DEF 14A of Redwood Trust Inc, Apr 2, 2024

DEF 14A of Redwood Trust Inc

Filed Apr 2, 2024 · FY20230000930236-24-000014

Open on EDGAR

  1. ITEM 1 — ELECTION OF DIRECTORS

    ITEM 1 — ELECTION OF DIRECTORS The nominees for the nine director positions are set forth below. In the event we are advised prior to the Annual Meeting that any nominee will be unable to serve or for good cause will not serve as a director if elected at the Annual Meeting, the proxies will cast votes for any person who shall be nominated by the present Board of Directors to fill such directorship. The nominees listed below currently are serving as directors of Redwood. If a quorum is present, the election of each nominee as a director requires a majority of the votes cast with respect to such nominee at the Annual Meeting. For purposes of the election of directors, a majority of the votes cast means that the number of votes cast “for” a nominee for election as a director exceeds the number of votes cast “against” that nominee. Cumulative voting in the election of directors is not permitted. Abstentions and broker non-votes will not be counted as votes cast and will have no effect on the results of the vote in the election of directors. In accordance with Redwood’s Bylaws and its Policy Regarding Majority Voting, any incumbent nominee for director must offer to resign from the Board if he or she fails to receive the required number of votes for re-election. The Governance and Nominating Committee will consider the offer of resignation and will recommend to the Board whether to accept the offer to resign. The Board will decide whether to accept the offer to resign and will publicly disclose its decision.

  2. Nominees to Board of Directors

    Nominees to Board of Directors

  3. Nominees to Board of Directors

    | Name | Current Position with Redwood | | Greg H. Kubicek | Chair of the Board | | Christopher J. Abate | Director and Chief Executive Officer | | Doneene K. Damon | Director | | Armando Falcon | Director | | Douglas B. Hansen | Director | | Debora D. Horvath | Director | | Georganne C. Proctor | Director | | Dashiell I. Robinson | Director and President | | Faith A. Schwartz | Director |

  4. Nominees to Board of Directors

    THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE NOMINEES IDENTIFIED ABOVE. Set forth below are summaries of the self-identified diversity characteristics, and the experience, qualifications, attributes and skills, of each of the nominees for election at the Annual Meeting, as well as certain biographical information regarding each of these individuals.

  5. Nominees to Board of Directors

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  6. Nominees to Board of Directors

    For each nominee for election as a director, set forth on the following pages is biographical information regarding the nominee, as well as factors supporting the Board of Directors’ conclusion to nominate the nominee for election to continue to serve as a director.

  7. Nominees to Board of Directors

    | | Greg H. Kubicek, age 67, is Chair of the Board, having previously served as Vice Chair of the Board from December 2020 to May 2022. After serving as Founder and CEO of The Holt Group, Inc. for 41 years, Mr. Kubicek was appointed CEO of GHK Enterprises, Inc. following Sekisui House’s acquisition of The Holt Group, Inc., a real estate company and its associated funds that purchase, develop, own, and manage real estate properties. Mr. Kubicek has also served as Chair of the | | the Board of Cascade Corporation, an international manufacturing corporation. Mr. Kubicek holds an A.B. in Economics from Harvard College. | | | The Board of Directors concluded that Mr. Kubicek should be nominated to continue to serve as a director on account of, among other things, the following experience, qualifications, attributes, and skills: •Leadership attributes •Management and entrepreneurial experience •Expertise and experience in the real estate development industry •Experience and expertise in the property management business •Professional and educational background | |

  8. Nominees to Board of Directors

    | | Christopher J. Abate, age 44, has served as Chief Executive Officer since May 2018 and as a director since December 2017. Mr. Abate has been employed with Redwood since April 2006, previously serving as Redwood’s President from July 2016 to May 2018, Chief Financial Officer from March 2012 to August 2017, and Controller from January 2009 to March 2013. From October 2019 to December 2021, Mr. Abate served as Chair of the Board of Structured Finance Association | | Association. Before joining Redwood, Mr. Abate was employed by PricewaterhouseCoopers LLP. He holds a B.A. in accounting and finance from Western Michigan University, an M.B.A. from the University of California at Berkeley and Columbia University. | | | The Board of Directors concluded that Mr. Abate should be nominated to continue to serve as a director on account of, among other things, the following experience, qualifications, attributes, and skills: •Leadership attributes and management experience, including experience as Chief Executive Officer, President, Chief Financial Officer, and Controller of Redwood •Skill and experience in managing balance sheet exposures and managing risks •Skill and experience in executing capital markets transactions •Finance and accounting expertise and experience •Professional and educational background | |

  9. Nominees to Board of Directors

    | | Doneene K. Damon, age 56, has been a director of Redwood since November 2023. Ms. Damon is a practicing attorney as a Director of Richards, Layton & Finger, P.A. (“RLF”), a multidisciplinary law firm based in Wilmington, Delaware, which she joined in 1992. Ms. Damon served as the President of RLF from 2019 to 2022, and currently serves as chair of the firm’s Corporate Trust and Agency Services Group and as Chief Diversity Director. Ms. Damon also currently serves on the | | the Board of Directors of Brown Advisory Delaware Trust Company and as a board member of the Structured Finance Association, the Forum of Executive Women and the Delaware Business Roundtable. Ms. Damon’s commitment to public service and nonprofit organizations includes current or past service as a member of Delaware’s Judicial Nominating Commission, the Delaware Prosperity Partnership, and the Delaware Bench and Bar Diversity Project. Ms. Damon previously served as the Chair of the Board of Directors of Christiana Care Health System, Inc. and Health Services, Inc., and she currently serves on the Board of Directors of St. Joseph’s University and is a member of the Board of Visitors of Temple University’s Beasley School of Law. Ms. Damon holds a B.S. in Accounting from St. Joseph’s University in Philadelphia and a J.D. from Temple University’s School of Law. | | | The Board of Directors concluded that Ms. Damon should be nominated to continue to serve as a director on account of, among other things, the following experience, qualifications, attributes, and skills: •Leadership attributes and management experience •Skill and experience in executing structured finance transactions •Expertise and experience in legal and regulatory matters •Expertise and experience relating to corporate and institutional governance •Professional and educational background | |

  10. Nominees to Board of Directors

    | | Armando Falcon, age 63, has been a director of Redwood since March 2021. Mr. Falcon is CEO of Falcon Capital Advisors LLC, a management consulting firm based in Washington, DC, that provides strategic advice and technical assistance to financial services companies, mortgage industry companies, and government agencies on matters involving process reengineering, project management, regulatory compliance, and data analytics, which he founded in 2007. He previously served | | served as the Director of the Office of Federal Housing Enterprise Oversight, and as the General Counsel for the Committee on Banking and Financial Services of the U.S. House of Representatives. Mr. Falcon currently serves on the Board of Directors of the Structured Finance Association. Mr. Falcon also serves as an advisor to the Board of Directors of the National Association of Hispanic Real Estate Professionals. Mr. Falcon holds a B.A. from St. Mary’s University, an M.P.P. from Harvard University, and a J.D. from the University of Texas. | | | The Board of Directors concluded that Mr. Falcon should be nominated to continue to serve as a director on account of, among other things, the following experience, qualifications, attributes, and skills: •Leadership attributes and management experience •Experience in government service and financial regulation •Expertise and experience in the real estate finance and financial services industries •Expertise and experience relating to corporate and institutional governance •Professional and educational background | |

  11. Nominees to Board of Directors

    | | Douglas B. Hansen, age 66, is a founder of Redwood, and served as Redwood’s President from 1994 through 2008. Mr. Hansen retired from his position as President of Redwood at the end of 2008. Mr. Hansen has been a director of Redwood since 1994. Mr. Hansen serves on the Board of Directors of Four Corners Property Trust, Inc., a publicly traded real estate investment trust. Mr. Hansen also serves on the board of River of Knowledge, a not-for-profit institution. Mr. Hansen holds | | holds an A.B. in Economics from Harvard College and an M.B.A. from Harvard Business School. | | | The Board of Directors concluded that Mr. Hansen should be nominated to continue to serve as a director on account of, among other things, the following experience, qualifications, attributes, and skills: •Leadership attributes and management experience, including experience as Redwood’s President since its founding in 1994 through 2008 •Skill and experience in investing in real estate-related assets and managing portfolios of such investments •Skill and experience in managing balance sheet exposures and managing risks •Skill and experience in executing capital markets transactions •Experience in finance and accounting matters •Professional and educational background | |

  12. Nominees to Board of Directors

    | | Debora D. Horvath, age 69, has been a director of Redwood since 2016. Ms. Horvath is Principal of Horvath Consulting LLC, which she founded in 2010. Ms. Horvath served as an Executive Vice President for JP Morgan Chase & Co. from 2008 to 2010. Ms. Horvath served as an Executive Vice President and Chief Information Officer for Washington Mutual, Inc. (“WaMu”) from 2004 to 2008. In addition to being the technology leader at WaMu, Ms. Horvath was responsible for the Enterprise | | Enterprise Project Office and was Chair of WaMu’s Environmental Council. Ms. Horvath, a 25-year veteran from General Electric Company (“GE”), served 12 years as a Senior Vice President and Chief Information Officer for the GE insurance businesses. Ms. Horvath has been a Director of StanCorp Financial Group, Inc. since 2013. She was a director of the Federal Home Loan Bank of Seattle from 2012 to January 2014. Ms. Horvath holds a B.A. in Business Administration from Baldwin Wallace University and is a graduate of GE’s Financial Management Program (FMP). | | | The Board of Directors concluded that Ms. Horvath should be nominated to continue to serve as a director on account of, among other things, the following experience, qualifications, attributes, and skills: •Leadership attributes and management experience •Experience as a chief information officer •Expertise and experience relating to information technology and technology risk management •Accounting and finance experience •Expertise and experience relating to institutional governance •Professional and educational background | |

  13. Nominees to Board of Directors

    | | Georganne C. Proctor, age 67, has been a director of Redwood since March 2006. Ms. Proctor is the former Chief Financial Officer of TIAA-CREF, and served in that position from June 2006 to July 2010. Additionally, Ms. Proctor served jointly as Chief Financial Officer and Executive Vice President for Enterprise Integration at TIAA-CREF from January 2010 to July 2010. From July 2010 to October 2010, she continued to serve as Executive Vice President for Enterprise Integration | | Integration at TIAA-CREF. From 2003 to 2005, Ms. Proctor was Executive Vice President of Golden West Financial Corporation, a thrift institution. From 1994 to 1997, Ms. Proctor was Vice President of Bechtel Group, a global engineering firm, and also served as its Senior Vice President and Chief Financial Officer from 1997 to 2002 and as a director from 1999 to 2002. From 1991 to 1994, Ms. Proctor served as finance director of certain divisions of The Walt Disney Company, a diversified worldwide entertainment company. Ms. Proctor previously served as Chair of Avantax, Inc.’s Board of Directors from July 2019 to November 2023. She also served on the Board of Directors of Sculptor Capital Management, Inc. from 2011-2021, Kaiser Aluminum Corporation from 2006 to 2009 and SunEdison, Inc. from 2013 to 2017. Ms. Proctor holds a B.S. in Business Management from the University of South Dakota and an M.B.A. from California State University East Bay. | | | The Board of Directors concluded that Ms. Proctor should be nominated to continue to serve as a director on account of, among other things, the following experience, qualifications, attributes, and skills: •Management experience •Expertise as a chief financial officer •Expertise and experience in the banking, insurance, and investment management industries •Professional and educational background | |

  14. Nominees to Board of Directors

    | | Dashiell I. Robinson, age 44, has served as Redwood’s President since December 2017 and as a director since August 2021. Prior to joining Redwood in September 2017, Mr. Robinson was employed at Wells Fargo Securities, serving as the Head of Mortgage Finance within the Asset-Backed Finance Group. In that role, Mr. Robinson led a team of banking professionals responsible for financing and distributing an array of residential mortgage products, and serving a broad suite of | | of the firm's operating and investing clients. Prior to his employment at Wells Fargo, Mr. Robinson was employed within the Structured Credit Products Group at Wachovia Capital Markets from 2001 to 2008, serving in banking, structuring and risk mitigation roles. Mr. Robinson also serves as a member of the Board of Directors of the Jewish Community Center of San Francisco. Mr. Robinson holds a B.A. in English from Georgetown University. | | | The Board of Directors concluded that Mr. Robinson should be nominated to continue to serve as a director on account of, among other things, the following experience, qualifications, attributes, and skills: •Leadership attributes and management experience, including experience as President and Executive Vice President of Redwood •Expertise and experience in the real estate finance and financial services industries •Skill and experience investing in mortgages and other real estate-related assets and managing portfolios of such investments •Skill and experience in executing capital markets and structured finance transactions •Professional and educational background | |

  15. Nominees to Board of Directors

    | | Faith A. Schwartz, age 63, has been a director of Redwood since March 2021. Ms. Schwartz is the Founder & CEO of Housing Finance Strategies, LLC, a professional services and advisory practice focusing on capital markets, rating agencies, and mortgage modernization and innovation, which she founded in 2016. Ms. Schwartz currently serves on the Board of Directors of Gateway First Bank, as well as on the boards of several other privately held mortgage industry-focused companies | | companies, including Class Valuation LLC. From 2013 to 2016, Ms. Schwartz served as Senior Vice President of Federal Practice of CoreLogic, Inc., a provider of property information, insight, analytics and data-enabled solutions. She is also the founder of HOPE NOW Alliance, a public-private initiative launched in 2007 to seek solutions for American families facing foreclosure during the Great Recession. Ms. Schwartz also previously served as Senior Vice President of Government, Housing, and Industry at Option One Mortgage Corporation, a subsidiary of H&R Block, from 2003 to 2007 and as Director of Alternative Markets and Director of National Sales at Freddie Mac between 1997 and 2003. From October 2021 to October 2023, Ms. Schwartz served on the Consumer Advisory Board for the Consumer Finance Protection Bureau (CFPB). She also previously served on the Federal Reserve Board’s Consumer Advisory Council. In 2010, Ms. Schwartz founded HOPE LoanPort, a technology non-profit organization that helps families reach and sustain their goal of homeownership. She started her career at Dominion Bancshares Mortgage Company as Vice President of Capital Markets and Wholesale Lending. Ms. Schwartz holds a B.S. from Shippensburg State College and an M.B.A. from the University of Pittsburgh. | | | The Board of Directors concluded that Ms. Schwartz should be nominated to continue to serve as a director on account of, among other things, the following experience, qualifications, attributes, and skills: •Leadership attributes and management experience •Expertise and experience in the real estate finance industry and the use of technology within this industry •Expertise and experience in the banking and financial services industries •Professional and educational background | |

  16. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION Information on our non-employee director cash compensation paid (or currently scheduled to be paid) during the annual periods commencing in May 2022, May 2023, and May 2024, is set forth in the tables below. Non-employee director cash compensation is paid quarterly, in arrears.

  17. DIRECTOR COMPENSATION

    | Non-Employee Director Cash Compensation | | | | | Annual Period Commencing May 1, | | | | 2022, 2023, and 2024 | | | Annual Retainer * | | 90,000 | | Retainer for Service as a Committee Member (per Committee)** | | 12,500 | | ———— | | | | * The Chairs of the Audit Committee and the Governance and Nominating Committee each receive an additional annual cash retainer of $20,000. The Chair of the Compensation Committee receives an additional annual cash retainer of $30,000 (increased from $20,000 in 2022). The additional annual cash retainer payable to the Chair of the Board of the Directors is currently $120,000. | | | | ** Non-employee directors who are members of Board Committees receive a retainer for their service on each Committee and do not receive committee meeting attendance fees. In cases where a non-employee director is formally invited to participate in a committee meeting of which he or she is not a member, he or she will be paid $2,000 per meeting for in-person attendance and $1,000 per meeting for telephonic attendance. | | |

  18. DIRECTOR COMPENSATION

    After submission of appropriate documentation on a timely basis, non-employee directors are also reimbursed for reasonable out-of-pocket expenses incurred in attending Board and committee meetings, as well as for their and, in some cases, their guests’ attendance at other Redwood-related meetings or events. Non-employee directors may also be reimbursed for out-of-pocket expenses incurred in attending conferences or educational seminars that relate to their Board service and are approved by the Chair of the Governance and Nominating Committee. Non-employee directors are also granted deferred stock units (“DSUs”), or comparable equity-based awards, each year at the time of the annual meeting of stockholders. The number of DSUs granted is determined by dividing the dollar value of the grant by the closing price of Redwood’s common stock on the NYSE on the day of grant (and rounding to the nearest whole share amount). In May 2023, non-employee directors received an annual DSU award valued at $125,000. On the 2024 Annual Meeting date, non-employee directors who are re-elected will receive an annual grant of vested DSUs for the May 2024 to May 2025 annual period determined by dividing $125,000 by the closing price of Redwood’s common stock on the meeting date. Non-employee directors may also be granted equity-based awards upon their initial election to the Board. These initial and annual DSU grants are fully vested upon grant, and they are generally subject to a mandatory three-year holding period. Dividend equivalent rights on DSUs are generally paid in cash to directors on each dividend distribution date. In August 2023, following a review of director compensation by the Compensation Committee and Governance and Nominating Committee, with the assistance of the Compensation Committee’s independent compensation consultant, Semler Brossy Consulting Group, LLC (“Semler Brossy”), the Board of Directors reviewed the compensation program for non-employee directors and determined to maintain the current compensation program with no additional changes beyond the increase of $10,000 for the annual cash retainer for service as Compensation Committee Chair which had been previously approved at the end of the May 2022 to May 2023 annual compensation cycle. In connection with this review, Semler Brossy conducted an independent review of Redwood’s non-employee director compensation program at the request of the Compensation Committee. The review conducted by Semler Brossy included a comparison against non-employee director compensation at the companies that comprise Redwood's executive compensation peer group. The non-employee director compensation program is intended to maintain Redwood’s total average annual compensation for non-employee directors at or near the compensation peer group median. Further detail regarding the executive compensation peer group is provided on pages 59 - 60 of this Proxy Statement under the heading “Executive Compensation in 2023 — Compensation Peer Group for 2023.” In particular, the Board approved the existing compensation program: an annual cash retainer for Board service of $90,000; an annual equity retainer for Board service of $125,000; an annual cash retainer for service as a Committee member of $12,500 (per Committee); an annual cash retainer for service as Audit Committee Chair of $20,000; an annual cash retainer for service as Governance and Nominating Committee Chair of $20,000; an annual cash retainer for service as Compensation Committee Chair of $30,000; and an annual cash retainer for service as Board Chair of $120,000. Each director may elect to defer receipt of cash compensation or dividend equivalent rights through Redwood’s Executive Deferred Compensation Plan. Cash balances in the Executive Deferred Compensation Plan are unsecured liabilities of Redwood and are utilized by Redwood as available capital to fund investments and operations. Based on each director’s election, deferred compensation can either be deferred into a cash account and earn a rate of return that is equivalent to 120% of the applicable long-term federal rate published by the IRS compounded monthly or be deferred into deferred stock units which will, among other things, entitle them to receive dividend equivalent rights related to those units. Each year the Compensation Committee and Governance and Nominating Committee review Redwood’s compensation of non-employee directors with the assistance of the Compensation Committee’s independent compensation consultant. Any changes to non-employee director compensation recommended by these Committees are subject to review and approval by the Board. These Committees intend to complete their annual review of Redwood’s non-employee director compensation prior to year-end in 2024, when updated comparative compensation data will be available. Any changes to non-employee director compensation that are approved by the Board following this 2024 review may increase or decrease non-employee director compensation for the May 2024 to May 2025 annual period from the amounts set forth in the “Non-Employee Director Cash Compensation” table on the preceding page.

