Stuart Aronson

About Stuart Aronson

Stuart Aronson is Chief Executive Officer of WhiteHorse Finance, Inc. (WHF) and an interested director; he has served as CEO since 2016 and as a Class II director since 2017 (term expires 2026) . He is Group Head of the U.S. direct lending platform of H.I.G. Capital (since Feb 2016), previously spent 1990–2015 at General Electric including as President & CEO of GE Capital’s U.S. Sponsor Finance business; he holds a B.A. cum laude from Tufts and an M.B.A. with honors from Columbia Business School . As an externally managed BDC, WHF pays no executive compensation to Aronson; his pay is determined and paid by H.I.G. WhiteHorse Advisers, with potential alignment/agency implications driven by the adviser’s base and incentive fee structure . WHF discloses stock performance graphs for shareholder returns but does not provide explicit TSR or revenue/EBITDA growth metrics tied to Aronson’s tenure in the proxy or 10-K narrative sections .

Past Roles

External Roles

Fixed Compensation

• WHF pays no compensation to executive officers or interested directors; the Compensation Committee states “none of our executive officers is compensated by us,” and thus it does not produce a report on executive compensation .

Performance Compensation

• WHF grants no equity/option awards or cash incentives to executive officers; any Aronson variable pay would be at the adviser, not disclosed by WHF .

Indirect incentives: WHF pays the external adviser (H.I.G. WhiteHorse Advisers) a 1.75% base management fee (reduced from 2.00% effective Jan 1, 2024) and performance-based incentive fees; in FY 2024, WH Advisers earned $12.1m base fee and $9.3m incentive fee, which can create incentives not fully aligned with shareholders (e.g., asset growth, fee-driven returns) .

Equity Ownership & Alignment

Employment Terms

Board Governance

Director Compensation (for context)

Performance & Track Record

• Stock performance: WHF presents shareholder return graphs comparing WHF to Nasdaq Financial 100 and S&P 500 (e.g., 2019–2024), but does not quantify TSR percentages in text; graphs assume dividend reinvestment and use closing prices .
• Strategic execution context: As CEO and H.I.G. U.S. Direct Lending head, Aronson oversees strategy via the external adviser; Board acknowledges adviser fee structure and uses independent valuation support and risk oversight processes .

Compensation Structure Analysis

• Shift/mix: There is no WHF-paid cash vs equity mix for executives; interested directors/executives receive $0 from WHF, while independent directors receive fixed cash retainers .
• Adviser fee incentives: Effective Jan 1, 2024, base fee reduced to 1.75% from 2.00%; FY 2024 adviser fees totaled $21.4m (base $12.1m; incentive $9.3m), which can incentivize AUM growth and fee-eligible income; Board reapproved the agreement and deemed rates reasonable .
• Conflicts/controls: WHF details allocation, co-investment, and related-party structures with H.I.G., including SEC exemptive relief for co-investments, with processes to mitigate conflicts; however, WHF notes incentives may not be fully aligned with stockholders .

Related Party Transactions (Adviser/Administrator Economics)

Board Service History and Dual-Role Implications

• Service history: Class II director since 2017; interested due to CEO role and H.I.G. position .
• Committee roles: None (committees limited to independent directors) .
• Dual-role implications: CEO is also a director; Chairman is an interested person (H.I.G.), and there is no Lead Independent Director—Board relies on Audit Chair as liaison; structure may heighten independence sensitivity though a majority of directors are independent and committees are independent-only .

Say-on-Pay & Shareholder Feedback

• Not disclosed/applicable; WHF does not pay executive compensation and provides no say-on-pay results in the proxy .

Compensation Peer Group

• Not disclosed; Compensation Committee can engage independent consultants but focuses on independent director pay since executives are not paid by WHF .

Equity Ownership & Alignment Details (Expanded)

Expertise & Qualifications

• Deep sponsored lending and credit markets experience across origination, structuring, distribution, and portfolio management; senior leadership at H.I.G. and GE Capital Sponsor Finance .
• Academic credentials: Tufts University (cum laude), Columbia Business School (MBA with honors) .

Investment Implications

• Pay-for-performance alignment: As an externally managed BDC, Aronson’s direct WHF compensation is $0; incentives are primarily through H.I.G. WhiteHorse Advisers’ fee structure—base fee on assets and performance fee—creating potential growth/fee biases; base fee cut to 1.75% modestly improves alignment .
• Ownership alignment and selling pressure: Aronson holds 36,000 WHF shares (<1%); no vesting schedules or award overhang disclosed; the Joint Code does not expressly prohibit hedging, a potential red flag if used (no pledging disclosures found) .
• Governance risk: CEO is an interested director, Chairman is also interested, and there is no Lead Independent Director; mitigation includes a majority-independent board and independent-only committees with regular meetings and 75%+ attendance .
• Related-party economics: Adviser and administrator collected ~$22.1m in FY 2024 fees (base, incentive, admin), underscoring the importance of fee terms and investment discipline for shareholder returns; Board reapproved the advisory agreement in Oct 2024 .
• Track record signal: WHF provides stock performance graphs but no quantified TSR in text; investors should assess WHF’s NII, NAV stability, and dividend coverage in conjunction with the adviser’s incentive fee realization to gauge execution quality during Aronson’s tenure .