DEF 14A of Redwood Trust Inc
Filed Mar 31, 2026 · FY20250000930236-26-000011
ITEM 1 — ELECTION OF DIRECTORS
ITEM 1 — ELECTION OF DIRECTORS The nominees for the eight 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 are currently serving as directors of Redwood. Note: One of our current directors, Georganne C. Proctor, is retiring from the Board of Directors, effective upon the conclusion of the Company’s 2026 Annual Meeting, at which time the Board of Directors will be reduced from nine to eight.
Nominees to Board of Directors
Nominees to Board of Directors
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 | | Dashiell I. Robinson | Director and President | | Faith A. Schwartz | Director |
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 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. Directors have acquired such experience, qualifications, attributes and skills reflected in the matrix through: •Education and experience in one or more full-time professional positions that involve the performance of such matters or similar functions; •Experience actively supervising a person performing such matters or similar functions; •Experience overseeing or assessing the performance of a company’s internal business unit, function, or division with respect to such matters; or •Other relevant experience For each nominee for election as a director, set forth below and 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.
Nominees to Board of Directors
| | Greg H. Kubicek, age 69, is Chair of the Board, having previously served as Vice Chair of the Board from December 2020 to May 2022. Mr. Kubicek has been a director of Redwood since 2002. 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 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 | |
Nominees to Board of Directors
| | Christopher J. Abate, age 46, 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. In August 2025, Mr. Abate was named as a member of the Board of Directors of Heritage Commerce Corp. | | (Nasdaq: HTBK) where he serves as a member of HTBK Board’s Audit Committee and its Personnel and Compensation Committee. From October 2019 to December 2021, Mr. Abate served as Chair of the Board of the Structured Finance Association. Before joining Redwood, Mr. Abate was employed by PricewaterhouseCoopers LLP. He holds a B.A. in accounting and finance from Western Michigan University, and 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 | |
Nominees to Board of Directors
| | Doneene K. Damon, age 58, 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. Ms. Damon also currently serves on the Board of | | Directors of Brown Advisory Delaware Trust Company and as Board Chair of the Structured Finance Association. 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 Compensation Commission, and the Delaware Prosperity Partnership. 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 structured finance transactions •Expertise and experience in legal and regulatory matters •Expertise and experience relating to corporate and institutional governance •Professional and educational background | |
Nominees to Board of Directors
| | Armando Falcon, age 65, 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 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 as Vice Chairman of the Structured Finance Association Board. 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 | |
Nominees to Board of Directors
| | Douglas B. Hansen, age 68, 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 as Chairman of 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 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 from 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 | |
Nominees to Board of Directors
| | Debora D. Horvath, age 71, 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 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 | |
Nominees to Board of Directors
| | Dashiell I. Robinson, age 46, 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 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. Beyond his work at Redwood, Mr. Robinson is actively engaged in housing policy as a member of the Housing Policy Council, where he advocates for policies that ensure access to affordable, stable housing across income levels. He focuses on promoting a well-functioning mortgage market that balances consumer protection with the fair operation of private industry within a robust regulatory framework. Mr. Robinson is also a member of the Corporate Board of Governors for the National Association of Hispanic Real Estate Professionals (“NAHREP”) and 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 | |
Nominees to Board of Directors
| | Faith A. Schwartz, age 65, has been a Director of Redwood since March 2021. Ms. Schwartz is the Founder and 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 boards of several privately held mortgage industry-focused companies, including Class Valuation LLC. From June 2019 to June | | 2024, Ms. Schwartz served on the Board of Directors of Gateway First Bank. 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 | |
Nominees to Board of Directors
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Current Director - Retiring on May 19, 2026 / Not Standing for Re-Election
Current Director - Retiring on May 19, 2026 / Not Standing for Re-Election
Current Director - Retiring on May 19, 2026 / Not Standing for Re-Election
| | Georganne C. Proctor, age 69, 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. | |
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 2024, May 2025, and May 2026, is set forth in the tables below. Non-employee director cash compensation is paid quarterly, in arrears.
DIRECTOR COMPENSATION
| Non-Employee Director Cash Compensation | | | | | Annual Period Commencing May 1, | | | | 2024 | 2025 and 2026 | | Annual Retainer * | $90,000 | $100,000 | | Retainer for Service as a Committee Member (per Committee)** | $12,500 | $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. The Chair of the Board of Directors receives an additional cash retainer of $135,000. | | | | ** 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. | | |
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 2025, non-employee directors received an annual DSU award with a grant date value of $130,000. On the 2026 Annual Meeting date, non-employee directors who are re-elected will receive an annual grant of vested DSUs for the May 2026 to May 2027 annual period determined by dividing $130,000 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 February 2026, 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 changes for the May 2026 to May 2027 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 60 - 61 of this Proxy Statement under the heading “Executive Compensation in 2025 — Compensation Peer Group for 2025.” In particular, the Board approved the existing compensation program: an annual cash retainer for Board service of $100,000; an annual equity award grant for Board service of $130,000; 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 $135,000. 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 2026, when updated comparative compensation data will be available. Any changes to non-employee director compensation that are approved by the Board following this 2026 review may increase or decrease non-employee director compensation for the May 2026 to May 2027 annual period and/or May 2027 to May 2028 annual period from the amounts set forth in the “Non-Employee Director Cash Compensation” table on the preceding page. The following table provides information on non-employee director compensation for the 2025 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 following table.
Non-Employee Director Compensation — 2025
Non-Employee Director Compensation — 2025
Non-Employee Director Compensation — 2025
| Current Non-Employee Directors | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3) | All Other Compensation ($) | Total ($) | | Doneene K. Damon | $139,399 | $129,998 | — | $269,397 | | Armando Falcon | $141,102 | $129,998 | — | $271,100 | | Douglas B. Hansen | $104,102 | $129,998 | — | $234,100 | | Debora D. Horvath | $141,102 | $129,998 | — | $271,100 | | Greg H. Kubicek | $250,255 | $129,998 | — | $380,253 | | Georganne C. Proctor | $132,805 | $129,998 | — | $262,803 | | Faith A. Schwartz | $121,102 | $129,998 | — | $251,100 |
Non-Employee Director Compensation — 2025
_____________________________ (1)Fees earned are based on the non-employee director compensation policy in place for 2025: (i) annual cash retainer of $100,000; (ii) additional annual retainer for the Chair of the Board of $135,000; (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 $12,500 per committee. (2)Stock awards consisted of grants of vested DSUs. The value of DSUs awarded was determined in accordance with FASB Accounting Standards Codification Topic 718. Information regarding the assumptions used to value grants of DSUs is provided in Note 22 to our consolidated financial statements included in Redwood’s Annual Report on Form 10-K filed on February 27, 2026. The value of dividend equivalent rights associated with DSUs was taken into account in establishing the value of these DSUs and previously granted DSUs. Therefore, dividend equivalent rights payments made during 2025 to non-employee directors are not considered compensation or other amounts reported in the table above. (3)As of December 31, 2025, the aggregate number of stock awards/DSUs outstanding for each then-serving non-employee director was as follows: Doneene K. Damon had 58,189 vested DSUs, Armando Falcon had 63,566 vested DSUs, Douglas B. Hansen had 63,566 vested DSUs; Debora D. Horvath had 126,245 vested DSUs; Greg H. Kubicek had 553,837 vested DSUs; Georganne C. Proctor had 267,463 vested DSUs; and Faith A. Schwartz had 63,566 vested DSUs. Additional information regarding ownership of shares of common stock/DSUs by non-employee directors is set forth on page 31 of this Proxy Statement. The following table provides information on deferred stock unit distributions in the form of common stock to non-employee directors from our Executive Deferred Compensation Plan in 2025. Deferred stock units distributed represent compensation previously granted or deferred in prior years and were reported as director compensation in those prior years.
Non-Employee Director Compensation — 2025
| Current Non-Employee Directors | DSUs Distributed in 2025 (#)(1) | Aggregate Value of DSUs Distributed in 2025 ($)(2) | | Doneene Damon | 2,480 | $14,459 | | Armando Falcon | 15,012 | $82,066 | | Douglas B. Hansen | 13,984 | $76,078 | | Debora Horvath | 37,216 | $220,345 | | Faith A. Schwartz | 15,012 | $82,066 |
Non-Employee Director Compensation — 2025
(1)Mr. Falcon, Mr. Hansen, Ms. Horvath, and Ms. Schwartz’s 2025 DSU distributions included annual grants awarded in 2022. In addition, Ms. Horvath’s and Ms. Damon’s 2025 DSU distributions also included directors fees earned in 2023 which she elected to defer into 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.
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 executive officers. ▪The rationale for the different elements of the executive officers’ 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 executive officers 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.
