DEF 14A of Granite Point Mortgage Trust Inc.
Filed Apr 21, 2025 · FY20240001104659-25-036842
Michael J. Karber Vice President, General Counsel and Secretary
| COMPENSATION COMMITTEE REPORT | 59 | | EXECUTIVE COMPENSATION | 60 | | Summary Compensation Table | 60 | | Grants of Plan-Based Awards in 2024 | 62 | | Outstanding Equity Awards at 2024 Fiscal Year-End | 65 | | Stock Vested in 2024 | 67 | | Nonqualified Deferred Compensation | 67 | | Potential Payments upon Termination or Change in Control | 67 | | CEO Pay Ratio | 71 | | Pay Versus Performance | 72 | | PROPOSAL 2: ADVISORY APPROVAL OF EXECUTIVE COMPENSATION | 76 | | PROPOSAL 3: APPROVAL OF THE PROPOSED AMENDED AND RESTATED GRANITE POINT MORTGAGE TRUST INC. 2022 OMNIBUS INCENTIVE PLAN | 77 | | Overview | 78 | | Summary of the Material Features of the Amended and Restated 2022 Plan | 79 | | PROPOSAL 4: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR | 90 | | Audit and Non-Audit Fees | 90 | | Audit Services Pre-Approval Policy | 91 | | AUDIT COMMITTEE REPORT | 92 | | OTHER MATTERS | 93 | | Meeting Matters | 93 | | Stockholder Proposals and Director Nominations for 2026 Annual Meeting | 93 | | Annual Report | 93 | | FREQUENTLY ASKED QUESTIONS | 94 | | APPENDIX A – DEFINITIONS AND CALCULATION OF NON-GAAP MEASURES | A-1 | | APPENDIX B – TEXT OF THE PROPOSED AMENDED AND RESTATED GRANITE POINT MORTGAGE TRUST INC. 2022 OMNIBUS INCENTIVE PLAN | B-1 |
Michael J. Karber Vice President, General Counsel and Secretary
| Glossary of Proxy Statement Terms | | AIP − annual incentive plan CD&A − Compensation Discussion and Analysis CEO − Chief Executive Officer COBRA − Consolidated Omnibus Reconciliation Act of 1985, as amended Company − Granite Point Mortgage Trust Inc. CRE − commercial real estate DER − dividend equivalent right ESG − environmental, social and governance Exchange Act − Securities Exchange Act of 1934, as amended Former Manager − Pine River Capital Management L.P. GAAP − generally accepted accounting principles Internalization − internalization of our Company’s management on December 31, 2020, pursuant to an agreement with our Former Manager LTIP − long-term incentive plan NEO − named executive officer NYSE − New York Stock Exchange PSU − performance stock unit REIT − real estate investment trust REO − real estate owned ROAE − return on average equity RSU − restricted stock unit SEC − Securities Exchange Commission |
Audit Committee
| | PROPOSAL 3: APPROVAL OF PROPOSED AMENDED AND RESTATED GRANITE POINT MORTGAGE TRUST INC. 2022 OMNIBUS INCENTIVE PLAN The Board of Directors recommends that you vote FOR the proposed Amended and Restated Granite Point Mortgage Trust Inc. 2022 Omnibus Incentive Plan. | FOR (See Page 77) |
Audit Committee
| Chair of the Board and Independent Director Committee(s): Audit (Chair) | STEPHEN G. KASNET | | | | Age: 79 | Director Since: 2017 | | | KEY SKILLS & QUALIFICATIONS Real Estate or REIT – Through various director and management positions, including at Two Harbors Investment Corp., Silver Bay Realty Trust, Bradley Real Estate Trust and Harbor Global, Mr. Kasnet has extensive REIT and real estate sector experience Strategic Opportunities or Balance Sheet Management – In various director and management positions, including at Two Harbors Investment Corp. and Silver Bay Realty Trust, Mr. Kasnet has experience navigating and evaluating M&A, capital markets and other strategic opportunities and in balance sheet management Finance or Accounting – As a qualified financial expert on the Audit Committee, Mr. Kasnet has the experience and financial literacy to oversee financial reporting and internal controls Credit or Principal Investing – As a director of Two Harbors Investment Corp., former CEO of Pioneer First Voucher Fund and former President of Pioneer Real Estate Investors, among other positions, Mr. Kasnet has experience investing in real estate and other real estate products Operations and Management – Through various executive roles in the real estate and mortgage REIT industry, Mr. Kasnet has the right expertise to help develop and oversee our business strategy and has a broad perspective on operational matters Prior Public Board or Governance Experience – Mr. Kasnet has served as a director for multiple public companies, including Two Harbors Investment Corp. (NYSE: TWO), Silver Bay Realty Trust (NYSE: SBY), Columbia Laboratories (NASDAQ: CBRX) and Rubicon (NZX: RBC) | |
