DEF: Palmer Square BDC Sets 2025 Annual Meeting Agenda

Palmer Square Capital BDC Inc. announces its 2025 Annual Meeting of Stockholders to elect directors and ratify its independent auditor.

Summary

• The 2025 Annual Meeting of Stockholders for Palmer Square Capital BDC Inc. will be held electronically via live webcast on Thursday, December 18, 2025, at 10:00 a.m., Central Time.
• Stockholders will vote on three proposals: (1) the election of two Class I directors, Christopher D. Long and Megan L. Webber, to serve until the 2028 annual meeting; (2) the ratification of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025; and (3) any other business that may properly come before the meeting.
• The Board of Directors, including all independent directors, unanimously recommends voting FOR each of the proposals.
• As of the record date, November 17, 2025, there were 31,478,948 shares of common stock outstanding, with each share entitling the holder to one vote.
• The company's Board consists of five members, with three being independent directors, satisfying NYSE and 1940 Act requirements.
• Independent directors receive an annual fee of $50,000 for the fiscal year ending December 31, 2025, plus reimbursement for out-of-pocket expenses.
• The company incurred total fees of $577,619 to PwC for services in fiscal year 2024, up from $455,574 in fiscal year 2023.
• The Adviser earned a base management fee of $9.7 million and an incentive fee of $8.5 million for the year ended December 31, 2024, offset by a $50.5 thousand management fee waiver.

Sentiment

Score: 5

Explanation: The filing is a routine proxy statement for an annual meeting, focusing on corporate governance and procedural matters. It does not contain new financial results, strategic announcements, or operational updates that would significantly alter sentiment. The tone is neutral and informative, as expected for such a document.

Positives

• The Board of Directors, including independent directors, unanimously recommends voting FOR all proposals, indicating internal alignment.
• The company maintains a majority of independent directors (3 out of 5) on its Board, aligning with NYSE and 1940 Act corporate governance standards.
• All key Board committees (Audit, Nominating and Corporate Governance, Compensation) are comprised solely of independent directors, enhancing oversight and reducing potential conflicts of interest.
• The company has established robust corporate governance policies, including Codes of Ethics, Business Conduct and Ethics, and Corporate Governance Guidelines.
• The company has obtained SEC exemptive relief for co-investment opportunities with affiliates, which may afford additional investment opportunities and greater diversification, subject to Independent Director approval.

Negatives

• Christopher D. Long, an interested director and CEO, serves as Chairman of the Board, and there is no lead independent director, which could present potential conflicts of interest.
• The incentive fee structure may encourage the Adviser to favor debt financings that provide for deferred interest rather than current cash payments, potentially creating a conflict of interest.
• The Adviser's role as valuation designee for portfolio investments could create a conflict of interest, as the management fee is based, in part, on the value of total net assets.
• The company acknowledges that not all conflicts of interest can be expected to be resolved in its favor, particularly concerning investment opportunities shared with other accounts managed by the Adviser or its affiliates.

Risks

• The Board's oversight function cannot eliminate all risks or ensure that particular events do not adversely affect the value of investments.
• Potential conflicts of interest may arise when a non-Independent Director serves as Chairman of the Board.
• The Adviser and its affiliates manage other collective investment vehicles or managed accounts with similar investment policies, which may lead to competition for investment opportunities and incentives to favor certain accounts over others.
• The incentive fee structure could encourage the Adviser to prioritize investments with deferred interest income over current cash payments, potentially impacting cash flow.
• The Adviser's involvement in the valuation process for portfolio investments, which directly impacts management fees, presents a potential conflict of interest.
• There is no assurance that the Adviser's efforts to allocate investment opportunities fairly among all clients will result in an allocation of all or part of such opportunity to the company.

Future Outlook

The filing primarily focuses on the upcoming 2025 Annual Meeting and corporate governance matters. It outlines the process and deadlines for stockholder proposals for the 2026 Annual Meeting, indicating a continuation of regular corporate governance cycles. No specific forward-looking financial guidance or strategic outlook is provided.

Management Comments

• "Your vote and participation in the governance of the Company is very important to us." Christopher D. Long, Chairman and Chief Executive Officer.
• "The Board, including each of the Independent Directors, unanimously recommends that you vote FOR each of the proposals." Scott Betz, Chief Compliance Officer.