  19. Non-Employee Director Compensation — 2023

    Non-Employee Director Compensation — 2023 The following table provides information on non-employee director compensation for the 2023 calendar year. Director compensation is set by the Board and is subject to change. Directors who are employed by Redwood do not receive any compensation for their Board activities and do not appear in the table below.

  20. Non-Employee Director Compensation — 2023

    | Current Non-Employee Directors | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3) | All Other Compensation ($) | Total ($) | | Doneene K. Damon(4) | $18,750 | $69,519 | — | $88,269 | | Armando Falcon | $135,000 | $124,996 | — | $259,996 | | Douglas B. Hansen | $98,000 | $124,996 | — | $222,996 | | Debora D. Horvath | $135,000 | $124,996 | — | $259,996 | | Greg H. Kubicek | $235,000 | $124,996 | — | $359,996 | | Georganne C. Proctor | $151,071 | $124,996 | — | $276,067 | | Faith A. Schwartz | $115,000 | $124,996 | — | $239,996 | | Directors Retired During 2023 | | | | | | George W. Madison(5) | $86,250 | $124,996 | — | $211,246 |

  21. Non-Employee Director Compensation — 2023

    (1)Fees earned are based on the non-employee director compensation policy in place for 2023: (i) annual cash retainer of $90,000; (ii) additional annual retainer for the Chair of the Board of $120,000; (iii) additional annual cash retainer for Audit Committee Chair and Governance and Nominating Committee Chair of $20,000 and for Compensation Committee Chair of $30,000; (iv) invitational committee fees of $2,000 (in person) and $1,000 (telephonic); and (v) an annual committee retainer of $12,500 per committee. (2)Stock awards consisted of grants of vested DSUs. The value of DSUs awarded was determined in accordance with FASB Accounting Standards Codification Topic 718. The value of dividend equivalent rights associated with DSUs was taken into account in establishing the value of these DSUs and previously granted DSUs. Therefore, dividend equivalent rights payments made during 2023 to non-employee directors are not considered compensation or other amounts reported in the table above. (3)As of December 31, 2023, the aggregate number of stock awards/DSUs outstanding for each then-serving non-employee director was as follows: Doneene K. Damon had 12,856 vested DSUs, Armando Falcon had 45,795 vested DSUs, Douglas B. Hansen had 44,767 vested DSUs; Debora D. Horvath had 83,298 vested DSUs; Greg H. Kubicek had 404,059 vested DSUs; George W. Madison had no DSUs; Georganne C. Proctor had 197,331 vested DSUs; and Faith A. Schwartz had 45,795 vested DSUs. (4)Ms. Damon joined Redwood's Board effective November 2, 2023. (5)Mr. Madison retired from Redwood's Board effective September 30, 2023. The following table provides information on stock unit distributions in common stock to non-employee directors from our Executive Deferred Compensation Plan in 2023. Stock units distributed represent compensation previously granted in prior years and were reported as director compensation in those prior years.

  22. Non-Employee Director Compensation — 2023

    | Current Non-Employee Directors | DSUs Distributed (#)(1) | Aggregate Value of DSUs Distributed ($)(2) | | Armando Falcon | 6,756 | $42,429 | | Douglas B. Hansen | 12,459 | $79,364 | | Debora Horvath | 12,459 | $79,364 | | Faith A. Schwartz | 6,756 | $42,429 | | Directors Retired During 2023 | | | | George W. Madison(3) | 103,480 | $737,817 |

  23. Non-Employee Director Compensation — 2023

    (1)Mr. Hansen and Ms. Horvath’s 2023 DSU distributions included annual director’s grants awarded in 2020. Mr. Falcon’s and Ms. Schwartz’s 2023 DSU distributions also included directors fees earned in 2021 which they elected to defer into additional DSUs under Redwood’s Executive Deferred Compensation Plan. Mr. Madison’s 2023 DSU distribution included annual director grants as well as certain DERs and directors fees earned from 2020 to 2023, which he elected to defer into additional DSUs under Redwood’s Executive Deferred Compensation Plan. (2)The aggregate value of DSUs distributed is calculated by multiplying the number of DSUs distributed by the fair market value of Redwood common stock on the date of distribution. (3)Mr. Madison retired from Redwood's Board effective September 30, 2023.

  24. Compensation Committee

    Compensation Committee The Compensation Committee (the “Committee”) is committed to providing disclosure within this CD&A that gives insight into the process by which it arrives at executive compensation determinations and the underlying rationales. Among other things, this CD&A describes: •The Committee’s process for reviewing and determining the elements of the compensation of the Chief Executive Officer (“CEO”) and of the other NEOs. •The rationale for the different elements of the NEOs’ compensation and Redwood’s compensation philosophy, objectives, and methodology for peer comparisons. •The metrics and goals used for performance-based compensation and factors taken into account in the Committee’s determination of whether those metrics and goals were satisfied. •The severance and change of control payments that NEOs may become entitled to receive under certain circumstances. •The role of the Committee’s independent compensation consultant. The Committee generally meets at least four times annually and, over the course of an annual period, reviews Redwood’s compensation philosophy and its executive compensation plans and programs. After taking into account various factors and analyses, including those described in this CD&A, input from its independent compensation consultant, feedback from stockholders obtained during ongoing outreach efforts, and the outcome of recent stockholder advisory votes on executive compensation (commonly referred to as “Say-on-Pay” votes), the Committee makes compensation determinations it believes are appropriate in light of its executive compensation objectives.

  25. Stockholder Feedback

    | Section II - Executive Compensation in 2023 | | | | | ➢ | Redwood’s 2023 Performance | | | ➢ | Elements of Compensation in 2023 | | | ➢ | Process for Compensation Determinations for 2023 | | | ➢ | Compensation Peer Group for 2023 | | | ➢ | 2023 Base Salaries | | | ➢ | 2023 Performance-Based Annual Bonus Compensation | | | ➢ | Performance-Based Annual Bonuses Earned for 2023 | | | ➢ | 2023 Long-Term Equity-Based Incentive Awards | | | ➢ | Vesting and Mandatory Holding Periods for 2023 Long-Term Equity-Based Incentive Awards | | | ➢ | Pay-for-Performance Outcomes from Long-Term Equity-Based Incentive Awards |

  26. Elements of Compensation in 2023

    Elements of Compensation in 2023 In 2023, cash compensation for Redwood’s NEOs included a base salary and a performance-based annual bonus. Annual bonuses for 2023 were determined based on company financial performance and on each NEO’s individual performance. For each NEO, the Committee established a target annual bonus amount at the beginning of 2023 that would be earned if Redwood’s financial performance met Committee-established targets and the NEO’s individual performance merited target-level payment. In particular, one portion of each NEO’s annual bonus was determined based on company financial performance (referred to in this CD&A as the Company performance component of target bonus or Company performance or financial performance bonus), and another portion of each NEO’s annual bonus was determined based on individual performance (referred to in this CD&A as the individual performance component of target bonus or individual performance bonus). The Committee generally intends that the base salary and annual bonus target for each NEO to be appropriate in comparison to a market-based median level, after taking into account factors such as the NEO’s role and responsibilities, competitive factors, and internal equity. In addition, the Committee believes that performance-based bonuses for each NEO should have adequate upside so that total annual compensation actually earned may reach the top-quartile of the market-based level for strong performance. The market-based levels used by the Committee during 2023 were determined with the assistance of the Committee’s independent compensation consultant. The process included reviewing compensation practices of peer companies selected by the Committee (referred to in this CD&A as the compensation peer group). Further details regarding the compensation peer group and practices for comparisons to this peer group are provided on pages 59 – 60 within this CD&A under the heading “Compensation Peer Group for 2023.” For 2023, the Committee established the Company performance component of the annual bonus for each NEO such that half of this component would be realized based on Redwood’s 2023 “Adjusted ROE” and the other half of this component would be realized based on Redwood’s 2023 “Adjusted EAD ROE”. Adjusted ROE and Adjusted EAD ROE are each non-GAAP performance measures that are defined and described on page 61 within this CD&A under the heading “2023 Performance-Based Annual Bonus Compensation.” Furthermore, for 2023, the Committee established an Adjusted ROE financial performance target of 11.5% and an Adjusted EAD ROE performance target of 7.5%. With respect to long-term equity-based compensation, the Committee generally makes annual year-end awards to NEOs in amounts, and subject to terms and vesting conditions, that provide an incentive to create long-term stockholder value and align the interests of NEOs with the interests of long-term stockholders. These year-end awards are intended to provide performance-based compensation opportunities at levels that will be effective in retaining valued and productive executives. In determining the size of annual year-end long-term equity-based compensation opportunities, the Committee uses the same or similar considerations as are applied when setting salaries and target annual bonus opportunities, with the value actually delivered/realized being a result of subsequent performance. For 2023, the value of long-term equity-based compensation granted at year-end to NEOs was determined after taking into account the Committee’s philosophy that: •Competitive pressure on NEO compensation levels from higher-paying related market sectors should be addressed through the value of long-term equity-based awards. Annual target cash compensation amounts are generally intended to be appropriate in comparison to a median range of the compensation peer group, while long-term equity-based awards may be targeted above the median when justified by performance, experience, or the scope of the individual’s role. The value of long-term equity-based awards may also take into account each NEO’s individual performance. •The terms and vesting conditions of long-term equity-based awards should result in realized compensation for NEOs that correlates with long-term stockholder value creation (through dividend distributions and share-price growth) over a minimum of three years. In the first quarter of 2023, for two of Redwood’s NEOs, the Committee also determined to make a long-term equity-based compensation award due to identified competitive, retention and incentive circumstances. As a result, in addition to their annual year-end long-term equity-based award, in January of 2023 Ms. Carillo received an award of DSUs and in February of 2023 Mr. Matera received an award of cash-settled PSUs, each as further described on page 69 within this CD&A under the heading “2023 Long-Term Equity-Based Awards.” NEOs are also provided with other benefits that are also available to all eligible employees of Redwood on a substantially similar basis. These benefits, which are further described below on pages 76 – 77 within this CD&A, include standard health and welfare benefits and the ability to participate in Redwood’s tax-qualified 401(k) plan and Employee Stock Purchase Plan. In addition, NEOs may participate in Redwood’s Executive Deferred Compensation Plan. An illustration of the elements of the CEO’s target compensation at the outset of 2023, including base salary, annual bonus target, and long-term equity-based compensation is set forth under the heading “Elements of CEO’s Target Compensation Structure – Outset of 2023” in the Executive Summary of CD&A on page 39 of this Proxy Statement.

  27. Compensation Peer Group for 2023

    Compensation Peer Group for 2023 As in prior years, in 2023 the Committee asked its independent compensation consultant to conduct a market pay analysis with respect to the compensation of Redwood’s NEOs. For 2023, Semler Brossy’s market pay analysis relied primarily on publicly disclosed executive compensation data from the compensation peer group. The Committee may also consider supplemental data that provides insight into executive compensation practices at competitors that are externally managed and, therefore, do not generally disclose comprehensive compensation data for their named executive officers, as well as private companies and divisions of larger public companies for which individual compensation data are not publicly disclosed. Certain of the publicly-traded REITs that Redwood competes with for mortgage-industry talent are externally managed and do not disclose comprehensive executive compensation information and certain peers may not disclose information for officers with responsibilities comparable to all of Redwood’s executive officers. The Committee considers the use of a market-based compensation analysis important for validating competitive positioning in attracting and retaining executive talent. Each year, to prepare for conducting the competitive pay analysis, the Committee, after consultation with its independent compensation consultant, designates a compensation peer group using a pre-defined process and objective industry and size criteria that is intended to include companies with which Redwood competes for business or for executive talent. The process and objective criteria used to select the 2023 compensation peer group (which was used in the 2023 competitive pay analysis) is detailed below.

  28. Compensation Peer Group for 2023

    | Step 1: | Begin with a broad screening process intended to identify publicly traded, U.S.-based companies that are internally managed (externally-managed companies generally have not disclosed comprehensive compensation data and are therefore excluded) |

  29. Compensation Peer Group for 2023

    | Step 2: | Identify REITs and other companies most similar to Redwood (i.e., direct peers), including: | | | | • | Mortgage REITs, which are considered “direct peers” along with real estate development and financial services companies with a focus on mortgage servicing or mortgage-related assets | | | • | Exclude all companies with market capitalization values outside of a 0.25-4.0x range compared to Redwood, subject to reasonable exceptions for key business competitors and based on 12-month average market capitalization |

  30. Compensation Peer Group for 2023

    | Step 3: | Identify other relevant business and labor-market competitors: | | | | • | Financial services companies with both market capitalization value in a 0.5-2.0x range compared to Redwood based on 12-month average market capitalization | | | • | Exclude bank holding companies and companies in the cash advance/pawn broker businesses, due to fundamental differences in the underlying business model |

  31. Compensation Peer Group for 2023

    | Step 4: | Select 15 to 25 companies for inclusion in the compensation peer group: | | | | • | Generally include all companies identified in Step 2 | | | • | Generally include companies identified in Step 3 if they: (1) are included in the prior year’s compensation peer group or (2) have been identified as a peer of Redwood’s most-direct peers (e.g., a peer of another mortgage REIT identified in Step 2) | | | • | Add additional companies identified in Step 3 to: (1) ensure that the sample size is sufficient and (2) position Redwood closer to the median on key size measures, focusing primarily on market capitalization and secondarily on total assets and net income |

  32. Compensation Peer Group for 2023

    The Committee recognizes that the compensation peer group does not include generally higher-paying externally-managed REITs, mortgage-focused divisions of large publicly-traded financial institutions, private equity firms, and hedge funds with which Redwood competes for executive talent. These organizations are not included because they have different business economics and pay models from Redwood, and because comprehensive compensation data for their executives are generally not publicly available. The Committee reviews the compensation peer group and the selection process and criteria on an annual basis to confirm that it continues to reflect relevant business and labor market competitors for whom comprehensive data is available. Accordingly, the companies included as peers may change from year to year as a result of updates to the selection process and criteria and changes in the real estate and capital markets. 2023 Compensation Peer Group. Based on the above-described methodology, the compensation peer group approved by the Committee for use in preparing and reviewing the competitive pay analysis in 2023 consisted of the following 19 companies:

  33. Compensation Peer Group for 2023

    | • | Arbor Realty Trust, Inc. | • | BrightSphere Investments Group, Inc. | | • | Chimera Investment Corporation | • | Dynex Capital, Inc. | | • | Essent Group Ltd. | • | Granite Point Mortgage, Inc. | | • | Ladder Capital Corp. | • | MFA Financial, Inc. | | • | Mr. Cooper Group, Inc. | • | New York Mortgage Trust, Inc. | | • | NMI Holdings, Inc. | • | PennyMac Financial Services, Inc. | | • | Radian Group, Inc. | • | Rithm Capital Corp. | | • | Safehold, Inc. | • | Two Harbors Investment Corp. | | • | Victory Capital Holdings, Inc. | • | Virtus Investment Partners, Inc. | | • | Walker & Dunlop. Inc. | | |

  34. Compensation Peer Group for 2023

    Changes to Compensation Peer Group. As noted above, the companies included in the peer group may change from year to year. The following changes were made to Redwood’s compensation peer group from 2022 to 2023:

  35. Compensation Peer Group for 2023

    | | Additions: | | Removals: | | • | Rithm Capital Corp. | • | iStar Inc. | | • | Safehold Inc. | | |

  36. Compensation Peer Group for 2023

    Following the merger of iStar Inc. and Safehold Inc., Safehold Inc. replaced iStar Inc. in the compensation peer group. In addition, Rithm Capital Corp. was identified as an additional company for the compensation peer group, based on its business model and after review of the degree of alignment with key quantitative and qualitative criteria described above for inclusion in the peer group.