Outreach to Stockholders/Stockholder Feedback
| Section II - Executive Compensation in 2025 | | | | | ➢ | Redwood’s 2025 Performance | | | ➢ | Elements of Compensation in 2025 | | | ➢ | Process for Compensation Determinations for 2025 | | | ➢ | Compensation Peer Group for 2025 | | | ➢ | 2025 Base Salaries | | | ➢ | 2025 Performance-Based Annual Bonus Compensation | | | ➢ | Performance-Based Annual Bonuses Earned for 2025 | | | ➢ | 2025 Long-Term Equity-Based Incentive Awards | | | ➢ | Vesting and Mandatory Holding Periods for 2025 Long-Term Equity-Based Incentive Awards | | | ➢ | Pay-for-Performance Outcomes from Long-Term Equity-Based Incentive Awards |
Redwood’s 2025 Performance
Redwood’s 2025 Performance Redwood’s performance in 2025 included very strong growth in mortgage banking revenue and strong returns from its core mortgage banking activities within its Sequoia Mortgage Banking and CoreVest Mortgage Banking segments. The company’s overall ROE and book value TSR (“bvTSR”), however, were meaningfully and negatively impacted by the performance of legacy portfolio investments and, therefore, lagged behind peers and industry indices, as illustrated within the preceding “Executive Summary of CD&A” under the heading “Annual Financial Performance – 2025” on page 38 of this Proxy Statement. Redwood’s overall 2025 annual financial performance, as measured by two different ROE-based performance metrics, was below the targets established by the Committee, which drove below-target annual bonus realization for Redwood’s CEO and other executive officers notwithstanding strong mortgage banking revenue growth and strong strategic and operational achievements during 2025. ▪2025 Annual Financial Performance •Non-GAAP Financial Measures: ◦Non-GAAP Core Segments EAD ROE: 17.6% ▪Non-GAAP Core Segments EAD ROE is a non-GAAP performance measure that is defined and described, and is reconciled to ROE based on GAAP financial results, in Annex A to this Proxy Statement. ◦Non-GAAP EAD ROE: 2.6% ▪Non-GAAP EAD ROE is a non-GAAP performance measure that is defined and described, and is reconciled to ROE based on GAAP financial results, in Annex A to this Proxy Statement. •Core Mortgage Banking Measures: ◦Year-Over-Year Mortgage Banking Revenue Growth: 71.9% ▪Mortgage banking revenue includes GAAP net interest income and GAAP non-interest income (loss), associated with the Company’s Sequoia Mortgage Banking and CoreVest Mortgage Banking segments. ◦Mortgage Banking ROC: 25.6% ▪Mortgage Banking Return on Capital (ROC) is a non-GAAP measure that is calculated as combined GAAP net income (loss) for the Company’s Sequoia Mortgage Banking and CoreVest Mortgage Banking segments divided by average capital utilized for those combined segments and is further defined and described in Annex A to this Proxy Statement. •GAAP-Based Financial Measures: ◦Return on common equity (“ROE”): -7.4% ◦Book value TSR: -4.5%. ▪Book value TSR (also referred to as book value total shareholder return, or “bvTSR”) for a designated period represents the period change in GAAP book value per common share plus dividends declared per common share in the period. •Quarterly Dividend: ◦Maintained $0.18 per share quarterly dividend throughout 2025, an indicative dividend yield of 13% at December 31, 2025 (based on common stock closing price of $5.53 on December 31, 2025). ▪2025 Strategic and Operational Achievements •In 2025, the Company was focused on quality execution – delivering elevated volumes of mortgage banking activity and translating mortgage banking platform growth and scale into consistent earnings across a dynamic mortgage finance environment. ◦As the Sequoia, Aspire and CoreVest operating platforms continued to grow and scale during 2025, Redwood expedited the wind-down of its legacy (“non-core”) portfolio to allow stockholders to more clearly see the earnings power, capital efficiency, and scalability of its core operating businesses. This shift has enabled capital to be redeployed toward high-performing platforms and supported the expansion of strategic capital provider relationships that reinforce durable distribution and consistent earnings over time. •A detailed review of strategic and operational achievements in 2025 is set forth within the preceding “Executive Summary of CD&A” under the heading “2025 Strategic and Operational Achievements” on pages 40-43 of this Proxy Statement and additional information regarding achievement of the company-wide goals is set forth below under the heading “Performance Based Annual Bonuses Earned for 2025–Individual Performance Component of 2025 Annual Bonuses” on pages 68-69 of this Proxy Statement.
Elements of Compensation in 2025
Elements of Compensation in 2025 In 2025, cash compensation for Redwood’s executive officers included a base salary and a performance-based annual bonus. Annual bonuses for 2025 were determined based on company financial performance and on each executive officer’s individual performance. For each executive officer, the Committee established a target annual bonus amount at the beginning of 2025 that would be earned if Redwood’s financial performance met Committee-established targets and the executive officer’s individual performance merited target-level payment. In particular, one portion of each executive officer’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 executive officer’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 executive officer to be appropriate in comparison to a market-based median level, after taking into account factors such as the executive officer’s role and responsibilities, competitive factors, and internal equity. In addition, the Committee believes that performance-based bonuses for each executive officer 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 2025 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 60-61 within this CD&A under the heading “Compensation Peer Group for 2025.” For 2025, the Committee established the Company performance component of the annual bonus for each executive officer such that: 40% of this component would be realized based on Redwood’s 2025 “Adjusted ROE”; 40% of this component would be realized based on Redwood’s 2025 “Adjusted EAD ROE”; and 20% of this component would be realized based on Redwood’s 2025 mortgage banking revenue growth (as compared to Redwood’s 2024 mortgage banking revenue). Adjusted ROE and Adjusted EAD ROE are each non-GAAP performance measures that are defined and described on pages 62-63 within this CD&A under the heading “2025 Performance-Based Annual Bonus Compensation.” Furthermore, for 2025, the Committee established: an Adjusted ROE financial performance target of 10.0%; an Adjusted EAD ROE performance target of 7.0%; and a mortgage banking revenue growth performance target of 15%. With respect to long-term equity-based compensation, the Committee generally makes annual year-end awards to executive officers in amounts, and subject to terms and vesting conditions, that provide an incentive to create long-term stockholder value and align the interests of executive officers 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 2025, the value of long-term equity-based compensation granted at year-end to executive officers was determined after taking into account the following: ◦The Committee’s general philosophy that competitive pressure on executive officer 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 executive officer’s individual performance. ◦The Committee’s general philosophy that the terms and vesting conditions of long-term equity-based awards should result in realized compensation for executive officers that correlates with long-term stockholder value creation (through dividend distributions and share-price growth) over a minimum of three years. ◦Stockholder feedback regarding the overall quantum of target-level compensation for executive officers and the Committee’s decision, in response to this feedback, to reduce by 25%, compared to year-end 2024, the aggregate grant-date fair value of each executive officer’s 2025 year-end long-term equity-based incentive awards. Executive officers 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 76-78 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, executive officers may participate in Redwood’s Executive Deferred Compensation Plan and are eligible for a concierge medical benefit. An illustration of the elements of the CEO’s target compensation at the outset of 2025, 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 2025” in the Executive Summary of CD&A on page 48 of this Proxy Statement.
Compensation Peer Group for 2025
Compensation Peer Group for 2025 As in prior years, in 2025 the Committee asked its independent compensation consultant to conduct a market compensation analysis for Redwood’s executive officers. For 2025, Semler Brossy’s analysis relied 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 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, the Committee, in consultation with its independent compensation consultant, reviews and approves a compensation peer group using a pre-defined process and objective industry and size criteria designed to reflect companies with which Redwood competes for business and/or executive talent. The process and objective criteria used to select the 2025 compensation peer group (which was used in the 2025 competitive pay analysis) are summarized below.
Compensation Peer Group for 2025
| Step 1: | Identify publicly traded, U.S.-listed REITs and financial services companies that are internally managed (externally-managed companies generally do not disclose comprehensive compensation data and are therefore excluded) |
Compensation Peer Group for 2025
| 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 | | | • | Companies with market capitalization values generally within 0.25-4.0x of Redwood (based on one-month average market capitalization), subject to reasonable exceptions for key business competitors |
Compensation Peer Group for 2025
| 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 one-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 |
Compensation Peer Group for 2025
| 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, particularly those that: (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) | | | • | Adjust the group as needed 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 |
Compensation Peer Group for 2025
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/credit 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. Following the completion of the Committee’s review process in 2025, there were no changes to the compensation peer group from the 2024 compensation peer group. 2025 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 2025 consisted of the following 19 companies:
Compensation Peer Group for 2025
| • | Acadian Asset Management, Inc. | • | Adamas Trust, Inc. (1) | | • | Arbor Realty Trust, Inc. | • | Chimera Investment Corporation | | • | Dynex Capital, Inc. | • | Essent Group Ltd. | | • | Granite Point Mortgage Trust, Inc. | • | Ladder Capital Corp. | | • | MFA Financial, Inc. | • | Mr. Cooper Group, Inc.(2) | | • | 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. | | |
Compensation Peer Group for 2025
________________ (1) New York Mortgage Trust, Inc. rebranded as Adamas Trust, Inc. effective in September 2025. (2) Mr. Cooper Group, Inc. was acquired in October 2025. Compensation data was publicly disclosed by Mr. Cooper Group, Inc. in April 2025, which was used in the Committee’s 2025 compensation analysis. As a result of the acquisition, Mr. Cooper Group, Inc. will not be included in the Committee’s 2026 compensation peer group.
2025 Performance-Based Annual Bonus Compensation
2025 Performance-Based Annual Bonus Compensation Redwood’s annual bonus program is designed to reward executive officers based on Redwood’s financial performance and each executive officer’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 past ten years, reflecting the variations in Redwood’s compensation program and financial performance over the same period. Set forth below is a description of the components of the 2025 performance-based annual bonus compensation for Redwood’s executive officers, including a description of the financial performance metrics and targets used within the bonus program’s structure. Components of 2025 Annual Bonuses. In order to align executives’ interests with the interests of stockholders, in the first quarter of 2025 the Committee determined, after consultation with its independent compensation consultant, that 2025 target annual bonuses for executive officers 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 2025; and ◦Individual Performance Component. 25% on individual contributions to the Company’s pre-established annual strategic, business, operational and risk management goals and objectives for 2025. The weightings described above were used so that most of an executive officer’s target annual bonus will depend directly on company financial performance, while also providing incentives for achievement of individual strategic, business, operational and risk management 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 2025 Annual Bonuses. Also during the first quarter of 2025, after a review of Redwood’s compensation program, and following consultation with its independent compensation consultant, the Committee determined to: continue to use two different non-GAAP financial performance metrics in 2025 within the methodology for determining realization of each executive officer’s performance-based annual bonus; and to introduce a third financial performance metric – namely, mortgage banking revenue growth – for use within the methodology for determining realization of each executive officer’s performance-based annual bonus. In the process of reaching its conclusion to continue using two of the financial performance metrics for 2025 – namely, Adjusted ROE and Adjusted EAD ROE1 – each of which is further described below, the Committee considered whether alternative or additional financial performance metrics should be used within the methodology for determining performance-based annual bonuses. For 2025, based on the Company’s strategic focus on growing its mortgage banking platforms, the Committee determined to introduce a third financial performance metric – namely, mortgage banking revenue growth (or, growth in annual revenues in 2025 from its Sequoia and CoreVest Mortgage Banking segments as compared to 2024) – for use within the methodology for determining performance-based annual bonuses. The Committee also discussed that as the Company’s business model continued to evolve, additional or alternative financial performance metrics could be incorporated into the annual bonus methodology in future years to continue to maintain strong alignment between the bonus program’s incentive structure and the metrics that are strongly correlated with increasing earnings and book value and driving stockholder returns. For 2025, the Committee determined that: 40% of the target amount of the financial performance component of annual bonuses would be realized based on 2025 Adjusted ROE; 40% of the target amount of 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. the financial performance component of annual bonuses would be realized based on 2025 Adjusted EAD ROE; and 20% of the target amount of the financial performance component of annual bonuses would be realized based on Redwood’s 2025 mortgage banking revenue growth (as compared to Redwood’s 2024 mortgage banking revenue). ◦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 executive officers 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 realized gains and losses; (iii) 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).
