DEF 14A of Rithm Capital Corp., Apr 11, 2024

DEF 14A of Rithm Capital Corp.

Filed Apr 11, 2024 · FY20230001104659-24-046006

Open on EDGAR

  1. PROPOSAL NO. 1 ELECTION OF DIRECTORS

    PROPOSAL NO. 1 ELECTION OF DIRECTORS The first proposal is to elect three Class II nominees to our Board of Directors to serve until the 2027 annual meeting of stockholders and until their successors are duly elected and qualified. Our Bylaws provide that our Board of Directors shall consist of not less than three and not more than nine directors as the Board of Directors may from time to time determine. The number of directors on the Board is currently fixed at six. Our Board of Directors is divided into three classes. The members of each class of directors serve staggered three-year terms. Our current Board of Directors is classified as follows:

  2. PROPOSAL NO. 1 ELECTION OF DIRECTORS

    | Class | Term Expiration | Director | Age | | Class I | 2026 | David Saltzman | 62 | | Class II | 2024 | Kevin J. Finnerty | 69 | | | | Michael Nierenberg | 61 | | | | Patrice M. Le Melle | 65 | | Class III | 2025 | Peggy Hwan Hebard | 50 | | | | Andrew Sloves | 60 |

  3. PROPOSAL NO. 1 ELECTION OF DIRECTORS

    The Board of Directors has unanimously proposed Kevin J. Finnerty, Michael Nierenberg and Patrice M. Le Melle as nominees for election as Class II directors. Each of the director nominees currently serves on our Board of Directors. If elected at the Annual Meeting, Messrs. Finnerty and Nierenberg and Ms. Le Melle will hold office until the 2027 annual meeting of stockholders and until their successors are duly elected and qualified, subject to earlier retirement, resignation or removal. Unless otherwise instructed, we will vote all executed proxies we receive with no specifications FOR Kevin J. Finnerty, Michael Nierenberg and Patrice M. Le Melle. If any of the nominees becomes unable to stand for election as a director, an event that our Board of Directors does not presently expect, the proxy will be voted for a replacement nominee if one is designated by our Board of Directors. Assuming a quorum is present, for the election of the director nominees to our Board of Directors, the affirmative vote by holders of a plurality of the shares of our Common Stock present, in person or represented by proxy, at the Annual Meeting and entitled to vote on the election of directors is sufficient to elect the nominees. Brokers who do not receive instructions are not entitled to vote on the election of directors. A vote “withheld” from a director nominee or a broker non-vote on a director nominee will not affect the outcome of the election of directors. The Board of Directors recommends that you vote FOR the election of Messrs. Finnerty and Nierenberg and Ms. Le Melle to serve as our Class II directors until the 2027 annual meeting of stockholders and until their successors are duly elected and qualified.

  4. Information Concerning Our Directors, Including the Director Nominees

    Information Concerning Our Directors, Including the Director Nominees Set forth below is certain biographical information for our directors, including the director nominees, as well as the month and year each person was first elected as one of our directors. Each of our directors was selected because of the knowledge, experience, skill, expertise and diversity the director contributes to the Board of Directors as a whole. Our directors have extensive familiarity with our business and experience from senior positions in large, complex organizations. In these positions, they gained core management skills, such as strategic and financial planning, public company financial reporting, corporate governance, risk management and leadership development. The Nominating and Corporate Governance Committee believes that each of the directors also has key attributes that are important to an effective Board of Directors: integrity and demonstrated high ethical standards; sound judgment; analytical skills; the ability to engage management and each other in a constructive and collaborative fashion; diversity of origin, background, experience and/or thought; and the commitment to devote significant time and energy to service on the Board of Directors and its committees. Of the six members of our Board of Directors, 33% are women and 33% are racially/ethnically diverse.

  5. Information Concerning Our Directors, Including the Director Nominees

    | Kevin J. Finnerty Director since April 2013 | Mr. Finnerty has been a member of our Board of Directors since April 2013. Mr. Finnerty has been an employee of Mariner Investment Group since 2005 and is the founding partner of Galton Capital Group, a residential mortgage credit fund manager and a former founder and Managing Partner of Mariner F.I. Capital, an investment company focused on agency-mortgage related strategies. Previously, Mr. Finnerty was a Managing Director at J.P. Morgan Securities Inc., where he headed the Residential Mortgage Securities Department from 1999 to 2005. Prior to joining J.P. Morgan Securities Inc., Mr. Finnerty was a Senior Vice President at Freddie Mac during 1999 and headed the Mortgage-Backed Securities (MBS) Department at Union Bank of Switzerland from 1996 until 1998. Between 1986 and 1996, Mr. Finnerty was with Bear Stearns & Co. Inc., where he was a Senior Managing Director and ultimately headed the MBS Department and served as a member of the board of directors from 1993 until 1996. From August 2005 to May 2019, Mr. Finnerty was a member of the board of Drive Shack Inc. and its Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee. From 2009 to 2017, Mr. Finnerty served two four-year terms on the Board of Trustees at Loyola University Maryland, including his time as Chairman of their endowment Investment Committee. Mr. Finnerty graduated from St. John’s University with a B.S. in Communication Arts and a minor in Economics. Mr. Finnerty’s mortgage-related securities and finance knowledge, expertise and experience led the Board of Directors to conclude that Mr. Finnerty should serve as a director. | | Peggy Hwan Hebard Director since January 2023 | Ms. Hebard has been a member of our Board of Directors since January 2023. Ms. Hebard has served as the Chief Financial Officer and Chief Operating Officer at the Children’s Museum of Manhattan since April 2021. Additionally, from September 2018 through April 2021, Ms. Hebard served as a director of Turning Point Brands (NYSE: TPB), where she served on the Audit and Compensation committees and led a special committee overseeing strategic mergers and acquisitions. Ms. Hebard’s prior work experience included 14 years as a Senior Advisor to the Executive Office and the Director’s Office at The Metropolitan Museum of Art from August 2007 through April 2021. Prior to Ms. Hebard’s |