Audit Committee
| President, Chief Executive Officer and Director | JOHN (“JACK”) A. TAYLOR | | | | Age: 69 | Director Since: 2017 | | | KEY SKILLS & QUALIFICATIONS Real Estate or REIT – Through various management and real estate group leadership positions at asset management firms, including PGIM Real Estate Investors, UBS and PaineWebber, and membership in the Commercial Real Estate Finance Council and President’s Council of the Real Estate Roundtable, Mr. Taylor has extensive real estate sector experience Strategic Opportunities or Balance Sheet Management – As a leader in the real estate groups at Prudential Real Estate Investors, UBS, PaineWebber and Kidder, Peabody & Co., Mr. Taylor has extensive experience managing corporate strategy in the real estate sector – including by effecting transactions and raising capital – and the right experience to manage our balance sheet and funding profile Finance or Accounting – Through various management positions at real estate finance companies, Mr. Taylor brings strong financial literacy and a deep expertise in real estate finance fundamentals Credit or Principal Investing – As partner of Five Mile Capital and Head of Global Real Estate Finance at Prudential Real Estate Investors, Mr. Taylor has developed deep knowledge of debt products and asset-based lending in the real estate space Operations and Management – As President and CEO of Granite Point and through various management positions at asset management firms, Mr. Taylor has extensive knowledge of our Company and the right experience to oversee our Company’s operations and business strategy Investor Perspective – As President and CEO of Granite Point and through various management positions at asset management firms, Mr. Taylor has extensive experience with investor communications practices | |
Audit Committee
| Independent Director Committee(s): Nominating & Corporate Governance (Chair), Compensation | TANUJA M. DEHNE | | | | Age: 53 | Director Since: 2017 | | | KEY SKILLS & QUALIFICATIONS Real Estate or REIT – As a director at Silver Bay Realty Trust, Ms. Dehne developed knowledge of REITs and the real estate sector Strategic Opportunities or Balance Sheet Management – In various director and management positions, including at Silver Bay Realty Trust, Advanced Disposal Services and NRG Energy, as well as in private legal practice, Ms. Dehne has experience navigating and evaluating M&A, capital market and other strategic opportunities Finance or Accounting – Through her experience as a corporate and securities attorney, service on the Audit Committee of Silver Bay Realty Trust and her experience overseeing the investment management of an endowment, Ms. Dehne has the financial literacy to oversee financial reporting and internal controls Operations and Management – Through various roles and spans of control at NRG Energy and the Geraldine R. Dodge Foundation, Ms. Dehne has significant operational and management experience, including experience in managing human capital, that enhances our Board’s ability to develop and oversee our operations and business strategy Prior Public Board or Governance Experience – With over two decades teaching, advising and serving on corporate boards, and as Chair of the Advisory Board of the Gupta Governance Institute at Drexel University, Ms. Dehne provides corporate governance expertise to our Board ESG – Through her senior roles at NRG Energy and the Geraldine R. Dodge Foundation, in addition to her service on Climate Real Impact Solutions II Acquisition Corp.’s board, Ms. Dehne gained experience with environmental, sustainability and social justice issues and best practices | |
Audit Committee