2025 Performance-Based Annual Bonus Compensation
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 executive officers 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. ◦Mortgage Banking Revenue Growth. Mortgage banking revenue includes GAAP net interest income and GAAP non-interest income (loss), associated with the Company’s Sequoia Mortgage Banking and CoreVest Mortgage Banking segments. Mortgage banking revenue growth in 2025 is a measure of the increase in mortgage banking revenue in 2025 compared to 2024. The Committee believes that mortgage banking revenue growth is an appropriate measure of financial performance to use within its methodology for determining realization of annual bonuses for Redwood’s executive officers because, among other reasons, a key source of earnings at Redwood is income from mortgage banking activities within the Company’s Sequoia Mortgage Banking and CoreVest Mortgage Banking segments and the Company believes that in 2025 and future years the strategic positioning of the Company should be increasingly focused on growing revenues and returns from the Company’s mortgage banking platforms. Additional discussion, disclosure and details relating to mortgage banking revenue growth are set forth within Annex B to this Proxy Statement. Financial Performance Targets for 2025 Annual Bonuses. As noted above, for 2025, the Committee determined that: 40% of the target amount of the financial performance component of annual bonuses would be realized based on 2025 Adjusted ROE; 40% of the target amount of the financial performance component of annual bonuses would be realized based on 2025 Adjusted EAD ROE; and 20% of the target amount of the financial performance component of annual bonuses would be realized based on Redwood’s 2025 mortgage banking revenue growth (as compared to Redwood’s 2024 mortgage banking revenue), in each case based on 2025 financial performance relative to a 2025 target level established by the Committee in the first quarter of 2025. The 2025 financial performance targets established by the Committee were as follows: Adjusted ROE of 10.0%; Adjusted EAD ROE of 7.0%; and mortgage banking revenue growth of 15%. In determining these financial performance targets for 2025, 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 2024, 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 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 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. 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 2025, 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 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 2025 and thereby established an important incentive for executives to achieve attractive Adjusted EAD ROE financial performance for Redwood, without exposing Redwood to inappropriate risk.
2025 Performance-Based Annual Bonus Compensation
In setting a mortgage banking revenue growth target for 2025, the Committee took into account market conditions, factors impacting the Company’s internal business planning, and historical levels of mortgage banking revenue growth at Redwood, as well as the strategic importance of increased revenues from the Company’s mortgage banking platforms in generating annual returns and shareholder value, while also considering the potential risks associated with establishing overly ambitious year-over-year revenue growth targets. •Updated Financial Performance Targets Continued the Committee’s Focus on Rigorous and Risk-Appropriate Performance Targets. In determining target level performance for the three financial performance metrics that drive realization of the financial performance component of annual bonuses, the Committee continued to balance setting targets at levels that would appropriately incentivize strong financial performance, without exposing Redwood to inappropriate risk. In particular, in setting 2025 performance targets for Adjusted ROE and Adjusted EAD ROE (the two metrics that were also used in the prior year to drive realization of the financial performance component of 2024 annual bonuses), the Committee lowered the 2025 Adjusted ROE target to 10.0% (from the 11.5% level that had been established for 2024) and raised the 2025 Adjusted EAD ROE target to 7.0% (from the 6.5% level that had been established for 2024). The decision to raise one of these financial performance targets, while lowering the other, was taken after consideration of, among other things, market conditions, including the risk-free interest rate environment and credit risk “spread” environment, the projected return environment for industry participants, and review of historical target levels and returns at peer companies and competitors. Other Aspects of 2025 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 formulaically 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 2.5% or less; bonus amounts below or at the target bonus amounts would be earned if Adjusted ROE was between 2.5% and 10.0%; and bonus amounts in excess of the target bonus amounts would not be earned unless Adjusted ROE was more than 10.0%; (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 1.75% or less; bonus amounts below or at the target bonus amounts would be earned if Adjusted EAD ROE was between 1.75% and 7.0%; and bonus amounts in excess of the target bonus amounts would not be earned unless Adjusted EAD ROE was more than 7.0%; and (iii) with respect to the portion of the financial performance component of annual bonus determined based on mortgage banking revenue growth, no bonus amounts would be earned if mortgage banking revenue growth was 5.0% or less; bonus amounts below or at the target bonus amounts would be earned if mortgage banking revenue growth was between 5.0% and 15.0%; and bonus amounts in excess of the target bonus amounts would not be earned unless mortgage banking revenue growth was more than 15.0%. 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. The use of an initial performance threshold of greater than 2.5% Adjusted ROE and greater than 1.75% Adjusted EAD ROE for the payment of any 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. Similarly, the use of an initial performance threshold of greater than 5.0% mortgage banking revenue growth for the payment of any of portion of target Company performance bonuses based on this metric represents a determination by the Committee that mortgage banking revenue growth below that threshold is not significant enough 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 2.5% and 10.0% and Adjusted EAD in the range between 1.75% and 7.0%, 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. Similarly, the payment of target Company performance bonuses or a portion of target Company performance bonuses for mortgage banking revenue growth in the range between 5.0% and 15.0% reflects the determination by the Committee that mortgage banking revenue growth within this range merits payment of below-target or target Company performance bonuses as mortgage banking revenue growth improves above the initial performance threshold. The Committee also determined that for Adjusted ROE in excess of 10.0%, for Adjusted EAD ROE in excess of 7.0%, and for mortgage banking revenue growth in excess of 15%, respectively, subject to the maximum total bonus opportunity for each executive officer 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 2025 that individual performance in 2025 for each executive officer 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 2025 — Individual Performance Component of 2025 Annual Bonuses.” As in past years, during 2025 these individual factors and goals were subject to adjustment when circumstances warranted, at the discretion of the Committee. For 2025, 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 three components of the annual bonus) that each executive officer could earn for 2025, as disclosed in prior years’ annual proxy statements, these annual bonus caps were reduced from the levels that applied in 2023 (3.5x of total target annual bonus for each executive officer) to 3.0x of total target annual bonus for each executive officer in 2024 and going forward. Executive Officers’ 2025 Target Annual Bonus Amounts. At the end of 2024, the Committee made determinations with respect to each NEO’s target 2025 annual bonus after consultation with its independent compensation consultant and consideration of compensation peer group comparisons for the position, competitive factors and the executive officer’s role, experience, and performance at Redwood. ◦Mr. Abate. The Committee determined that the 2025 target bonus percentage for Mr. Abate would be increased from 200% to 215% of base salary.
2025 Performance-Based Annual Bonus Compensation
◦Mr. Robinson. The Committee determined that the 2025 target bonus percentage for Mr. Robinson would be increased from 195% to 210% of base salary. ◦Ms. Carillo. The Committee determined that the 2025 target bonus percentage for Ms. Carillo would be increased from 190% to 205% of base salary. ◦Ms. Macomber. The Committee determined that the 2025 target bonus percentage for Ms. Macomber would remain unchanged at 175% of base salary. ◦Mr. Stone. The Committee determined that the 2025 target bonus percentage for Mr. Stone would remain unchanged at 175% of base salary.
2025 Performance-Based Annual Bonus Compensation
| | 2025 | | 2025 | 2025 | | | | Base Salary | | Target Annual Bonus | Target Annual Bonus | | | NEO | ($ per annum) | | (as % of Base Salary) | | ($) | | Mr. Abate, Chief Executive Officer | $ | 975,000 | 215% | $ | 2,096,250 | | Mr. Robinson, President | $ | 890,000 | 210% | $ | 1,869,000 | | Ms. Carillo, Chief Financial Officer and Executive Vice President | $ | 860,000 | 205% | $ | 1,763,000 | | Ms. Macomber, Chief Human Resource Officer | $ | 525,000 | 175% | $ | 918,750 | | Mr. Stone, Executive Vice President and Chief Legal Officer | $ | 525,000 | 175% | $ | 918,750 |
Performance-Based Annual Bonuses Earned for 2025
Performance-Based Annual Bonuses Earned for 2025 Annual performance-based bonuses earned by executive officers for 2025 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 2025 Annual Bonuses. As described above, for 2025, the Committee determined that: 40% of the target amount of the Company performance component of annual bonuses would be realized based on 2025 Adjusted ROE; 40% of the target amount of the Company performance component of annual bonuses would be realized based on 2025 Adjusted EAD ROE; and 20% of the target amount of the Company performance component of annual bonuses would be realized based on Redwood’s 2025 mortgage banking revenue growth (as compared to Redwood’s 2024 mortgage banking revenue). ◦Redwood’s Adjusted ROE for 2025 was below the initial performance threshold of 2.5% Adjusted ROE. Accordingly, the portion of the Company performance component of 2025 annual bonuses determined based on Adjusted ROE was realized at 0% of the target amount for that component. ◦Redwood’s Adjusted EAD ROE for 2025 was 2.69%, above the initial performance threshold of 1.75%, but below the financial performance target of 7.0% for Adjusted EAD ROE. Accordingly, the portion of the Company performance component of 2025 annual bonuses determined based on Adjusted EAD ROE was realized at 38.4% of the target amount for that component. ◦Redwood’s mortgage banking revenue growth for 2025 was 71.9%, significantly above the target performance level for mortgage banking revenue growth. The Committee reviewed this exceptional revenue growth in the context of other factors that negatively impacted the Company’s financial performance for 2025 and determined to exercise negative discretion to reduce the portion of the Company performance component of 2025 annual bonuses determined based on mortgage banking revenue growth. As noted above, following review of the Company’s overall financial performance for 2025, the Committee exercised negative discretion to reduce each NEOs’ realization of annual bonus from the Company performance component of annual bonus to 75% of the target amount for such 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 executive officer realized/earned based on the Company’s financial performance in 2025, after giving effect to the Committee’s exercise of negative discretion with respect to this component of annual bonus.