  37. 2023 Performance-Based Annual Bonus Compensation

    2023 Performance-Based Annual Bonus Compensation Redwood’s annual bonus program is designed to reward NEOs based on Redwood’s financial performance and each NEO’s individual performance. In accordance with the Committee’s executive compensation philosophy, and the pay-for-performance structure of Redwood’s executive compensation program, there has been significant variability in the performance-based annual bonuses paid to Redwood’s CEO over the last five years, reflecting the variations in Redwood’s compensation program and financial performance over the same period. As described last year in the Company’s 2023 annual proxy statement, after taking into account stockholder feedback, for 2023 the Committee re-assessed maximum annual bonus opportunities and the methodology for determining realization of annual bonuses. Among other things, going-forward into 2023 the Committee lowered each NEO’s maximum annual bonus opportunity (annual bonus cap) and introduced an additional financial performance metric into the determination of annual bonus realization, while also reducing the “leverage” factor used for determining realization of above-target annual bonuses – i.e., for 2023 the Committee formulaically reduced the percentage of above target annual bonus that could be realized for above-target performance. Set forth below is a description of the components of the 2023 performance-based annual bonus compensation for Redwood’s NEOs, including a description of the financial performance metrics and targets used within the bonus program’s structure. Components of 2023 Annual Bonuses. In order to align executives’ interests with the interests of stockholders, in the first quarter of 2023 the Committee determined, after consultation with its independent compensation consultant, that 2023 target annual bonuses for NEOs would continue to be weighted as follows: •Company/Financial Performance Component. 75% on the achievement of predetermined target levels of Redwood’s financial performance for 2023; and •Individual Performance Component. 25% on individual contributions to the Company’s pre-established annual strategic, business, operational, risk management, and sustainability/ESG goals and objectives for 2023. The weightings described above were used so that most of an NEO’s target annual bonus will depend directly on company financial performance, while also providing incentives for achievement of individual strategic, business, operational, risk management and sustainability/ESG goals that the Committee believes are in the interests of Redwood and its stockholders, but in some cases may be difficult to quantitatively link to annual company financial performance. Financial Performance Metrics for 2023 Annual Bonuses. Also during the first quarter of 2023, after a review of Redwood’s compensation program, and following consultation with its independent compensation consultant, the Committee determined to use two different non-GAAP financial performance metrics in 2023 within the methodology for determining realization of each NEO’s performance-based annual bonus – namely, Adjusted ROE and Adjusted EAD ROE1 – each of which is further described below. For 2023, the Committee determined that 50% of the target amount of the financial performance component of annual bonuses would be realized based on 2023 Adjusted ROE and the other 50% of the target amount of the financial performance component of annual bonuses would be realized based on 2023 Adjusted EAD ROE. 1 Note: Adjusted ROE and Adjusted EAD ROE should not be considered as alternatives to GAAP net income, GAAP ROE or other measurements of results of operations computed in accordance with GAAP or for federal income tax purposes. See Annex B to this Proxy Statement for additional discussion, disclosure and details regarding these non-GAAP financial performance metrics. •Adjusted ROE. Adjusted ROE is a non-GAAP financial performance metric, which has historically been very closely correlated to Redwood’s ROE based on GAAP financial results, but differs in certain respects. ◦Adjusted ROE generally reflects adjusted earnings on average common equity capital adjusted to exclude certain unrealized mark-to-market gains and losses from equity. Because Adjusted ROE is a ratio of earnings to equity capital, the adjustment to exclude certain unrealized mark-to-market gains and losses from equity is made to enable the calculation of an “apples-to-apples” non-GAAP ratio of earnings to common equity capital for purposes of evaluating financial performance. ◦In addition, through adjustments to earnings, Adjusted ROE, among other things, excludes certain acquisition-related expenses – e.g., excludes amortization expense related to intangible assets acquired in acquisitions and the hypothetical income taxes associated with these adjustments. The Committee believes that Adjusted ROE is an appropriate measure of financial performance to use within its methodology for determining realization of annual bonuses for Redwood’s NEOs because, among other reasons, a key source of earnings at Redwood is income from investments in mortgage loans and other real estate-related assets, as well as from mortgage banking activities and Adjusted ROE assists the Committee in analyzing the Company’s results of operations. It is also a performance metric that the Committee believes, over the long-term, should be correlated with long-term stockholder returns. Additional discussion, disclosure and details relating to Adjusted ROE are set forth within Annex B to this Proxy Statement. •Adjusted EAD ROE. Adjusted EAD ROE is a non-GAAP financial performance metric derived from Redwood’s ROE based on GAAP financial results, but which differs in key respects. Adjusted EAD ROE is calculated by first deriving non-GAAP Adjusted Earnings Available for Distribution (“Adjusted EAD”) from earnings and then dividing Adjusted EAD by average common equity capital adjusted to exclude certain unrealized mark-to-market gains and losses from equity. ◦Adjusted EAD is derived from earnings through, among other things, the following adjustments: (i) exclude investment fair value changes, net; (ii) exclude HEI income, net; (iii) adjust for change in economic basis of investments; (iv) exclude realized gains and losses; (v) exclude certain acquisition-related expenses – e.g., exclude amortization expense related to intangible assets acquired in acquisitions; and (vi) exclude certain organizational restructuring charges (as applicable). The Committee believes that Adjusted EAD ROE is an appropriate measure of financial performance to use within its methodology for determining realization of annual bonuses for Redwood’s NEOs because, among other reasons, a key source of returns to Redwood’s stockholders is through regular quarterly dividends and Adjusted EAD ROE assists the Committee in analyzing the Company’s results of operations and helps to facilitate the Committee’s comparisons of Redwood’s financial performance to industry peers, including by supplementing the Committee’s analysis of the Company’s ability to pay dividends, and provides for the Committee an indication of the current income generating capacity of the Company's business operations on a quarterly basis. It is also a performance metric that the Committee believes, over the long-term, should be correlated with long-term stockholder returns. Additional discussion, disclosure and details relating to Adjusted EAD and Adjusted EAD ROE are set forth within Annex B to this Proxy Statement.

  38. 2023 Performance-Based Annual Bonus Compensation

    Financial Performance Targets for 2023 Annual Bonuses. As noted above, for 2023, the Committee determined that 50% of the target amount of the financial performance component of annual bonuses would be realized based on 2023 Adjusted ROE and the other 50% of the target amount of the financial performance component of annual bonuses would be realized based on 2023 Adjusted EAD ROE, in each case based on 2023 financial performance relative to a 2023 target level established by the Committee in the first quarter of 2023. The 2023 financial performance targets established by the Committee were as follows: Adjusted ROE of 11.5% and Adjusted EAD ROE of 7.5%. In determining these financial performance targets for 2023, the Committee took into account input from, management, its independent compensation consultant, and the Board of Directors, and followed a process consistent with how it has historically determined targets for the Company performance component of annual bonuses for executive officers. The Committee decided to continue its historical practice of using an Adjusted ROE financial performance target determined at the beginning of each year based on a risk-free interest rate plus an incremental premium determined by the Committee to be appropriate (each of which can vary from year to year). This decision continued to be premised, as it was in 2022, in large part on the nature of Redwood’s business model, which has had a significant focus on investing in residential mortgage loans and other real-estate related loans and debt instruments. Returns that Redwood can earn on new investments in residential mortgage loans and other real-estate related loans and debt investments are, to a certain extent, correlated with the market-driven interest rates for these and other types of loans and debt instruments (which rates depend on the perceived risk of these investments). These market-driven interest rates are typically analyzed as the risk-free interest rate for investment in U.S. Treasury obligations (or other debt backed by the full faith and credit of the U.S.) with a comparable duration plus an incremental risk premium above the risk-free rate. The decision to use an Adjusted ROE target based on a risk-free interest rate plus an incremental premium was also premised on the fact that management believes that investors focused on investing in companies like Redwood, including companies that operate mortgage banking platforms, also compare return on equity to risk-free rates of return in evaluating Redwood’s financial performance and that the Adjusted ROE financial performance target should take into account stockholders’ return and dividend yield expectations. As a result, the Committee also reviewed recent and historical dividend yields on Redwood’s common stock and determined a range of incremental premiums above the risk-free rate that would be supportive of those yields. In addition to its review of market returns Redwood could earn on new investments generated from mortgage banking operations, and the level of Adjusted ROE financial performance necessary to meet stockholders’ return and dividend yield expectations, the Committee reviewed the level of Adjusted ROE performance necessary to support the payment of regular quarterly dividends declared by the Board of Directors. The Committee believes that setting an Adjusted ROE performance target at an appropriate level above the risk-free interest rate (by adding the incremental premium to the risk-free interest rate) establishes an incentive for executives to achieve attractive financial performance for Redwood (and aligns the interests of executives and stockholders in seeking this level of financial performance), without exposing Redwood to inappropriate risk. If risk-free interest rates were to rise significantly in future years, all other factors being equal, the company financial performance target used for determining the Company performance component of annual bonuses for executive officers could be increased in recognition of the fact that accomplishing the same financial performance in a higher interest rate environment might only require lower risk investments. Conversely, if risk-free interest rates were to decline in future years, all other factors being equal, the company financial performance target used for determining the Company performance component of annual bonuses for executive officers could be lowered in recognition of the fact that reaching for the same financial performance in a lower interest environment could necessitate taking greater investment or other risks. Overall, the Committee believes that the use of a performance target that can vary from year to year provides the ability to adjust compensation incentives in a manner consistent with Redwood’s business model and the market environment in which Redwood operates. In setting an Adjusted EAD ROE financial performance target for 2023, the Committee took into account the factors described above with respect to its process for setting an Adjusted ROE target and also considered factors relating to the adjustments made to calculate Adjusted EAD ROE and how those adjustments assist management and investors in analyzing Redwood’s financial performance and help facilitate comparisons to industry peers and how those adjustments can also supplement analysis of the Redwood’s ability to pay a sustainable and growing level of dividends. After consideration of the foregoing, as well as the alternative line-of-sight that this financial performance metric provides into fundamental Company performance and key metrics that drive stockholder value creation, the Committee believes it set the Adjusted EAD ROE target at an appropriate level for the market environment the Company expected to operate in during 2023 and thereby established an important incentive for executives to achieve attractive Adjusted EAD ROE financial performance for Redwood, without exposing Redwood to inappropriate risk. Other Aspects of 2023 Annual Bonus Methodology. Following this process for determining the financial performance targets to be used in the methodology for determining Company performance bonuses, the Committee also established how above- and below-target bonus amounts would be formulaicly determined based on these financial performance targets, as follows: (i) with respect to the portion of the financial performance component of annual bonus determined based on Adjusted ROE, no bonus amounts would be earned if Adjusted ROE was 2.875% or less; bonus amounts below or at the target bonus amounts would be earned if Adjusted ROE was between 2.875% and 11.5%; and bonus amounts in excess of the target bonus amounts would not be earned unless Adjusted ROE was more than 11.5%; and (ii) with respect to the portion of the financial performance component of annual bonus determined based on Adjusted EAD ROE, no bonus amounts would be earned if Adjusted EAD ROE was 1.875% or less; bonus amounts below or at the target bonus amounts would be earned if Adjusted EAD ROE was between 1.875% and 7.5%; and bonus amounts in excess of the target bonus amounts would not be earned unless Adjusted EAD ROE was more than 7.5%. Additional detail regarding the formulaic determination of above- and below-target bonus amounts based on these financial performance targets – i.e., the formulaic “leverage” of this annual bonus methodology – is set forth within Annex B to this Proxy Statement.

  39. 2023 Performance-Based Annual Bonus Compensation

    The use of an initial performance threshold of greater than 2.875% Adjusted ROE and greater than 1.875% Adjusted EAD ROE for the payment of any of portion of target Company performance bonuses based on these metrics, respectively, represents a determination by the Committee that financial performance below that threshold is not significant enough margin to merit payment of any portion of this component of annual bonuses. The payment of target Company performance bonuses or a portion of target Company performance bonuses for Adjusted ROE in the range between 2.875% and 11.5% and Adjusted EAD in the range between 1.875% and 7.5%, respectively, reflects the determination by the Committee that financial performance within this range merits payment of below-target or target Company performance bonuses as financial performance improves above the initial performance threshold. The Committee also determined that for Adjusted ROE in excess of 11.5% and for Adjusted EAD ROE in excess of 7.5%, respectively, subject to the maximum total bonus opportunity for each NEO noted below and assuming the individual performance bonuses are earned at target level, the Company performance bonus would be increased by a pro-rated amount for the portion based on such metric above the target amount (based on a straight-line, mathematical interpolation) as described in Annex B to this Proxy Statement, but subject to each executive officer’s maximum annual bonus opportunity (annual bonus cap). Additionally, the Committee determined at the outset of 2023 that individual performance in 2023 for each NEO would be reviewed in the context of, among other things, the specific pre-determined goals and factors discussed below under “Performance-Based Annual Bonuses Earned for 2023 — Individual Performance Component of 2023 Annual Bonuses.” As in past years, during 2023 these individual factors and goals were subject to adjustment when circumstances warranted, at the discretion of the Committee. For 2023, the individual performance component of annual bonuses could be earned up to 200% of the target amount depending on the Committee’s assessment of individual performance. With respect to the maximum annual bonus opportunity (i.e., the maximum sum of the two components of the annual bonus) that each executive officer could earn, for 2023, these annual bonus caps were reduced from the levels that applied in 2022 – to 3.5x of total target annual bonus for each NEO. However, as described below under “2024 Maximum Total Annual Bonuses”, going forward into 2024, the Committee further lowered the maximum annual bonus opportunity for all of its NEOs to 3.0x of total target annual bonus for each NEO. NEOs’ 2023 Target Annual Bonus Amounts. At the end of 2022, the Committee made determinations with respect to each NEO’s target 2023 annual bonus after consultation with its independent compensation consultant and consideration of compensation peer group comparisons for the position, competitive factors and the NEO’s role, experience, and performance at Redwood. •Mr. Abate. The Committee determined that the 2023 target bonus percentage for Mr. Abate would remain unchanged at 200% of base salary. •Mr. Robinson. The Committee determined that the 2023 target bonus percentage for Mr. Robinson would remain unchanged at 190% of base salary. •Ms. Carillo. The Committee determined that the 2023 target bonus percentage for Ms. Carillo would be increased from 175% to 185% of base salary. •Mr. Matera. The Committee determined that the 2023 target bonus percentage for Mr. Matera would set at 185% of base salary. •Mr. Stone. The Committee determined that the 2023 target bonus percentage for Mr. Stone would remain unchanged at 150% of base salary. •Ms. Macomber. The Committee determined that the 2023 target bonus percentage for Ms. Macomber would remain unchanged at 150% of base salary.

  40. 2023 Performance-Based Annual Bonus Compensation

    | | 2023 | | 2023 | 2023 | | | | Base Salary | | Target Annual Bonus | Target Annual Bonus | | | NEO | ($ per annum) | | (as % of Base Salary) | | ($) | | Mr. Abate, Chief Executive Officer | $ | 900,000 | 200% | $ | 1,800,000 | | Mr. Robinson, President | $ | 850,000 | 190% | $ | 1,615,000 | | Ms. Carillo, Chief Financial Officer | $ | 800,000 | 185% | $ | 1,480,000 | | Mr. Matera, Chief Investment Officer | $ | 775,000 | 185% | $ | 1,433,750 | | Mr. Stone, Executive Vice President and Chief Legal Officer | $ | 450,000 | 150% | $ | 675,000 | | Ms. Macomber, Chief Human Resource Officer | $ | 450,000 | 150% | $ | 675,000 |

  41. Performance-Based Annual Bonuses Earned for 2023

    Performance-Based Annual Bonuses Earned for 2023 Annual performance-based bonuses earned by NEOs for 2023 consisted of both a Company performance component and an individual performance component. A further discussion of each of these components is set forth below. Company Performance Component of 2023 Annual Bonuses. As described above, for 2023, the Committee determined that 50% of the target amount of the Company performance component of annual bonuses would be realized based on 2023 Adjusted ROE and the other 50% of the target amount of the Company performance component of annual bonuses would be realized based on 2023 Adjusted EAD ROE. •Redwood’s Adjusted ROE for 2023 was below the initial performance threshold of 2.875% Adjusted ROE. Accordingly, the portion of the Company performance component of 2023 annual bonuses determined based on Adjusted ROE was realized at 0% of the target amount for that component. •Redwood’s Adjusted EAD ROE for 2023 was above the initial performance threshold of 1.875%, but below the financial performance target of 7.5% for Adjusted EAD ROE. Accordingly, the portion of the Company performance component of 2023 annual bonuses determined based on Adjusted EAD ROE was realized at 54% of the target amount for that component. The table below sets forth the target bonus amount for each NEO for the Company performance component of annual bonus, together with the amount of this component each NEO realized/earned based on the Company’s financial performance in 2023.

  42. Performance-Based Annual Bonuses Earned for 2023

    | | Company Performance Component of 2023 Target Annual Bonus | | 2023 Company Performance Component of Annual Bonus Earned | | % of Company Performance Component Earned | | NEO | ($) | | ($) | | (%) | | Mr. Abate, Chief Executive Officer | $ | 1,350,000 | $ | 362,782 | 27% | | Mr. Robinson, President | $ | 1,211,250 | $ | 325,496 | 27% | | Ms. Carillo, Chief Financial Officer | $ | 1,110,000 | $ | 298,287 | 27% | | Mr. Matera, Chief Investment Officer | $ | 1,075,312 | $ | 288,966 | 27% | | Mr. Stone, Executive Vice President and Chief Legal Officer | $ | 506,250 | $ | 136,043 | 27% | | Ms. Macomber, Chief Human Resource Officer | $ | 506,250 | $ | 136,043 | 27% |