| Independent Director Committee(s): Compensation | PATRICK G. HALTER | | | | Age: 65 | Director Since: 2025 | | | KEY SKILLS & QUALIFICATIONS Real Estate or REIT – Over his four decades in various leadership positions with Principal Financial Group, including as President and CEO of Principal Asset Management and CEO and Senior Executive Director of Principal Real Estate Investors (where, under his leadership, the firm was built into a top 10 global real estate manager), Mr. Halter developed extensive real estate sector experience Strategic Opportunities or Balance Sheet Management – As President, CEO and COO of Principal Asset Management. responsible for overseeing the firm’s operations, its investment teams and the distribution teams, Mr. Halter gained experience navigating and evaluating strategic opportunities as well as balance sheet management Finance or Accounting – Through Mr. Halter’s extensive background in the financial services industry, he possesses strong financial literacy and experience to oversee financial reporting and internal controls Credit or Principal Investing – Through his work as President and CEO of Principal Asset Management, managing over $650 billion in assets, and CEO and Senior Executive Director of Principal Real Estate Investors, Mr. Halter has decades of investing experience Operations and Management – During his time at Principal Asset Management, Mr. Halter developed extensive experience overseeing operations, global firm relations, human resources and business development; he has the right expertise to help develop and oversee our business strategy and has a broad perspective on operational matters Investor Perspective – As a member of Principal’s mutual fund Board and the Board of Governors of the Investment Company Institute, Mr. Halter gained significant experience understanding the investor perspective and is able to enhance our investor communications and outreach practices | |
Audit Committee
| Independent Director Committee(s): Audit, Nominating & Corporate Governance | SHEILA K. McGRATH | | | | Age: 60 | Director Since: 2023 | | | KEY SKILLS & QUALIFICATIONS Real Estate or REIT – Given her background as a senior REIT research analyst and involvement with several industry organizations such as the Real Estate Investment Advisory Council (REIAC) and National Association of Real Estate Investment Trusts (NAREIT), Ms. McGrath has a strong understanding of REITs and the real estate sector Strategic Opportunities or Balance Sheet Management – As a senior equity research analyst for over 25 years, with the last 10 years at Evercore, Ms. McGrath has broad expertise in analyzing and evaluating the financial and public market considerations of M&A, capital markets and other strategic opportunities and brings valuable insight into our balance sheet management policies Finance or Accounting – Through her 25+ years of experience as a REIT research analyst, Ms. McGrath has deep expertise in REIT fundamentals and valuation, and she is a qualified financial expert on the Audit Committee Credit or Principal Investing – As a commercial real estate appraiser with the Member of Appraisal Institute (MAI) designation while at CB Commercial, Ms. McGrath brings deep knowledge of commercial real estate valuation and feasibility analysis conducted for financial institutions and institutional investors for both equity investment and debt financing purposes Investor Communications and Outreach – Given her sell-side research expertise, Ms. McGrath has both an acute understanding of the investor perspective and deep institutional relationships, which enhance our investor communications and outreach ESG – Through her roles with NAREIT’s Dividends Through Diversity and Inclusion Initiative and the Gaining and Retaining Outstanding Women program at Rutgers Business School’s Center for Women in Business, Ms. McGrath has experience leading inclusion and belonging initiatives in our industry | |
Audit Committee