Performance-Based Annual Bonuses Earned for 2025
| | Company Performance Component of 2025 Target Annual Bonus | | 2025 Company Performance Component of Annual Bonus Earned | | % of Company Performance Component Earned | | NEO | ($) | | ($) | | (%) | | Mr. Abate, Chief Executive Officer | $ | 1,572,188 | $ | 1,179,141 | 75.0% | | Mr. Robinson, President | $ | 1,401,750 | $ | 1,051,313 | 75.0% | | Ms. Carillo, Chief Financial Officer and Executive Vice President | $ | 1,322,250 | $ | 991,688 | 75.0% | | Ms. Macomber, Chief Human Resource Officer | $ | 689,063 | $ | 516,797 | 75.0% | | Mr. Stone, Executive Vice President and Chief Legal Officer | $ | 689,063 | $ | 516,797 | 75.0% |
Performance-Based Annual Bonuses Earned for 2025
Individual Performance Component of 2025 Annual Bonuses. For 2025, 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 performance of the NEOs as a team, 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 contributions to the achievement of the company-wide goals noted below in assessing individual performance for 2025. 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 contributions 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. Goals – Increase Operating Volume and Operational Efficiency for Sequoia and CoreVest: Achieve high volume of mortgage loan origination and transactional activity within the Company’s historical operating platforms – Sequoia and CoreVest – and increase the Company’s market share in these areas of residential-focused mortgage finance. At the same time, control operating expenses and increase capital and operating efficiency for these platforms. The Committee evaluated achievement of these goals in the context of various factors, including primarily the achievements described under the heading “2025 Strategic and Operational Achievements” in the Executive Summary of CD&A on pages 40-43 of this Proxy Statement. Goals – Launch and Build-Out of Aspire Mortgage Banking Platform: Successfully launch the Aspire Expanded mortgage loan platform to both loan sellers who participate in the Company’s historical Sequoia mortgage loan platform, as well as to additional “non-QM” mortgage loan originators. As support for the platform’s launch and planned volume growth, build a network of whole loan buyers and prepare for inaugural securitization of Aspire loans, in each case as part of a comprehensive distribution strategy for the Aspire platform. The Committee evaluated achievement of these goals in the context of various factors, including primarily the achievements described under the heading “2025 Strategic and Operational Achievements” in the Executive Summary of CD&A on pages 40-43 of this Proxy Statement. Goals – Redwood Investments and Legacy Investments: Increase capital efficiency relating to portfolio investments through financing of unencumbered assets, structured financing for non-performance legacy investments, and optimization of portfolio holdings and financing facilities. Continue to effectively resolve legacy investments to free up capital for redeployment to “core” mortgage banking platforms. The Committee evaluated achievement of these goals in the context of various factors, including primarily the achievements described under the heading “2025 Strategic and Operational Achievements” in the Executive Summary of CD&A on pages 40-43 of this Proxy Statement. Goals – Technology: Leverage technology to create value within Redwood’s mortgage banking platforms, including through streamlining existing technology “stack” and increasing deployment of artificial intelligence (“AI”) solutions. Continue to enhance and maintain robust cybersecurity program to protect Company systems and data. The Committee evaluated achievement of these goals in the context of various factors, including that the IT department has strongly supported volume growth within Redwood’s Sequoia and Aspire mortgage banking platforms, including through enhanced functionality relating to funding mortgage purchase transactions, workflow build-out and streamlining of loan acquisition system to support Aspire’s volume growth, and deployment of numerous custom AI process solutions to enhance efficiency. Similarly, within the Company’s CoreVest mortgage banking business, enhancements to the CoreVest loan origination platform and deployment of AI process solutions has enhanced both operational efficiency and customer experience. At the enterprise-level, the IT department’s work on its “knowledge graph” initiative, treasury function enhancement initiative, and enterprise-wide data platform initiative have enabled further efficiency and functionality relating to financial and operational reporting and risk management. With respect to cybersecurity, continued enhancements to the Company’s cybersecurity program, including to respond to AI-related cybersecurity threats, resulted in a secure environment for the Redwood enterprise in 2025. Goals – Human Capital: In connection with the launch of the Aspire Expanded mortgage loan platform, support the build-out of the Aspire workforce, including in the business development, capital markets, underwriting and operational functions. Support reorganization of human capital within the corporate Treasury and IT functions and continue a strong cadence of workforce programming and development that supports employee engagement and the Company’s long-term strategic and growth objectives. The Committee evaluated achievement of these goals in the context of various factors, including that during 2025 the HR team supported the growth of the Aspire platform by successfully broadening the workforce footprint of Aspire with staffing of business development, capital markets, underwriting and operating professionals that were generally separate from, but consistent with, the Company’s Sequoia platform, with shared resources where appropriate. In addition, in partnership with the Company’s CFO and IT leadership, HR successfully recruited Managing Director-level talent for the Treasurer role, as well as within the IT department to facilitate the further development of these functions across the Redwood enterprise. With respect to the full workforce, the HR department continued to drive high levels of employee engagement through quarterly “Town Hall” meetings, regional office meetings with senior executives, employee resource groups, and other professional and personal development opportunities. Based on the review described above, the individual performance components of annual bonuses for each NEO for 2025 were determined, as set forth in the table below.
Performance-Based Annual Bonuses Earned for 2025
| | Individual Performance Component of 2025 Target Annual Bonus | | % of Individual Performance Component Earned | 2025 Individual Performance Component of Annual Bonus Realized/Earned | | | NEO | ($) | | (%) | | ($) | | Mr. Abate, Chief Executive Officer | | $524,063 | 120% | | $628,875 | | Mr. Robinson, President | | $467,250 | 100% | | $467,250 | | Ms. Carillo, Chief Financial Officer and Executive Vice President | | $440,750 | 115% | | $506,862 | | Ms. Macomber, Chief Human Resource Officer | | $229,688 | 100% | | $229,687 | | Mr. Stone, Executive Vice President and Chief Legal Officer | | $229,688 | 100% | | $229,687 |
Performance-Based Annual Bonuses Earned for 2025
Total Performance-Based Annual Bonus Earned for 2025. Based on the realization of the Company performance and individual performance components of annual bonuses described above, the table below sets forth the total performance-based annual bonus realized by each NEO for 2025.
Performance-Based Annual Bonuses Earned for 2025
| | 2025 Target Annual Bonus | | 2025 Annual Bonus Realized | 2025 Annual Bonus Realized | | | NEO | ($) | | ($) | | (% of Target) | | Mr. Abate, Chief Executive Officer | | $2,096,250 | $1,808,016 | | 86.3% | | Mr. Robinson, President | | $1,869,000 | $1,518,563 | | 81.3% | | Ms. Carillo, Chief Financial Officer and Executive Vice President | | $1,763,000 | $1,498,550 | | 85.0% | | Ms. Macomber, Chief Human Resource Officer | | $918,750 | $746,484 | | 81.2% | | Mr. Stone, Executive Vice President and Chief Legal Officer | | $918,750 | $746,484 | | 81.2% |
2025 Long-Term Equity-Based Incentive Awards
2025 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 executive officer’s position, responsibilities, total compensation level, individual and company financial performance, competitive factors, and compensation peer group comparisons. The Committee’s annual practice is generally to determine the size of long-term equity-based awards to NEOs at the regularly scheduled (pre-established) fourth quarter meeting of the Committee, which for 2025 occurred on December 11, 2025. The long-term equity-based awards the Committee granted to NEOs in 2025 were in three forms: Deferred Stock Units (“DSUs”), cash-settled RSUs (“csRSUs”), and Performance Stock Units (“PSUs”) partially settleable in cash, the key terms of which are summarized below.
2025 Long-Term Equity-Based Incentive Awards
| • | The DSUs granted to NEOs on December 11, 2025 will vest over four years, with 25% vesting on January 31, 2027, and an additional 6.25% vesting on the first day of each subsequent quarter (beginning April 1, 2027), with full vesting occurring on December 11, 2029. Shares of Redwood common stock underlying these DSUs will be distributed to the recipients not earlier than December 11, 2029 and not later than December 31, 2029, unless electively deferred under the terms of Redwood’s Executive Deferred Compensation Plan. |
2025 Long-Term Equity-Based Incentive Awards
| • | The csRSUs granted to NEOs on December 11, 2025 will vest over four years, with 25% vesting on December 11, 2026, and an additional 25% vesting on December 11th of each of 2027, 2028 and 2029. The terms of the csRSUs granted on December 11, 2025 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. |
2025 Long-Term Equity-Based Incentive Awards
| • | The PSUs granted to NEOs on December 11, 2025 are performance-based equity-based 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, 2029. Settlement of any vested portion of these PSUs is through the delivery of underlying shares of common stock and/or through a cash payment. Further detail on performance-based vesting of the PSUs granted in December 2025 is set forth below. |
2025 Long-Term Equity-Based Incentive Awards
Performance-Based Vesting – PSUs Granted in December 2025. Performance-based vesting of the PSUs granted to NEOs in December 2025 will generally occur as of January 1, 2029, after a three-year performance measurement period encompassing January 1, 2026 to December 31, 2028, based on a three-step process as described below.