Industry Context

As a Business Development Company (BDC), Palmer Square Capital BDC Inc. operates under the extensive regulatory framework of the Investment Company Act of 1940. This includes specific requirements for asset coverage (at least 150% after incurring indebtedness), qualifying assets (at least 70% of total assets), and restrictions on co-investments with affiliates. The company's governance structure, with a majority of independent directors and dedicated committees, aligns with industry best practices and regulatory mandates for BDCs and NYSE-listed companies. The discussion of co-investment exemptive relief highlights a common strategy for BDCs to enhance investment opportunities while navigating regulatory constraints.

Comparison to Industry Standards

• The company's board composition, with three out of five directors being independent, meets the NYSE corporate governance rules and the 1940 Act requirement for a majority of non-interested directors.
• The establishment of Audit, Nominating and Corporate Governance, and Compensation Committees, all composed solely of independent directors, aligns with leading corporate governance practices for publicly traded companies and BDCs.
• The annual compensation of $50,000 for independent directors is within the typical range for BDC independent director compensation, reflecting industry standards for attracting qualified oversight.
• The company's adherence to Section 16(a) filing requirements for officers, directors, and greater than 10% stockholders, as well as the adoption of Codes of Ethics and Corporate Governance Guidelines, demonstrates compliance with regulatory and ethical standards comparable to other public companies.

Corporate Governance

Related Party Transactions

• The company has an Investment Advisory Agreement with Palmer Square BDC Advisor LLC (the Adviser), under which it pays base management fees and incentive fees. Messrs. Long, Fox, and Bloomfield and Ms. Long have indirect pecuniary interests in these fees.
• An Administration Agreement exists with the Administrator (the Adviser), for which the company reimburses allocable costs, including compensation for the Chief Financial Officer and Chief Compliance Officer and their staffs.
• The Adviser has a Resource Sharing Agreement with Palmer Square Capital Management LLC (PSCM), providing access to investment professionals and resources.
• A License Agreement grants the company a non-exclusive, royalty-free license to use the 'Palmer Square' name as long as the Adviser or an affiliate remains its investment adviser.
• Co-investment opportunities with affiliates are permitted under SEC exemptive relief, subject to Independent Director review and approval for each transaction, to manage potential conflicts.

Stakeholder Impact

• Shareholders: Directly impacted by the proposals to elect directors and ratify the auditor, influencing corporate governance and oversight. Their votes are crucial for these decisions.
• Management/Employees: Executive officers and directors are involved in the governance structure and receive compensation (direct for independent directors, indirect for interested directors/officers through the Adviser).
• Auditor (PwC): The ratification of PwC ensures their continued engagement, impacting their professional services and fees.
• Adviser (Palmer Square BDC Advisor LLC): Continues to receive management and incentive fees, and provides administrative services, directly impacting its financial interests and operational responsibilities.

Next Steps

• Stockholders are urged to vote their shares by proxy via Internet, telephone, or mail by December 17, 2025, or electronically during the live webcast on December 18, 2025.
• The Annual Meeting will be held on December 18, 2025, at 10:00 a.m., Central Time, to consider and vote on the proposals.
• The company will continue to operate under the re-approved Advisory Agreement and Administration Agreement for an additional one-year term.
• Stockholders wishing to submit proposals for the 2026 Annual Meeting must do so by July 27, 2026 (Rule 14a-8) or between June 23, 2026, and July 23, 2026 (Bylaws).

Key Dates

Recommendation

This filing is a routine definitive proxy statement for Palmer Square Capital BDC Inc.'s annual meeting. It outlines proposals for director elections and auditor ratification, along with detailed corporate governance information and related party transactions. There are no new financial results, strategic announcements, or operational changes that would fundamentally alter the company's valuation or investment thesis. While it provides transparency on governance and potential conflicts of interest inherent to BDCs, these are standard disclosures. Therefore, a 'hold' recommendation is appropriate as the filing does not present new information warranting a change in investment position.

Keywords

Proxy Statement, Annual Meeting, Director Election, Auditor Ratification, Corporate Governance, BDC, Investment Company Act of 1940, Related Party Transactions, Independent Directors, PricewaterhouseCoopers LLP