| Independent Director Committee(s): Nominating & Corporate Governance | LAZAR NIKOLIC | | | | Age: 45 | Director Since: 2025 | | | KEY SKILLS & QUALIFICATIONS Real Estate or REIT – As co-founder and Managing Member of JPL Advisors, where he oversees the firm’s portfolio management with a focus in mortgage REITs, equity REITs, closed-end funds, business development companies, specialty finance companies and special situations, Mr. Nikolic has extensive REIT and real estate sector experience Strategic Opportunities or Balance Sheet Management – Mr. Nikolic has experience navigating and evaluating M&A, capital markets and other strategic opportunities and in balance sheet management as co-founder and Managing Member of JPL Advisors, where he oversees the firm’s portfolio management, investment analysis and risk management, as well as his portfolio management experience at Adler & Co. Finance or Accounting – Through Mr. Nikolic’s extensive background in the financial services industry, he possesses strong financial literacy and experience to oversee financial reporting and internal controls Credit or Principal Investing – As co-founder and Managing Member of JPL Advisors, where he oversees the firm’s portfolio management with a focus in mortgage REITs, equity REITs, closed-end funds, business development companies, specialty finance companies and special situations, and as a former Portfolio Manager at Adler & Co., focusing on RMBS and structured credit, Mr. Nikolic provides valuable perspectives that inform our strategy and long-term, fundamental, value-driven investment philosophy Prior Public Board or Governance Experience – Mr. Nikolic’s service as a director for Front Yard Residential Corporation (NYSE: RESI) prior to its private acquisition in 2021 provides him with a governance perspective Investor Communications and Outreach – Through his experience as a large shareholder, Mr. Nikolic has a valuable perspective of the investor viewpoint and is able to enhance our investor communications and outreach practices | |
Audit Committee
| Independent Director Committee(s): Compensation (Chair), Audit | HOPE B. WOODHOUSE | | | | Age: 68 | Director Since: 2017 | | | KEY SKILLS & QUALIFICATIONS Real Estate or REIT – As a long-standing director of Two Harbors Investment Corp., Ms. Woodhouse has developed knowledge of REITs and the real estate sector Strategic Opportunities or Balance Sheet Management – Through various director and management positions, including at Two Harbors Investment Corp., Piper Jaffray and Seoul Securities, Ms. Woodhouse has experience navigating and evaluating M&A, capital markets and other strategic opportunities and in balance sheet management Finance or Accounting – As a qualified financial expert on the Audit Committee, Ms. Woodhouse has the experience and financial literacy to oversee financial reporting and internal controls Credit or Principal Investing – As a former executive at Bridgewater Associates, Soros Fund Management, Tiger Management and Salomon Brothers, Ms. Woodhouse brings extensive investing experience Operations and Management – As a former executive at Bridgewater Associates, Soros Fund Management, Tiger Management and Salomon Brothers, Ms. Woodhouse brings extensive management and operations experience, including the oversight of human resources Prior Public Board or Governance Experience – Ms. Woodhouse had served as a director for multiple public companies before joining our Board, including Two Harbors Investment Corp (NYSE: TWO) and Piper Jaffray (NYSE: PJC) | |
Audit Committee
| | Cash ($) | Restricted Stock Unit Awards ($) | | Board | | | | Chair | 160,000 | 160,000 | | Other Directors | 100,000 | 100,000 | | Audit Committee | | | | Chair | 10,000 | 10,000 | | Other Members | 5,000 | 5,000 | | Compensation Committee | | | | Chair | 6,250 | 6,250 | | Other Members | 3,750 | 3,750 | | Nominating and Corporate Governance Committee | | | | Chair | 6,250 | 6,250 | | Other Members | 3,750 | 3,750 |
Audit Committee
| Name | Fees Earned or Paid in Cash ($) | Stock Awards(1)(2) ($) | Total ($) | | Tanuja M. Dehne | 110,000 | 109,999 | 219,999 | | Stephen G. Kasnet | 170,000 | 324,998 | 494,998 | | Sheila K. McGrath | 108,750 | 108,748 | 217,498 | | W. Reid Sanders | 112,500 | 112,498 | 224,998 | | Hope B. Woodhouse | 111,250 | 111,250 | 222,500 |
