 compliance | Disclosed | Company reports compliance for FY2024; prior late filing (1 day) noted for a director in earlier proxy year (not Hale) . |
Board Governance
- Independence and structure: Board determined all directors except Hale (CEO) are independent; Hale serves as combined CEO and Chair, a governance concentration noted by the board as suitable for current strategy .
- Committees (2024): Audit (Gilliam, Chair; Sherman), Compensation & Benefits (Sherman, Chair; Gilliam), Corporate Governance & Nominating (Sherman, Chair; Gilliam) .
- Meetings: Board met 4 times in 2024; all incumbent directors attended ≥75% of board/committee meetings; similar attendance reported in prior years (2022, 2023) .
- Director pay: Non‑employee directors receive $35,000 cash annual retainer; Hale serves as director without compensation under his election agreement .
- Annual retainer detail (examples):
- 2024: Sherman $35,000; Gilliam $35,000; Hale $0 .
- 2023: Sherman $35,000; Gilliam $35,000; Hale $0 .
Pay Versus Performance (company disclosure)
| Year | PEO SCT total ($) | PEO CAP ($) | Avg SCT total Non‑PEO ($) | Avg CAP Non‑PEO ($) | TSR value ($100 base) | Net income (loss) ($) |
|---|---|---|---|---|---|---|
| 2021 | 125,000 | 273,714 | 125,000 | 162,176 | 184.75 | 2,760,000 |
| 2022 | 125,000 | 30,003 | 98,317 | 86,443 | 59.57 | 3,659,000 |
| 2023 | 125,000 | 125,000 | 550,000 | 550,000 | 53.11 | (953,000) |
| 2024 | 125,000 | 125,000 | 230,500 | 230,500 | 40.43 | (249,000) |
Notes:
- CAP reconciliation shows no equity-driven adjustments for Hale in 2023–2024; 2021 CAP includes valuation impacts from prior awards .
Performance Compensation Details
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Cash bonus (Hale) | Not disclosed | Not disclosed | 0 for 2023–2024 | $0 | N/A |
| Equity (RSU) | N/A | 27,777 shares (2019 grant) | Vested 6/28/2022 | N/A | Fully vested; none outstanding thereafter |
Related Party Transactions (2024–2025)
- Master Services Agreement: Effective June 1, 2025, STLY to provide services to HP Risk Solutions, LLC (entity wholly-owned by affiliates of Hale) for $6 million per year over three years; enumerated services include reinsurance brokerage, compliance, capital modeling, M&A evaluations, legal, and internal control services .
- 2024 Management Advisory Services: STLY’s subsidiary HG Managing Agency, LLC provided services to HP Managing Agency, LLC (controlled by Hale) at $250,000 per month for 12 months in 2024 .
- 2024 Investment: STLY invested $500,000 into HP LPT Holding Company LLC (controlled by Hale) .
- 2024 Distributions: STLY received $465,000 from its equity investment in HP Holding Company, LLC (controlled by Hale) .
- Change of Control Transaction: On April 21, 2025, HPCM-managed Assignors contributed ACMAT securities to STLY in exchange for 2,899,876 STLY shares; Assignors’ ownership increased from ~34.7% to ~73.0% post-contribution and repurchase; Hale individually owned ~0.52% post-transaction .
Equity Ownership Concentration and Control
- Beneficial owners >5%: Hale Partnership Fund, L.P. & related parties 3,874,836 shares (73.0%); Solas Capital 762,727 shares (14.4%) .
- Hale’s beneficial ownership totals 3,902,613 shares (73.5%), including sole voting power on 27,777 shares and shared power via HPCM on 3,874,836 shares .
Board Service History and Dual-Role Implications
- Service timeline: Director since Feb 2017; Chairman since Nov 2017; CEO since Mar 2018 .
- Committees: Independent directors Sherman and Gilliam constitute Audit (Gilliam chair), Compensation (Sherman chair), and Corporate Governance & Nominating (Sherman chair) committees; Hale is not on these committees .
- Independence: Board deems all directors other than Hale independent; combined CEO/Chair role retained by board policy to fit strategy .
- Attendance: ≥75% attendance and board met 4 times in 2024; committees met (e.g., Audit 4x; Compensation 4x; CGN 4x) .