  43. Performance-Based Annual Bonuses Earned for 2023

    Individual Performance Component of 2023 Annual Bonuses. For 2023, the individual performance components of annual bonuses were determined after a review of each NEO’s individual achievements and contributions to the collective achievements of the senior management team. The Committee reviewed the individual performance of each of the NEOs, which included a review of the NEOs’ self-assessment and the assessment by Mr. Abate of the other NEOs. Among other factors, the Committee considered each NEO’s contribution to the achievement of the company-wide goals noted below in assessing each NEO’s individual performance for 2023. With respect to each of these goals, the Committee took into account various factors (other than the Company’s financial performance) in evaluating the level of attainment of the goal and each NEO’s contribution to achieving the goal, including the principal factors described below and the related level of attainment (presented in italics after each listed goal). In considering these goals and factors, the Committee did not assign specific weightings to each factor and goal, but instead considered them together as part of a comprehensive qualitative review. Goal: Position Redwood’s Residential Consumer Mortgage Banking platform to dynamically respond to market conditions by, among other things: deepening the network of originators that sell “jumbo” mortgage loans to Redwood, increasing market share, and maintaining a diversified distribution strategy for residential consumer loans; in addition, proactively monitor markets for opportunities to address consumer demand for access to home equity in the current interest rate environment, including through further development of Redwood’s in-house HEI origination initiative and distribution strategies. The Committee evaluated achievement of this goal in the context of various factors, including that during 2023 management’s initiatives relating to the Residential Consumer Mortgage Banking platform resulted in: an effective response to the regional bank crisis in early 2023, as well as to the Federal proposal to evolve banks’ Basel III capital requirements) by adding 68 new or re-established loan seller relationships with bank counterparties (with the result that this platform ended 2023 with approximately 190 loan seller relationships – across banks, independent mortgage companies and other counterparties); an increase in market share from approximately 1% to 5% by locking $3.5 billion of jumbo mortgage loans (i.e., volume of loan purchase commitments); the distribution of $1.8 billion of loans, including $1.7 billion through five SEMT® securitizations and $126 million through whole loan sales – representing the continuation of ongoing efforts to maintain a diversified distribution strategy across capital markets executions and whole loan sales – a strong foundation that will continue to support future growth across varying market environments; the launch of Redwood’s in-house HEI origination platform, branded as “Aspire”, to directly originate HEIs to qualified homeowners; the issuance of the Company’s first securitization of HEIs with an investment-grade rating, a key to expanding the investor base for this emerging home equity product; and the coupling of the creation of the Aspire HEI origination platform with roll-out of a new program to acquire second lien mortgage loans – positioning Redwood to respond to increased demand from homeowners for a variety of products to access their home equity. Goal: Optimize the Residential Investor Mortgage Banking platform’s strategic positioning in the marketplace and relative to competitors by, among other things: continuing to diversify distribution channels through whole-loan sales, private securitizations and a targeted origination footprint that serves durable market demand; enhancing capital efficiency through joint ventures and other structures that allow Redwood to invest pari passu alongside capital partners and augment traditional revenue streams (and by arranging financing structures that are responsive to the structured needs of these vehicles); and, subject to financial market conditions and risk management considerations, execute on operational, capital markets and product development initiatives to continue to provide a full spectrum of financing solutions that is responsive to housing investors’ borrowing needs. •From a Corporate Responsibility/ESG perspective, continue focus on financing workforce and affording housing, consistent with Redwood's mission to make quality housing – whether rented or owned – accessible to all American households. The Committee evaluated achievement of this goal in the context of various factors, including that during 2023 management’s initiatives relating to the Residential Investor Mortgage Banking platform resulted in: funding of $1.6 billion of loans, including $1.1 billion of bridge loans and $525 million of term loans; distribution of $1.1 billion of loans, including $528 million through two CAFL® securitizations and $600 million through whole loan sales; the addition of new whole loans buyers to Redwood’s network; the launch of a new debt service coverage ratio (“DSCR”) loan product, furthering the full spectrum of financing solutions this platform provides to respond to housing investors’ borrowing needs; the establishment of a new joint venture with Oaktree Capital Management to invest in the Company’s bridge loan originations (and the establishment of a corresponding financing facility for this joint venture); and the initiation of the negotiation of an additional strategic partnership to further enhance corporate financing and distribution strategy for this platform (leading to the March 2024 announcement of new strategic joint venture and financing relationship with CPP Investments). •From a Corporate Responsibility/ESG perspective, Redwood continued its focus on financing affordable housing, a segment of the market that is supported by strong forward-looking supply-demand dynamics – with 70% of units in rental properties that Redwood provided long-term financing for being considered affordable housing. Goal: Within Redwood’s Investment Portfolio and corporate finance function optimize investment and financing strategies, explore alternative products/markets to diversify capital base, and position the Company to effectively address convertible debt maturities in 2023 and future years; in addition, maintain a sufficient excess capital position to appropriately balance risk and desired growth in Redwood’s mortgage banking platforms. The Committee evaluated achievement of this goal in the context of various factors, including that during 2023 management’s initiatives relating to the Investment Portfolio and its corporate capital structure resulted in: raising $70 million of gross proceeds in an inaugural preferred stock issuance; positioning Redwood for the issuance of senior unsecured notes in early January 2024; through repayments and repurchases (at a discount to par), reducing Redwood’s convertible debt position by 28% year-over-year; through financing optimization and establishment of new warehouse lines, including executing three non-recourse securitizations of portfolio assets across HEI, bridge loan and re-performing loan categories, organically unlocking $210 million of capital; and, overall, lowering Redwood’s recourse debt exposure by 13% year-over-year and significantly enhancing the Company’s overall capital, liquidity and financing position (including as a result of actions noted above relating to Redwood’s mortgage banking platforms), supporting forward-looking growth objectives for Redwood’s operating platforms and future capital deployment opportunities for the Investment Portfolio.

  44. Performance-Based Annual Bonuses Earned for 2023

    Goal: Further public disclosures relating to Corporate Responsibility/ESG, including disclosures that align with SASB standards; maintain strong human capital engagement initiatives; and continue to invest in training, programs and mentorship efforts that contribute to an inclusive and equitable work environment. The Committee evaluated achievement of this goal in the context of various factors, including that during 2023 management’s initiatives relating to Corporate Responsibility/ESG resulted in: publication of Redwood’s second annual ESG report, which included disclosures in accordance with principles and standards of the Sustainability Accounting Standards Board (SASB) Mortgage Finance and Asset Management & Custody Activities industry standards; ongoing outreach to and engagement with stockholders regarding Corporate Responsibility/ESG matters; continuing sponsorship of Employee Resource Groups (ERGs) focused on diversity, professional development that supports the advancement of women in leadership, and charitable giving and community engagement; offering of a variety of training program to develop employees across all areas of the Company; and continuation of a summer internship program for college-level students preparing to enter the workforce. Based on the review described above, the individual performance components of annual bonuses for each NEO for 2023 were determined, as set forth in the table below.

  45. Performance-Based Annual Bonuses Earned for 2023

    | | Individual Performance Component of 2023 Target Annual Bonus | | % of Individual Performance Component Earned | 2023 Individual Performance Component of Annual Bonus Realized/Earned | | | NEO | ($) | | (%) | | ($) | | Mr. Abate, Chief Executive Officer | $ | $450,000 | 190% | $ | $855,000 | | Mr. Robinson, President | $ | $403,750 | 190% | $ | $767,125 | | Ms. Carillo, Chief Financial Officer | $ | $370,000 | 190% | $ | $703,000 | | Mr. Matera Chief Investment Officer | | $358,437 | 180% | | $645,187 | | Mr. Stone, Executive Vice President and Chief Legal Officer | $ | $168,750 | 170% | $ | $286,875 | | Ms. Macomber, Chief Human Resource Officer | $ | $168,750 | 170% | | $286,875 |

  46. Performance-Based Annual Bonuses Earned for 2023

    Total Performance-Based Annual Bonus Earned for 2023. Based on the realization of the Company performance and individual performance components of annual bonuses described above, the table below sets forth the total performance-based annual bonus realized by each NEO for 2023.

  47. Performance-Based Annual Bonuses Earned for 2023

    | | 2023 Target Annual Bonus | | 2023 Annual Bonus Realized | 2023 Annual Bonus Realized | | | NEO | ($) | | ($) | | (% of Target) | | Mr. Abate, Chief Executive Officer | $ | $1,800,000 | $1,217,782 | $ | 67.7% | | Mr. Robinson, President | $ | $1,615,000 | $1,092,621 | $ | 67.7% | | Ms. Carillo, Chief Financial Officer | $ | $1,480,000 | $1,001,287 | $ | 67.7% | | Mr. Matera Chief Investment Officer | | $1,433,750 | $934,153 | | 65.2% | | Mr. Stone, Executive Vice President and Chief Legal Officer | $ | $675,000 | $422,918 | $ | 62.7% | | Ms. Macomber, Chief Human Resource Officer | $ | $675,000 | $422,918 | | 62.7% |

  48. 2023 Long-Term Equity-Based Incentive Awards

    2023 Long-Term Equity-Based Incentive Awards Equity ownership in Redwood provides an important link between the interests of stockholders and executives by rewarding long-term stockholder value creation. To meet this objective, officers, directors, key employees, and other persons expected to contribute to Redwood’s management, growth, and profitability are eligible to receive long-term equity-based awards. The Committee oversees the issuance of these awards to NEOs. The Committee, in consultation with its independent compensation consultant, determines the types and sizes of awards granted based upon a number of factors, including the NEO’s position, responsibilities, total compensation level, individual and company financial performance, competitive factors, and compensation peer group comparisons. The Committee’s annual practice is to make long-term equity-based awards to NEOs at the regularly scheduled (pre-established) fourth quarter meeting of the Committee, which for 2023 occurred on December 14, 2023. In addition, as described above, in the first quarter of 2023, for two of Redwood’s NEOs, the Committee also determined to make a long-term equity-based compensation award due to identified competitive, retention and incentive circumstances. As a result, in addition to their annual year-end long-term equity-based award, in January of 2023 Ms. Carillo received an award of DSUs with a grant date fair value of $4 million and in February of 2023 Mr. Matera received an award of cash-settled PSUs with a grant date fair value of $3 million, each as further described below. The long-term equity-based awards the Committee granted to NEOs in 2023 were in four forms: Deferred Stock Units (“DSUs”), cash-settled RSUs (“csRSUs”), Performance Stock Units (“PSUs”) and cash-settled PSUs (“csPSUs”), the key terms of which are summarized below.

  49. 2023 Long-Term Equity-Based Incentive Awards

    | • | The DSUs granted to all NEOs on December 14, 2023 will vest over four years, with 25% vesting on January 31, 2025, and an additional 6.25% vesting on the last day of each subsequent quarter (beginning with the quarter ending March 31, 2025), with full vesting occurring on December 13, 2027. Shares of Redwood common stock underlying these DSUs will be distributed to the recipients not earlier than December 13, 2027 and not later than December 31, 2027, unless electively deferred under the terms of Redwood’s Executive Deferred Compensation Plan. |

  50. 2023 Long-Term Equity-Based Incentive Awards

    | • | The csRSUs granted to all NEOs on December 14, 2023 will vest over four years, with 25% vesting on December 13, 2024, and an additional 25% vesting on December 13th of each of 2025, 2026 and 2027. The terms of the csRSUs granted on December 14, 2023 are otherwise generally consistent with the terms of the DSUs noted above, except that at each csRSU vesting date, the value of the common stock referenced by the csRSUs vesting on such date will be settled with a cash payment, rather than through the delivery of shares of common stock, based on the closing price of Redwood’s common stock on such vesting date. |

  51. 2023 Long-Term Equity-Based Incentive Awards

    | • | The PSUs granted to all NEOs on December 14, 2023 are performance-based equity awards which provide for vesting to generally range from 0% to 250% of the target number of PSUs granted, with the target number of PSUs adjusted to reflect the value of any dividends declared on Redwood common stock during the vesting period (as further described below). Vesting of these PSUs will generally occur based on the performance metrics described below during a three-year measurement period and continued employment through January 1, 2027. Further detail on performance-based vesting of the PSUs granted in December 2023 is set forth below. |

  52. 2023 Long-Term Equity-Based Incentive Awards

    Performance-Based Vesting – PSUs Granted in December 2023. Performance-based vesting of the PSUs granted to NEOs in December 2023 will generally occur as of January 1, 2027, after a three-year performance measurement period encompassing January 1, 2024 to December 31, 2026, based on a three-step process as described below.

  53. 2023 Long-Term Equity-Based Incentive Awards

    | First, the target number of PSUs granted (“Target PSUs”) is divided into two tranches of Target PSUs, as follows: | | | (1) | one tranche (the “bvTSR Tranche”) represents 66.7% of the Target PSUs, with vesting for this portion of the Target PSUs to range from 0% to 250% of this portion of the Target PSUs based on the level of Redwood’s book value TSR (or “bvTSR”) over the three-year performance measurement period, with 100% of this portion of the Target PSUs vesting if cumulative bvTSR for the three-year performance period is 25%; and | | (2) | a second tranche (the “rTSR Tranche”) represents 33.3% of the Target PSUs, with vesting for this portion of the Target PSUs to range from 0% to 250% of this portion of the Target PSUs based on the level of Redwood’s relative TSR (or “rTSR”) over the three-year performance measurement period, with 100% of this portion of the Target PSUs vesting if rTSR for the three-year performance period is at the 55th percentile relative to the comparator group of companies described below. |

  54. 2023 Long-Term Equity-Based Incentive Awards

    •Vesting for the bvTSR tranche of these PSUs will be in accordance with the following table:

  55. 2023 Long-Term Equity-Based Incentive Awards

    | Cumulative bvTSR Over Three-Year Period: | % of Performance-Based Vesting:* | | Less than 12.5% bvTSR | 0% | | 12.5% bvTSR | 50% | | 25% bvTSR | 100% | | 37.5% or greater bvTSR | 250% | | * If actual bvTSR is between two of the performance thresholds set forth in this table, the percentage of performance-based vesting is determined based on a straight-line, mathematical interpolation between the applicable performance-based vesting percentages. | |

  56. 2023 Long-Term Equity-Based Incentive Awards

    •Vesting for the rTSR tranche of these PSUs will be in accordance with the following table:

  57. 2023 Long-Term Equity-Based Incentive Awards

    | | Three-Year Relative TSR (“rTSR”): | % of Performance-Based Vesting:* | | | Less than 27.5th percentile | 0% | | | 27.5th percentile | 50% | | | 55th percentile | 100% | | | 82.5th percentile or greater | 250% | | * If actual relative TSR is between two of the performance thresholds set forth in this table, the adjustment to baseline vesting is determined based on a straight-line, mathematical interpolation between the applicable percentage point adjustments. | | |

  58. 2023 Long-Term Equity-Based Incentive Awards

    •bvTSR for the PSUs granted in December 2023 is generally defined as the percentage by which Redwood’s GAAP book value per share (after reversing the net impact of specified acquisition-related accounting items) has increased or decreased as of the last day of the three-year performance measurement period relative to the first day of such period, plus the value of cash dividends declared and/or paid during such period on Redwood common stock. •rTSR for the PSUs granted in December 2023 is generally defined as Redwood’s three-year rTSR compared to a subset of the component companies of the FTSE NAREIT Mortgage REITs Index, as constituted on December 31, 2023, categorized within that index as “Property Sector: Mortgage-Home Financing” (other than Redwood), expressed as a percentile of relative performance. Second, at the end of the three-year vesting period, the aggregate vesting level of the two tranches would be determined as the sum of (i) the bvTSR-based vesting of the bvTSR Tranche and (ii) rTSR-based vesting of the rTSR Tranche. Third, if the aggregate vesting level after steps one and two is greater than 100% of the Target PSUs, but Redwood’s absolute total shareholder return (“TSR”) is negative over the three-year performance period, performance-based vesting will be capped at 100% of Target PSUs. •Absolute TSR is generally defined as the percentage by which the per share price of Redwood’s common stock has increased or decreased as of the last day of the three-year performance measurement period relative to the first day of such period, adjusted to reflect the reinvestment of all dividends declared and/or paid during such period on Redwood common stock. Vested shares of Redwood common stock underlying these PSUs, if any, will be distributed to the recipients not later than 45 days following April 1, 2027, unless electively deferred under the terms of Redwood’s Executive Deferred Compensation Plan. Prior to vesting, no dividend equivalent rights are paid in respect of PSUs. At the time of vesting, the value of any dividends paid during the vesting period will be reflected in the PSUs by increasing the target number of PSUs granted by an amount corresponding to the incremental number of shares of Redwood common stock that a stockholder would have acquired between the grant date and the end of the three-year performance measurement period, had all dividends during that period been reinvested in Redwood common stock on the applicable dividend payment dates. After the vesting of any of these PSUs on January 1, 2027, and until the delivery of the underlying shares of Redwood common stock, the underlying vested award shares will have attached dividend equivalent rights, resulting in the payment of dividend equivalents each time Redwood pays a common stock dividend. Performance-Based Vesting – csPSUs Granted to Mr. Matera in February 2023. Performance-based vesting of the csPSUs granted to Mr. Matera in February 2023 will generally occur as of January 1, 2026, based on the same three-step process as described above with respect to PSUs granted in December 2023, except that the three-year performance measurement period will encompass January 1, 2023 to December 31, 2025 and Redwood’s three-year rTSR will be based on the subset of the component companies of the FTSE NAREIT Mortgage REITs Index, as constituted on December 31, 2022, categorized within that index as “Property Sector: Mortgage-Home Financing.” A cash settlement payment in respect of the vested shares of Redwood common stock referenced by these PSUs (rather than the delivery of shares of common stock), if any, will be distributed to Mr. Matera following vesting, but not later than 45 days following April 1, 2026, and will be based on the closing price of Redwood’s common stock on the payment date. Prior to vesting, no dividend equivalent rights are paid in respect of PSUs. At the time of vesting, the value of any dividends paid during the vesting period will be reflected in the PSUs by increasing the target number of PSUs granted by an amount corresponding to the incremental number of shares of Redwood common stock that a stockholder would have acquired between the grant date and the end of the three-year performance measurement period, had all dividends during that period been reinvested in Redwood common stock on the applicable dividend payment dates. After the vesting of any of these PSUs on January 1, 2026, and until the cash settlement payment in respect of the underlying shares of Redwood common stock referenced by these PSUs, the underlying vested award shares will have attached dividend equivalent rights, resulting in the payment of dividend equivalents each time Redwood pays a common stock dividend. Equity-Based Award Agreements. The terms of the DSUs, csRSUs, PSUs and csPSUs granted in 2023 are established under applicable equity-based award agreements and Redwood’s 2014 Incentive Plan. These terms include provisions relating to dividend equivalent rights, forfeiture, retirement, mandatory net settlement for income tax withholding purposes, and change-in-control. NEOs’ 2023 Year-End Long-Term Equity-Based Incentive Award Values. The Committee made the following determinations with respect to the value of each NEO’s 2023 year-end long-term equity-based incentive awards after consultation with its independent compensation consultant, a review of compensation peer group comparisons for the position and consideration of competitive factors, and the NEO’s role, experience, and performance at Redwood. • Mr. Abate. In December 2023, the Committee determined that the aggregate grant date fair value of year-end, long-term equity-based incentive awards granted to Mr. Abate would total $4.1 million, with this award value granted as: $2.255 million in PSUs (55% of total value), $922,500 in DSUs (22.5% of total value), $922,500 in csRSUs (22.5% of total value). • Mr. Robinson. In December 2023, the Committee determined that the aggregate grant date fair value of year-end, long-term equity-based incentive awards granted to Mr. Robinson would total $3.5 million, with this award value granted as: $1.75 million in PSUs (50% of total value), $875,000 in DSUs (25% of total value), $875,000 in csRSUs (25% of total value). • Ms. Carillo. In December 2023, the Committee determined that the aggregate grant date fair value of year-end, long-term equity-based incentive awards granted to Ms. Carillo would total $3.25 million, with this award value granted as: $1.625 million in PSUs (50% of total value), $812,500 in DSUs (25% of total value), $812,500 in csRSUs (25% of total value). •Mr. Matera. In December 2023, the Committee determined that the aggregate grant date fair value of year-end, long-term equity-based incentive awards granted to Mr. Matera would total $3.25 million, with this award value granted as: $1.625 million in PSUs (50% of total value), $812,500 in DSUs (25% of total value), $812,500 in csRSUs (25% of total value). • Mr. Stone. In December 2023, the Committee determined that the aggregate grant date fair value of year-end, long-term equity-based incentive awards granted to Mr. Stone would total $1.5 million, with this award value granted as: $750,000 in PSUs (50% of total value), $375,000 in DSUs (25% of total value), $375,000 in csRSUs (25% of total value). • Ms. Macomber. In December 2023, the Committee determined that the aggregate grant date fair value of year-end, long-term equity-based incentive awards granted to Mr. Macomber would total $1.5 million, with this award value granted as: $750,000 in PSUs (50% of total value), $375,000 in DSUs (25% of total value), $375,000 in csRSUs (25% of total value).