Audit Committee
| Name | Restricted Stock Units | | Ms. Dehne | 35,256 | | Mr. Kasnet | 104,166 | | Ms. McGrath | 34,855 | | Mr. Sanders(a) | 36,057 | | Ms. Woodhouse | 35,657 |
Audit Committee
| EXECUTIVE COMPENSATION OVERVIEW | p. 39 | | • Program Evolution • Executive Compensation Components Awarded in 2024 • Supplemental Equity Awards Granted in 2024 • 2024 Target Pay Levels • Summary of Results Under Performance-Based Awards • Executive Officer Transitions and Related Compensation • Quality Compensation Practices | | | HOW EXECUTIVE COMPENSATION IS DETERMINED | p. 43 | | • Compensation Philosophy and Objectives • Roles and Responsibilities in Executive Compensation Decisions • Employment Agreements • Peer Group • Say on Pay Vote | | | EXECUTIVE COMPENSATION COMPONENTS | p. 46 | | • 2024 Base Salary • 2024 AIP Awards • LTIP Awards Granted in 2024 • 2022 PSU Award Results (2022-2024 Performance Period) • Benefits | |
Audit Committee
| EXECUTIVE COMPENSATION POLICIES AND PRACTICES | p. 57 | | • Stock Ownership Guidelines • Prohibition Against Hedging and Pledging • Equity Granting Practices • Clawback Policy • Compensation Risk Assessment | |
Audit Committee
| Named Executive Officer | 2024 Base Salary | Target AIP Award for 2024 Performance | Annual RSU Award Granted in March 2024 | Target PSU Award Granted in March 2024 | Supplemental RSU Award Granted in June 2024(1) | Target Total Direct Compensation | | John (“Jack”) A. Taylor | $1,000,000 | $1,000,000 | $1,125,000 | $1,125,000 | $800,000 | $5,050,000 | | Marcin Urbaszek(2) | $600,000 | $450,000 | $500,000 | $500,000 | $500,000 | $2,550,000 | | Stephen Alpart | $600,000 | $450,000 | $600,000 | $600,000 | $500,000 | $2,750,000 | | Peter Morral | $600,000 | $450,000 | $500,000 | $500,000 | $250,000 | $2,300,000 | | Steven Plust(3) | $600,000 | $450,000 | $500,000 | $500,000 | $250,000 | $2,300,000 |
Chief Financial Officer Transition in 2024
Chief Financial Officer Transition in 2024 On August 25, 2024, Marcin Urbaszek notified our Board that he intended to resign as Chief Financial Officer and Treasurer of our Company, effective December 1, 2024. In connection with Mr. Urbaszek’s resignation, Blake Johnson began working for our Company as Deputy Chief Financial Officer on October 4, 2024, and he assumed the role of Chief Financial Officer and Treasurer on December 1, 2024. From the inception of our Company in 2017 through 2020, Mr. Johnson had served in various roles at our Company as an employee of our Former Manager, most recently serving as our Controller, and played an integral role in establishing our finance, accounting and tax functions. Mr. Johnson’s employment agreement provides for an initial base salary of $500,000, a sign-on bonus of $110,000, a sign-on award of RSUs with a grant date fair value of $200,000, and eligibility to receive a cash bonus for 2024 of $250,000, which was paid in the first quarter of 2025. Beginning in 2025, Mr. Johnson will participate in the AIP instead of receiving non-formulaic cash bonuses. The sign-on cash and equity awards and the 2024 bonus paid in early 2025 were made as an inducement for Mr. Johnson join our Company and thereby forfeit unvested equity awards he had been granted by his previous employer and the potential for a cash bonus for his 2024 performance with that employer. The employment agreement also provided that Mr. Johnson’s equity award to be granted in early 2025 would have an aggregate value of $250,000 (which is significantly lower than the value granted to any other NEO in March 2024 or early 2025) and would be in the same split of 50% PSUs and 50% RSUs as our other executive officers would receive. More information about Mr. Johnson’s contract provisions is set forth following the Grants of Plan-Based Awards Table in this proxy statement. Mr. Urbaszek did not receive any payments following his departure other than accrued salary, and his outstanding equity awards have been forfeited. He was not eligible to receive an AIP payout in early 2025.