  6. Information Concerning Our Directors, Including the Director Nominees

    | | role at The Metropolitan Museum of Art, she was a debt ratings analyst at Standard & Poor’s focusing on cruise line and gaming companies, an investment banker at Credit Suisse First Boston focusing on retail and consumer products companies, a consultant at PwC working with companies in the financial services industry and an auditor at Coopers & Lybrand. Ms. Hebard has an M.B.A. from the Yale School of Management, a master’s degree in museum studies from Johns Hopkins and a B.S. from the Wharton School at the University of Pennsylvania. Ms. Hebard holds the CFA and CPA designations. Ms. Hebard’s finance and accounting knowledge and public company and strategic transaction experience led the Board of Directors to conclude that Ms. Hebard should serve as a director. | | Patrice M. Le Melle Director since November 2021 | Ms. Le Melle has been a member of our Board of Directors since November 2021. Ms. Le Melle is currently Associate General Counsel at Columbia University. Ms. Le Melle joined Columbia University in this role in 2008, practicing in the areas of government, general contracts, privacy and data security, sponsored research and real estate. Previously, she served as an Administrative Law Judge for the New York Department of State and as Deputy Secretary of State and Counsel to the Secretary of the State of New York. In these roles, Ms. Le Melle was crucial to providing management and legal advice and services to the Department of State operations. Ms. Le Melle began her career as an Associate in the corporate group at the law firm Richards O’Neil, followed by a position as First Deputy General Counsel of the Off-Track Betting Corporation. Ms. Le Melle obtained her J.D. from Rutgers-Newark Law School where she was an editor of the Rutgers Law Review. Prior to attending law school, she received her B.A. from Yale University. Ms. Le Melle’s government, corporate governance and data & privacy experience led our Board of Directors to conclude that Ms. Le Melle should serve as a director. | | Michael Nierenberg Chairman of the Board since May 2016; Director since November 2013 | Mr. Nierenberg has been a member of our Board of Directors since November 2013 and Chairman of the Board since May 2016. Mr. Nierenberg was appointed as our Chief Executive Officer and President on November 13, 2013. From November 2013 until June 2022, Mr. Nierenberg served as a Managing Director at Fortress (as defined below), our Former Manager. From December 2020 until June 2022, Mr. Nierenberg also served as Chief Executive Officer and Chairman of the board of Fortress Capital Acquisition Corp., and, from January 2021 until June 2022, as a member of its Audit and Compensation Committees. Prior to becoming Chief Executive Officer of Rithm Capital, Mr. Nierenberg served as a Managing Director and head of Global Mortgages and Securitized Products at Bank of America Merrill Lynch. Mr. Nierenberg joined Bank of America Merrill Lynch in November 2008 from JP Morgan, where he was head of Global Securitized Products and a member of the management committee of the investment bank. Prior to his tenure at JP Morgan, Mr. Nierenberg held a range of senior leadership positions during fourteen years with Bear Stearns & Co. Inc., including Head of Interest Rate and Foreign Exchange Trading Operations, Co-Head of Structured Products and Co-Head of Mortgage-Backed |

  7. Information Concerning Our Directors, Including the Director Nominees

    | | Securities Trading. From 2006 to 2008, he was a member of Bear Stearns’s Board of Directors. Mr. Nierenberg spent seven years at Lehman Brothers prior to joining Bear Stearns and was instrumental in building the company’s adjustable-rate mortgage business. Mr. Nierenberg’s knowledge, skill, expertise and experience as described above led the Board of Directors to conclude that Mr. Nierenberg should serve as a director. | | David Saltzman Director since April 2013 | Mr. Saltzman has been a member of our Board of Directors since April 2013. Mr. Saltzman is a co-founder of The Atria Institute, and was previously a Partner of Two Sigma Investments, where he served from 2017 until 2021. Mr. Saltzman was the Executive Director of The Robin Hood Foundation from 1989 until 2016, and currently serves on its board of directors. Prior to joining Robin Hood, Mr. Saltzman served as the Special Assistant to the President of the Board of Education of the City of New York for three years. Before working at the Board of Education, he ran AIDS education programs for the New York City Department of Health. Mr. Saltzman began his career in public service working with homeless families for the Human Resources Administration of the City of New York, the city’s Department of Social Services. Mr. Saltzman earned a Master’s of Public Policy and Administration from Columbia University and a Bachelor’s degree from Brown University. In 2001, Mr. Saltzman was named as one of Time Magazine’s 100 Innovators. Mr. Saltzman’s knowledge, skill, management expertise and experience as described above led the Board of Directors to conclude that Mr. Saltzman should serve as a director. | | Andrew Sloves Director since June 2016 | Mr. Sloves has been a member of our Board of Directors since June 2016. Mr. Sloves is currently a trader at Isaak Bond Investments. Previously, Mr. Sloves was a Managing Director of JP Morgan Securities from 2008 to 2015, where he was the head of west coast Securitized Product Sales. Prior to his tenure at JP Morgan Securities, Mr. Sloves was a Senior Managing Director of Bear Stearns & Co. Inc. from 1993 to 2008. Mr. Sloves is currently a director of Nonstop Administration and Insurance Services, Inc., a privately held company. Mr. Sloves currently serves as a member of the board of directors of Temple Shalom of the South Bay, and as a member of the board of trustees of Rolling Hills Preparatory School, where he also serves as a member of the Finance Committee. Mr. Sloves holds a Bachelor’s degree from Pomona College. Mr. Sloves’ knowledge, skill, expertise in finance and experience as described above led the Board of Directors to conclude that Mr. Sloves should serve as a director. |

  8. Compensation of Directors

    Compensation of Directors Our independent directors are paid in two principal ways: an annual cash retainer and an annual award of shares of our Common Stock. Our independent directors are paid a total annual fee of $275,000 in two semi-annual installments — (i) $150,000 in shares of our Common Stock issued based on the fair market value of shares of such Common Stock on the date of issuance and paid on the first business day after each annual stockholders’ meeting and (ii) $125,000 of fees paid in December in cash, or, at the election of the relevant director, by issuance of shares of our Common Stock, based on the value of such Common Stock at the date of issuance. In addition, an annual fee of $20,000 is paid to the chairperson of each of the Audit Committee and the Compensation Committee, and an annual fee of $10,000 is paid to the chairperson of each of the Nominating and Corporate Governance Committee and the Mortgage Regulatory Compliance Committee. Such chairperson fees are paid in two semi-annual installments, at the same time as the payments of the directors’ annual fee — (i) half in shares of our Common Stock issued based on the fair market value of shares of such Common Stock on the date of issuance and paid on the first business day after each annual stockholders’ meeting and (ii) half paid in December in cash, or at the election of the relevant director, by issuance of shares of our Common Stock, based on the value of such Common Stock at the date of issuance. We do not separately compensate our affiliated directors. All members of our Board of Directors are reimbursed for reasonable costs and expenses incurred in attending meetings of our Board of Directors.

