Item 9A. Controls and Procedures
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired objectives.
Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) are effective to provide reasonable assurance that information that we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with U.S. GAAP.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Company’s internal control over financial reporting includes policies and procedures that:
• Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
184
Table of Contents
• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors; and
• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the consolidated financial statements.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of March 31, 2024, based on the criteria described in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the results of its evaluation, management concluded that our internal control over financial reporting was effective as of March 31, 2024.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recent quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Attestation Report of the Independent Registered Public Accounting Firm
Ernst & Young LLP, our independent registered public accounting firm, has audited the Company’s consolidated financial statements included in this annual report and issued its report on the effectiveness of our internal control over financial reporting as of March 31, 2024, which is included in Item 8 of this annual report.
Item 9B. Other Information.
(a) None.
(b) Trading Arrangements.
During the quarter ended March 31, 2024, none of our directors or officers (as defined in Exchange Act Rule 16a-1(f)) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
185
Table of Contents
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
We have adopted a Code of Conduct and Ethics that applies to all directors, officers and employees, which is available on our website at www.stepstonegroup.com. If we make any amendments to our Code of Conduct and Ethics that require disclosure under the rules of the Securities and Exchange Commission or the rules of the Nasdaq Global Select Market or grant any waivers to our directors or executive officers, we will disclose any such amendment and/or waiver on our website listed above.
The remaining information required by this item is incorporated by reference to the sections titled “Board of Directors and Corporate Governance” and “Executive Officers” of the definitive Proxy Statement for our 2024 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission no later than 120 days after March 31, 2024.
Item 11. Executive Compensation.
The information required by this item is incorporated by reference to the sections titled “Compensation Committee Interlocks and Insider Participation,” “Compensation Discussion and Analysis,” “Compensation Committee Report,” and “Executive Compensation Tables” of the definitive Proxy Statement for our 2024 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission no later than 120 days after March 31, 2024.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information regarding the beneficial ownership of our common stock required by this item is incorporated by reference to the section titled “Beneficial Ownership of Securities” of the definitive Proxy Statement for our 2024 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission no later than 120 days after March 31, 2024.
Securities Authorized for Issuance under Equity Compensation Plans
The table set forth below provides information concerning the awards that may be issued under the LTIP as of March 31, 2024:
Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) (1)
Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (2)
Equity compensation plans approved by security holders 1,422,658 N/A 22,787,636
Equity compensation plans not approved by security holders — — —
Total 1,422,658 N/A 22,787,636
_______________________________
(1) Reflects the outstanding RSUs granted under the LTIP as of March 31, 2024.
186
Table of Contents
(2) The aggregate number of our shares available for future issuance under the LTIP will automatically increase on January 1st of each year beginning in 2021 and ending with a final increase on January 1, 2030, in an amount equal to 5% of the total number of shares of stock outstanding on December 31st of the preceding calendar year. The Board may provide that there will be no January 1st increase in the shares available for future issuance for any such year or that the increase in the shares available for future issuance for any such year will be a smaller number of shares than would otherwise occur under the automatic increase.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this item is incorporated by reference to the sections titled “Certain Relationships and Related Person Transactions” and “Director Independence” of the definitive Proxy Statement for our 2024 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission no later than 120 days after March 31, 2024.
Item 14. Principal Accountant Fees and Services.
The information required by this item is incorporated by reference to the section titled “Independent Registered Public Accounting Firm” of the definitive Proxy Statement for our 2024 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission no later than 120 days after March 31, 2024.
187
Table of Contents
PART IV
Item 15. Exhibit and Financial Statement Schedules.
(a) The following documents are filed as part of this Form 10-K:
(1) Financial statements
Index to Consolidated Financial Statements Page
Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42)
129
Consolidated Balance Sheets as of March 31, 202 4 and 202 3
133
Consolidated Statements of Income (Loss) for the Years Ended March 31, 202 4 , 202 3 and 202 2
135
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended March 31, 202 4 , 202 3 and 202 2
136
Consolidated Statements of Stockholders’ Equity for the Years Ended March 31, 202 4 , 202 3 and 202 2
137
Consolidated Statements of Cash Flows for the Years Ended March 31, 202 4 , 202 3 and 202 2
139
Notes to Consolidated Financial Statements
141
(2) Financial statement schedules
All financial statement schedules have been omitted because they are not applicable, not required or the information has been otherwise included in the consolidated financial statements or accompanying notes to the consolidated financial statements.
(3) Exhibits:
Incorporated By Reference Filed or Furnished Herewith
Exhibit No. Description of Exhibit Form Exhibit Filing Date File No.
2.1
Transaction Agreement, dated July 7, 2021, by and among, StepStone Group Inc., StepStone Group LP, certain wholly-owned subsidiaries of StepStone Group LP, the sellers party thereto, Greenspring Associates, Inc. and certain of its affiliates and Shareholder Representative Services LLC, as Seller Representative.
8-K 2.1 7/07/2021 001-39510
2.2
Transaction Agreement, dated February 7, 2024, by and among StepStone Group Inc., StepStone Group LP, StepStone Group Real Estate LP, Jeffrey Giller, solely in his capacity as a seller representative, and the seller parties signatory thereto.
8-K 2.1 2/08/2024 001-39510
2.3
Transaction Agreement, dated February 7, 2024, by and among StepStone Group Inc., StepStone Group LP, StepStone Group Real Assets LP, James O’Leary, solely in his capacity as a seller representative, and the seller parties signatory thereto.
