DEF 14A 1 nc10022118x1_def14a.htm DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

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Filed by a Party other than the Registrant ☐

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☐			Soliciting Material Pursuant to §240.14a-12

Hercules Capital, Inc.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)

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April 27, 2021

Dear Stockholder:

You are cordially invited to attend the 2021 Annual Meeting of Stockholders of Hercules Capital, Inc., which will be held virtually on Thursday, June 24, 2021 at 9:00 a.m. (Pacific Time). The annual meeting can be accessed by visiting www.virtualshareholdermeeting.com/HTGC2021, where you will be able to listen to the meeting live, submit questions, and vote online.

Details regarding the business to be conducted at the annual meeting are more fully described in the accompanying notice of annual meeting and proxy statement.

Your vote is very important. Whether or not you plan to attend the virtual meeting, please cast your vote as soon as possible by Internet, by QR Code, by telephone, or by completing and returning the enclosed proxy card in the postage-prepaid envelope to ensure that your shares will be represented. For shares held in “street name,” please follow the relevant instructions for telephone and Internet voting provided by your broker, bank or other nominee. Returning the proxy does not deprive you of your right to attend the virtual meeting and to vote your shares at the virtual meeting.

Your continuing support of Hercules is very much appreciated.

			Sincerely,


			Scott Bluestein Chief Executive Officer Chief Investment Officer

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400 Hamilton Avenue, Suite 310

Palo Alto, California 94301

(650) 289-3060

NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS

HERCULES CAPITAL, INC.


Time	9:00 a.m., Pacific Time

Date	June 24, 2021

Place	Virtually at www.virtualshareholdermeeting.com/HTGC2021

	Please have your 16-Digit Control Number to join the annual meeting. Instructions on how to attend and participate via the Internet, including how to demonstrate proof of stock ownership, are posted on www.proxyvote.com.

Purpose	1.	Elect three directors who will serve for the term specified in the Proxy Statement.

	2.	Approve, on an advisory basis, the compensation of the Company’s named executive officers.

	3.	Ratify the selection of PricewaterhouseCoopers LLP to serve as our independent public accounting firm for the year ending December 31, 2021.

	4.	Transact such other business as may properly come before the meeting or any postponement or adjournment thereof.

Record Date	You have the right to receive notice of and to vote at the annual meeting if you were a stockholder of record at the close of business on April 23, 2021. We plan to begin mailing this Proxy Statement on or about April 30, 2021 to all stockholders entitled to vote their shares at the annual meeting.

Voting by Proxy	Please submit a proxy card or, for shares held in “street name,” voting instruction form as soon as possible so your shares can be voted at the virtual meeting. You may submit your proxy card or voting instruction form by mail. If you are a registered stockholder, you may also vote electronically by telephone or over the Internet by following the instructions included with your proxy card. If your shares are held in “street name,” you will receive instructions for voting of shares from your broker, bank or other nominee, which may permit telephone or Internet voting. Follow the instructions on the voting instruction form that you receive from your broker, bank or other nominee to ensure that your shares are properly voted at the annual meeting.

	The enclosed Proxy Statement is also available at www.proxyvote.com. This website also includes copies of the proxy card and our annual report to stockholders. Stockholders may request a copy of the Proxy Statement and our annual report by contacting our main office at (650) 289-3060.

			By Order of the Board,

			General Counsel, Chief Compliance Officer and Secretary

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PROXY STATEMENT—TABLE OF CONTENTS

			Page
Summary Information			1
Security Ownership of Certain Beneficial Owners and Management			6
Board of Directors and Corporate Governance
Proposal No. 1—Election of Directors			8
Director Qualifications			8
Information about the Directors and Executive Officers			10
Director Nominees Biographies			12
Corporate Governance			20
Board Leadership Structure			20
Board Oversight of Risk			20
Board Committees			21
Director Independence			22
Communication with the Board			23
Code of Business Conduct and Ethics			23
Availability of Corporate Documents			23
Compensation Committee Interlocks and Insider Participation			23
Executive Officers and Director Compensation
Information about Executive Officers Who Are Not Directors			25
Executive Compensation			26
Compensation Discussion and Analysis			26
Executive Compensation Tables			38
Compensation of Directors			44
Equity Compensation Plan Information			45
OTHER PROXY PROPOSALS
Proposal 2—Advisory Vote to Approve the Company’s Named Executive Officer Compensation			46
Proposal 3—Ratification of Selection of Independent Public Accountant			48
Principal Accountant Fees and Services			48
MEETING AND OTHER INFORMATION
Stockholder Proposals			50
Question and Answer: Proxy Statement General Information			51

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SUMMARY INFORMATION

This summary provides highlights about Hercules Capital, Inc., and information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider when deciding how to vote your shares. The “Company,” “Hercules,” “HTGC,” “we,” “us” and “our” refer to Hercules Capital, Inc. and its wholly owned subsidiaries and its affiliated securitization trusts.