  59. 2023 Long-Term Equity-Based Incentive Awards

    The number and grant date fair value of DSUs, csRSUs and PSUs comprising the 2023 year-end long-term equity-based awards granted to each NEO in December 2023 are set forth in the table below, with the January and February of 2023 awards of DSUs and csPSUs to Ms. Carillo and Mr. Matera, respectively, also noted.

  60. 2023 Long-Term Equity-Based Incentive Awards

    | | Deferred Stock Units (“DSUs”)(1) | | Cash Settled Restricted Stock Units (“csRSUs”)(1) | | Performance Stock Units (“PSUs”)(1) | | | NEO | # | Aggregate Grant Date Fair Value | # | Aggregate Grant Date Fair Value | # | Aggregate Grant Date Fair Value | | Mr. Abate, Chief Executive Officer | 118,421 | $922,500 | 118,421 | $922,500 | 255,988 | $2,254,998 | | Mr. Robinson, President | 112,323 | $874,996 | 112,323 | $874,996 | 198,660 | $1,749,996 | | Ms. Carillo(2), Chief Financial Officer | 104,300 | $812,497 | 104,300 | $812,497 | 184,470 | $1,624,996 | | Mr. Matera(3), Chief Investment Officer | 104,300 | $812,497 | 104,300 | $812,497 | 184,470 | $1,624,996 | | Mr. Stone, Executive Vice President and Chief Legal Officer | 48,138 | $374,995 | 48,138 | $374,995 | 85,140 | $749,998 | | Ms. Macomber, Chief Human Resource Officer | 48,138 | $374,995 | 48,138 | $374,995 | 85,140 | $749,998 |

  61. 2023 Long-Term Equity-Based Incentive Awards

    (1) Grant date fair value determined at the time the grant was made in accordance with FASB Accounting Standards Codification Topic 718. The value of dividend equivalent rights associated with DSUs and csRSUs and the value of any increase in the target number of PSUs to reflect dividends paid during the performance period were taken into account in establishing the grant date fair value of these DSUs, csRSUs and PSUs under FASB Accounting Standards Codification Topic 718 at the time the awards were granted. Therefore, dividend equivalent right payments and any increase in the target number of PSUs to reflect dividends paid during the performance period are not considered part of the compensation or other amounts reported in the summary table of NEO compensation under “Executive Compensation Tables — Summary Compensation,” or reported below under “Executive Compensation Tables — Grants of Plan-Based Awards.” (2) As described above, in addition to the 2023 year-end long-term equity-based awards detailed in this table, in January 2023, Ms. Carillo received an award of 478,468 DSUs with an aggregate grant date fair value of $4 million determined at the time the grant was made in accordance with FASB Accounting Standards Codification Topic 718 in the same manner as described in the preceding footnote (1). (3) As described above, in addition to the 2023 year-end long-term equity-based awards detailed in this table, in February 2023, Mr. Matera received an award of 307,537 cash-settled PSUs (“csPSUs”) with an aggregate grant date fair value of $3 million determined at the time the grant was made in accordance with FASB Accounting Standards Codification Topic 718 in the same manner as described in the preceding footnote (1).

  62. Vesting and Mandatory Holding Periods for 2023 Long-Term Equity-Based Incentive Awards

    Vesting and Mandatory Holding Periods for 2023 Long-Term Equity-Based Incentive Awards DSUs Granted in December 2023. The DSUs granted to NEOs in December 2023 have the four-year vesting schedule described above on pages 69 – 73 within this CD&A under the heading “2023 Long-Term Equity-Based Incentive Awards.” Notwithstanding this vesting schedule, while continuously employed, the NEOs are subject to a mandatory four-year holding period with respect to these DSU awards, with the result that these DSU awards are not scheduled to be distributed to recipients in shares of Redwood common stock until four years following the grant date (i.e., in December 2027). csRSUs Granted in December 2023. The cash-settled RSUs (“csRSUs”) granted to NEOs in December 2023 have the four-year vesting schedule described above on pages 69 – 73 within this CD&A under the heading “2023 Long-Term Equity-Based Incentive Awards.” PSUs Granted in December 2023. The PSUs granted to NEOs in December 2023 have the vesting/performance measurement period described above on pages 69 – 73 within this CD&A under the heading “2023 Long-Term Equity-Based Incentive Awards.” For any of these PSUs that vest, they will be distributed to recipients in shares of Redwood common stock not later than 45 days following April 1, 2027. DSUs and csPSUs Granted in Q1 2023. The DSUs granted to Ms. Carillo in January 2023 have a four-year vesting schedule – with 50% of such DSUs scheduled to vest in January 2025 and the remaining 50% scheduled to vest in January 2027. Notwithstanding this vesting schedule, while continuously employed, Ms. Carillo is subject to a mandatory four-year holding period with respect to these DSU awards, with the result that these DSU awards are not scheduled to be distributed to her in shares of Redwood common stock until four years following the grant date (i.e., in January 2027). The cash-settled PSUs (“csPSUs”) granted to Mr. Matera in February 2023 have a three-year vesting/performance measurement period the ends on January 1, 2026. For any of these csPSUs that vest, the resulting cash settlement payment to Mr. Matera will be made not later than 45 days following April 1, 2026.

  63. Pay-for-Performance Outcomes from Long-Term Equity-Based Incentive Awards

    Pay-for-Performance Outcomes from Long-Term Equity-Based Incentive Awards As described above, long-term incentive awards, including awards in the form of DSUs and PSUs (collectively, “LTI Awards”), are a significant component of Redwood’s performance-based compensation program, and generally account for a majority of each executive officer’s annual target compensation. These LTI Awards are a key component of the overall executive compensation program, as actual value delivery/realization from these LTI Awards aligns executive compensation with long-term shareholder return experiences, with a key focus on three-year performance measurement periods. As detailed below, in 2023, Redwood’s NEOs realized compensation from LTI Awards awarded in prior years as follows: Mr. Abate: Vesting and delivery of 113,636 DSUs granted in December 2019; performance-based vesting of 214,549 PSUs granted in December 2020 (based on overall attainment of 88% of performance-based vesting criteria); and service-based vesting and payment of $750,000, which represented 50% of 2023-eligible value of the mid-2020 three-year LTI award granted in connection with the Company’s mid-2020 strategic repositioning following the severe market, operating, and personnel disruptions that occurred following the onset of the COVID pandemic in March 2020. •As described and illustrated above in the Executive Summary of CD&A on page 44 of this Proxy Statement, Redwood’s three-year TSR over the 2020 to 2023 period was 12.9%. This level of performance, which was below target but outperformed peers and certain industry indices, was one of the underlying drivers of Mr. Abate’s below-target realization of the target/awarded amount of his long-term compensation that vested and/or was delivered in 2023. Redwood’s book value TSR (“bvTSR”) in 2021 of 29.6% was also a driver of a portion of the performance-based vesting of PSUs granted in December 2020. Mr. Robinson: Vesting and delivery of 136,363 DSUs granted in December 2019; performance-based vesting of 143,032 PSUs granted in December 2020 (based on overall attainment of 88% of performance-based vesting criteria); and service-based vesting and payment of $618,750, which represented 50% of 2023-eligible value of the mid-2020 three-year LTI award granted in connection with the Company’s mid-2020 strategic repositioning following the severe market, operating, and personnel disruptions that occurred following the onset of the COVID pandemic in March 2020. •As described and illustrated above in the Executive Summary of CD&A on page 44 of this Proxy Statement, Redwood’s three-year TSR over the 2020 to 2023 period was 12.9%. This level of performance, which was below target but outperformed peers and certain industry indices, was one of the underlying drivers of Mr. Robinson’s below-target realization of the target/awarded amount of his long-term compensation that vested and/or was delivered in 2023. Redwood’s bvTSR in 2021 of 29.6% was also a driver of a portion of the performance-based vesting of PSUs granted in December 2020. Ms. Carillo: During 2023, Ms. Carillo did not have LTI Awards scheduled for final vesting/delivery and, as a result, did not realize any compensation from LTI Awards awarded in prior years. Mr. Matera: Vesting and/or delivery of 59,611 DSUs granted in 2020, a portion of which DSUs were granted as compensation for service as a director of the Company during 2020; and service-based vesting and payment of $333,333, representing one-third of two three-year LTI awards granted to Mr. Matera in 2020 and 2021, respectively, prior to his appointment as an executive officer. Mr. Stone. Vesting and delivery of 31,818 DSUs granted in December 2019; performance-based vesting of 60,073 PSUs granted in December 2020 (based on overall attainment of 88% of performance-based vesting criteria); and service-based vesting and payment of $266,250, which represented 50% of 2023-eligible value of the mid-2020 three-year LTI award granted in connection with the Company’s mid-2020 strategic repositioning following the severe market, operating, and personnel disruptions that occurred following the onset of the COVID pandemic in March 2020. •As described and illustrated above in the Executive Summary of CD&A on page 44 of this Proxy Statement, Redwood’s three-year TSR over the 2020 to 2023 period was 12.9%. This level of performance, which was below target but outperformed peers and certain industry indices, was one of the underlying drivers of Mr. Stone’s below-target realization of the target/awarded amount of his long-term compensation that vested and/or was delivered in 2023. Redwood’s bvTSR in 2021 of 29.6% was also a driver of a portion of the performance-based vesting of PSUs granted in December 2020. Ms. Macomber. Vesting and delivery of 18,181 DSUs granted in December 2019; performance-based vesting of 45,769 PSUs granted in December 2020 (based on overall attainment of 88% of performance-based vesting criteria); and service-based vesting and payment of $83,333, which represented 33% of 2023-eligible value of the mid-2020 three-year LTI award granted in connection with the Company’s mid-2020 strategic repositioning following the severe market, operating, and personnel disruptions that occurred following the onset of the COVID pandemic in March 2020. •As described and illustrated above in the Executive Summary of CD&A on page 44 of this Proxy Statement, Redwood’s three-year TSR over the 2020 to 2023 period was 12.9%. This level of performance, which was below target but outperformed peers and certain industry indices, was one of the underlying drivers of Ms. Macomber’s below-target realization of the target/awarded amount of her long-term compensation that vested and/or was delivered in 2023. Redwood’s bvTSR in 2021 of 29.6% was also a driver of a portion of the performance-based vesting of PSUs granted in December 2020.

  64. Pay-for-Performance Outcomes from Long-Term Equity-Based Incentive Awards

    | Section III - Other Compensation, Plans and Benefits | | | | | ➢ | Deferred Compensation | | | ➢ | Employee Stock Purchase Plan | | | ➢ | 401(k) Plan and Other Matching Contributions | | | ➢ | Other Compensation and Benefits | | | ➢ | Severance and Change of Control Arrangements |

  65. Deferred Compensation

    Deferred Compensation Under Redwood’s Executive Deferred Compensation Plan, NEOs (and other eligible officers of Redwood) may elect to defer up to 100% of their cash compensation as well as dividend equivalent right payments on DSUs, csDSUs and vested PSUs and, under certain circumstances, can also elect to re-defer scheduled distributions of cash or stock from the plan. Additionally, delivery of shares of Redwood common stock underlying DSUs and PSUs granted under Redwood’s 2014 Incentive Plan may be deferred under the Executive Deferred Compensation Plan. Deferred amounts may be deferred until a date chosen by the participant in the plan at the time of the initial deferral (subject to certain restrictions) or until separation from service, at which time the balance in the participant’s account will be delivered in cash or common stock (as applicable), or paid out over a period of up to 15 years, depending upon deferral elections. Cash amounts deferred under the Executive Deferred Compensation Plan are credited with interest at 120% of the long-term applicable federal rate as published by the IRS, which does not constitute above-market interest under IRS regulations. As an example, for December 2023, 120% of the long-term applicable federal rate was approximately 5.89% per annum. Cash balances deferred under the Executive Deferred Compensation Plan remain available to Redwood for general corporate purposes subject to the obligation to deliver the deferred amounts on the deferral date. The ability of participants to receive interest on deferred amounts is one incentive to participate in this Plan, and has the benefit of making the funds available for use by Redwood. Redwood also matches 50% of cash compensation deferred by participants in the Executive Deferred Compensation Plan, provided that total matching payments and contributions made by Redwood to participants in the Executive Deferred Compensation Plan and Redwood’s 401(k) plan (discussed below) are limited to 6% of base salary. Participants are fully vested in all prior and all new matching payments after three years of employment. Redwood believes the Executive Deferred Compensation Plan provides a vehicle for executive officers and other participants to plan for retirement and supports tax planning flexibility.

  66. Severance and Change of Control Arrangements

    Severance and Change of Control Arrangements For NEOs and other Redwood employees, the terms of outstanding long-term incentive award agreements include “change of control” double-trigger protection that provide for the acceleration of outstanding awards in the event of a termination without “cause” or a termination of employment with “good reason,” following a “change of control.” In addition, each of Redwood’s NEOs has entered into an employment agreement with Redwood, which provide for severance payments and vesting (or, as applicable, non-forfeiture) of equity-related awards in the event Redwood terminates the executive’s employment without “cause” or the executive terminates his or her employment for “good reason” outside of a change of control context. These employment agreements also provide for payments and vesting of equity-related awards in the event of the executive’s death or disability. In the event of a “change of control,” these employment or letter agreements provide for vesting of long-term incentive awards only after a “double trigger” — meaning that no awards would vest unless the executive is terminated without “cause” or, in certain cases, terminates his or her employment with “good reason,” following such a “change of control.” In addition, under these employment agreements, following a “change of control,” if the surviving or acquiring corporation does not assume outstanding long-term incentive awards or substitute equivalent awards, then the long-term incentive awards will generally vest in full. These agreements were entered into in order to attract and retain these executives in the competitive marketplace for executive talent. For all NEOs, under the award agreements governing outstanding PSUs and csPSUs, in the event of a “change of control,” the per share price paid in connection with the change of control will be used to calculate TSR when determining performance-based vesting that is based on TSR. When applicable, absolute TSR performance goals will be annualized to reflect the number of days completed in the performance-measurement period (from the first day of the period through the closing date of the change of control). The various levels of post-termination benefits for each of the NEOs were determined by the Committee to be appropriate based on that executive’s duties and responsibilities with Redwood and were the result of arm’s-length negotiations with these individuals. The different levels were also determined to be appropriate and reasonable when compared to post-termination benefits provided by Redwood’s peers to executives with similar titles and similar levels of responsibility. The levels of benefit were also intended to take into account the expected length of time and difficulty the executive may experience in trying to secure new employment. The amount of the severance is balanced against Redwood’s need to be responsible to its stockholders and also considers the potential impact the severance payments may have on other potential parties to a change in control transaction. The terms of the executive severance and change of control arrangements that were in place with NEOs at the end of 2023 are described in more detail below under “Potential Payments upon Termination or Change of Control.” Redwood does not provide for excise tax gross-ups for change-in-control severance payments. Redwood does not have any agreements in place with any executive officer (or any other employee) that provide for an excise tax gross-up for a change-in-control severance payment, whether imposed under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) or otherwise. The Committee does not intend to offer any such excise tax gross-up provisions in any future agreements.

  67. Severance and Change of Control Arrangements

    | Section IV - Compensation-Related Policies and Tax Considerations | | | | | ➢ | Mandatory Executive Stock Ownership Requirements | | | ➢ | Prohibition on Use of Margin, Pledging, and Hedging in Respect of Redwood Shares | | | ➢ | Clawback Policy | | | ➢ | Tax Considerations | | | ➢ | Accounting Standards |

  68. Accounting Standards

    Accounting Standards Under GAAP, ASC Topic 718 requires Redwood to calculate the grant date “fair value” of certain long-term incentive awards using a variety of assumptions. ASC Topic 718 also requires Redwood to recognize an expense for the fair value of certain equity-based and other long-term incentive compensation awards. Grants of deferred stock units, cash-settled deferred stock units, restricted stock, restricted stock units, and performance stock units will be accounted for under ASC Topic 718. The Compensation Committee regularly considers the accounting implications of significant compensation decisions, especially in connection with decisions that relate to equity incentive award plans and programs. As accounting standards change, the Committee may revise certain programs to align appropriately the accounting expense of equity awards with Redwood’s overall executive compensation philosophy and objectives.

  69. Accounting Standards

    | Section V - Conclusion | | | | | ➢ | Certain Compensation Determinations Relating to 2024 | | | ➢ | 2024 Maximum Total Annual Bonuses | | | ➢ | Compensation Committee Report |

  70. Certain Compensation Determinations Relating to 2024

    2024 Targets for Performance-Based Annual Bonuses. In December 2023 the Committee established a 2024 target annual bonus for each of Redwood’s NEOs. The table below sets forth the 2024 target annual bonuses for each of the NEOs.

  71. Certain Compensation Determinations Relating to 2024

    | NEOs | 2024 Base Salary | 2024 Target Annual Bonus (%) | Change from 2023 Target Annual Bonus Percentage (%)(1) | Total 2024 Target Annual Bonus ($) | | Mr. Abate, Chief Executive Officer | $950,000 | 200% | 0% | $1,900,000 | | Mr. Robinson, President | $875,000 | 195% | 3% | $1,608,750 | | Ms. Carillo, Chief Financial Officer | $825,000 | 190% | 3% | $1,567,500 | | Mr. Matera, Chief Investment Officer | $800,000 | 185% | 0% | $1,480,000 | | Mr. Stone, Executive Vice President and Chief Legal Officer | $500,000 | 175% | 17% | $875,000 | | Ms. Macomber, Chief Human Resource Officer | $500,000 | 175% | 17% | $875,000 |

  72. Certain Compensation Determinations Relating to 2024

    (1) Amounts set forth in the table under “Change from 2023 Target Annual Bonus Percentage (%)” reflect the increase, if any, in the 2024 Target Annual Bonus (%) from the 2023 Target Annual Bonus (%) in effect for each current executive officer at the end of 2023.

