G. Stacy Smith
About G. Stacy Smith
Independent director of WhiteHorse Finance, Inc. since 2015; age 57; Chairman of the Nominating and Corporate Governance Committee. Smith is a long-time investment professional: partner at Trinity Investment Group since 2013, former partner at SCW Capital (2013–2022), and co-founder/portfolio manager at Walker Smith Capital (1997–2012). He holds a B.B.A. in Finance and Accounting from the University of Texas at Austin (1990) .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Trinity Investment Group | Partner | 2013–present | Private/public investing; board and governance experience applied to WHF |
| SCW Capital, LP | Partner | 2013–2022 | Hedge fund investing; portfolio oversight |
| Walker Smith Capital | Co-founder; Partner; Portfolio Manager | 1997–2012 | Small/mid-cap equity hedge fund; portfolio management |
External Roles
| Organization | Role | Tenure | Committees/Notes |
|---|---|---|---|
| SouthState Bank | Director | Elected Jan 2025 | Committee roles not disclosed in WHF proxy |
| Independent Bank Group (NASDAQ: IBTX) | Director | Feb 2013–Dec 2024 | Board service concluded with sale to SouthState Bank |
| USD Partners LP (NYSE: USDP) | Director | Oct 2015–Dec 2024 | Energy logistics board experience |
Board Governance
- Independence: The Board determined Smith is independent under Nasdaq and the 1940 Act; four of seven directors are independent; Audit and Nominating committees limited to independent directors .
- Committees: Audit Committee member; Nominating & Corporate Governance Committee Chair; Compensation Committee member .
- Attendance and engagement: In FY2024, Board held 4 meetings; Audit Committee held 4; the Compensation and Nominating & Corporate Governance Committees held four joint meetings; all directors attended at least 75% of aggregate meetings; three of seven directors attended the 2024 annual meeting .
- Leadership structure: No Lead Independent Director; Audit Chair Rick D. Puckett acts as liaison between independent directors and management between meetings .
Fixed Compensation
| Component | Amount | Effective Date/Period | Notes |
|---|---|---|---|
| Annual retainer (Independent Directors) | $107,500 | Effective Oct 30, 2024 | Increased from $102,000 pre-10/30/2024 |
| Committee chair fee – Nominating & Corporate Governance | $10,000 | Ongoing | Smith is chair and eligible for this fee |
| Committee chair fee – Audit | $15,000 | Ongoing | For Audit Chair (Smith is a member, not chair) |
| Total cash compensation (FY2024) – Smith | $112,500 | FY2024 | Directors are paid cash; no pension/retirement benefits |
No equity compensation, options, RSUs, PSUs, or meeting fees are disclosed for directors; compensation is reported as cash-only .
Performance Compensation
- No performance-based incentives or equity awards are disclosed for directors (no EPS/EBITDA/TSR metrics or vesting schedules for directors). Proxy reports cash director fees only for FY2024 .
Other Directorships & Interlocks
| Company | Sector | Role | Potential Interlock/Conflict |
|---|---|---|---|
| SouthState Bank | Banking | Director | Bank board service; WHF is a BDC lender. No related-party transactions with SouthState disclosed in WHF proxy . |
| Independent Bank Group | Banking | Director (former) | Prior bank board role; no WHF-related transactions disclosed |
| USD Partners LP | Energy logistics | Director (former) | No WHF-related transactions disclosed |
Expertise & Qualifications
- Investment leadership across hedge funds and private/public investments; governance and nominating experience as committee chair .
- Education: B.B.A. Finance & Accounting, University of Texas at Austin (1990) .
Equity Ownership
| Metric | Value |
|---|---|
| Shares beneficially owned | 3,700 |
| Dollar range (proxy classification) | Below $50,000 |
| Shares outstanding (record date) | 23,243,088 |
| Ownership as % of shares outstanding | ~0.016% (3,700 ÷ 23,243,088) |
- Pledging/Hedging: WHF’s Joint Code of Ethics does not expressly prohibit directors and others from engaging in hedging transactions (e.g., collars, swaps) that offset decreases in WHF stock value — a potential alignment risk .
- Ownership guidelines: Proxy references compliance with stock ownership/trading policies for nominees but does not disclose quantitative director ownership guideline multiples .
Shareholder Voting Signal (2025 Annual Meeting)
| Nominee | Votes For | Votes Against | Abstentions | Broker Non-Vote |
|---|---|---|---|---|
| G. Stacy Smith | 4,653,996 | 799,821 | 86,623 | 7,352,120 |
Related Party / Conflicts Context (Company-Level)
- Externally managed BDC: WHF pays WhiteHorse Advisers a base management fee (reduced to 1.75% effective Jan 1, 2024 from 2.00%) and an incentive fee; for FY2024, base fee $12.1M and incentive fee $9.3M — potential misalignment risks inherent in incentive structures .
- Co-investment framework: SEC exemptive relief (July 8, 2014) permits negotiated co-investments with affiliates subject to Board determinations; allocation policy seeks equitable distribution but cannot assure allocation in WHF’s favor, which Independent Directors review periodically .
- Administration agreement: Services provided by WhiteHorse Administration with cost allocations; renewed Oct 30, 2024 .
- Related party transactions policy: Audit Committee conducts quarterly reviews; no Smith-specific related party transactions disclosed .
Governance Assessment
- Positives: Independent status; chairs Nominating & Corporate Governance; serves on Audit and Compensation Committees; acceptable attendance; re-elected by stockholders in 2025 .
- Alignment and structure considerations:
- Cash-only director pay and low personal shareholdings (~0.016% and “Below $50,000” dollar range) signal limited “skin-in-the-game” versus equity-based alignment models .
- Board lacks a formal Lead Independent Director (liaison role handled by Audit Chair), which can weaken independent oversight optics .
- Hedging not expressly prohibited under Joint Code of Ethics raises alignment concerns if used by directors or affiliates .
- Compensation governance: Director retainer increased to $107,500 as of Oct 30, 2024; chair fees clearly defined; Compensation Committee (independent) has authority to engage independent consultants .
RED FLAGS
- No explicit prohibition on hedging WHF stock for directors (alignment risk) .
- No Lead Independent Director (oversight signal) .
- Minimal disclosed share ownership by Smith (3,700 shares) relative to outstanding, with no quantitative ownership guideline disclosed (transparency gap) .