2025 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 “Core Segments EAD ROE Tranche”) represents 50% 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 non-GAAP Core Segments EAD ROE over the three-year performance measurement period, with 100% of this portion of the Target PSUs vesting if cumulative non-GAAP Core Segments EAD ROE for the three-year performance period is 25%; and | | (2) | a second tranche (the “rTSR Tranche”) represents 50% 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. |
2025 Long-Term Equity-Based Incentive Awards
◦Vesting for the non-GAAP Core Segments EAD ROE tranche of these PSUs will be in accordance with the following table:
2025 Long-Term Equity-Based Incentive Awards
| Cumulative non-GAAP Core Segments EAD ROE Over Three-Year Period: | % of Performance-Based Vesting:* | | Less than 12.5% non-GAAP Core Segments EAD ROE | 0% | | 12.5% non-GAAP Core Segments EAD ROE | 50% | | 25% non-GAAP Core Segments EAD ROE | 100% | | 37.5% or greater non-GAAP Core Segments EAD ROE | 250% | | * If actual non-GAAP Core Segments EAD ROE 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. | |
2025 Long-Term Equity-Based Incentive Awards
◦Vesting for the rTSR tranche of these PSUs will be in accordance with the following table:
2025 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. | | |
2025 Long-Term Equity-Based Incentive Awards
◦Non-GAAP Core Segments EAD ROE for the PSUs granted in December 2025 is a non-GAAP measure of Redwood’s financial performance that management uses to assess the combined performance of the Company’s mortgage banking platforms and related investments, which include the Sequoia Mortgage Banking, CoreVest Mortgage Banking, and Redwood Investments segments (collectively, the “Core Segments”), together with an allocated portion of the Corporate segment attributable to those operations, and is further defined and described in Annex B to this Proxy Statement. ◦rTSR for the PSUs granted in December 2025 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, 2025, 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 Core Segments EAD ROE-based vesting of the Core Segments EAD ROE Tranche and (ii) the 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. 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 dates. The settlement of the tranche of these PSUs that vest based on the level of Redwood’s non-GAAP Core Segments EAD ROE over the three-year performance measurement period is through the delivery of the underlying shares of Redwood common stock. The settlement of the tranche of these PSUs that vest based on the level of Redwood’s rTSR over the three-year performance measurement period is through 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 settlement date. After the vesting of any of these PSUs on January 1, 2029, and until the delivery of the underlying shares of Redwood common stock and/or payment of the cash settlement amount equal to the value of underlying shares of Redwood common stock referenced by the vested award shares, 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. On a date not later than 45 days following March 31, 2029, (i) vested shares of Redwood common stock underlying these PSUs, if any, and (ii) a cash payment based on the closing price of Redwood’s common stock, if any, as applicable, will be distributed and/or to the recipients, in each case, unless electively deferred under the terms of Redwood’s Executive Deferred Compensation Plan. Equity-Based Award Agreements. The terms of the DSUs, csRSUs, and PSUs granted in 2025 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’ 2025 Year-End Long-Term Equity-Based Incentive Award Values. The Committee made determinations with respect to the value of 2025 year-end long-term equity-based incentive awards granted to NEOs in December 2025 after consultation with its independent compensation consultant, a review of compensation peer group comparisons for the position and consideration of competitive factors, review of stockholder feedback, and the executive officer’s role, experience, and performance at Redwood. Reduction in Value of Year-End Long-Term Equity-Based Incentive Awards in Response to Stockholder Feedback. As described above in the Executive Summary of CD&A on page 36 of this Proxy Statement under the heading “Key Stockholder Feedback During 2025”, in response to stockholder feedback, the aggregate grant date fair value of year-end long-term equity-based incentive awards granted to each NEO at year-end 2025 was reduced by 25% compared to the values of the long-term equity-based awards granted to each NEO at year-end 2024. At the conclusion of the Committee review, the Committee made the following determinations with respect to the value of 2025 year-end long-term equity-based incentive awards for each NEO, as follows: ◦Mr. Abate. In December 2025, 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 $3,262,481, with this award value granted as: $1,794,363 in PSUs (55% of total value), $652,494 in DSUs (20% of total value), and $815,624 in csRSUs (25% of total value). ◦Mr. Robinson. In December 2025, 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 $2,699,986, with this award value granted as: $1,079,993 in PSUs (40% of total value), $539,996 in DSUs (20% of total value), and $1,079,997 in csRSUs (40% of total value). ◦Ms. Carillo. In December 2025, 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 $2,624,984, with this award value granted as: $1,049,991 in PSUs (40% of total value), $524,998 in DSUs (20% of total value), and $1,049,995 in csRSUs (40% of total value). ◦Ms. Macomber. In December 2025, the Committee determined that the aggregate grant date fair value of year-end, long-term equity-based incentive awards granted to Ms. Macomber would total $1,124,990, with this award value granted as: $449,998 in PSUs (40% of total value), $224,997 in DSUs (20% of total value), and $449,995 in csRSUs (40% of total value). ◦Mr. Stone. In December 2025, 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 $1,124,990, with this award value granted as: $449,998 in PSUs (40% of total value), $224,997 in DSUs (20% of total value), and $449,995 in csRSUs (40% of total value). The number and grant date fair value of DSUs, csRSUs and PSUs comprising the 2025 year-end long-term equity-based awards granted to each NEO in December 2025 are set forth in the table below.
2025 Long-Term Equity-Based Incentive Awards
| | Deferred Stock Units (“DSUs”)(1) | | Cash-Settled Restricted Stock Units (“csRSUs”)(1) | | Performance Stock Units (“PSUs”)(1)(2) | | | NEO | # | Aggregate Grant Date Fair Value | # | Aggregate Grant Date Fair Value | # | Aggregate Grant Date Fair Value | | Mr. Abate, Chief Executive Officer | 115,896 | $652,494 | 144,871 | $815,624 | 269,020 | $1,794,363 | | Mr. Robinson, President | 95,914 | $539,996 | 191,829 | $1,079,997 | 161,918 | $1,079,993 | | Ms. Carillo, Chief Financial Officer and Executive Vice President | 93,250 | $524,998 | 186,500 | $1,049,995 | 157,420 | $1,049,991 | | Ms. Macomber, Chief Human Resource Officer | 39,964 | $224,997 | 79,928 | $449,995 | 67,466 | $449,998 | | Mr. Stone, Executive Vice President and Chief Legal Officer | 39,964 | $224,997 | 79,928 | $449,995 | 67,466 | $449,998 |
2025 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 executive compensation under “Executive Compensation Tables — Summary Compensation,” or reported below under “Executive Compensation Tables — Grants of Plan-Based Awards.” (2) As noted above, the settlement of the portion of these PSUs that vest based on the level of Redwood’s rTSR over the three-year performance measurement period, if any, is through a cash payment, rather than through the delivery of shares of common stock, based on the closing price of Redwood’s common stock on the settlement date.
Vesting and Mandatory Holding Periods for 2025 Long-Term Equity-Based Incentive Awards
Vesting and Mandatory Holding Periods for 2025 Long-Term Equity-Based Incentive Awards DSUs Granted in December 2025. The DSUs granted to executive officers in December 2025 have the four-year vesting schedule described above on pages 69-72 within this CD&A under the heading “2025 Long-Term Equity-Based Incentive Awards.” Notwithstanding this vesting schedule, while continuously employed, the executive officers 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 2029). csRSUs Granted in December 2025. The cash-settled RSUs (“csRSUs”) granted to executive officers in December 2025 have the four-year vesting schedule described above on pages 69-72 within this CD&A under the heading “2025 Long-Term Equity-Based Incentive Awards.” PSUs Granted in December 2025. The PSUs granted to executive officers in December 2025 have the three-year vesting/performance measurement period described above on pages 69-72 within this CD&A under the heading “2025 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 and/or by payment of a cash settlement amount not later than 45 days following March 31, 2029.
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 (collectively, “LTI Awards”), including awards in the form of DSUs, RSUs, and PSUs, are a significant component of Redwood’s performance-based compensation program, and generally account for the largest portion of each NEO’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 stockholder return experiences, with a key focus on three-year performance measurement periods. In particular, with respect to performance stock units that were granted to NEOs in December 2022 – which had a three-year performance measurement period that ended on December 31, 2025 – realization of value from these LTI Awards (i.e., performance-based vesting) was directly linked to achievement of book value TSR and relative TSR performance over the 2023-2025 three-year period: ◦Redwood’s three-year TSR over the January 1, 2023 to December 31, 2025 period was at the 29th percentile of the comparator group of companies, resulting in vesting at 18% of target level for the portion of these PSUs with performance-based vesting driven by relative TSR. ◦Redwood’s bvTSR over this same period was below the threshold for performance-based vesting for the portion of these PSUs with performance-based vesting driven by book value TSR, resulting is vesting at 0% of target level for the portion of these PSUs with performance-based vesting driven by book value TSR In accordance with the terms of these performance stock units, after adjusting the target number of PSUs granted in December 2022 to reflect the value of dividends declared on Redwood common stock during the performance measurement period, approximately 25% of the target performance stock units originally granted to each NEO in December 2022 vested. Additional discussion and a graphical depiction of this performance-based vesting outcome with respect to Redwood’s CEO is set forth within the preceding “Executive Summary of CD&A” under the heading “CEO's 2025 Long-Term Pay-for-Performance Outcome (cont.)” on page 47 of this Proxy Statement. As detailed below, in 2025 Redwood’s NEOs vested into realized and delivered compensation from LTI Awards awarded in prior years as follows: Mr. Abate: (i) vesting and delivery of 113,808 DSUs granted in December 2021; (ii) vesting and settlement of 113,808 csDSUs granted in December 2021; (iii) vesting and settlement of 78,739 csRSUs (consisting of 25% of the each of the csRSU awards granted in December 2023 and December 2024); and (iv) performance-based vesting of 111,609 PSUs granted in December 2022, which represented 25% of the target number of PSUs granted in December 2022 (based on level of overall attainment of performance-based vesting criteria). ◦As described and illustrated above in the Executive Summary of CD&A on page 46 of this Proxy Statement with respect to Mr. Abate, performance-based vesting of the PSUs granted in December 2022 was driven by both (a) Redwood’s three-year TSR over the January 1, 2023 to December 31, 2025 period, which was at the 29th percentile of the comparator group of companies, and (b) Redwood’s bvTSR over this same period, which, as measured in accordance with the terms of these PSUs, was below the initial performance threshold for any bvTSR-based vesting. Mr. Robinson: (i) vesting and delivery of 85,356 DSUs granted in December 2021; (ii) vesting and settlement of 85,356 csDSUs granted in December 2021; (iii) vesting and settlement of 72,810 csRSUs (consisting of 25% of the each of the csRSU awards granted in December 2023 and December 2024); and (iv) performance-based vesting of 45,341 PSUs granted in December 2022, which represented 25% of the target number of PSUs granted in December 2022 (based on level of overall attainment of performance-based vesting criteria). ◦As described and illustrated above in the Executive Summary of CD&A on page 46 of this Proxy Statement with respect to Redwood’s CEO, performance-based vesting of the PSUs granted in December 2022 was driven by both (a) Redwood’s three-year TSR over the January 1, 2023 to December 31, 2025 period, which was at the 29th percentile of the comparator group of companies, and (b) Redwood’s bvTSR over this same period, which, as measured in accordance with the terms of these PSUs, was below the initial performance threshold for any bvTSR-based vesting. Ms. Carillo: (i) vesting and delivery of 52,162 DSUs granted in December 2021; (ii) vesting and settlement of 52,162 csDSUs granted in December 2021; (iii) vesting and settlement of 69,562 csRSUs (consisting of 25% of the each of the csRSU awards granted in December 2023 and December 2024); and (iv) performance-based vesting of 41,853 PSUs granted in December 2022, which represented 25% of the target number of PSUs granted in December 2022 (based on level of overall attainment of performance-based vesting criteria). ◦As described and illustrated above in the Executive Summary of CD&A on page 46 of this Proxy Statement with respect to Redwood’s CEO, performance-based vesting of the PSUs granted in December 2022 was driven by both (a) Redwood’s three-year TSR over the January 1, 2023 to December 31, 2025 period, which was at the 29th percentile of the comparator group of companies, and (b) Redwood’s bvTSR over this same period, which, as measured in accordance with the terms of these PSUs, was below the initial performance threshold for any bvTSR-based vesting. Ms. Macomber: (i) vesting and delivery of 28,452 DSUs granted in December 2021; (ii) vesting and settlement of 28,452 csDSUs granted in December 2021; (iii) vesting and settlement of 30,672 csRSUs (consisting of 25% of the each of the csRSU awards granted in December 2023 and December 2024); and (iv) performance-based vesting of 17,439 PSUs granted in December 2022, which represented 25% of the target number of PSUs granted in December 2022 (based on level of overall attainment of performance-based vesting criteria). ◦As described and illustrated above in the Executive Summary of CD&A on page 46 of this Proxy Statement with respect to Redwood’s CEO, performance-based vesting of the PSUs granted in December 2022 was driven by both (a) Redwood’s three-year TSR over the January 1, 2023 to December 31, 2025 period, which was at the 29th percentile of the comparator group of companies, and (b) Redwood’s bvTSR over this same period, which, as measured in accordance with the terms of these PSUs, was below the initial performance threshold for any bvTSR-based vesting. Mr. Stone: (i) vesting and delivery of 28,452 DSUs granted in December 2021; (ii) vesting and settlement of 28,452 csDSUs granted in December 2021; (iii) vesting and settlement of 30,672 csRSUs (consisting of 25% of the each of the csRSU awards granted in December 2023 and December 2024); and (iv) performance-based vesting of 17,439 PSUs granted in December 2022, which represented 25% of the target number of PSUs granted in December 2022 (based on level of overall attainment of performance-based vesting criteria). ◦As described and illustrated above in the Executive Summary of CD&A on page 46 of this Proxy Statement with respect to Redwood’s CEO, performance-based vesting of the PSUs granted in December 2022 was driven by both (a) Redwood’s three-year TSR over the January 1, 2023 to December 31, 2025 period, which was at the 29th percentile of the comparator group of companies, and (b) Redwood’s bvTSR over this same period, which, as measured in accordance with the terms of these PSUs, was below the initial performance threshold for any bvTSR-based vesting.