  73. 2024 Maximum Total Annual Bonuses

    2024 Maximum Total Annual Bonuses As discussed under the heading “2023 Performance-Based Annual Bonus Compensation” on page 61 within this CD&A, for 2023, the CEO’s maximum annual bonus opportunity (bonus cap) was 3.5x of his target annual bonus for 2023, and the other executive officers were also subject to a maximum annual bonus opportunity (bonus cap) for 2023 equal to 3.5x of their respective target annual bonuses for 2023. These maximum total annual bonus amounts were established by the Committee in early 2023, in response to stockholder feedback following the 2022 annual meeting of stockholders and with input from the Committee’s independent compensation consultant, following a review of peer practice, competitive considerations, and other factors. With respect to 2024, as discussed within the Executive Summary of CD&A under the heading “Stockholder Feedback” on pages 37 - 38 of this proxy statement, in the fourth quarter of 2023, the Committee lowered the maximum annual bonus opportunity for the CEO and the other executive officers from 3.5x to 3.0x of their target annual bonuses – marking the second reduction to maximum annual bonus opportunities for executive officers since 2022.

  74. Summary Compensation

    | Name and Principal Position | Year | Salary | Bonus | Stock Awards (1) | Non-Equity Incentive Plan Compensation(2) | All Other Compensation(3) | Total | | Christopher J. Abate, Chief Executive Officer | 2023 | $900,000 | — | $4,099,997 | $1,967,782 | $54,000 | $7,021,779 | | | 2022 | $900,000 | — | $3,999,993 | $450,000 | $55,000 | $5,404,993 | | | 2021 | $800,000 | — | $5,999,971 | $6,750,000 | $49,000 | $13,598,971 | | Dashiell I. Robinson, President | 2023 | $850,000 | — | $3,499,988 | $1,711,370 | $51,000 | $6,112,358 | | | 2022 | $825,000 | — | $3,249,981 | $509,438 | $49,500 | $4,633,919 | | | 2021 | $750,000 | — | $4,499,970 | $5,956,250 | $45,000 | $11,251,220 | | Brooke E. Carillo, Chief Financial Officer | 2023 | $800,000 | | $7,249,983 | $1,001,287 | $48,000 | $9,099,270 | | | 2022 | $700,000 | | $2,999,987 | $505,000 | $42,000 | $4,246,987 | | | 2021 | $396,346 | $750,000 | $3,749,971 | $4,750,000 | $9,323 | $9,655,640 | | Fred J. Matera(4), Chief Investment Officer | 2023 | $775,000 | — | $6,249,983 | $1,267,486 | $150,150 | $8,442,619 | | Andrew P. Stone, Executive Vice President and Chief Legal Officer | 2023 | $450,000 | — | $1,499,988 | $689,168 | $28,000 | $2,667,156 | | | 2022 | $445,000 | — | $1,249,990 | $250,313 | $27,700 | $1,973,003 | | | 2021 | $420,000 | — | $1,499,985 | $3,085,997 | $26,188 | $5,032,170 | | Sasha G. Macomber, Chief Human Resource Officer | 2023 | $450,000 | — | $1,499,988 | $506,251 | $11,250 | $2,467,489 | | | 2022 | $425,000 | — | $1,249,990 | $322,396 | $10,250 | $2,007,636 | | | 2021 | $400,000 | — | $1,499,985 | $2,937,854 | $9,750 | $4,847,589 |

  75. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table reflects estimated possible payouts to the NEOs for 2023 under Redwood’s performance-based bonus compensation program, as well as grants of plan-based awards made in 2023 under Redwood’s Incentive Plan. Actual bonus payments for 2023 are reflected in the “Summary Compensation” table above. As discussed above under “Compensation Discussion and Analysis — 2023 Performance-Based Annual Bonus Compensation,” 2023 target annual performance-based bonuses for 2023 were structured to be earned on a weighted basis based on Adjusted ROE (37.5%), Adjusted EAD ROE (37.5%), and on individual contributions to the Company’s pre-established annual strategic, operational, risk management, and sustainability/ESG goals for 2023 (25%). For 2023, total annual bonuses were subject to the overall maximum amounts (caps) set forth in the following table.

  76. Grants of Plan-Based Awards

    | Name | Type of Award(1) | Grant Date | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards ($)(5) | | | | | | Estimated Possible Payouts Under Equity Incentive Plan Awards ($) | | | | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($) (8) | | | | | Threshold | | Target | | Maximum | | Threshold | | Target (6) | | | Maximum (7) | | | | Christopher J. Abate | Annual Bonus | — | — | | 1,800,000 | | 6,300,000 | | — | | — | | | — | — | — | | | DSU (2) | 12/14/2023 | — | | — | | — | | — | | — | | | — | 118,421 | 922,500 | | | csRSU (2) | 12/14/2023 | | | | | | | | | | | | | 118,421 | 922,500 | | | PSU (3) | 12/14/2023 | — | | — | | — | | — | | 255,988 | | | 639,970 | — | 2,254,998 | | Dashiell I. Robinson | Annual Bonus | | — | | 1,615,000 | | 5,652,500 | | — | | — | | | — | — | — | | | DSU (2) | 12/14/2023 | — | | — | | — | | — | | — | | | — | 112,323 | 874,996 | | | csRSU (2) | 12/14/2023 | — | | — | | — | | — | | — | | | — | 112,323 | 874,996 | | | PSU (3) | 12/14/2023 | — | | — | | — | | — | | 198,660 | | | 496,650 | — | 1,749,996 | | Brooke E. Carillo | Annual Bonus | — | — | | 1,480,000 | | 5,180,000 | | — | | — | | | — | — | — | | | DSU (2) | 1/31/2023 | — | | — | | — | | — | | — | | | — | 478,568 | 3,999,992 | | | DSU (2) | 12/14/2023 | — | | — | | — | | — | | — | | | — | 104,300 | 812,497 | | | csRSU (2) | 12/14/2023 | — | | — | | — | | — | | — | | | — | 104,300 | 812,497 | | | PSU (3) | 12/14/2023 | — | | — | | — | | — | | 184,470 | | | 461,175 | — | 1,624,996 | | Fred J Matera | Annual Bonus | | | | 1,433,750 | | 5,018,125 | | — | | — | | | — | — | — | | | csPSU (4) | 2/17/2023 | — | — | — | — | — | — | — | | 307,537 | | | 768,843 | — | 2,999,993 | | | DSU (2) | 12/14/2023 | — | — | — | — | — | — | — | — | — | — | — | — | 104,300 | 812,497 | | | csRSU (2) | 12/14/2023 | — | — | — | — | — | — | — | — | — | — | — | — | 104,300 | 812,497 | | | PSU (3) | 12/14/2023 | — | — | — | — | — | — | — | | 184,470 | | | 461,175 | | 1,624,996 | | Andrew P. Stone | Annual Bonus | — | — | | 675,000 | | 2,362,500 | | — | | — | | | — | — | — | | | DSU (2) | 12/14/2023 | — | | — | | — | | — | | — | | | — | 48,138 | 374,995 | | | csRSU (2) | 12/14/2023 | — | | — | | — | | — | | — | | | — | 48,138 | 374,995 | | | PSU (3) | 12/14/2023 | — | | — | | — | | — | | 85,140 | | | 212,850 | — | 749,998 | | Sasha G. Macomber | Annual Bonus | — | — | | 675,000 | | 2,362,500 | | — | | — | | | — | — | — | | | DSU (2) | 12/14/2023 | — | | — | | — | | — | | — | | | — | 48,138 | 374,995 | | | csRSU (2) | 12/14/2023 | — | | — | | — | | — | | — | | | — | 48,138 | 374,995 | | | PSU (3) | 12/14/2023 | — | | — | | — | | — | | 85,140 | | | 212,850 | — | 749,998 |

  77. Grants of Plan-Based Awards

    (1) DSU refers to deferred stock units, csDSU refers to cash-settled deferred stock units, csRSU refers to cash-settled restricted stock units, PSU refers to performance stock units, and csPSU refers to cash-settled performance stock units. (2) Mr. Abate received a 2023 annual long-term equity-based award in December 2023 and received 45% of that award value divided equally in the form of deferred stock units and cash-settled restricted stock units on December 14, 2023. The other NEOs also received a 2023 annual long-term equity-based award in December 2023 and received one-half of that award value divided equally in the form of deferred stock units and cash-settled restricted stock units on December 14, 2023. Deferred stock units and cash-settled restricted stock units were granted with a grant date fair value of $7.79 per share subject to a four-year vesting schedule (fully vesting on December 14, 2027). In addition, Ms. Carillo also received a grant of deferred stock units on January 31, 2023 with a grant date fair value of $8.36 per share subject to a four-year vesting schedule (fully vesting on January 31, 2027) (3) Mr. Abate received a 2023 annual long-term equity-based award in December 2023 and received 55% of that award value in the form of a target number of performance stock units on December 14, 2023. The other NEOs also received a 2023 annual long-term equity-based award in December 2023 and received one-half of that award value in the form of a target number of performance stock units on December 14, 2023. The performance stock units were granted with a grant date fair value of $8.809 per unit. Vesting of these performance stock units will generally occur, if at all, as of January 1, 2027 based on a three-step process, as described on page 70 of this Proxy Statement under the heading “Compensation Discussion and Analysis – 2023 Long-Term Equity-Based Incentive Awards – Performance-Based Vesting – PSUs Granted in December 2023.” (4) Mr. Matera received a grant of cash-settled performance stock units on February 17, 2023 with a grant date fair value of $8.75 per unit. Vesting of these cash-settled performance stock units will generally occur, if at all, as of January 1, 2026. The maximum potential value of the cash-settled performance stock units granted to Mr. Matera (assuming the maximum number of units vest and calculated based on the closing price of Redwood’s common stock on he NYSE on the grant date) is $6,127,675, assuming the Company achieves the maximum performance goals during the performance period and that there is no adjustment to the target number of reference units to reflect the value of any dividends paid on Redwood common stock during the vesting period. (5) The amounts reported in the “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards” column reflect the target, threshold and maximum payouts for each of the NEOs under Redwood’s performance-based bonus compensation program, which were structured to be earned based on Redwood’s 2023 Adjusted ROE, Redwood’s 2023 Adjusted EAD ROE and individual contributions to the Company’s pre-established annual strategic, operational, risk management, and sustainability/ESG goals for 2023. See “Compensation Discussion and Analysis — 2023 Performance-Based Annual Bonus Compensation” beginning on page 61 for a more complete description of the Company’s performance-based annual bonus program. Actual bonus amounts awarded to NEOs for 2023 are reflected above in the “Summary Compensation” table. (6) Represents the target number of shares to be awarded upon the contingent vesting of performance stock units as discussed above in Note 3. With respect to cash-settled performance stock units, represents the number shares to be referenced in determining the cash settlement payment upon the contingent vesting of cash-settled performance stock units as discussed above in Note 4. Information regarding the assumptions used to value our NEOs’ stock units is provided in Note 19 to our consolidated financial statements included in Redwood’s Annual Report on Form 10-K filed on February 29, 2024. (7) For December 2023 awards of performance stock units, represents the maximum number of shares that could contingently vest, as discussed above in Note 3, subject to any adjustment of the target number of performance stock units granted to reflect the value of any dividends paid on Redwood common stock during the vesting period. The maximum potential value of the performance stock units granted in December 2023 to Mr. Abate, Mr. Robinson, Ms. Carillo, Mr. Matera, Mr. Stone and Ms. Macomber (assuming the maximum number of units vest and calculated based on the closing price of Redwood’s common stock on the NYSE on the grant date) are $4,985,366, $3,868,904, $3,592,553, $3,592,553, $1,658,102 and $1,658,102, respectively, assuming the Company achieves the maximum performance goals during the performance period and that there is no adjustment to the target number of units to reflect the value of any dividends paid on Redwood common stock during the vesting period. For the award of cash-settled performance stock units to Mr. Matera in February 2023, represents the maximum number of reference shares that could contingently vest, as discussed above in Note 4, subject to any adjustment of the target number of cash-settled performance stock units granted to reflect the value of any dividends paid on Redwood common stock during the vesting period. The maximum potential value of the February 2023 cash-settled performance stock units granted to Mr. Matera (assuming the maximum number of reference units vest and calculated based on the closing price of Redwood’s common stock on the NYSE on the grant date) is $6,127,675, assuming the Company achieves the maximum performance goals during the performance period and that there is no adjustment to the target number of reference units to reflect the value of any dividends paid on Redwood common stock during the vesting period. Information regarding the assumptions used to value our NEOs’ stock units is provided in Note 19 to our consolidated financial statements included in Redwood’s Annual Report on Form 10-K filed on February 29, 2024. (8) These awards were approved by the Compensation Committee of the Board of Directors and granted pursuant to Redwood’s 2014 Incentive Plan. The value of these awards is determined in accordance with FASB Accounting Standards Codification Topic 718 based on, among other things, the closing price of Redwood’s common stock on the grant date.

  78. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End The following table sets forth certain information regarding outstanding equity awards for each NEO as of December 31, 2023.

  79. Outstanding Equity Awards at Fiscal Year-End

    | | Stock Awards | | | | | NEO | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, That Have Not Vested ($)(4) | | Christopher J. Abate | 431,686 | $3,198,796 | 1,067,217 | $7,908,078 | | Dashiell I. Robinson | 576,602 | $4,272,619 | 640,849 | $4,748,691 | | Brooke E. Carillo | 947,361 | $7,019,943 | 437,146 | $3,239,252 | | Fred J. Matera | 525,853 | $3,896,571 | 656,992 | $4,868,311 | | Andrew P. Stone | 230,988 | $1,711,623 | 252,098 | $1,868,046 | | Sasha G. Macomber | 228,660 | $1,694,372 | 240,102 | $1,779,156 |

  80. Outstanding Equity Awards at Fiscal Year-End

    (1)Represents unvested deferred stock units, cash-settled deferred stock units and cash-settled restricted stock units as of December 31, 2023. The table below shows the vesting schedule for these stock units as of December 31, 2023. Deferred stock units and cash-settled deferred stock units generally time-vest over four years as follows: 25% after the first year, and 6.25% every quarter thereafter. Cash-settled restricted stock units generally time-vest over four years as follows: 25% after each annual anniversary of the grant date. Deferred stock unit, cash-settled deferred stock unit and cash-settled restricted stock unit awards relating to the schedule below were granted from December 2020 through December 2023.

  81. Outstanding Equity Awards at Fiscal Year-End

    | Total DSUs Scheduled to Vest On: | Christopher J. Abate | Dashiell I. Robinson | Brooke E. Carillo | Fred J. Matera | Andrew P. Stone | Sasha G. Macomber | | 1/1/2024 | 13,794 | 9,789 | 3,260 | 15,541 | 3,649 | 4,265 | | 1/31/2024 | — | 27,302 | 25,202 | 25,202 | 10,501 | 10,501 | | 3/1/2024 | — | — | — | — | — | 1,062 | | 4/1/2024 | 13,794 | 16,614 | 9,560 | 21,841 | 6,273 | 5,828 | | 7/1/2024 | 13,794 | 16,614 | 9,560 | 21,841 | 6,273 | 5,828 | | 10/1/2024 | 13,794 | 16,614 | 9,560 | 21,841 | 6,273 | 5,828 | | 12/15/2024 | 6,681 | 4,454 | — | 6,057 | 1,870 | 1,425 | | 1/1/2025 | 36,719 | 40,241 | 35,635 | 41,859 | 16,438 | 16,438 | | 1/31/2025 | — | — | 239,234 | — | — | — | | 4/1/2025 | 14,515 | 19,181 | 16,079 | 22,303 | 7,412 | 7,412 | | 7/1/2025 | 14,515 | 19,181 | 16,079 | 22,303 | 7,412 | 7,412 | | 10/1/2025 | 14,515 | 19,180 | 16,079 | 22,303 | 7,412 | 7,412 | | 12/13/2025 | 7,113 | 5,335 | 3,260 | 9,484 | 1,778 | 1,778 | | 1/1/2026 | 7,401 | 13,845 | 12,819 | 12,819 | 5,634 | 5,634 | | 4/1/2026 | 7,401 | 13,845 | 12,819 | 12,819 | 5,634 | 5,634 | | 7/1/2026 | 7,401 | 13,845 | 12,819 | 12,819 | 5,634 | 5,634 | | 10/1/2026 | 7,401 | 13,845 | 12,819 | 12,819 | 5,634 | 5,634 | | 12/14/2026 | — | 6,825 | 6,300 | 6,300 | 2,625 | 2,625 | | 1/1/2027 | 7,401 | 7,020 | 6,519 | 6,519 | 3,008 | 3,008 | | 1/31/2027 | — | — | 239,234 | — | — | — | | 4/1/2027 | 7,401 | 7,020 | 6,519 | 6,519 | 3,008 | 3,008 | | 7/1/2027 | 7,401 | 7,020 | 6,518 | 6,518 | 3,008 | 3,008 | | 10/1/2027 | 7,401 | 7,020 | 6,518 | 6,518 | 3,008 | 3,008 | | 12/14/2027 | 7,401 | — | 6,518 | 6,518 | 3,008 | 3,008 | | TOTAL | 215,843 | 284,792 | 712,915 | 320,747 | 115,495 | 115,393 |

  82. Outstanding Equity Awards at Fiscal Year-End

    | Total csDSUs Scheduled to Vest On: | Christopher J. Abate | Dashiell I. Robinson | Brooke E. Carillo | Fred J. Matera | Andrew P. Stone | Sasha G. Macomber | | 1/1/2024 | 13,794 | 9,789 | 3,260 | — | 3,649 | 3,203 | | 1/31/2024 | — | 27,302 | 25,202 | 25,202 | 10,501 | 10,501 | | 4/1/2024 | 13,794 | 16,615 | 9,561 | 6,301 | 6,274 | 5,829 | | 7/1/2024 | 13,794 | 16,615 | 9,561 | 6,301 | 6,273 | 5,828 | | 10/1/2024 | 13,794 | 16,615 | 9,561 | 6,301 | 6,273 | 5,828 | | 12/15/2024 | 6,681 | 4,454 | — | — | 1,870 | 1,425 | | 1/1/2025 | 7,113 | 12,160 | 9,561 | 6,301 | 4,403 | 4,403 | | 4/1/2025 | 7,113 | 12,160 | 9,560 | 6,300 | 4,403 | 4,403 | | 7/1/2025 | 7,113 | 12,159 | 9,560 | 6,300 | 4,403 | 4,403 | | 10/1/2025 | 7,113 | 12,159 | 9,560 | 6,300 | 4,403 | 4,403 | | 12/14/2025 | 7,113 | 5,334 | 3,260 | — | 1,778 | 1,778 | | 1/1/2026 | — | 6,825 | 6,300 | 6,300 | 2,625 | 2,625 | | 4/1/2026 | — | 6,825 | 6,300 | 6,300 | 2,625 | 2,625 | | 7/1/2026 | — | 6,825 | 6,300 | 6,300 | 2,625 | 2,625 | | 10/1/2026 | — | 6,825 | 6,300 | 6,300 | 2,625 | 2,625 | | 12/14/2026 | — | 6,825 | 6,300 | 6,300 | 2,625 | 2,625 | | TOTAL | 97,422 | 179,487 | 130,146 | 100,806 | 67,355 | 65,129 |

  83. Outstanding Equity Awards at Fiscal Year-End

    [Additional table that accompanies this footnote (1) is set forth on the following page.]