Upcoming Chief Operating Officer Transition
Upcoming Chief Operating Officer Transition On January 7, 2025, we announced that Steven Plust will resign from his role as Chief Operating Officer of our Company no later than May 1, 2025, and he will continue his employment with our Company as Senior Managing Director for a term that will end no later than December 31, 2027. Ethan Lebowitz, who had been working for our Company as a Managing Director focused on sourcing, originating and overseeing commercial mortgage loans, began serving as Deputy Chief Operating Officer effective January 7, 2025. Mr. Lebowitz will become our Chief Operating Officer when Mr. Plust resigns from that role, at which point Mr. Plust will no longer be an executive officer of our Company. Mr. Plust’s amended and restated employment agreement, which was effective on January 7, 2025, provides for an annual base salary of $500,000 starting in 2025 and eligibility to receive a cash bonus of $250,000 for 2024, which was paid in the first quarter of 2025, in lieu of payment of his 2024 AIP award. He will not receive any future AIP awards; his amended and restated employment agreement instead provides for opportunities to be paid non-formulaic cash bonuses for the remaining years of his employment, depending on his performance, with the maximum amounts of those bonuses decreasing each year. Mr. Plust is no longer eligible to receive equity awards and did not receive an award in early 2025 when grants were made to other executive officers. His outstanding equity awards will continue to be governed by the terms and conditions of the applicable plan and award agreement. Mr. Plust is also no longer eligible to receive severance payments upon any termination of employment. More information about Mr. Plust’s amended and restated employment agreement is set forth following the Grants of Plan-Based Awards Table in this proxy statement. QUALITY COMPENSATION PRACTICES
Upcoming Chief Operating Officer Transition
| What We Do | | | • A significant portion of each NEO’s compensation is at risk • We have adopted meaningful stock ownership requirements applicable to our NEOs • Our independent Compensation Committee retains an independent compensation consultant who provides no other services to our Company • Performance-based cash and equity awards have a sliding scale earn-out structure that allows for 0% payouts and is capped at 200% of target amounts • Our performance-based equity awards use both absolute and relative performance metrics • Our Compensation Committee conducts an annual compensation risk assessment • We hold an annual Say on Pay vote | |
Role of the Compensation Consultant
Role of the Compensation Consultant Our Compensation Committee engaged Semler Brossy Consulting Group LLC, or Semler Brossy, as its independent compensation consultant in 2019. Semler Brossy advises our Compensation Committee on market practices, peer group composition, executive compensation program design and executive pay levels. Semler Brossy also provides advice on setting compensation for independent directors. Semler Brossy does not provide any other services to our Company. Following a review of the relationship between our Company and Semler Brossy during 2024, our Compensation Committee concluded that Semler Brossy’s work did not raise any conflicts of interest.
2024 AIP Award Values
2024 AIP Award Values Each NEO’s target AIP award value was set in his respective employment agreement as a percentage of his base salary as follows, with an opportunity to earn 0% to 200% of the target value:
2024 AIP Award Values
| Named Executive Officer | 2024 Base Salary | Target Award Percentage | Minimum AIP Payout for 2024 Performance | Target AIP Payout for 2024 Performance | Maximum AIP Payout for 2024 Performance | | John (“Jack”) A. Taylor | $1,000,000 | 100% | $0 | $1,000,000 | $2,000,000 | | Marcin Urbaszek(1) | $600,000 | 75% | $0 | $450,000 | $900,000 | | Stephen Alpart | $600,000 | 75% | $0 | $450,000 | $900,000 | | Peter Morral | $600,000 | 75% | $0 | $450,000 | $900,000 | | Steven Plust(2) | $600,000 | 75% | $0 | $450,000 | $900,000 |
2024 AIP Award Values
Mr. Urbaszek resigned as our Chief Financial Officer effective December 1, 2024, and was not eligible to receive a payout under the AIP for 2024 performance. His successor, Blake Johnson, entered into an employment agreement that provided a cash bonus of $250,000 instead of an AIP award for 2024 performance. (2) Mr. Plust entered into an amended and restated employment agreement in connection with his upcoming transition out of the Chief Operating Officer role, under which he received a cash bonus of $250,000 for 2024 performance in lieu of his AIP award. Our Compensation Committee believes these award values appropriately reflect internal pay equity considerations, will motivate achievement of the performance goals described below and are competitive within the marketplace for talent, while the cap of 200% of target helps protect our Company against imprudent risk taking.
2024 AIP Award Structure – Measuring Corporate Performance
2024 AIP Award Structure – Measuring Corporate Performance The percentage of each NEO’s target award value earned was dependent on achievement of a mix of strategic objectives and financial metrics portrayed below: Our Compensation Committee assigned even weighting to the Strategic Component and Financial Component to recognize the value of both qualitative and quantitative measures of corporate performance and to incentivize a range of achievements relevant to our growing company’s long-term success. Detailed information about these performance goals and 2024 results follows.