  9. Director Compensation Table for 2023

    Director Compensation Table for 2023

  10. Director Compensation Table for 2023

    | Name | Fees Earned or Paid in Cash(4) | Stock Awards | Option Awards(5) | Total | | Kevin J. Finnerty | $130,000 | $155,001 | — | $285,001 | | Peggy Hwan Hebard(1) | $135,000 | $151,995 | — | $286,995 | | Patrice M. Le Melle | $125,000 | $150,001 | — | $275,001 | | Pamela F. Lenehan(2) | — | $128,179 | — | $128,179 | | David Saltzman | $135,000 | $160,001 | — | $295,001 | | Andrew Sloves(3) | $130,000 | $155,001 | — | $285,001 |

  11. Director Compensation Table for 2023

    (1) Our Board appointed Ms. Hebard as the chairperson of the Audit Committee beginning May 25, 2023. (2) Ms. Lenehan’s term expired at our Annual Meeting of Stockholders held on May 25, 2023. Ms. Lenehan did not stand for re-election. Ms. Lenehan served as the chairperson of the Audit Committee until May 25, 2023. (3) For 2023, Mr. Sloves elected to receive all of his compensation for his service as a director in the form of shares of our Common Stock in lieu of cash. (4) Each director may elect to receive their respective $125,000 of fees paid in cash and, as applicable, the half of their chairperson fees paid in cash by issuance of shares of our Common Stock instead. (5) As of December 31, 2023, other than 1,000 options held by each of Ms. Le Melle and Mr. Sloves. None of our non-employee directors held any option awards or unvested stock awards.

  12. Role of the Independent Compensation Consultant

    Role of the Independent Compensation Consultant Our Compensation Committee reviews the competitiveness of our executive compensation programs and recent governance trends relating to executive compensation when determining the compensation levels for our named executive officers. To assist the Compensation Committee in this process, our Compensation Committee retained FW Cook as its independent compensation consultant to provide advice on our executive compensation practices. FW Cook does no work for our management team that is not under the Compensation Committee’s purview. Representatives of FW Cook attended certain meetings of the Compensation Committee, including meeting with members of the Compensation Committee without members of management present. During 2023, the Compensation Committee reviewed the independence of FW Cook using assessment criteria under applicable NYSE rules and concluded the retention of FW Cook did not raise any conflicts of interest.

  13. Elements of our Executive Compensation Program

    Elements of our Executive Compensation Program In 2023, our first full year as an internally-managed organization, the Compensation Committee continued the process of establishing an effective executive compensation program built on the following objectives: • Attract and Retain the Right Talent. Executive compensation opportunities should be market-competitive to attract and retain highly motivated talent with a performance-driven mindset; • Pay for Performance. The majority of each executive’s compensation opportunity should be at-risk and tied to the achievement of short-term and long-term financial and strategic objectives; and • Align the Interest of Management with Stockholders. A substantial portion of executive’s total compensation should be in the form of equity-based incentives, subject to multi-year vesting schedules. The compensation program for our named executive officers consists of an annual base salary, the ability to earn short-term incentive awards, the ability to earn long-term equity incentive awards based on individual and Company performance and the ability to participate in employee benefit plans and programs at the same level and on the same terms that apply to Rithm Capital Corp.’s employees generally. The following is a detailed description of each material element of our compensation program for our named executive officers for the 2023 fiscal year. Base Salary. Base salary is a fixed component of compensation for each of our named executive officers. The base salaries for each of our named executive officers were originally set at the time of the internalization of our management function and rebranding of our platform on June 17, 2022 (the “Internalization” and such date, the “Internalization Date”) and are intended to reflect the position, duties and responsibilities of each executive. The 2023 base salaries for Messrs. Nierenberg, Santoro and Sivin were $1,250,000, $300,000 and $250,000, respectively, unchanged from 2022. The base salaries payable to our named executive officers may be adjusted from time to time based on the executive’s performance and other factors as determined by our Compensation Committee. Short-Term Incentive Awards. Our named executive officers are each eligible to receive annual short-term incentive bonus payments from the Company based on annual performance achievements. We consider these short-term incentive bonuses to be “at-risk” compensation. For 2023, Mr. Nierenberg had a target short-term incentive opportunity equal to $5,000,000, of which he was eligible to earn from 0% to 200% based on performance in three categories: financial, strategic and individual performance: • Financial Category (weighted 60%) — The Compensation Committee selected Earnings Available for Distribution (EAD) per Diluted Share as the financial metric because it is a key metric that allows our investors to readily identify and track the operating performance of the assets that form the core of the Company’s activity, compare the core operating results between periods and value our stock. EAD per Diluted Share measures our ability to generate income in a manner accretive to stockholders. Target 2023 EAD per diluted share was aligned with the Company’s internal operating plan established as of the first quarter of 2023. The Compensation Committee established a goal range around target for threshold and maximum payouts; these goals along with actual performance and the corresponding payout were follows:

  14. Elements of our Executive Compensation Program

    | | Threshold | Target | Maximum | 2023 Actual | | EAD per Diluted Share | $1.04 | $1.30 | $1.56 | $2.06(a) | | Payout (% of Target) | 25% | 100% | 200% | 200% |