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 |
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.” Within these award agreements, Redwood’s entry into an agreement with a third-party management company to externally manage all or substantially all of Redwood’s assets and/or operations is referred to as an “externalization of management” and is generally treated analogously to 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. These agreements were entered into in order to attract and retain these executives in the competitive marketplace for executive talent. In the event of a “change of control,” these employment 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. Within the employment agreement of each executive officer, Redwood’s entry into an agreement with a third-party management company to externally manage all or substantially all of Redwood’s assets and/or operations is referred to as an “externalization of management” and is generally treated analogously to a “change of control”. For all NEOs, under the award agreements governing outstanding PSUs, 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 severance and change of control arrangements that were in place with NEOs at the end of 2025 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 NEO (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.
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 Securities | | | ➢ | Clawback Policy | | | ➢ | Tax Considerations | | | ➢ | Accounting Standards |
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, cash-settled restricted stock units, performance stock units, and cash-settled 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-based awards with Redwood’s overall executive compensation philosophy and objectives.
Accounting Standards
| Section V - Conclusion | | | | | ➢ | Certain Compensation Determinations Relating to 2026 | | | ➢ | 2026 Maximum Total Annual Bonuses | | | ➢ | Compensation Committee Report |
Certain Compensation Determinations Relating to 2026
2026 Targets for Performance-Based Annual Bonuses. In December 2025, the Committee established a 2026 target annual bonus for each of Redwood’s NEOs. The table below sets forth the 2026 target annual bonuses for each of these NEOs.
Certain Compensation Determinations Relating to 2026
| NEOs | 2026 Base Salary | 2026 Target Annual Bonus (%) | Change from 2025 Target Annual Bonus Percentage (%)(1) | Total 2026 Target Annual Bonus ($) | | Mr. Abate, Chief Executive Officer | $1,000,000 | 220% | 5.0% | $2,200,000 | | Mr. Robinson, President | $890,000 | 210% | 0% | $1,869,000 | | Ms. Carillo, Chief Financial Officer and Executive Vice President | $875,000 | 210% | 4.2% | $1,837,500 | | Ms. Macomber, Chief Human Resource Officer | $525,000 | 175% | 0% | $918,750 | | Mr. Stone, Executive Vice President and Chief Legal Officer | $525,000 | 175% | 0% | $918,750 |
Certain Compensation Determinations Relating to 2026
(1) Amounts set forth in the table under “Change from 2025 Target Annual Bonus Percentage (%)” reflect the increase, if any, in the 2026 Target Annual Bonus (%) from the 2025 Target Annual Bonus (%) in effect for each NEO at the end of 2025.
2026 Maximum Total Annual Bonuses
2026 Maximum Total Annual Bonuses As discussed under the heading “2025 Performance-Based Annual Bonus Compensation” on pages 62-63 within this CD&A, 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.
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 | 2025 | $975,000 | — | $3,262,481 | $1,808,016 | $86,451 | $6,131,948 | | | 2024 | $950,000 | — | $4,349,994 | $1,573,696 | $94,917 | $6,968,607 | | | 2023 | $900,000 | — | $4,099,997 | $1,967,782 | $54,000 | $7,021,779 | | Dashiell I. Robinson, President | 2025 | $890,000 | — | $2,699,986 | $1,518,563 | $79,650 | $5,188,199 | | | 2024 | $875,000 | — | $3,599,992 | $1,413,221 | $87,500 | $5,975,713 | | | 2023 | $850,000 | — | $3,499,988 | $1,711,370 | $51,000 | $6,112,358 | | Brooke E. Carillo, Chief Financial Officer and Executive Vice President | 2025 | $860,000 | — | $2,624,984 | $1,498,550 | $77,850 | $5,061,384 | | | 2024 | $825,000 | — | $3,499,988 | $1,337,487 | $84,500 | $5,746,975 | | | 2023 | $800,000 | — | $7,249,983 | $1,001,287 | $48,000 | $9,099,270 | | Andrew P. Stone, Executive Vice-President and Chief Legal Officer | 2025 | $525,000 | — | $1,124,990 | $746,484 | $34,750 | $2,431,224 | | | 2024 | $500,000 | — | $1,499,990 | $702,853 | $31,000 | $2,733,843 | | | 2023 | $450,000 | — | $1,499,988 | $689,168 | $28,000 | $2,667,156 | | Sasha G. Macomber, Chief Human Resource Officer | 2025 | $525,000 | — | $1,124,990 | $746,484 | $57,750 | $2,454,224 | | | 2024 | $500,000 | — | $1,499,990 | $702,853 | $46,500 | $2,749,343 | | | 2023 | $450,000 | — | $1,499,988 | $506,251 | $11,250 | $2,467,489 |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table reflects estimated possible payouts to the NEOs for 2025 under Redwood’s performance-based bonus compensation program, as well as grants of plan-based awards made in 2025 under Redwood’s Incentive Plan. Actual bonus payments for 2025 are reflected in the “Summary Compensation” table above. As discussed above under “Compensation Discussion and Analysis — 2025 Performance-Based Annual Bonus Compensation,” 2025 target annual performance-based bonuses for 2025 were structured to be earned on a weighted basis based on Adjusted ROE (30%), Adjusted EAD ROE (30%), mortgage banking revenue growth (15%), and on individual contributions to the Company’s pre-established annual strategic, operational, and risk management goals for 2025 (25%). For 2025, total annual bonuses were subject to the overall maximum amounts (caps) set forth in the following table.
Grants of Plan-Based Awards
| Name | Type of Award(1) | Grant Date | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards ($)(4) | | | Estimated Possible Payouts Under Equity Incentive Plan Awards ($) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($) (5)(6)(7) | | | | | Threshold | Target | Maximum | Threshold | Target (5) | Maximum (6) | | | | Christopher J. Abate | Annual Bonus | — | — | 2,096,250 | 6,288,750 | — | — | — | — | — | | | DSU (2) | 12/11/2025 | — | — | — | — | — | — | 115,896 | $652,494 | | | csRSU (2) | 12/11/2025 | — | — | — | — | — | — | 144,871 | $815,624 | | | PSU(3) | 12/11/2025 | — | — | — | — | 269,020 | 672,550 | — | $1,794,363 | | Dashiell I. Robinson | Annual Bonus | — | — | 1,869,000 | 5,607,000 | — | — | — | — | — | | | DSU (2) | 12/11/2025 | — | — | — | — | — | — | 95,914 | $539,996 | | | csRSU (2) | 12/11/2025 | — | — | — | — | — | — | 191,829 | $1,079,997 | | | PSU (3) | 12/11/2025 | — | — | — | — | 161,918 | 404,795 | — | $1,079,993 | | Brooke E. Carillo | Annual Bonus | — | — | 1,763,000 | 5,289,000 | — | — | — | — | — | | | DSU (2) | 12/11/2025 | — | — | — | — | — | — | 93,250 | $524,998 | | | csRSU (2) | 12/11/2025 | — | — | — | — | — | — | 186,500 | $1,049,995 | | | PSU (3) | 12/11/2025 | — | — | — | — | 157,420 | 393,550 | — | $1,049,991 | | Andrew P. Stone | Annual Bonus | — | — | 918,750 | 2,756,250 | — | — | — | — | — | | | DSU (2) | 12/11/2025 | — | — | — | — | — | — | 39,964 | $224,997 | | | csRSU (2) | 12/11/2025 | — | — | — | — | — | — | 79,928 | $449,995 | | | PSU (3) | 12/11/2025 | — | — | — | — | 67,466 | 168,665 | — | $449,998 | | Sasha G. Macomber | Annual Bonus | — | — | 918,750 | 2,756,250 | — | — | — | — | — | | | DSU (2) | 12/11/2025 | — | — | — | — | — | — | 39,964 | $224,997 | | | csRSU (2) | 12/11/2025 | — | — | — | — | — | — | 79,928 | $449,995 | | | PSU (3) | 12/11/2025 | — | — | — | — | 67,466 | 168,665 | — | $449,998 |
Grants of Plan-Based Awards
(1) DSU refers to deferred stock units, csRSU refers to cash-settled restricted stock units, and PSU refers to performance stock units. (2) Mr. Abate received a 2025 annual long-term equity-based award in December 2025 and received 20% of that award value in the form of deferred stock units and 25% in the form of cash-settled restricted stock units on December 11, 2025. Each of Mr. Robinson, Ms. Carillo, Mr. Stone and Ms. Macomber also received a 2025 annual long-term equity-based award in December 2025 and received 20% of that award value in the form of deferred stock units and 40% in the form of cash-settled restricted stock units on December 11, 2025. Deferred stock units and cash-settled restricted stock units were granted with a grant date fair value of $5.63 per share subject to a four-year vesting schedule (fully vesting on December 11, 2029). (3) Mr. Abate received a 2025 annual long-term equity-based award in December 2025 and received 55% of that award value in the form of a target number of performance stock units on December 11, 2025. The other NEOs also received a 2025 annual long-term equity-based award in December 2025 and received 40% of that award value in the form of a target number of performance stock units on December 11, 2025. The performance stock units were granted with a grant date fair value of $6.67 per unit. Vesting of these performance stock units will generally occur, if at all, as of January 1, 2029 based on a three-step process, as described on pages 69-72 of this Proxy Statement under the heading “Compensation Discussion and Analysis – 2025 Long-Term Equity-Based Incentive Awards – Performance-Based Vesting – PSUs Granted in December 2025.” Settlement of any vested portion of these PSUs is through the delivery of underlying shares of common stock and/or through a cash payment. The settlement of the tranche of these PSUs that vest based on the level of Redwood’s non-GAAP Core Segments EAD ROE over the three-year performance measurement period is through the delivery of the underlying shares of Redwood common stock. The settlement of the tranche of these PSUs that vest based on the level of Redwood’s rTSR over the three-year performance measurement period is through 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 settlement date. (4) 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 2025 Adjusted ROE, Redwood’s 2025 Adjusted EAD ROE, Redwood’s 2025 mortgage banking revenue growth, and individual contributions to the Company’s pre-established annual strategic, operational and risk management goals for 2025. See “Compensation Discussion and Analysis — 2025 Performance-Based Annual Bonus Compensation” beginning on pages 62-63 for a more complete description of the Company’s performance-based annual bonus program. Actual bonus amounts awarded to NEOs for 2025 are reflected above in the “Summary Compensation” table. (5) Represents the target number of shares to be awarded upon the contingent vesting of performance stock units as discussed above in Note 3. Information regarding the assumptions used to value our NEOs’ performance stock units is provided in Note 22 to our consolidated financial statements included in Redwood’s Annual Report on Form 10-K filed on February 27, 2026. (6) For December 2025 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 2025 to Mr. Abate, Mr. Robinson, Ms. Carillo, 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 $3,786,457, $2,278,996, $2,215,687, $949,584 and $949,584 respectively, assuming the Company achieves the maximum performance goals during the performance period and that there is no adjustment to the target number of units to reflect the value of any dividends paid on Redwood common stock during the vesting period. Information regarding the assumptions used to value our NEOs’ performance stock units is provided in Note 22 to our consolidated financial statements included in Redwood’s Annual Report on Form 10-K filed on February 27, 2026. (7) These awards were approved by the Compensation Committee of the Board of Directors and granted pursuant to Redwood’s 2014 Incentive Plan. The value of these awards is determined in accordance with FASB Accounting Standards Codification Topic 718 based on, among other things, the closing price of Redwood’s common stock on the grant date.