ABOUT HERCULES AND 2020 FINANCIAL HIGHLIGHTS

We are a specialty finance company focused on providing senior secured venture and growth stage loans to growth oriented, innovative venture capital and sponsor-backed companies in a variety of technology, life sciences and sustainable and renewable technology industries.

2020 PEER GROUP ANALYSIS

As of December 31, 2020, the Company generally outperformed most of its Peer Group (defined on page 30) over a one-, three- and five-year period in both financial efficiencies measured using Return on Average Assets (“ROAA”), Return on Equity (“ROE”), Return on Investment Capital (“ROIC”), as well as using the market measure Average Annual Shareholder Return (“AASR”):

Performance Period	Return on Average Assets (excl. cash)		Return on Equity		Return on Invested Capital		Average Annual Shareholder Returns (“AASR”)
Performance Period	HTGC	% Rank of Peer Group	HTGC	% Rank of Peer Group	HTGC	% Rank of Peer Group	HTGC	% Rank of Peer Group
1-year	5.8%	100%	11.5%	100%	5.9%	100%	15.1%	65%
3-year	5.8%	100%	11.5%	100%	5.9%	100%	14.5%	72%
5-year	5.8%	100%	11.3%	100%	6.0%	100%	14.3%	73%

−1-, 3- and 5-year calculations of performance are based on data as of December 31, 2020.

−Companies with less than three and/or less than five full years of historical financial and AASR performance are excluded.

−Financial Services peers are excluded from analysis of capital allocation because services companies are not as capital intensive as REITs and BDCs, which are primarily engaged in direct investment of firm capital.

−The data is from S&P Capital IQ and is not adjusted by F.W. Cook, which means the data may not reflect internal adjustments regularly made by Hercules or by the peer companies when assessing their performance.

VOTING MATTERS AND RECOMMENDATIONS

Agenda Items		Board Vote Recommendation	Page Reference (for more detail)
1.	To elect three directors who will serve for the term specified in the Proxy Statement.	FOR	8

2.	Approve, on an advisory basis, the compensation of the Company’s named executive officers.	FOR	46

3.	To ratify the selection of PricewaterhouseCoopers LLP (“PwC”) to serve as our independent public accounting firm for the fiscal year ending December 31, 2021.	FOR	48

SUMMARY INFORMATION

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BOARD NOMINEES

Gayle Crowell

2019

Thomas J. Fallon

2014

Brad Koenig

2017

AC = Audit Committee CC = Compensation Committee NCGC = Nominating and Corporate Governance Committee

M = Member C = Committee Chairman

(1) Under the rules and regulations of the SEC and the listing standards of New York Stock Exchange (“NYSE”).

CORPORATE GOVERNANCE HIGHLIGHTS

•	Board Independence: Independent directors comprise the majority of our board of directors (“Board”) (7 out of 8 directors).

•	Chairman: Our Board is led by an independent Chairman who manages the Board’s responsibilities.

•	Board Committee: All of members of our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee (“Governance Committee”) are independent directors.

•	Board Accountability: Our Board and its committees conduct scheduled meetings in executive session, out of the presence of our chief executive officer.

•	Risk Management: Our Board and its committees remain in close contact with, and receive reports on various aspects of our business from, our senior management team and independent auditors.

•	The “Corporate Governance” section of this Proxy Statement provides further information about our corporate governance practices, Board structure and Board committees.

EXECUTIVE COMPENSATION (Say-on-Pay)

Consistent with our Board’s recommendation and our stockholders’ preference, we submit an advisory vote to approve our executive compensation (otherwise known as “say-on-pay”) on an annual basis. Accordingly, we are seeking your approval, on an advisory basis, of the compensation for our NEOs, as further described in the “Compensation Discussion and Analysis” section of this Proxy Statement. In 2020, stockholders voted 88.95% in favor of Say-on-Pay.

2020 EXECUTIVE COMPENSATION HIGHLIGHTS

For a summary of our 2020 executive compensation and key features of our executive compensation programs, please refer to the Executive Summary of the “Compensation Discussion and Analysis” section of this Proxy Statement on page 26.

AUDITOR MATTERS

We are seeking your ratification of PwC as our independent public accounting firm for the 2021 fiscal year. The following table summarizes the fees billed by PwC for the fiscal year ending December 31, 2020 (please refer to the proposal on page 48):

			2020 (in millions)
Audit Fees			$1.1
Audit-Related Fees			$—
Tax Fees			$0.1
All Other Fee			$0.2
Total			$1.4

For 2020, 78.6% of the 2020 fees represented audit and audit-related fees.

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GENERAL INFORMATION

For general information regarding our Proxy Statement, please review the questions and answers at the end of our Proxy Statement. For questions in which you require additional information, please call us at (650) 600-5405 or send an e-mail to Melanie Grace, Secretary, at mgrace@htgc.com.

You may authorize a proxy to cast your vote in any of the following ways:

SEC Form DEF 14A filed by Hercules Capital Inc.