  15. Elements of our Executive Compensation Program

    EAD per Diluted Share is based on 483,716,715 weighted average diluted common shares for the year ended December 31, 2023. Please refer to Annex A for a discussion and reconciliation of EAD and EAD per Diluted Share to the most directly comparable GAAP measures. Based on the financial performance outlined above, the Compensation Committee determined Mr. Nierenberg earned the maximum (200% of target) for the Financial Category: Financial Category Payout: 200% of target x 60% weighting = 120% of target. Strategic Category (weighted 30%) — In considering the strategic category, the Compensation, Committee considered performance against multiple strategic objectives related to the Company’s continuing evolution of its investment platform with a diverse portfolio of investments and operating companies across the real estate and financial services sectors. Significant accomplishments in 2023 included: • Successfully Completed the Acquisition of Sculptor, enhancing our position as a global asset manager, expanding our capabilities across multi-strategy, real estate and credit platforms and adding $33.0 billion of Assets Under Management(a); • Diversified Rithm Capital’s Portfolio, including the acquisition of a $1.4 billion portfolio of consumer loans, demonstrating our Company’s growth into a diversified global asset manager in line with management’s go forward goals for our Company; • Announced the Acquisition of Specialized Loan Servicing LLC (“SLS”)(b), significantly expanding our mortgage company’s subservicing and special servicing portfolio; • Expanded Rithm Capital’s Global Presence, through the establishment of our London business and the acquisition of Sculptor, including its offices in London and Hong Kong; and • Achieved Significant Cost Savings and Efficiencies at our Mortgage Company, including the completion of the conversion to the mortgage company’s proprietary servicing system, the internalization of $60 billion in unpaid principal balance of third-party servicing and reduced corporate expenditures by 25% year over year(c). (a) “Assets Under Management” (“AUM”) refers to the assets for which Sculptor provides investment management, advisory or certain other investment-related services. This is generally equal to the sum of (i) net asset value of the funds, (ii) uncalled capital commitments, (iii) total capital commitments for certain real estate funds and (iv) par value of collateralized loan obligations. AUM includes amounts that are not subject to management fees, incentive income or other amounts earned on AUM. Our calculation of AUM may differ from the calculations of other asset managers, and as a result, may not be comparable to similar measures presented by other asset managers. Our calculations of AUM are not based on any definition set forth in the governing documents of the investment funds and are not calculated pursuant to any regulatory definitions. (b) The acquisition of SLS has not yet closed and is expected to close during Q2’24, subject to customary closing conditions. (c) Decline in corporate expense refers to expenses to support the mortgage company’s origination and servicing segments. Based on the achievements outlined above, the Compensation Committee determined Mr. Nierenberg earned the maximum (200% of target) for the Strategic Category: Strategic Category Payout: 200% of target x 30% weighting = 60% of target. • Individual Category (weighted 10%) — For this category, the Compensation Committee evaluated Mr. Nierenberg’s vision in developing and executing the Company’s business strategy, his leadership in driving the Company’s financial and strategic accomplishments, and, in particular, his instrumental role in successfully closing the Sculptor transaction, which marked a significant milestone in the growth and evolution of Rithm. Based on the achievements outlined above, the Compensation Committee determined Mr. Nierenberg earned the maximum (200% of target) for the Individual Category: Individual Category Payout: 200% of target x 10% weighting = 20% of target. Based on the combination of performance across all three categories, the Compensation Committee awarded Mr. Nierenberg his maximum short-term incentive of 200% of target, or $10,000,000. Each of Messrs. Santoro and Sivin did not have a specific target short-term incentive opportunity amount, and instead were eligible to receive discretionary short-term incentive amounts from the Company based on our Compensation Committee’s determination of their individual performance and the performance of the Company as a whole. Although Messrs. Santoro and Sivin did not have specific financial and strategic goals, the Compensation Committee considered the same financial and strategic performance accomplishments as outlined above for Mr. Nierenberg. In addition, the Compensation Committee considered Mr. Nierenberg’s evaluation of individual performance and recommended short-term incentive for Messrs. Santoro and Sivin. Following a review of all applicable factors by our Compensation Committee, the Compensation Committee awarded the following short-term incentive amounts to Messrs. Santoro and Sivin: Mr. Santoro, $1,100,000; and Mr. Sivin, $937,500. Long-Term Incentive Awards. Our named executive officers are eligible to receive long-term equity incentive awards relating to our Common Stock, which are intended to further align the interests of our named executive officers with those of our stockholders generally. As described below, these awards are subject to vesting terms, which include continued employment with the Company for specified periods of time, and in certain cases, the achievement of specified performance criteria. In February 2023, the Compensation Committee granted equity compensation to our named executive officers, using a combination of time-vesting and performance-vesting restricted stock units. The target grant date fair values of the awards were $8,750,000 for Mr. Nierenberg, $1,250,000 for Mr. Santoro and $250,000 for Mr. Sivin. For Mr. Nierenberg, the target grant date fair value was determined based on the Compensation Committee’s assessment of what would comprise an appropriate target pay opportunity for our CEO and the desire for the majority of the CEO’s pay opportunity to be in the form of long-term incentives. For Messrs. Santoro and Sivin, the grant date fair value was equal to 114% and 33.3%, respectively, of their 2022 short-term incentive awards. Fifty-percent of the target grant date fair value was awarded in time-vesting restricted stock units that vest in three equal installments on February 21 of each of 2024, 2025 and 2026, generally subject to the executive’s continued employment through the applicable vesting date. The remaining 50% of the target grant date fair value was awarded in performance-vesting restricted stock units that are subject to vesting based on the achievement of specified targets relating to the Company’s annual average EAD ROE over a three-year performance period running from January 1, 2023 through December 31, 2025 and generally subject to the executive’s continued employment through the end of the performance period. The performance-vesting restricted stock units may be earned between 0% and 200% of the target value of the award depending on the level of achievement of the EAD ROE targets. While the long-term equity incentive awards made to Messrs. Santoro and Sivin that were awarded in February 2023 were related to performance in 2022, the grant date value of those awards has been included in the “Summary Compensation Table for 2023” and the “Grant of Plan Based Awards in 2023” table below in accordance with SEC disclosure rules.