  84. Outstanding Equity Awards at Fiscal Year-End

    | Total csRSUs Scheduled to Vest On: | Christopher J. Abate | Dashiell I. Robinson | Brooke E. Carillo | Fred J. Matera | Andrew P. Stone | Sasha G. Macomber | | 1/1/2025 | 29,606 | 28,081 | 26,075 | 26,075 | 12,035 | 12,035 | | 12/14/2025 | 29,605 | 28,081 | 26,075 | 26,075 | 12,035 | 12,035 | | 12/14/2026 | 29,605 | 28,081 | 26,075 | 26,075 | 12,034 | 12,034 | | 12/14/2027 | 29,605 | 28,080 | 26,075 | 26,075 | 12,034 | 12,034 | | TOTAL | 118,421 | 112,323 | 104,300 | 104,300 | 48,138 | 48,138 |

  85. Outstanding Equity Awards at Fiscal Year-End

    (2) Assumes a common stock value of $7.41 per share (the closing price of Redwood’s common stock on the NYSE on December 29, 2023). (3) Represents unearned performance stock units and cash-settled performance stock units as of December 31, 2023. Performance stock units are performance-based equity awards under which the number of underlying shares of Redwood common stock that vest and that the award recipient becomes entitled to receive at the time of vesting (or, in the case of cash-settled performance stock units, the cash payment in respect of underlying reference shares) will generally range from 0% to 250% of the number of PSUs granted based on absolute, book value, and/or relative total shareholder return goals over the three-year performance period. Performance stock units are generally granted annually and vest, if at all, at the end of the three-year performance period, with the number of PSUs granted being adjusted to reflect the value of any dividends paid on shares of common stock during the vesting period. The tables below shows the vesting schedule for unearned performance stock units and cash-settled performance stock units, as of December 31, 2023. The number of PSUs shown below is dependent on the interim performance of the respective PSU grants as of December 31, 2023 and does not reflect any adjustment to the number of PSUs granted to reflect the value of any dividends paid on shares of common stock during the vesting period. Grant(s) performing at below-target level on December 31, 2023 are reflected as target number of shares, and grant(s) performing at above-target level on December 31, 2023 are reflected as the maximum number of shares that can be earned. The performance stock unit awards relating to the tables below were granted from December 2020 to December 2023.

  86. Outstanding Equity Awards at Fiscal Year-End

    | PSUs Scheduled to Vest On: | PSUs Shown | Christopher J. Abate | Dashiell I. Robinson | Brooke E. Carillo | | Fred J. Matera | Andrew P. Stone | Sasha G. Macomber | | 12/31/2023 | Target | 179,942 | 119,961 | — | | — | 50,383 | 38,387 | | 12/31/2024 | Target | 191,326 | 143,494 | 87,691 | | — | 47,831 | 47,831 | | 12/31/2025 | Maximum | 1,099,903 | 446,835 | 412,463 | | 412,463 | 171,860 | 171,860 | | 12/31/2026 | Target | 255,988 | 198,660 | 184,470 | | 184,470 | 85,140 | 85,140 | | | TOTAL | 1,727,159 | 908,950 | 684,624 | 684,624 | 596,933 | 355,214 | 343,218 |

  87. Outstanding Equity Awards at Fiscal Year-End

    | csPSUs Scheduled to Vest On: | csPSUs Shown | Christopher J. Abate | Dashiell I. Robinson | Brooke E. Carillo | Fred J. Matera | Andrew P. Stone | Sasha G. Macomber | | 12/31/2025 | Maximum | — | — | — | 768,843 | — | — | | | TOTAL | — | — | — | 768,843 | — | — |

  88. Outstanding Equity Awards at Fiscal Year-End

    (4) Represents the applicable number of PSUs and csPSUs multiplied by a value per share of $7.41 (the closing price of Redwood common stock on the NYSE on December 29, 2023). Please refer to the preceding “Grants of Plan-Based Awards” table for additional detail on the vesting of PSUs and csPSUs.

  89. Options Exercised and Stock Vested

    Options Exercised and Stock Vested The following table sets forth the value of accumulated deferred stock unit awards, cash-settled deferred stock units and performance stock unit awards that vested during 2023 for each NEO.

  90. Options Exercised and Stock Vested

    | | Stock Awards | | | NEO | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Christopher J. Abate | 188,540 | $1,366,109 | | Dashiell I. Robinson | 159,953 | $1,152,641 | | Brooke E. Carillo | 45,643 | $350,019 | | Fred J. Matera | 90,620 | $672,668 | | Andrew P. Stone | 49,809 | $359,635 | | Sasha G. Macomber | 46,227 | $335,217 |

  91. Options Exercised and Stock Vested

    (1) The value realized on vesting is calculated by multiplying the number of shares vesting by the fair market value of Redwood’s stock on the respective vesting date.

  92. Non-Qualified Deferred Compensation

    Non-Qualified Deferred Compensation Our Executive Deferred Compensation Plan permits eligible employees to voluntarily defer receipt of a portion or all of their salary, bonus, and/or dividend equivalent right payments on a tax-deferred basis for distribution from the plan to the employee at a later date, and deferred stock units awarded to eligible employees can also be deferred for distribution from the plan at a later date. Distributions of deferred stock units and voluntary cash amounts deferred under the Executive Deferred Compensation Plan are distributed according to the date provided in a deferral election form or related award agreement, in accordance with the terms and conditions of the Executive Deferred Compensation Plan. The earliest permissible distribution date for deferred stock units is generally four years after the grant date, when they have vested in full. The earliest distribution date of voluntary cash amounts deferred is the May 1 that occurs sixteen months after the end of the plan year in which the deferral occurred. Most of our NEOs participate in our Executive Deferred Compensation Plan. Each of Mr. Abate, Mr. Robinson, Ms. Carillo and Mr. Stone voluntarily deferred a portion of his or her cash earnings during fiscal year 2023. Interest accrual in respect of cash amounts deferred in our Executive Deferred Compensation Plan is described above under “Compensation Discussion and Analysis — Deferred Compensation.” Our NEOs are also entitled to a Redwood matching contribution on all or a portion of their deferred cash compensation, subject to vesting requirements and a matching contribution limit, as described above under “Compensation Discussion and Analysis — Deferred Compensation.” As of December 31, 2023, with the exception of Ms. Carillo and Mr. Matera, all of our NEOs were fully vested in matching payments made under our Executive Deferred Compensation Plan. The following table sets forth information with respect to our NEOs’ cash contributions, vested deferred stock unit contributions, cash and deferred stock unit withdrawals, earnings, and aggregate balances in our Executive Deferred Compensation Plan for the fiscal year ended December 31, 2023.

  93. Non-Qualified Deferred Compensation

    | NEO | Executive Contributions in 2023 | Redwood Matching Contributions in 2023 | Aggregate Earnings in 2023(1) | Aggregate Withdrawals/ Distributions in 2023 | Aggregate Balance at 12/31/2023(2) | | Christopher J. Abate(3) | $1,451,609 | $42,750 | $14,081 | $(971,924) | $2,102,629 | | Dashiell I. Robinson(4) | $1,232,141 | $39,750 | $11,066 | $(1,132,043) | $1,589,560 | | Brooke E. Carillo(5) | $423,519 | $36,750 | $9,576 | $— | $554,751 | | Fred J. Matera(6) | $672,668 | $— | $— | $(524,658) | $1,890,669 | | Andrew P. Stone(7) | $391,135 | $15,750 | $4,392 | $(286,921) | $590,533 | | Sasha G. Macomber(8) | $335,217 | $— | $— | $(135,323) | $527,079 |

  94. Non-Qualified Deferred Compensation

    (1)Represents market rate interest earned on cash balances in our Executive Deferred Compensation Plan. “Market rate interest” is defined as 120% of long-term applicable federal rate compounded monthly, as published by the IRS. (2)Reflects the value of vested stock units, assuming a price of $7.41 per share (the closing price of Redwood common stock on the NYSE on December 29, 2023), and the cash balance in the Executive Deferred Compensation Plan, all of which has been previously reported as compensation in 2023 or in prior years. (3)Mr. Abate’s contribution included $85,500 in voluntary cash deferrals from his 2023 compensation (reported as compensation in the “Summary Compensation” table above) and $1,366,109 as a result of vesting of previously awarded deferred stock units (reported as compensation in previous years). Mr. Abate received a distribution of 113,636 shares of common stock underlying deferred stock units awarded in 2019. (4)Mr. Robinson’s contribution included $79,500 in voluntary cash deferrals from his 2023 compensation (reported as compensation in the “Summary Compensation” table above) and $1,152,641 as a result of vesting of previously awarded deferred stock units (reported as compensation in previous years). Mr. Robinson received a distribution of 136,363 shares of common stock underlying deferred stock units awarded in 2019. (5)Ms. Carillo’s contribution included $73,500 in voluntary cash deferrals from her 2023 compensation (reported as compensation in the “Summary Compensation” table above) and $350,019 as a result of vesting of previously awarded deferred stock units (reported as compensation in previous years). (6)Mr. Matera’s contribution included $672,668 as a result of vesting of previously awarded deferred stock units (reported as compensation in previous years). Mr. Matera received a distribution of 72,070 shares of common stock underlying deferred stock units awarded in 2020. (7)Mr. Stone’s contribution included $31,500 in voluntary cash deferrals from his 2023 compensation (reported as compensation in the “Summary Compensation” table above) and $359,635 as a result of vesting of previously awarded deferred stock units (reported as compensation in previous years). Mr. Stone received a distribution of 31,818 shares of common stock underlying deferred stock units awarded in 2019. (7) Ms. Macomber’s contribution included $335,217 as a result of vesting of previously awarded deferred stock units. Ms. Macomber received a distribution of 18,181 shares of common stock underlying deferred stock units awarded in 2019.

  95. Potential Payments upon Termination or Change of Control

    Potential Payments upon Termination or Change of Control In 2023, each of Mr. Abate, Mr. Robinson, Ms. Carillo, Mr. Matera, Mr. Stone, and Ms. Macomber had an employment agreement in place with Redwood that provides for cash severance payments, vesting of long-term equity-based incentive awards and other long-term incentive awards, and other benefits in the event the executive is terminated without “cause” or the executive terminates employment for “good reason,” each as defined in the applicable agreement. As compensation for employment prior to the date of any such termination, these employment agreements also provide for payment of base salary through the date of any such termination, as well as, in the event of a “change of control” a performance-based bonus payment, pro-rated as applicable, through the date of any such termination. These employment agreements provide for a one-year term of service ending on December 31 of each year and are subject to automatic one-year renewals if not terminated by either party. In particular, the employment agreements with each of Mr. Abate, Mr. Robinson, Ms. Carillo, Mr. Matera, Mr. Stone, and Ms. Macomber provide for the applicable executive to receive a cash severance payment in the event Redwood terminates the executive’s employment without “cause” or the executive terminates employment for “good reason.” The cash severance payments to these executives under these agreements in respect of any such termination are in addition to compensation for employment prior to the date of any such termination and, in each case, would be equal to the executive’s target annual bonus prorated through the date of termination plus the amount of additional cash severance specified in the table below.

  96. Potential Payments upon Termination or Change of Control

    | | | Additional Cash Severance | | | | | In Connection With a | Other Than in Connection With a | | Name | | Change of Control | Change of Control | | Christopher J. Abate | | 2x the sum of Base Salary plus Target Annual Bonus (1) | 1.5x the sum of Base Salary plus Target Annual Bonus | | Dashiell I. Robinson | | 1.5x the sum of Base Salary plus Target Annual Bonus(2) | 1x the sum of Base Salary plus Target Annual Bonus | | Brooke E. Carillo | | 1.25x the sum of Base Salary plus Target Annual Bonus(3) | 1x the sum of Base Salary plus Target Annual Bonus | | Fred J. Matera | | 1.5x the sum of Base Salary plus Target Annual Bonus(4) | 1x the sum of Base Salary plus Target Annual Bonus | | Andrew P. Stone | | 1x the sum of Base Salary plus Target Annual Bonus(5) | 0.75x the sum of Base Salary plus Target Annual Bonus(7) | | Sasha G. Macomber | | 1x the sum of Base Salary plus Target Annual Bonus(6) | 0.75x the sum of Base Salary plus Target Annual Bonus | | (1) | The total of the amount of the Additional Cash Severance in Connection With a Change of Control and the amount of the pro-rated target annual bonus, cannot exceed $7.5 million | | | | (2) | The total of the amount of the Additional Cash Severance in Connection With a Change of Control and the amount of the pro-rated target annual bonus cannot exceed $5.5 million | | | | (3) | The total of the amount of the Additional Cash Severance in Connection With a Change of Control and the amount of the pro-rated target annual bonus cannot exceed $5 million | | | | (4) | The total of the amount of the Additional Cash Severance in Connection With a Change of Control and the amount of the pro-rated target annual bonus cannot exceed $5 million | | | | (5) | The total of the amount of the Additional Cash Severance in Connection With a Change of Control and the amount of the pro-rated target annual bonus cannot exceed $2 million | | | | (6) | The total of the amount of the Additional Cash Severance in Connection With a Change of Control and the amount of the pro-rated target annual bonus cannot exceed $2 million. | | | | (7) | Subject to a minimum of 2x Base Salary plus pro-rated Base Salary. | | |

  97. Potential Payments upon Termination or Change of Control

    In addition, for Mr. Abate, Mr. Robinson, Ms. Carillo, Mr. Matera, Mr. Stone, and Ms. Macomber upon either such type of termination: (i) all outstanding time-based long-term equity-based incentive awards and other time-based long-term incentive awards will vest in full; and (ii) all outstanding performance-based long-term equity-based incentive awards and other performance-based long-term incentive awards will remain outstanding and continue to be eligible to vest in full or in part based on the achievement of relevant performance goals. Additionally, these six executives would be entitled to receive all life insurance, disability insurance, and medical coverage fringe benefits for periods ranging from nine to 24 months following termination of employment, depending on the individual executive and the type of termination. The employment agreements with Mr. Abate, Mr. Robinson, Ms. Carillo, Mr. Matera, Mr. Stone, and Ms. Macomber provide that 75% of severance amounts due will be paid in a lump sum six months following termination and the remaining 25% will be paid in equal monthly installments over the succeeding six months. The employment agreements with Mr. Abate, Mr. Robinson, Ms. Carillo, Mr. Matera, Mr. Stone, and Ms. Macomber do not provide excise tax gross-ups with respect to any excise taxes that may be imposed on change-in-control severance payments. The agreements provide that in the event that any payments or benefits under the employment agreements constitute an “excess parachute payment” for purposes of Section 280G of the Code, the amounts otherwise payable and benefits otherwise due under these employment agreements will either (i) be delivered in full or (ii) be reduced or limited to the minimum extent necessary to ensure that no payments will be subject to the excise tax imposed under Section 4999 of the Code, taking into account applicable federal, state and local income and employment taxes, whichever results in the largest benefit to the executive on an after-tax basis, notwithstanding that all or some portion of such payments and/or benefits may be subject to the excise tax imposed under Section 4999 of the Code. All severance benefits under each employment agreement with these six executives are contingent on the applicable executive executing a release of all claims against Redwood. To the extent enforceable under applicable law, each of the executives is subject to non-solicitation restrictions for one year following a termination for which severance is paid. “Cause” for purposes of Mr. Abate, Mr. Robinson, Ms. Carillo, Mr. Matera, Mr. Stone, and Ms. Macomber’s employment agreements is defined as (i) the executive’s material failure to substantially perform the reasonable and lawful duties of his or her position for Redwood, including any habitual or repeated neglect if such duties, which failure has caused, or could reasonably be expected to cause, significant injury to the interests, property, operations, business or reputation of Redwood, and which failure shall continue to be uncured for thirty (30) days after written notice thereof by the Board of Directors to the executive; (ii) acts or omissions constituting gross negligence, recklessness or willful misconduct on the part of the executive in respect of the performance of his or her duties hereunder, his or her fiduciary obligations or otherwise relating to the business of Redwood, which failure has caused material injury to the interests, property, operations, business or reputation of Redwood, and which failure shall continue to be uncured for thirty (30) days after written notice thereof by the Board to the executive; (iii) unauthorized use or disclosure of trade secrets or confidential or proprietary information pertaining Redwood business, which use or disclosure has caused, or could reasonably be expected to cause significant injury to the interests, property, operations, business or reputation of Redwood, and which failure shall continue to be uncured for thirty (30) days after written notice thereof by the Board to the executive; (iv) acts or omissions constituting willful misconduct on the part of the executive in respect of the performance of his or her fiduciary duty of loyalty to Redwood, which failure has caused material injury to the interests, property, operations, business or reputation of Redwood; (v) theft or embezzlement, or attempted theft or embezzlement, of money, tangible, or intangible assets or property of Redwood or its employees, customers, clients, or others having business relations with Redwood; (vi) the executive’s conviction of, or plea of guilty or nolo contendere to, a non-vehicular felony, including, without limitation, a non-vehicular felony the elements of which involve fraud, dishonesty, or moral turpitude; (vii) the executive’s conviction of, or plea of guilty or nolo contendere to, a misdemeanor the elements of which involve fraud, dishonesty, or moral turpitude, and which is substantially related to the executive’s employment and duties to Redwood; or (viii) the executive’s commission of a crime the elements of which involve fraud, dishonesty, or moral turpitude, and which has caused, or could reasonably be expected to cause, material injury to the interests, property, operations, business or reputation of Redwood. “Good reason” for purposes of Mr. Abate, Mr. Robinson, Ms. Carillo, Mr. Matera, Mr. Stone, and Ms. Macomber’s employment agreements is defined as the occurrence, without the executive’s written consent, of (i) a material reduction in the executive’s responsibilities, title, duties or authority; (ii) a material reduction in the executive’s base salary or target annual bonus, or a material reduction by Redwood in the value of the executive’s total compensation package if such a reduction is not made in proportion to an across-the-board reduction of all senior executives of Redwood; (iii) the relocation of the executive’s principal office to a location not within a designated area of Marin County, California; (iv) a failure at any time to renew the employment agreement; (v) the complete liquidation of Redwood; or (vi) in the event of a merger, consolidation, transfer, or closing of a sale of all or substantially all the assets of Redwood, the failure of the successor company to affirmatively adopt the employment agreement. In the event of a “change of control” (as defined below) in which the surviving or acquiring corporation does not assume outstanding long-term equity-based incentive awards and other long-term incentive awards or substitute equivalent awards, outstanding long-term equity-based incentive awards and other long-term incentive awards for all the NEOs will immediately vest and become exercisable. In the event of a “change of control” in which outstanding long-term equity-based incentive awards and other long-term incentive awards are assumed or substituted, then acceleration only would occur upon a qualifying employment termination as specified in the award agreement for such award or the executives’ employment agreements. The number or amount of any outstanding performance-based long-term equity-based incentive awards or other long-term incentive awards eligible to vest will be determined by reference to the applicable performance goals for each such award, pro-rated on an annualized basis to reflect the shortened performance period.

