Joshua Easterly

About Joshua Easterly

Joshua Easterly is Chairman, Chief Executive Officer, and an “Interested” director of Sixth Street Specialty Lending, Inc. (TSLX). He has served as a director since 2011 and CEO since 2018; he also chairs TSLX’s Risk Management Committee and is Co‑Founder, Partner, Co‑President, and Co‑Chief Investment Officer of Sixth Street . Prior roles include Managing Director in Goldman Sachs’ Americas Special Situations Group (2008–2010) and Co‑Head of its Specialty Lending Group (2006–2008); earlier he was Senior Vice President at Wells Fargo Capital Finance; he holds a B.S. in Business Administration from California State University, Fresno (magna cum laude) . As context for shareholder value, TSLX declared $2.08/share in dividends from 2024 earnings and traded at a ~30.4% premium to year‑end NAV as of March 31, 2025 (close $22.38 vs. 12/31/24 NAV $17.16) .

Past Roles

External Roles

Fixed Compensation

Performance Compensation

Easterly’s economic incentives are primarily linked to the external manager’s fee structure; this is critical for alignment analysis.

• Adviser fee structure (paid by TSLX to the Adviser)
  • Base management fee: 1.5% annually on average gross assets (quarterly in arrears); waiver down to 1.0% on assets financed above 1.0x debt/equity (“Leverage Waiver”) .
  • Income incentive fee: 17.5% over a 1.5% quarterly hurdle, with a 100% catch‑up to 1.82% quarterly (7.28% annualized) and 17.5% thereafter .
  • Capital gains incentive fee: 17.5% of cumulative realized gains net of losses, calculated since inception and paid annually in arrears .

Key implications:

• Fee design can lead to incentive fees being paid even in quarters with capital losses (if NII exceeds the hurdle); decreases in NAV can make the hurdle easier to reach—potential misalignment risk in down markets .
• Easterly, as Co‑CIO/Partner of the Adviser and on the Investment Review Committee, is economically linked to fee outcomes and asset growth, not to TSLX-specific salary/bonus—important for pay-for-performance assessment .

Equity Ownership & Alignment

Additional alignment and policy considerations:

• Dollar range of Easterly’s beneficial holdings: over $100,000 (as of 3/31/2025) .
• Insider trading policy prohibits short sales and options and discourages hedging; pledging/margin generally prohibited but exceptions may be granted—relevant given Easterly’s pledged shares .

Vesting/insider selling pressure:

• TSLX has no equity compensation plans and does not grant options; there are no RSU/PSU vesting overhangs for executives at TSLX level (reduces mechanical selling pressure) .

Employment Terms

Although Easterly is the CEO, TSLX’s operating model is externally managed; retention/economics are primarily governed by advisory contracts rather than executive employment agreements.

Non‑compete, severance, change‑of‑control:

• Not disclosed for Easterly at TSLX level (executives are employees of the Adviser) .

Board Governance and Director Service

• Roles and independence: Easterly is Chairman of the Board and CEO; he is an “Interested Director” (employed by the Adviser). The Board has no designated Lead Independent Director; potential dual‑role conflicts are mitigated via executive sessions and fully independent Audit, Compensation, and Nominating & Corporate Governance committees .
• Committees: Easterly chairs the Risk Management Committee (voting members include two independent directors; non‑voting members include CFO and CRO) .
• Meetings/attendance: The Board met 4 times in 2024; Audit Committee met 8 times; Compensation 3; Nominating & Corporate Governance 1; Risk Management 4 (jointly with full board). No incumbent director attended fewer than 75% of meetings .
• Dollar range of equity owned by directors: Easterly and several directors report “over $100,000” ranges; one nominee had no reportable range as of the record date .

Dual‑role implications:

• Concentration of chair/CEO roles can raise independence concerns; the Board highlights offsets including regular independent executive sessions, independent committee composition, and a majority‑independent board .

Performance & Track Record (context)

Snapshot as of 3/31/2025:

• Stock price $22.38; premium to 12/31/2024 NAV ($17.16) ≈ 30.4% .

These indicators suggest sustained income generation and strong market valuation relative to NAV during Easterly’s tenure, though TSR figures are not explicitly disclosed in the proxy .

Related‑Party Transactions and Conflicts

• Adviser relationship and fees: Base management fee ($51.8M gross in 2024; $1.5M waived under leverage waiver) and incentive fees ($40.2M in 2024; $45.5M realized and payable per disclosure) create potential incentives for asset growth and income generation; Board renews agreements annually and monitors alignment .
• Co‑investment exemptive order (amended Aug 3, 2022): Allows TSLX to co‑invest with Sixth Street affiliates within Board‑established criteria, subject to “required majority” independent director approvals to ensure fairness and no overreaching .
• Allocation of opportunities: Adviser allocates fairly among Sixth Street vehicles per stated principles; conflicts may arise due to overlapping mandates; Adviser holds ~2.9% of TSLX shares .

Say‑on‑Pay and Shareholder Feedback

• No executive say‑on‑pay applicable because TSLX has no employees and does not directly compensate executives; independent director compensation is disclosed and paid in cash retainers/meeting fees .

Investment Implications

• Alignment: Easterly’s direct ownership is modest (0.07%) with ~18.8K shares pledged (~30% of his holdings), introducing potential selling pressure in adverse scenarios; however, the Adviser itself holds a 2.9% stake, partially aligning the platform with shareholders .
• Incentives: As a senior leader of the Adviser, Easterly’s compensation is tied to advisory fee outcomes rather than TSLX‑specific salary/bonus—structures that reward gross asset growth and NII can incentivize capital raising and leverage, particularly when the premium to NAV is high; the Board’s oversight and fee waivers (leverage waiver) partially mitigate this .
• Governance risk: Combined Chair/CEO role without a Lead Independent Director raises governance optics; balanced by fully independent key committees and regular executive sessions .
• Trading signals: No equity award vesting calendar at TSLX reduces forced selling risk; pledged shares are a red flag to monitor; strong premium to NAV and consistent dividends suggest positive market perception under current strategy, but fee structures can lead to incentive fees in periods of capital losses—investors should track NII vs. hurdle and NAV trends each quarter .

Block quotes denote key disclosures:

“None of our executive officers receives direct compensation from us.”
“18,792 shares of common stock beneficially owned by Mr. Easterly have been pledged as security…”
“Income incentive fee… 17.5% over a 1.5% quarterly ‘hurdle rate’… catch‑up to 1.82% quarterly.”
“Board does not currently have a designated lead Independent Director… Independent Directors meet in executive session.”