  16. Elements of our Executive Compensation Program

    Changes for 2024. For 2024, the Compensation Committee amended Mr. Nierenberg’s employment agreement, re-allocating Mr. Nierenberg’s target pay opportunity by reducing the base salary and target short-term incentive opportunity and increasing the target long-term incentive opportunity. This reallocation is intended to more strongly align Mr. Nierenberg’s compensation with long-term performance and the stockholder experience. Pursuant to the Amended Employment Agreement (as defined below), (i) his base salary was reduced from $1,250,000 to $1,000,000, effective April 1, 2024, (ii) his annual target short-term incentive was reduced from $5,000,000 to $4,000,000, of which he is eligible to earn from 0% to 200% based on performance objectives established by the Compensation Committee, (iii) the target value of his annual time-based equity award was reduced from $4,375,000 to $3,000,000 and (iv) the target value of the annual performance-vesting equity award was increased $4,375,000 to $9,000,000, such that 75% of the target value of Mr. Nierenberg's annual equity award grants will now be in the form of performance-vesting awards. Additionally, the Compensation Committee adjusted the base salary of each of Messrs. Santoro and Sivin to $400,000, effective as of January 1, 2024 in order to bring the salaries of Messrs. Santoro and Sivin in line with other senior employees of our Company. The Compensation Committee granted equity compensation to Messrs. Santoro and Sivin in February 2024 and to Mr. Nierenberg in March 2024 in connection with performance for the 2023 fiscal year, using a combination of time-vesting and performance-vesting Class B Profits Units of Rithm Capital Management LLC (“RCM”) designated as “Share-Settled Awards.” Awards of Class B Profits Units that are designated as “Share-Settled Awards” will be exchangeable into shares of our common stock in accordance with the terms and conditions set forth in the individual award agreement. These Class B Profits Units are intended to be generally economically equivalent to the time-vesting and performance-vesting restricted stock units granted in 2023, except that they are structured as “profits interests” for U.S. federal income tax purposes under current federal income tax law. As profits interests, the Class B Profits Units generally only have value if the value of the assets of RCM increases between the issuance of the Class B Profits Units and the date of a book-up event for partnership tax purposes. If the value of the assets of RCM increases sufficiently, the Class B Profits Units are redeemable, subject to the satisfaction of applicable vesting conditions, by the holder for cash, or at our election, on a one-for-one basis into shares of our common stock. The target grant date fair values of the Class B Profits Units were $12,000,000 for Mr. Nierenberg, $1,100,000 for Mr. Santoro and $312,500 for Mr. Sivin. For Mr. Nierenberg, the target grant date fair value was determined based on the Compensation Committee’s assessment of what would comprise an appropriate target pay opportunity for our CEO and the desire for the majority of the CEO’s pay opportunity to be in the form of long-term incentives. For Messrs. Santoro and Sivin, the grant date fair value was equal to 100% and 33.3%, respectively, of their 2023 short-term incentive awards. For Mr. Nierenberg, 25% of the target grant date fair value, and for Messrs. Santoro and Sivin, 50% of the target grant date fair value was awarded in time-vesting Class B Profits Units that vest in three equal installments on the anniversary of the grant date (which is March 15 for Mr. Nierenberg and February 23 for each of Messrs. Santoro and Sivin) in each of 2025, 2026 and 2027, generally subject to the executive’s continued employment through the applicable vesting date. The remaining 75% for Mr. Nierenberg and 50% for Messrs. Santoro and Sivin of the target grant date fair value was awarded in performance-vesting Class B Profits Units that are subject to vesting based on the achievement of specified annual targets relating to the Company’s EAD ROE over a three-year performance period running from January 1, 2024 through December 31, 2026, and generally subject to the executive’s continued employment through the end of the performance period. For Mr. Nierenberg, the performance-vesting Class B Profits Units may be earned between 0% and 300% of the target value of the award depending on the level of achievement of the annual EAD ROE targets. For Messrs. Santoro and Sivin, the performance-vesting Class B Profits Units may be earned between 0% and 200% of the target value of the award depending on the level of achievement of the annual EAD ROE targets. While the long-term equity incentive awards made to Messrs. Santoro and Sivin that were awarded in February 2024 were related to performance in 2023, the grant date value of those awards has not been included in the “Summary Compensation Table for 2023” or the “Grant of Plan Based Awards in 2023” table below in accordance with SEC disclosure rules and will instead be included in our proxy statement filed in 2025. Employee Benefits. Our named executive officers are generally eligible to participate in the same health, welfare and retirement benefits that apply to the employees of Rithm Capital Corp. generally. We do not sponsor or maintain any defined benefit pension plans or similar arrangements and did not provide any perquisites to our named executive officers in 2023.

  17. Employment Agreements and Offer Letters with our Named Executive Officers

    Employment Agreements and Offer Letters with our Named Executive Officers Michael Nierenberg. We are party to an employment agreement, dated as of June 17, 2022 (the “Original Employment Agreement”), with Mr. Nierenberg, which was amended by the first amendment to employment agreement, dated as of March, 14, 2024 (as amended, the “Amended Employment Agreement”). Pursuant to the Original Employment Agreement, Mr. Nierenberg received a base salary at the annualized rate of $1,250,000 and, for 2023, had an annual short-term incentive amount of $5,000,000 of which he was eligible to earn between 0% and 200% based on various financial, strategic and individual performance metrics determined by our Compensation Committee each year. In addition, for 2023, the Original Employment Agreement specified annual long-term equity incentive awards having a target grant date value of $8,750,000, of which 50% is issued in the form of performance-vesting restricted stock units and 50% is issued in the form of time-vesting restricted stock units. Pursuant to the Amended Employment Agreement, effective April 1, 2024, Mr. Nierenberg will receive a base salary at the annualized rate of $1,000,000 and, beginning in 2024, will have an annual short-term incentive amount of $4,000,000, of which he will be eligible to earn from 0% to 200% based on various financial, strategic and individual performance metrics determined by our Compensation Committee each year. Further, pursuant to the Amended Employment Agreement, beginning in 2024, Mr. Nierenberg will receive annual long-term equity incentive awards having a target grant date value of $12,000,000, of which 75% will be in the form of performance-vesting equity incentive awards and 25% will be in the form of time-vesting equity incentive awards. In the event of certain qualifying terminations of employment by the Company or Mr. Nierenberg, he will be eligible to receive (i) cash severance equal to two times the sum of his base salary and target annual bonus, (ii) a prorated target bonus for the year of termination, (iii) 18 months of health insurance premiums and (iv) accelerated vesting of any time-vesting awards that would have become vested during the two-year period following the qualifying termination and continuing eligibility to earn a pro-rata portion (based on the period from the beginning of the performance period through the date that is 24 months following such qualifying termination) of any performance-vesting awards granted to him based on actual performance through the end of the original performance period. If the qualifying termination occurs in the 24-month period following a change in control of the Company, any outstanding time-based awards will become fully vested and Mr. Nierenberg will be eligible to earn (without pro-ration) any performance-vesting awards granted to him based on actual performance through the end of the original performance period. Mr. Nierenberg is required to sign a separation and general release agreement in a form and manner satisfactory to the Company in order to receive these severance payments and benefits. Mr. Nierenberg’s employment agreement further provides that he is subject to certain post-employment non-competition and non-solicitation covenants for a 24-month period following any termination of employment, as well as a covenant not to disclose confidential information. Nicola Santoro, Jr. We are party to an offer letter with Mr. Santoro, dated as of August 1, 2022, pursuant to which he receives a base salary at the annualized rate of $300,000. As discussed above, the Compensation Committee adjusted the base salary of Mr. Santoro to $400,000, effective as of January 1, 2024. He is also eligible to receive an annual discretionary short-term incentive award. Mr. Santoro is also subject to a post-employment non-competition covenant for 12 months following his termination of employment as a result of his resignation or a termination by the Company for cause (as defined in the offer letter), certain non-solicitation covenants for 18 months following his termination of employment for any reason and covenants involving confidentiality and proprietary rights. Philip Sivin. We are party to an offer letter with Mr. Sivin, dated as of August 1, 2022, pursuant to which he receives a base salary at the annualized rate of $250,000. As discussed above, the Compensation Committee adjusted the base salary of Mr. Sivin to $400,000, effective as of January 1, 2024. He is also eligible to receive an annual discretionary short-term incentive award. Mr. Sivin is also subject to certain non-solicitation covenants for 18 months following his termination of employment for any reason and covenants involving confidentiality and proprietary rights.