8-K 2.2 2/08/2024 001-39510
2.4
Transaction Agreement, dated February 7, 2024, by and among StepStone Group Inc., StepStone Group LP, StepStone Europe Limited, Swiss Capital Alternative Investments AG, Marcel Schindler, solely in his capacity as a seller representative, and SC Partner LP.
8-K 2.3 2/08/2024 001-39510
188
Table of Contents
3.1
Amended and Restated Certificate of Incorporation of StepStone Group Inc.
8-K 3.1 9/18/2020 001-39510
3.2
Amended and Restated Bylaws of StepStone Group Inc.
10-Q 3.2 2/09/2023 001-39510
4.1
Description of Securities.
X
10.1
Ninth Amended and Restated Limited Partnership Agreement of StepStone Group LP, dated as of September 20, 2021, by and among StepStone Group Holdings LLC, as General Partner, and each of the other persons and entities parties thereto.
8-K 10.3 9/20/2021 001-39510
10.2
Tax Receivable Agreement (Exchanges), dated as of September 18, 2020, by and among StepStone Group Inc., StepStone Group LP, and each of the other persons and entities parties thereto.
8-K 10.2 9/18/2020 001-39510
10.3
Tax Receivable Agreement (Reorganization), dated as of September 18, 2020, by and among StepStone Group Inc., StepStone Group LP, and each of the other persons and entities parties thereto.
8-K 10.3 9/18/2020 001-39510
10.4
Exchange Agreement, dated as of September 18, 2020, by and among the Company, the Partnership, and each of the other persons and entities party thereto.
8-K 10.4 9/18/2020 001-39510
10.5
Amended and Restated Registration Rights Agreement, dated as of September 20, 2021, by and among the Company and the other persons and entities party thereto.
8-K 10.4 9/20/2021 001-39510
10.6
Amended and Restated Stockholders Agreement, dated as of September 20, 2021, by and among the Company, the Partnership and the other persons and entities party thereto.
8-K 10.2 9/20/2021 001-39510
10.7 †
StepStone Group Inc. 2020 Long-Term Incentive Plan.
8-K 10.7 9/18/2020 001-39510
10.8 †
Form of Restricted Stock Unit Award Agreement under the 2020 Long-Term Incentive Plan.
10-Q 10.2 2/09/2023 001-39510
10.9†
Form of Restricted Stock Unit Award Agreement under the 2020 Long-Term Incentive Plan (for awards issued prior to February 2023).
S-1 10.8 8/24/2020 333-248313
10.10 †
Form of Indemnification Agreement for directors and officers.
S-1 10.9 8/24/2020 333-248313
10.11
Class C Exchange Agreement, dated as of September 20, 2021, by and among the Company, the Partnership and the other persons and entities party thereto.
8-K 10.5 9/20/2021 001-39510
10.12
Amended and Restated Credit Agreement, dated as of May 16, 2024, by and among StepStone Group LP, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and certain other lenders party thereto.
8-K 10.1 5/17/2024 001-39510
10.13
Option Agreement, dated November 2, 2022.
8-K 10.1 11/03/2022 001-39510
10.14 †
Consulting Services Agreement, effective as of August 1, 2023, by and among StepStone Group Inc., StepStone Group LP, MMAR HNL, LLC and Monte Brem.
10-Q 10.2 8/07/2023 001-39510
10.15 †
StepStone Group Inc. 2023 Employee Stock Purchase Plan.
S-8 99.3 9/18/2023 333-274556
19.1
StepStone Group Inc. Insider Trading Policy.
X
189
Table of Contents
21.1
List of Subsidiaries.
X
23.1
Consent of Ernst & Young LLP.
X
31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
X
31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
X
32.1
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
32.2
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
97.1
StepStone Group Inc. Clawback Policy.
X
101 The following financial information in Part II, Item 8, “Financial Statements and Supplementary Data” from our Annual Report on Form 10-K for the year ended March 31, 2024 formatted in Inline XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income (Loss); (iii) the Consolidated Statements of Comprehensive Income (Loss); (iv) the Consolidated Statements of Stockholders’ Equity; (v) the Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements.
X
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). X
† Indicates a management contract or compensatory plan or arrangement.
Item 16. Form 10-K Summary.
None.
190
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on May 24, 2024.
STEPSTONE GROUP INC.
By: /s/ David Y. Park
David Y. Park
Chief Financial Officer
(Principal Financial Officer and Authorized Signatory)
191
Table of Contents
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on May 24, 2024.
Signature Title
/s/ Scott W. Hart Chief Executive Officer and Director (Principal Executive Officer)
Scott W. Hart
/s/ David Y. Park Chief Financial Officer (Principal Financial Officer)
David Y. Park
/s/ Anthony Keathley Chief Accounting Officer (Principal Accounting Officer)
Anthony Keathley
/s/ Monte Brem Chairman of the Board of Directors
Monte Brem
/s/ Valerie Gay Brown Director
Valerie Gay Brown
/s/ Jose A. Fernandez Director
Jose A. Fernandez
/s/ David F. Hoffmeister Director
David F. Hoffmeister
/s/ Thomas Keck Director
Thomas Keck
/s/ Michael I. McCabe Director
Michael I. McCabe
/s/ Steven R. Mitchell Director
Steven R. Mitchell
/s/ Anne L. Raymond Director
Anne L. Raymond
192