  98. Potential Payments upon Termination or Change of Control

    In addition, in the event of a termination due to the executive’s death or disability, the employment agreements with Mr. Abate, Mr. Robinson, Ms. Carillo, Mr. Matera, Mr. Stone, and Ms. Macomber provide for (i) the payment to the executive or his or her estate of (a) the executive’s base salary to the date of termination, and (b) the executive’s target annual bonus for the year, prorated to the date of termination (as well as any earned but unpaid annual bonus from a prior service year (as and when such bonus becomes payable generally)), (ii) vesting in full of all long-term equity-based incentive awards and other long-term incentive awards with time-based vesting, and (iii) with respect to long-term equity-based incentive awards and other long-term incentive awards with performance-based vesting, such awards to remain outstanding and to continue to be eligible to vest and become payable based on the number of target shares or granted award value and the performance goals set forth in the applicable award agreement by which such awards are evidenced, in each case unless otherwise provided in the award agreement for the award. With respect to the employment agreements with Mr. Abate, Mr. Robinson, Ms. Carillo, Mr. Matera, Mr. Stone, and Ms. Macomber, “change of control” is defined as follows: (a) With respect to any long-term equity-based incentive award or other long-term incentive award granted prior to December 16, 2020, the occurrence of any of the following: (1) any one person, or more than one person acting as a group (within the meaning of Section 409A of the Code), acquires ownership of stock of Redwood that, together with other stock held by such person or group constitutes more than 50 percent of the total fair market value or total voting power of all stock of Redwood; or (2) any one person, or more than one person acting as a group (within the meaning of Section 409A of the Code), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of Redwood possessing 30 percent or more of the total voting power of the stock of Redwood; or (3) during any 12-month period, a majority of the members of Redwood’s Board of Directors is replaced by directors whose appointment or election is not endorsed by a majority of the members of Redwood’s Board of Directors prior to such appointment or election; or (4) any one person, or more than one person acting as a group (within the meaning of Section 409A of the Code), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from Redwood that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of Redwood immediately before such acquisition or acquisition; provided, that no change of control shall be deemed to occur when the assets are transferred to (x) a stockholder of Redwood in exchange for or with respect to its stock, (y) a person, or more than one person acting as a group (within the meaning of Section 409A of the Code), that owns, directly or indirectly, 50 percent or more of the total value or voting power of all of the outstanding stock of Redwood, or (z) an entity, at least 50 percent of the total value or voting power of which is owned, directly or indirectly, by a person that owns directly or indirectly 50 percent or more of the total value or voting power of all of the outstanding stock of Redwood, in each case with such persons status determined immediately after the transfer of assets. (b) With respect to any severance payment or benefit or any long-term equity-based incentive award or other long-term incentive award granted on or after December 16, 2020, the occurrence of any of the following: (1) a transaction or series of transactions (other than an offering of common stock to the general public through a registration statement filed with the Securities and Exchange Commission or a transaction or series of transactions that meets the requirements of clauses (a) and (b) of subsection (3) below) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) (other than Redwood, any of its subsidiaries, an employee benefit plan maintained by Redwood or any of its subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, Redwood) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of Redwood possessing more than 30% of the total combined voting power of Redwood’s securities outstanding immediately after such acquisition; or (2) during any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new Director(s) (other than a Director designated by a person who shall have entered into an agreement with Redwood to effect a transaction described in subsections (1) or (3) of this definition) whose election by the Board or nomination for election by Redwood’s stockholders was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or (3) the consummation by Redwood (whether directly involving Redwood or indirectly involving Redwood through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of Redwood’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction: a. which results in Redwood’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of Redwood or the person that, as a result of the transaction, controls, directly or indirectly, Redwood or owns, directly or indirectly, all or substantially all of Redwood’s assets or otherwise succeeds to the business of Redwood (Redwood or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction; and b. after which no person or group beneficially owns voting securities representing 30% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this clause (ii) as beneficially owning 30% or more of the combined voting power of the Successor Entity solely as a result of the voting power held in Redwood prior to the consummation of the transaction. For additional information related to the employment agreements with Mr. Abate, Mr. Robinson, Ms. Carillo, Mr. Matera, Mr. Stone, and Ms. Macomber, please refer to Exhibits 10.28 through 10.33 to Redwood’s Annual Report on Form-K for the year ended December 31, 2023, filed on February 29, 2024.

  99. CEO Pay Ratio

    CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of the SEC’s Regulation S-K, the following information is being provided regarding the ratio of the total compensation of Redwood’s median compensated employee to the total compensation of Redwood’s CEO during 2023. For 2023, Redwood’s most recently completed fiscal year: •Median Total Compensation – 2023. The annual total compensation of the employee who represents Redwood’s median compensated employee (excluding our CEO) was $141,166; and •CEO’s Total Annual Compensation – 2023. The annual total compensation of Redwood’s CEO was $7,021,779. CEO Pay Ratio of 50 to 1. Based on this information, for 2023, the estimated ratio of (x) the annual total compensation of Redwood’s CEO, to (y) the annual total compensation of Redwood’s median compensated employee, was 50 to 1. Determining the Median Compensated Employee •Employee Population As of December 31, 2023, Redwood’s employee workforce consisted of 289 full-time employees. However, for purposes of determining the median compensated employee, the Chief Executive Officer and one employee on permanent leave of absence were excluded. As a result, 287 of the 289 employees were included in the CEO Pay Ratio calculation. •Methodology for Determining Redwood’s Median Compensated Employee To identify the median compensated employee from Redwood’s employee population, a review of the annual total compensation of each of Redwood’s employees was conducted. For purposes of measuring the annual total compensation of each employee, Redwood selected base salary, overtime pay and bonus as the most appropriate measure of compensation, which was consistently applied to the 287 included employees. In identifying the median compensated employee, the compensation of permanent employees who were new hires in 2023 was annualized. •Compensation Measure and Annual Total Compensation of Median Compensated Employee With respect to the annual total compensation of the median compensated employee, Redwood calculated the elements of such employee’s compensation for 2023 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $141,166. •Annual Total Compensation of CEO With respect to the annual total compensation of Redwood’s CEO, Redwood used the annual total compensation amount as reported in the “Summary Compensation Table” in this proxy statement.

  100. Pay vs. Performance Comparison

    Pay vs. Performance Comparison As described within the Compensation Discussion and Analysis section of this Proxy Statement, Redwood maintains a performance-based compensation philosophy and program for its executive officers that seeks to provide incentives to achieve business goals and sustainable stockholder returns, align the interests of executive officers with those of long-term stockholders in achieving strong stockholder returns, and enable it to hire and retain talented individuals in a competitive marketplace. Accordingly, under Redwood’s executive compensation program, base salary and standard benefits are generally the only fixed elements of compensation, while performance-based components of compensation and long-term incentive awards represent the predominant forms of compensation for the CEO and other executive officers. A fulsome discussion of how the Compensation Committee has structured executive compensation at Redwood to be consistent with the Company’s performance-based compensation philosophy is included in the Compensation Discussion and Analysis section of this Proxy Statement beginning on page 49 above. The following table, the related footnotes, and the other disclosures set forth below in this “Pay vs. Performance Comparison” section of this Proxy Statement, have all been prepared in accordance with Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of the SEC’s Regulation S-K, which were enacted and promulgated to, among other things, require the disclosure of information about the relationship between: (i) “Compensation Actually Paid” (as defined in Item 402(v) of Regulation S-K) to executives by a company over a specified period, and (ii) certain measures of the financial performance of the company over that period. During 2023 and early 2024, when the Compensation Committee made certain executive compensation determinations related to 2023 and 2024, the Compensation Committee did not directly consider the table, the related footnotes, and the other disclosures set forth below in this “Pay vs. Performance Comparison” section. Amounts designated as “Compensation Actually Paid” in the table, the related footnotes, and the other disclosures set forth below are calculated in accordance with Item 402(v) of Regulation S-K and do not necessarily represent amounts actually earned or realized by Redwood’s CEO or other executive officers in the periods presented or in any other period. In accordance with SEC regulations, within this “Pay vs. Performance Comparison” section the term “NEOs” refers to Redwood’s five Named Executive Officers and does not include Ms. Sasha Macomber.

  101. Pay vs. Performance Table

    Pay vs. Performance Table

  102. Pay vs. Performance Table

    | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(1)(3) | Average Summary Compensation Table Total for Non-PEO NEOs(2) | Average Compensation Actually Paid to Non-PEO NEOs(2)(3) | Total Shareholder Return(4) | Peer Group Total Shareholder Return(5) | Net Income (Loss) (in millions) | Adjusted ROE(6) | | 2023 | $7,021,779 | $7,052,048 | $6,580,351 | $6,728,959 | $65 | $80 | $(2) | 0.1% | | 2022 | $5,404,993 | $(2,530,287) | $3,215,636 | $310,195 | $53 | $69 | $(164) | -11.4% | | 2021 | $13,598,971 | $17,746,852 | $6,713,889 | $7,987,344 | $92 | $94 | $320 | 26.3% | | 2020 | $5,552,321 | $165,376 | $2,191,888 | $280,033 | $57 | $81 | $(582) | -49.2% |

  103. Pay vs. Performance Table

    (1) PEO for 2023, 2022, 2021, and 2020 was Christopher J. Abate (2) The non-PEO named executive officers (NEOs) reflects the following individuals in each year: 2023: Dashiell I. Robinson, Brooke E. Carillo, Fred J. Matera, Andrew P. Stone 2022: Dashiell I. Robinson, Brooke E. Carillo, Andrew P. Stone, Sasha G. Macomber 2021: Dashiell I. Robinson, Collin L. Cochrane, Andrew P. Stone, Sasha G. Macomber 2020: Dashiell I. Robinson, Collin L. Cochrane, Andrew P. Stone, Sasha G. Macomber, Shoshone (“Bo”) Stern (3) The dollar amounts reported as “Compensation Actually Paid” represent the amount of “compensation actually paid”, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned or paid during the applicable year. In accordance with the requirement of Item 402(v) of Regulation S-K, “Compensation Actually Paid” for 2023 is calculated by making the following adjustments from the Summary Compensation Table totals as follows:

  104. Pay vs. Performance Table

    | Item and Value Added (Deducted) | | | 2023 | | For PEO: | | | | | Summary Compensation Table Total | | | $7,021,779 | | | - | SCT “Stock Awards” column value | $(4,099,997) | | | + | year-end fair value of outstanding equity awards granted in Covered Year that remain unvested(*) | $3,943,657 | | + | / - | change in fair value of outstanding and unvested equity awards granted in prior years(*)(†) | $(336,946) | | + | / - | change in fair value of prior-year equity awards vested in Covered Year(*)(†) | $91,576 | | | + | dividends paid on equity awards in the Covered Year prior to vesting date not otherwise included in total compensation for covered year | $431,979 | | Compensation Actually Paid(•) | | | $7,052,048 | | For Non-PEO Named Executive Officers (Average) | | | | | Summary Compensation Table Total | | | $6,580,351 | | | - | SCT “Stock Awards” column value | $(4,624,986) | | | + | year-end fair value of outstanding equity awards granted in Covered Year that remain unvested(*) | $4,268,442 | | + | / - | change in fair value of outstanding and unvested equity awards granted in prior years(*)(†) | $13,346 | | + | / - | change in fair value of prior-year equity awards vested in Covered Year(*)(†) | $50,292 | | | + | dividends paid on equity awards in the Covered Year prior to vesting date not otherwise included in total compensation for covered year | $441,514 | | Compensation Actually Paid(•) | | | $6,728,959 |

  105. Pay vs. Performance Table

    (*) Fair value of outstanding and unvested equity awards were determined using valuation assumptions, methodologies and market condition inputs (including, for example, risk-free interest rates and the following metrics related to Redwood common stock: market value, volatility, and dividend yield) that are generally consistent with those used to estimate fair value at grant date in accordance with ASC Topic 718. For awards subject to financial performance-based vesting conditions (e.g., performance stock units), fair values reflect an estimate of the probable outcome of the financial performance-based vesting conditions updated as of each measurement date. See “Equity Compensation Plans” in Note 19 to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for 2023, which sets forth assumptions made in valuing awards subject to financial performance-based vesting conditions at grant date and at measurement dates subsequent to grant date during the corresponding vesting periods. Value of equity awards at vesting is determined by the closing market price of the number of shares of common stock that vest on the applicable vesting date. (†) Amounts represent changes in value from beginning of year to end of year or vesting date of individual awards. (•) Table does not include reconciling line items for (i) changes in pension benefits, (ii) awards that were granted and vested in the same year, or (iii) awards granted during a prior period that were forfeited during the Covered Year, as these items were not applicable for Redwood in 2023. (4) For the relevant fiscal year, represents the cumulative TSR of Redwood for the measurement periods ending on December 31 of each of 2023, 2022, 2021, and 2020, respectively, and in each case beginning on January 1, 2020. Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the company’s share price at the end and the beginning of the measurement period by the company’s share price at the beginning of the measurement period. (5) For the relevant fiscal year, represents the cumulative TSR of the FTSE NAREIT Mortgage REIT Index (for purposes of this Pay vs. Performance Table, and in accordance with Item 402(v) of Regulation S-K, “Peer Group TSR”) for the measurement periods ending on December 31 of each of 2023, 2022, 2021, and 2020, respectively, and in each case beginning on January 1, 2020. (6) Adjusted ROE represents the “Company Selected Measure” as determined in accordance with Item 402(v) of Regulation S-K, and is a non-GAAP financial performance metric. Non-GAAP Adjusted ROE is further described on page 61 within the Compensation Discussion and Analysis section of this Proxy Statement and within Annex B to this Proxy Statement. Analysis of Information Presented in the Pay vs. Performance Table The graphs below describe and illustrate the relationships between (i) the “Compensation Actually Paid” (CAP) to the PEO and the other NEOs, as set forth in the Pay vs. Performance table above, and (ii) Net Income (Loss), Adjusted ROE, and TSR (including TSR of the FTSE NAREIT mREIT index).

  106. Pay vs. Performance Table

    | Relationship of CAP to Net Income (Loss) | | |

  107. Pay vs. Performance Table

    | Relationship of CAP to Adjusted Return on Equity (Adjusted ROE) | | |

  108. Pay vs. Performance Table

    | Relationship of CAP to Total Stockholder Return (TSR)** | | | | * As set forth in this graph, “Peer TSR” represents the annual TSR of the FTSE NAREIT Mortgage REIT Index for each of the years presented. ** For each year presented within this graph, Redwood TSR and Peer TSR represent annual TSR as measured from January 1st of such year to December 31st of each such year, based on an initial fixed $100 investment on each such January 1st. |

  109. Pay vs. Performance Table

    Financial Performance Measures Disclosed below are the most important financial measures used by the Company to link (i) “Compensation Actually Paid” to the Company’s Named Executive Officers for 2023 (the Company’s most recently completed fiscal year) to (ii) the Company’s performance:

  110. Pay vs. Performance Table

    | Most Important Performance Measures: | | Adjusted Return on Equity (Adjusted ROE) | | Adjusted Earnings Available for Distribution ROE (Adjusted EAD ROE) | | Book Value Total Shareholder Return (bvTSR) | | Total Shareholder Return (TSR) | | Relative Total Shareholder Return (rTSR) |

  111. Pay vs. Performance Table

    As discussed within the Compensation Discussion and Analysis section of this Proxy Statement, Redwood’s business model and internally-managed REIT structure inform the Compensation Committee’s selection of performance metrics used in Redwood’s performance-based executive compensation program. As described in the Compensation Discussion and Analysis section of this Proxy Statement, in addition to total stockholder return and relative total stockholder return, which is Redwood’s total stockholder return measured on a relative basis against the TSR of a comparator group of companies or the group of companies that comprise a stock index, the Compensation Committee believes that return-on-equity based measures, including Adjusted ROE, Adjusted EAD ROE, and book value total stockholder return, are highly relevant metrics for determining annual bonuses and measuring Redwood’s longer-term performance because, among other things, these financial performance measures should correlate with Redwood’s ability to increase book value and pay attractive levels of sustainable and growing dividends and, over the long-term, strong results under these performance measures should correlate with strong TSR. A described within the Compensation Discussion and Analysis section of this Proxy Statement, Adjusted ROE and Adjusted EAD ROE are each non-GAAP performance measures that are defined and described on page 61 within this CD&A under the heading “2023 Performance-Based Annual Bonus Compensation.” Adjusted ROE and Adjusted EAD ROE should not be considered as alternatives to GAAP net income, GAAP ROE or other measurements of results of operations computed in accordance with GAAP or for federal income tax purposes. See Annex B to this Proxy Statement for additional discussion, disclosure and details regarding these non-GAAP financial performance metrics.

  112. ADDITIONAL INFORMATION ABOUT DIRECTORS AND EXECUTIVE OFFICERS

    ADDITIONAL INFORMATION ABOUT DIRECTORS AND EXECUTIVE OFFICERS