  18. Summary Compensation Table for 2023

    Summary Compensation Table for 2023 Prior to the Internalization Date on June 17, 2022, our executive officers were employees of FIG LLC (the “Former Manager”), an affiliate of Fortress Investment Group (“Fortress”), which served as our external manager. The Former Manager was solely responsible for determining compensation for those executive officers. Following the Internalization, the executive officers became employees of the Company, and our Compensation Committee became responsible for determining their compensation. The Summary Compensation Table that follows provides information regarding the compensation awarded to each of our named executive officers for 2023 and for the 2022 Stub Year. Our Former Manager previously informed us that it was not able to segregate and identify any portion of the compensation that it awarded to our named executive officers as relating solely to service performed for the Company, because the services performed by our named executive officers prior to the Internalization were not performed exclusively for us, and therefore no compensation information has been included for our named executive officers for any period prior to the Internalization Date.

  19. Summary Compensation Table for 2023

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | Michael Nierenberg Chairman of the Board, Chief Executive Officer and President | 2023 | 1,250,000 | — | 8,749,984 | 10,000,000 | 160,039 | 20,160,023 | | | 2022 | 653,587 | 3,750,000 | 4,999,994 | — | 110 | 9,403,691 | | Nicola Santoro Jr. Chief Financial Officer, Chief Accounting Officer and Treasurer | 2023 | 300,000 | 1,100,000 | 1,249,996 | — | 26,781 | 2,676,777 | | | 2022 | 118,318 | 1,100,000 | — | — | 99 | 1,218,417 | | Philip Sivin Chief Legal Officer and Secretary | 2023 | 250,000 | 937,500 | 249,996 | — | 31,858 | 1,469,354 | | | 2022 | 99,432 | 750,000 | — | — | 97 | 849,529 |

  20. Summary Compensation Table for 2023

    (1) Because the Class B Profits Units granted to our named executive officers in connection with performance for the 2023 fiscal year were granted in February 2024, SEC disclosure rules do not require that they be reflected in the “Summary Compensation Table for 2023” or the “Grants of Plan-Based Awards in 2023” table for the 2023 fiscal year. We describe these grants in “Compensation Discussion and Analysis—Elements of our Executive Compensation Program” of this proxy statement. (2) With respect to each of Messrs. Nierenberg, Santoro and Sivin, the amounts shown in the “Stock Awards” column for 2023 represent the grant of restricted stock units, of which (i) 50% were granted in time-vesting restricted stock units, that vest in three equal installments on February 21 of each of 2024, 2025 and 2026, generally subject to the executive’s continued employment through the applicable vesting date and (ii) 50% were granted in performance-vesting restricted stock units that are subject to vesting based on the achievement of specified targets relating to the Company’s annual average EAD ROE over a three-year performance period running from January 1, 2023 through December 31, 2025 and generally subject to the executive’s continued employment through the end of the performance period. The performance-vesting restricted stock units may be earned between 0% and 200% of the target value of the award depending on the level of achievement of the EAD ROE targets. The amounts shown reflect the grant date fair value of awards made during 2023 as determined pursuant to FASB ASC Topic 718. The fair value of granted awards is determined based on the closing price of the Company’s common stock on the last trading date of prior to the date of the grant of the awards multiplied by the number of restricted stock units granted. The amount shown with respect to the performance-vesting restricted stock units is based on the grant date fair value assuming the target level of performance. The maximum value of performance-vesting restricted stock units granted in 2023 is (i) $8,749,984 for Mr. Nierenberg, (ii) $1,249,995 for Mr. Santoro and (iii) $249,995 for Mr. Sivin. For complete valuation assumptions of the awards, see Note 22 to the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 20, 2024. (3) As discussed above in the Compensation Discussion and Analysis section of this proxy statement, the Non-Equity Incentive Plan compensation for Mr. Nierenberg is based upon a target short-term incentive opportunity equal to $5,000,000, of which he was eligible to earn from 0% to 200%. Mr. Nierenberg’s other compensation included a payment of $144,509, representing dividends entitled to be paid on Mr. Nierenberg’s restricted stock awards, which were paid in January 2023 in the form of compensation. Each of our named executive officers received a profit sharing bonus, representing the (i) unvested profit sharing portion of such named executive officer’s 401(k) and (ii) the profit sharing contribution which would have been paid for the 2022 fiscal year if such named executive officer had remained an employee of Fortress. Each of Messrs. Nierenberg’s and Santoro’s profit sharing bonus payment was $15,250, and Mr. Sivin’s profit sharing bonus was $21,369. Each of our named executive officers also received life insurance premiums in the 2023 fiscal year of $281. Messrs. Santoro’s and Sivin’s other compensation additionally includes Company 401(k) matching of $11,250 and $10,208, respectively.

  21. Grants of Plan-Based Awards in 2023

    Grants of Plan-Based Awards in 2023 The table below sets forth the plan-based awards granted to our named executive officers in 2023.