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table sets forth certain information regarding outstanding equity awards for each NEO as of December 31, 2025.
Outstanding Equity Awards at Fiscal Year-End
| | Stock Awards | | | | | NEO | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(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 | 632,256 | $3,496,376 | 1,283,862 | $7,099,757 | | Dashiell I. Robinson | 701,690 | $3,880,346 | 779,232 | $4,309,153 | | Brooke E. Carillo | 912,870 | $5,048,171 | 740,130 | $4,092,919 | | Andrew P. Stone | 291,600 | $1,612,548 | 321,316 | $1,776,877 | | Sasha G. Macomber | 291,600 | $1,612,548 | 321,316 | $1,776,877 |
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, 2025. The table below shows the vesting schedule for these stock units as of December 31, 2025. 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 2022 through December 2025.
Outstanding Equity Awards at Fiscal Year-End
| Total DSUs Scheduled to Vest On: | Christopher J. Abate | Dashiell I. Robinson | Brooke E. Carillo | Andrew P. Stone | Sasha G. Macomber | | 1/1/2026 | 7,401 | 13,845 | 12,819 | 5,634 | 5,634 | | 1/31/2026 | 24,567 | 23,042 | 22,402 | 9,601 | 9,601 | | 4/1/2026 | 13,543 | 19,607 | 18,420 | 8,035 | 8,035 | | 7/1/2026 | 13,543 | 19,607 | 18,420 | 8,035 | 8,035 | | 10/1/2026 | 13,543 | 19,606 | 18,420 | 8,034 | 8,034 | | 12/14/2026 | — | 6,825 | 6,301 | 2,625 | 2,625 | | 1/1/2027 | 13,543 | 12,781 | 12,120 | 5,408 | 5,408 | | 1/31/2027 | 28,974 | 23,979 | 262,547 | 9,991 | 9,991 | | 4/1/2027 | 20,787 | 18,776 | 17,949 | 7,906 | 7,906 | | 7/1/2027 | 20,786 | 18,775 | 17,947 | 7,905 | 7,905 | | 10/1/2027 | 20,787 | 18,775 | 17,946 | 7,906 | 7,906 | | 12/14/2027 | 7,401 | 7,020 | 6,518 | 3,008 | 3,008 | | 1/1/2028 | 13,385 | 11,754 | 11,429 | 4,897 | 4,897 | | 4/1/2028 | 13,386 | 11,755 | 11,429 | 4,898 | 4,898 | | 7/1/2028 | 13,384 | 11,754 | 11,429 | 4,897 | 4,897 | | 10/1/2028 | 13,385 | 11,755 | 11,429 | 4,898 | 4,898 | | 12/19/2028 | 6,141 | 5,760 | 5,601 | 2,400 | 2,400 | | 1/1/2029 | 7,243 | 5,994 | 5,828 | 2,498 | 2,498 | | 4/1/2029 | 7,244 | 5,994 | 5,828 | 2,498 | 2,498 | | 7/1/2029 | 7,243 | 5,995 | 5,828 | 2,498 | 2,498 | | 10/1/2029 | 7,244 | 5,995 | 5,828 | 2,498 | 2,498 | | 12/11/2029 | 7,243 | 5,995 | 5,828 | 2,498 | 2,498 | | TOTAL | 280,773 | 285,389 | 512,262 | 118,568 | 118,568 |
Outstanding Equity Awards at Fiscal Year-End
[Additional table that accompanies this footnote (1) is set forth on the following page.]
Outstanding Equity Awards at Fiscal Year-End
| Total csDSUs Scheduled to Vest On: | Christopher J. Abate | Dashiell I. Robinson | Brooke E. Carillo | Andrew P. Stone | Sasha G. Macomber | | 1/1/2026 | — | 6,825 | 6,300 | 2,625 | 2,625 | | 4/1/2026 | — | 6,825 | 6,300 | 2,625 | 2,625 | | 7/1/2026 | — | 6,825 | 6,300 | 2,625 | 2,625 | | 10/1/2026 | — | 6,825 | 6,300 | 2,625 | 2,625 | | 12/14/2026 | — | 6,825 | 6,300 | 2,625 | 2,625 | | TOTAL | — | 34,125 | 31,500 | 13,125 | 13,125 |
Outstanding Equity Awards at Fiscal Year-End
| Total csRSUs Scheduled to Vest On: | Christopher J. Abate | Dashiell I. Robinson | Brooke E. Carillo | Andrew P. Stone | Sasha G. Macomber | | 12/11/2026 | 36,218 | 47,958 | 46,625 | 19,982 | 19,982 | | 12/14/2026 | 29,605 | 28,081 | 26,075 | 12,034 | 12,034 | | 12/18/2026 | 49,134 | 44,729 | 43,486 | 18,637 | 18,637 | | 12/11/2027 | 36,218 | 47,957 | 46,625 | 19,982 | 19,982 | | 12/14/2027 | 29,605 | 28,080 | 26,075 | 12,034 | 12,034 | | 12/18/2027 | 49,134 | 44,729 | 43,486 | 18,637 | 18,637 | | 12/11/2028 | 36,218 | 47,957 | 46,625 | 19,982 | 19,982 | | 12/18/2028 | 49,134 | 44,728 | 43,486 | 18,637 | 18,637 | | 12/11/2029 | 36,217 | 47,957 | 46,625 | 19,982 | 19,982 | | TOTAL | 351,483 | 382,176 | 369,108 | 159,907 | 159,907 |
Outstanding Equity Awards at Fiscal Year-End
(2) Assumes a common stock value of $5.53 per share (the closing price of Redwood’s common stock on the NYSE on December 31, 2025). (3) Represents unearned performance stock units as of December 31, 2025. 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 performance stock units with a cash settlement provision, the cash value of such underlying shares that the award recipient becomes entitled to receive at the time of vesting) 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, as of December 31, 2025. The number of PSUs shown below is dependent on the interim performance of the respective PSU grants as of December 31, 2025 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, 2025 are reflected as target number of shares, and grant(s) performing at above-target level on December 31, 2025 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 2022 to December 2026. [Additional table that accompanies this footnote (3) is set forth on the following page.]
Outstanding Equity Awards at Fiscal Year-End
| PSUs Scheduled to Vest On: | PSUs Shown | Christopher J. Abate | Dashiell I. Robinson | Brooke E. Carillo | Andrew P. Stone | Sasha G. Macomber | | 1/1/2026 | Target | 439,961 | 178,734 | 164,985 | 68,744 | 68,744 | | 1/1/2027 | Target | 255,988 | 198,660 | 184,470 | 85,140 | 85,140 | | 1/1/2028 | Target | 318,893 | 239,920 | 233,255 | 99,966 | 99,966 | | 1/1/2029 | Target | 269,020 | 161,918 | 157,420 | 67,466 | 67,466 | | | TOTAL | 1,283,862 | 779,232 | 740,130 | 321,316 | 321,316 |
Outstanding Equity Awards at Fiscal Year-End
(4) Represents the applicable number of PSUs multiplied by a value per share of $5.53 (the closing price of Redwood common stock on the NYSE on December 31, 2025). Please refer to the preceding “Grants of Plan-Based Awards” table for additional detail on the vesting of PSUs granted in 2025.
Options Exercised and Stock Vested
Options Exercised and Stock Vested The following table sets forth the value of accumulated deferred stock unit awards, cash-settled deferred stock units, cash-settled restricted stock units and performance stock unit awards that vested during 2025 for each NEO. As of December 31, 2025, and as of the date of this Proxy Statement, there were no stock options outstanding under Redwood’s 2014 Incentive Award Plan.
Options Exercised and Stock Vested
| | Stock Awards | | | NEO | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Christopher J. Abate | 269,272 | $1,647,978 | | Dashiell I. Robinson | 280,591 | $1,714,125 | | Brooke E. Carillo | 468,409 | $2,961,116 | | Andrew P. Stone | 107,411 | $654,696 | | Sasha G. Macomber | 107,411 | $654,696 |
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.