- Director pay: Non-employee director retainer $35,000; Hale serves without director compensation .
Investment Signals: Compensation & Incentives
- Cash-heavy, low variable pay: Hale’s reported total pay is a flat $125,000 with no bonuses or LTIs in 2022–2024, indicating minimal pay-for-performance linkage through compensation vehicles .
- Ownership-driven alignment: Alignment primarily via substantial beneficial ownership (~73.5%), creating powerful economic incentives independent of pay program design .
- Limited vesting overhang: Only notable vesting event was 27,777 RSUs vested in 2022; no outstanding awards thereafter, reducing near-term selling pressure from vesting .
- Hedging oversight gap: Company has not adopted a hedging policy, a governance gap given concentrated insider ownership .
Risk Indicators & Red Flags
- Related party transactions: Significant recurring RPTs (advisory fees, services, investments) with Hale-controlled entities; a $6 million/year services agreement effective 2025 increases RPT exposure and oversight demands .
- Control concentration: Post-transaction control by Hale/HPCM (~73%) raises minority shareholder protection considerations and potential entrenchment risk .
- Combined CEO/Chair: Concentrates authority; mitigated in part by fully independent committees but still a governance focus area .
- No hedging policy: Absence of anti-hedging policy is shareholder‑unfriendly relative to common practice .
Employment Terms (Severance/CIC)
- No severance, CIC, non‑compete, or clawback terms are disclosed for Hale in the reviewed proxies (2022–2025); analysis of retention and change‑of‑control economics is therefore constrained .
Director Compensation (for completeness)
| Year | Hale (cash, stock) | Sherman (cash) | Gilliam (cash) |
|---|---|---|---|
| 2024 | $0 / $0 | $35,000 | $35,000 |
| 2023 | $0 / $0 | $35,000 | $35,000 |
| 2022 | $0 / $0 | $35,000 | $35,000 |
Compensation Structure Analysis
- Shift in mix: No shift—Hale’s comp remains 100% fixed cash, with no new equity awards versus prior years; LTIs appear discontinued after the 2019 grant vested in 2022 .
- Target metrics: No disclosure of performance metric weightings/targets (e.g., EBITDA, TSR) for Hale’s incentives; bonus outcomes were $0 in 2023–2024 .
- Equity plan activity: No option grants, repricings, or RSU awards in 2023–2024; no outstanding awards at FY-end 2024 .
Say‑on‑Pay & Shareholder Feedback
- 2025 agenda: The Board recommended “FOR” advisory approval of NEO compensation for FY2024; prior vote outcomes not disclosed in the proxy excerpt reviewed .
Performance & Track Record
- TSR trend: $100 initial investment declined to $40.43 by 2024, down from $53.11 (2023) and $59.57 (2022) .
- Profitability trend: Net income of $3.659M (2022) followed by losses: $(953)k (2023) and $(249)k (2024) .
- CAP vs. performance: Hale’s CAP stable at $125k in 2023–2024; variability in 2021–2022 reflects equity valuation adjustments tied to legacy awards .
Compensation Committee Analysis
- Composition: Sherman (Chair), Gilliam—both independent under NASDAQ rules; committee met four times in 2024 .
- Consultant usage: Not disclosed in the proxies reviewed .
Investment Implications
- Alignment via ownership, not pay: Hale’s economic incentives are driven by substantial control (~73.5%) rather than variable pay, which may align his horizon with equity value creation but also heightens entrenchment risks for minorities .
- Governance and RPT oversight are central: The 2025 services agreement ($6M/year), 2024 advisory fees, investments, and distributions with Hale‑controlled entities require robust independent oversight; Audit/CGN/Comp committees are independent but small (two members), making process rigor critical .
- Limited selling pressure from vesting: No outstanding equity awards reduce near‑term insider selling from vest schedules; Form 16 compliance reported for 2024 .
- Hedging policy gap: Absence of a hedging policy is a governance negative; investors may press for formal prohibitions to protect alignment .
- CEO/Chair concentration: Combined role persists; while committees are independent, minority investors may advocate for a Lead Independent Director or eventual separation to strengthen counterbalances .