  22. Grants of Plan-Based Awards in 2023

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards(1) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(2) | Grant Date Fair Value of Stock Awards ($)(3)(4) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Michael Nierenberg | February 21, 2023 | — | — | — | — | — | — | 459,558 | 4,374,992 | | | February 21, 2023 | — | — | — | 114,890 | 459,558 | 919,116 | — | 4,374,992 | | | February 21, 2023 | — | 5,000,000 | 10,000,000 | — | — | — | — | — | | Nicola Santoro, Jr. | February 21, 2023 | — | — | — | — | — | — | 65,651 | 624,998 | | | February 21, 2023 | — | — | — | 16,413 | 65,651 | 131,302 | — | 624,998 | | Philip Sivin | February 21, 2023 | — | — | — | — | — | — | 13,130 | 124,998 | | | February 21, 2023 | — | — | — | 3,283 | 13,130 | 26,260 | — | 124,998 |

  23. Grants of Plan-Based Awards in 2023

    (1) Awards represent performance-vesting restricted stock units that are subject to vesting based on the achievement of specified targets relating to the Company’s annual average EAD ROE over a three-year performance period running from January 1, 2023, through December 31, 2025, and generally subject to the executive’s continued employment through the end of the performance period. The performance-vesting restricted stock units may be earned between 0% and 200% of the target value of the award depending on the level of achievement of the EAD ROE targets. (2) Awards represent time-vesting restricted stock units, which vest in three equal installments on February 21 of each of 2024, 2025 and 2026, generally subject to the executive’s continued employment through the applicable vesting date. (3) The amounts shown reflect the grant date fair value of awards made during 2023 as determined pursuant to FASB ASC Topic 718. For complete valuation assumptions of the awards, see Note 22 to the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 20, 2024. The amount shown with respect to the performance-vesting restricted stock units is based on the grant date fair value assuming the target level of performance. (4) Because the Class B Profits Units granted to our named executive officers in connection with performance for the 2023 fiscal year were granted in February 2024, SEC disclosure rules do not require that they be reflected in the “Summary Compensation Table for 2023” or the “Grants of Plan-Based Awards in 2023” table for the 2023 fiscal year. We describe these grants in “Compensation Discussion and Analysis—Elements of our Executive Compensation Program” of this proxy statement.

  24. Outstanding Equity Awards at Fiscal Year-End for 2023

    Outstanding Equity Awards at Fiscal Year-End for 2023 The following table provides information about unvested equity awards held by our named executive officers as of December 31, 2023. None of our named executive officers held any stock options as of December 31, 2023.

  25. Outstanding Equity Awards at Fiscal Year-End for 2023

    | | Stock Awards | | | | | Name | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(2) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | | Michael Nierenberg | 883,908(3) | 9,440,137 | 997,104 | 10,649,071 | | Nicola Santoro, Jr. | 71,221(4) | 760,640 | 142,442 | 1,521,281 | | Philip Sivin | 14,243(4) | 152,115 | 28,486 | 304,230 |

  26. Outstanding Equity Awards at Fiscal Year-End for 2023

    Market value is based on $10.68, which was the closing price of a share of our Common Stock on December 29, 2023, which was the last trading day of the year. Includes performance-vesting restricted stock units that were granted on February 21, 2023 and the related dividend equivalents, and are subject to vesting based on the achievement of specified targets relating to the Company’s annual average EAD ROE over a three-year performance period running from January 1, 2023, through December 31, 2025, and generally subject to the executive’s continued employment through the end of the performance period. The performance-vesting restricted stock units may be earned between 0% and 200% of the target value of the award depending on the level of achievement of the EAD ROE targets. The amount shown with respect to the performance-vesting restricted stock units is based on the number of shares granted and the market value assuming the maximum level of performance. (3) Includes (i) 385,356 unvested shares of restricted stock, which were granted on June 17, 2022, and will vest in equal installments on June 17 of each of 2024 and 2025 and (ii) 498,558 time-vesting restricted stock units granted on February 21, 2023 and the related dividend equivalents, which will vest in equal installments on February 21 of each of 2024, 2025 and 2026, subject to the executive’s continued employment through the applicable vesting date. (4) Includes time-vesting restricted stock units that were granted on February 21, 2023 and the related dividend equivalents, that vest in three equal installments on February 21, of each of 2024, 2025 and 2026, generally subject to the continued employment of the executives through the applicable vesting date.

  27. Options Exercised and Stock Vested for 2023

    Options Exercised and Stock Vested for 2023 None of our named executive officers exercised any stock options relating to our Common Stock in 2023. The following table provides information about the vesting of stock awards during the fiscal year ended December 31, 2023.

  28. Options Exercised and Stock Vested for 2023

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Michael Nierenberg | 192,678 | 1,791,905 | | Nicola Santoro, Jr. | — | — | | Philip Sivin | — | — |

  29. Options Exercised and Stock Vested for 2023

    (1) Value realized on vesting is based on $9.30, which was the closing price of a share of our Common Stock on June 16, 2023, which was the last trading day prior to the vesting of the restricted stock.

  30. Pension Benefits for 2023

    Pension Benefits for 2023 We do not maintain any defined benefit pension plans in which any of our named executive officers participate.

  31. Nonqualified Deferred Compensation for 2023

    Nonqualified Deferred Compensation for 2023 We do not maintain any nonqualified deferred compensation plans in which any of our named executive officers participate.

  32. Potential Payments upon Termination or Change of Control

    Potential Payments upon Termination or Change of Control As described in the section of this Proxy Statement titled “Executive Compensation—Employment Agreements and Offer Letters with our Named Executive Officers,” Mr. Nierenberg is eligible to receive certain payments and benefits in connection with the termination of his employment without cause or his resignation for good reason (each as defined in his employment agreement) outside of the period that is 24 months following a change in control as well as in connection with the termination of his employment without cause or his resignation for good reason during the 24-month period following a change in control. The following table summarizes the potential payments and benefits to which Messrs. Nierenberg, Santoro and Sivin would be entitled upon the various termination scenarios set forth below assuming the termination occurred on December 31, 2023. Messrs. Santoro and Sivin were not entitled to receive any cash severance payments or benefits pursuant to each of their respective offer letters in connection with any termination of employment occurring on December 31, 2023.

  33. CEO Pay Ratio

    CEO Pay Ratio Pursuant to Item 402(u) of Regulation S-K, presented below is the total compensation of our median employee, the annual total compensation of our CEO for the 2023 fiscal year and the ratio of those two values: • The 2023 annual total compensation of our median employee (other than our CEO), calculated in accordance with Item 402(c) of Regulation S-K, was $64,805; The 2023 annual total compensation of our CEO, Mr. Nierenberg, calculated in accordance with Item 402(c) of Regulation S-K and as reported in the Summary Compensation Table for 2023 in this Proxy Statement, was $20,160,023; and For 2023, the ratio of the annual total compensation of Mr. Nierenberg to the annual total compensation of our median employee was 311 to 1. This reflects analysis of our global workforce of 6,678 employees as of December 31, 2023, including part-time employees. We did not include independent contractors in our determination. In order to identify our median employee, we reviewed the W-2 Box 1 compensation for all of our United States employees, the estimated amounts of the equivalent compensation measure in Schedule K-1 for our Sculptor service providers who do not receive W-2s and the equivalent compensation measure, converted to United States dollars, in the applicable tax forms for our employees located in the United Kingdom and Hong Kong. This approach was consistently applied to all our employees included in the calculation. We did not make any cost-of-living adjustments in identifying our median employee for 2023. Once we identified our median employee for 2023 using the methodology described above, we determined the median employee’s annual total compensation for 2023 in accordance with the requirements of Item 402(c) of Regulation S-K consistent with the calculation of the 2023 annual total compensation of our CEO as reported in the Summary Compensation Table for 2023 in this Proxy Statement. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. The information disclosed in this section was developed and is provided solely to comply with specific legal requirements. We do not use this information in managing our Company.