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. Our NEOs generally participate in our Executive Deferred Compensation Plan. Each of Mr. Abate, Mr. Robinson, Ms. Carillo, Mr. Stone and Ms. Macomber voluntarily deferred a portion of his or her cash earnings during fiscal year 2025. 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, 2025, 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, 2025.
Non-Qualified Deferred Compensation
| NEO | Executive Contributions in 2025 | Redwood Matching Contributions in 2025 | Aggregate Earnings in 2025(1) | Aggregate Withdrawals/ Distributions in 2025 | Aggregate Balance at 12/31/2025(2) | | Christopher J. Abate(3) | $1,290,221 | $46,750 | $17,274 | $(2,383,993) | $743,939 | | Dashiell I. Robinson(4) | $1,380,296 | $41,650 | $13,341 | $(1,811,416) | $1,372,896 | | Brooke E. Carillo(5) | $2,642,136 | $39,850 | $14,838 | $(1,162,364) | $2,592,923 | | Andrew P. Stone(6) | $518,519 | $19,750 | $5,736 | $(612,042) | $556,612 | | Sasha G. Macomber(7) | $518,519 | $19,750 | $2,820 | $(560,103) | $497,920 |
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 $5.53 per share (the closing price of Redwood common stock on the NYSE on December 31, 2025), and the cash balance in the Executive Deferred Compensation Plan, all of which has been previously reported as compensation in 2025 or in prior years. (3)Mr. Abate’s contribution included $93,500 in voluntary cash deferrals from his 2025 compensation (reported as compensation in the “Summary Compensation” table above) and $1,196,721 as a result of vesting of previously awarded deferred stock units, cash-settled deferred and units and performance stock units (reported as compensation in previous years). Mr. Abate received a distribution of 161,844 shares of common stock underlying deferred stock units and performance stock units awarded in 2021. Mr. Abate also received $637,325 related to the settlement of cash-settled deferred stock units awarded in 2021. (4)Mr. Robinson’s contribution included $83,300 in voluntary cash deferrals from his 2025 compensation (reported as compensation in the “Summary Compensation” table above) and $1,296,996 as a result of vesting of previously awarded deferred stock units, cash-settled deferred stock units and performance stock units (reported as compensation in previous years). Mr. Robinson received a distribution of 121,383 shares of common stock underlying deferred stock units and performance stock units awarded in 2021. Mr. Robinson also received $477,994 related to the settlement of cash-settled deferred stock units awarded in 2021. (5)Ms. Carillo’s contribution included $79,700 in voluntary cash deferrals from her 2025 compensation (reported as compensation in the “Summary Compensation” table above) and $2,562,436 as a result of vesting of previously awarded deferred stock units, cash-settled deferred stock units and performance stock units (reported as compensation in previous years). Ms. Carillo received a distribution of 74,178 shares of common stock underlying deferred stock units and performance stock units awarded in 2021. Ms. Carillo also received $292,107 related to the settlement of cash-settled deferred stock units awarded in 2021. (6)Mr. Stone’s contribution included $39,500 in voluntary cash deferrals from his 2025 compensation (reported as compensation in the “Summary Compensation” table above) and $479,019 as a result of vesting of previously awarded deferred stock units, cash-settled deferred stock units and performance stock units (reported as compensation in previous years). Mr. Stone received a distribution of 40,460 shares of common stock underlying deferred stock units and performance stock units awarded in 2021. Mr. Stone also received $159,331 related to the settlement of cash-settled deferred stock units awarded in 2021. (7)Ms. Macomber’s contribution included $39,500 in voluntary cash deferrals from her 2025 compensation (reported as compensation in the “Summary Compensation” table above) and $479,019 as a result of vesting of previously awarded deferred stock units, cash-settled deferred stock units and performance stock units. Ms. Macomber received a distribution of 40,460 shares of common stock underlying deferred stock units and performance stock units awarded in 2021. Ms. Macomber also received $159,331 related to the settlement of cash-settled deferred stock units awarded in 2021.
Potential Payments upon Termination or Change of Control
Potential Payments upon Termination or Change of Control In 2025, each of Mr. Abate, Mr. Robinson, Ms. Carillo, 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. Within these employment agreements, Redwood’s entry into an agreement with a third-party management company to externally manage all or substantially all of Redwood’s assets and/or operations is referred to as an “externalization of management” and is generally treated analogously to a “change of control”, and within this “Potential Payments upon Termination or Change of Control” section (and the tables set forth herein) the term “change of control” generally includes any such externalization of management. 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. 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.
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 (1) | Change of Control | | Christopher J. Abate | | 2x the sum of Base Salary plus Target Annual Bonus (2) | 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(3) | 1x the sum of Base Salary plus Target Annual Bonus | | Brooke E. Carillo | | 1.25x 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) | As noted above, within this table and the tables set forth below, the term “Change of Control” generally includes an “externalization of management”. | | | | (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 $7.5 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 $5.5 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. | | |
Potential Payments upon Termination or Change of Control
In addition, for Mr. Abate, Mr. Robinson, Ms. Carillo, 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 five 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. 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. 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. The payment and/or vesting of severance benefits under each employment agreement with these five executives may be contingent on the applicable executive executing a release of all claims against Redwood. To the extent enforceable under applicable law, each of the executives may be 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. 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. 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 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 in proximity to the executive’s current principal office; (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 executives 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 would only 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.
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. 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. Stone, and Ms. Macomber, “change of control” is defined as follows: (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. Stone, and Ms. Macomber, please refer to Exhibits 10.25 through 10.29 to Redwood’s Annual Report on Form 10-K for the year ended December 31, 2025, filed on February 27, 2026.
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 2025. For 2025, Redwood’s most recently completed fiscal year: •Median Total Compensation – 2025. The annual total compensation of the employee who represents Redwood’s median compensated employee (excluding our CEO) was $141,570; and •CEO’s Total Annual Compensation – 2025. The annual total compensation of Redwood’s CEO was $6,131,948, as reported in the preceding “Summary Compensation Table” on page 83 of this Proxy Statement. CEO Pay Ratio of 43 to 1. Based on this information, for 2025, 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 43 to 1. Determining the Median Compensated Employee •Employee Population As of December 31, 2025, Redwood’s employee workforce consisted of 351 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, 349 of the 351 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 349 included employees. In identifying the median compensated employee, the compensation of permanent employees who were new hires in 2025 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 2025 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $141,570. •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” on page 83 of this Proxy Statement.
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 51 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 2025 and early 2026, when the Compensation Committee made certain executive compensation determinations related to 2025 and 2026, 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.
Pay vs. Performance Table
Pay vs. Performance Table
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) | | 2025 | $6,131,949 | $3,357,299 | $3,783,758 | $2,868,036 | $105 | $109 | $(70) | -6.6% | | 2024 | $6,968,607 | $5,798,938 | $4,301,468 | $3,921,884 | $63 | $80 | $54 | 4.5% | | 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% |
Pay vs. Performance Table
(1) PEO for 2025, 2024, 2023, 2022 and 2021 was Christopher J. Abate. (2) The non-PEO named executive officers (NEOs) reflects the following individuals in each year: 2025: Dashiell I. Robinson, Brooke E. Carillo, Andrew P. Stone, Sasha G. Macomber 2024: Dashiell I. Robinson, Brooke E. Carillo, Andrew P. Stone, Sasha G. Macomber 2023: Dashiell I. Robinson, Brooke E. Carillo, Fred J. Matera, Andrew P. Stone 2021: Dashiell I. Robinson, Collin L. Cochrane, Andrew P. Stone, Sasha G. Macomber (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 2025 is calculated by making the following adjustments from the Summary Compensation Table totals as follows:
Pay vs. Performance Table
| Item and Value Added (Deducted) | | | 2025 | | For PEO: | | | | | Summary Compensation Table Total | | | $6,131,949 | | | - | SCT “Stock Awards” column value | $(3,262,481) | | | + | year-end fair value of outstanding equity awards granted in Covered Year that remain unvested(*) | $3,260,506 | | + | / - | change in fair value of outstanding and unvested equity awards granted in prior years(*)(†) | $(3,246,765) | | + | / - | change in fair value of prior-year equity awards vested in Covered Year(*)(†) | $(110,368) | | | + | dividends paid on equity awards in the Covered Year prior to vesting date not otherwise included in total compensation for covered year | $584,458 | | Compensation Actually Paid(•) | | | $3,357,299 | | For Non-PEO Named Executive Officers (Average) | | | | | Summary Compensation Table Total | | | $3,783,758 | | | - | SCT “Stock Awards” column value | $(1,893,738) | | | + | year-end fair value of outstanding equity awards granted in Covered Year that remain unvested(*) | $1,883,730 | | + | / - | change in fair value of outstanding and unvested equity awards granted in prior years(*)(†) | $(1,367,377) | | + | / - | change in fair value of prior-year equity awards vested in Covered Year(*)(†) | $(77,283) | | | + | dividends paid on equity awards in the Covered Year prior to vesting date not otherwise included in total compensation for covered year | $538,946 | | Compensation Actually Paid(•) | | | $2,868,036 |
Pay vs. Performance Table
(*) Fair value of outstanding and unvested equity awards subject to financial performance-based vesting conditions (e.g., performance stock units), 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. The fair values of these awards reflect an estimate of the probable outcome of the financial performance-based vesting conditions updated as of each measurement date. Fair value of the other equity and cash-settled awards is determined based on the closing market price of common stock on the applicable vesting date or as of December 31, 2025. The 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. See “Equity Compensation Plans” in Note 22 to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for 2025, for further details on these equity and cash-settled awards and the 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. (†) 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 2025. (4) For the relevant fiscal year, represents the cumulative TSR of Redwood for the measurement periods ending on December 31 of each of 2025, 2024, 2023, 2022 and 2021, respectively, and in each case beginning on January 1, 2021. 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 2025, 2024, 2023, 2022 and 2021, respectively, and in each case beginning on January 1, 2021. (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 pages 62-63 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 Mortgage REIT Index).
Pay vs. Performance Table
| Relationship of CAP to Net Income (Loss) | | |
Pay vs. Performance Table
| Relationship of CAP to Adjusted Return on Equity (Adjusted ROE) | | |
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. |
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 2025 (the Company’s most recently completed fiscal year) to (ii) the Company’s performance:
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) |
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 ability to 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 pages 62-66 within this CD&A under the heading “2025 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.
ADDITIONAL INFORMATION ABOUT DIRECTORS AND EXECUTIVE OFFICERS
ADDITIONAL INFORMATION ABOUT DIRECTORS AND EXECUTIVE OFFICERS