  34. Pay Versus Performance

    Pay Versus Performance As required by Item 402(v) of Regulation S-K, we are providing the following information regarding the relationship between executive compensation and our financial performance for 2023 and 2022. As described above, our named executive officers did not receive any compensation from us prior to the Internalization Date and were compensated solely by our Former Manager; accordingly, we do not include disclosure for 2021 and 2020 in this section. Similarly, the executive compensation for 2022 covers only that portion of 2022 included in the 2022 Stub Year. In determining the “compensation actually paid” to our named executive officers, we are required to make various adjustments to amounts that have been reported in the Summary Compensation Table for 2023 and 2022, as the SEC’s valuation methods for this section differ from those required in the Summary Compensation Table for 2023 and 2022.

  35. Pay Versus Performance Table

    Pay Versus Performance Table

  36. Pay Versus Performance Table

    | | | | Average Summary Compensation Table Total for Non-PEO Named Executive Officers(1) | Average Compensation Actually Paid to Non-PEOs Named Executive Officers(2) | Value of initial fixed $100 investment based on: | | | | | Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2) | | | Total Stockholder Return(3) | Peer Group Total Stockholder Return(4) | GAAP Net Income (in millions)(5) | EAD ROE(6) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | $20,160,023 | $27,656,434 | $2,073,066 | $2,585,143 | $124.3 | $84.8 | $532.7 | 17.4% | | 2022 | $9,403,691 | $9,126,235 | $1,033,973 | $1,033,973 | $85.4 | $73.6 | $864.8 | 11.2% |

  37. Pay Versus Performance Table

    (1) For each of 2022 and 2023, our principal executive officer (“PEO”) was Mr. Nierenberg, and our non-PEO named executive officers were Messrs. Santoro and Sivin. The amounts in the following table represent the amount of “compensation actually paid” to our PEO and non-PEO named executive officers (as an average), for each applicable year, as computed in accordance with Item 402(v) of Regulation S-K. Under SEC rules, the amounts shown below were deducted and added, as applicable, to total compensation as included in the “Summary Compensation Table Total” or “Average Summary Compensation Table Total for Non-PEO named executive officers” columns, as applicable, set forth above to determine the “compensation actually paid” for the applicable fiscal year.

  38. Pay Versus Performance Table

    | | Summary Compensation Table Total | Minus Grant Date Fair Value of Equity Awards Granted During Applicable Year | Plus Year-End Fair Value of Equity Awards Granted During Applicable Year(a) | Plus Change in Fair Value (as of year end from prior year end) of Previously-Granted Equity Awards that Remain Unvested at Year End(b) | Plus Change in Fair Value (as of vesting date from prior year end) of Previously-Granted Equity Awards for Which All Applicable Vesting Conditions Were Satisfied During the Covered Fiscal Year(c) | Plus Any Dividends Paid Prior to the Vesting Date of the Underlying Award | Equals Compensation Actually Paid | | Michael Nierenberg | | | | | | | | | 2023 | $20,160,023 | $(8,749,984) | $14,724,238 | $967,244 | $217,726 | $337,187 | $27,656,434 | | 2022 | $9,403,691 | $(4,999,994) | $4,722,538 | — | — | — | $9,126,235 | | Average of Non-PEO Named Executive Officers | | | | | | | | | 2023 | $2,073,066 | $(749,995) | $1,262,072 | — | — | — | $2,585,143 | | 2022 | $1,033,973 | — | — | — | — | — | $1,033,973 |

  39. Pay Versus Performance Table

    (a) Represents the fair value as of December 31, 2023 of time-vesting and performance-vesting restricted stock units based on $10.68 per share, which was the closing price of a share of our Common Stock on December 29, 2023, which was the last trading day of the year. The amount shown with respect to the performance-vesting restricted stock units is based on the number of shares granted and the market value assuming the maximum level of performance. (b) Represents the change in fair value as of year end from prior year end of 385,356 unvested and outstanding shares of restricted stock held by Mr. Nierenberg as of December 31, 2023. The fair value as of December 31, 2022 is based on $8.17 per share, which was the closing price of a share of our Common Stock on December 30, 2022, which was the last trading day of the year. The fair value as of December 31, 2023 is based on $10.68 per share, which was the closing price of a share of our Common Stock on December 29, 2023, which was the last trading day of the year. (c) Represents the change in fair value as of the vesting date of June 17, 2023 from prior year end of 192,678 shares of restricted stock held by Mr. Nierenberg. The fair value as of December 31, 2022 is based on $8.17 per share, which was the closing price of a share of our Common Stock on December 30, 2022, which was the last trading day of the year. The fair value as of the vesting date of June 17, 2023 is based on $9.30 per share, which was the closing price of a share of our Common Stock on June 16, 2023, which was the last trading day prior to the vesting date. (3) The Total Stockholder Return assumes $100 invested in our common stock for the period starting December 31, 2021 through December 31 of the applicable year. (4) The NAREIT Mortgage REIT index (which was also used in the Company’s Form 10-K filing) was used to calculate the Company’s peer group total stockholder return. The Peer Group Total Stockholder Return assumes $100 was invested in the NAREIT Mortgage REIT index for the period starting December 31, 2021 through December 31 of the applicable year. (5) As reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The EAD ROE metric is a non-GAAP metric. EAD ROE is utilized in our long-term incentive plan but is not a financial measure under GAAP. Please refer to Annex A for a discussion and reconciliation of EAD to the most directly comparable GAAP measure. EAD ROE for the year represents reported 2023 FY EAD divided by average quarterly Common Stockholder’s Equity over the same period.