Strategic Component of 2024 AIP Awards – Goals and Results
Strategic Component of 2024 AIP Awards – Goals and Results Our Compensation Committee established specific assessment factors for each of the strategic objectives in the AIP awards for 2024, as follows:
Strategic Component of 2024 AIP Awards – Goals and Results
| Objective | Percentage of Strategic Component | Summary of Assessment Factors | | Balance sheet management | 30% | • Create a diversified and stable funding profile • Maintain appropriate balance sheet leverage • Actively manage corporate liquidity and comply with financial covenants • Grow equity capital to achieve economies of scale, larger market presence and increasing liquidity for stockholders | | Risk management | 30% | • Use a comprehensive risk management framework to mitigate various risks, including credit risk, financing and liquidity risk, internal control and operational risk, and IT infrastructure and cybersecurity risk • Assess business counterparties | | Stockholder/investor focus | 20% | • Generate detailed, transparent and accurate public company disclosures • Engage equity and debt investors through a robust investor relations program • Attend various equity and fixed income industry conferences and execute marketing efforts | | Enhancing franchise value | 20% | • Enhance the Company’s brand and presence in the CRE market to further growth opportunities • Maintain a first-class team with highly skilled and experienced professionals with broad CRE lending relationships • Expand the Company’s reputation in the market as a fair and reliable business counterparty |
Strategic Component of 2024 AIP Awards – Goals and Results
The NEOs are evaluated collectively with respect to their performance against these objectives. To the extent that achievement of any of these qualitative metrics exceeded the target level of performance, our Compensation Committee had the discretion under the AIP to apply an aggregate multiplier of between one and two based on the actual achievement of the qualitative metric above target. To the extent that achievement of any of these qualitative metrics fell below the target level of performance, our Compensation Committee had the discretion under the AIP to apply an aggregate multiplier of between zero and one based on the actual achievement of the qualitative metric below target. At the conclusion of the one-year performance period, our Compensation Committee conducted a thorough assessment of our executive team’s performance against the factors set forth above. The committee considered the challenging interest rate and capital markets environment that adversely affected our Company and the CRE industry as a whole during 2024. The committee also weighed whether the objectives that will position our Company for long-term success had been achieved. The committee’s performance assessment for the 2024 AIP’s Strategic Component is summarized below:
Strategic Component of 2024 AIP Awards – Goals and Results
| 2024 PERFORMANCE ASSESSMENT OF STRATEGIC FACTORS | | | Balance Sheet Management (30% of Strategic Component) | • Proactively managed our investment portfolio, producing $411 of loan repayments and paydowns as well as $312 million of loan resolutions over nine assets; each of the nine resolutions involved highly technical and complex factors to mitigate realized losses • Actively partnered with our lending counterparties to structure financings of our REO assets through the repurchase facilities at a lower cost of capital than available on nonperforming lines • Retained valuable CRE collateralized loan obligation liabilities through creative restructuring of certain loans • Extended the maturities of several of our bank financing facilities and renegotiated certain terms, as our lenders continue to support our platform and seek to do more business with us • Actively renegotiated expenses with key vendors to reduce our operating expenses • Continued to comply with our covenants and actively managed our balance sheet given the ongoing market uncertainty and volatility | | Risk Management (30% of Strategic Component) | • Actively managed our liquidity and funding sources while maintaining an active dialogue with our lending counterparties to ensure they have up-to-date information regarding our loan performance • Actively managed our portfolio and collaboratively worked with our borrowers to help them navigate any disruptions due to market dislocations; closed on 68 modifications, which helped us realize a healthy volume of loan repayments and minimized potential credit losses to protect investors’ capital • Oversaw a fully dedicated team of professionals at our sub-servicer, who are focused exclusively on servicing and assisting in asset managing our loan portfolio • Maintained active oversight of our internal controls and operations processes to ensure accurate financial reporting that meets all regulatory requirements • Maintained a sophisticated and secure IT infrastructure environment through our master service provider, and maintained cybersecurity insurance coverage | | | (continued) |
Strategic Component of 2024 AIP Awards – Goals and Results
| 2024 PERFORMANCE ASSESSMENT OF STRATEGIC FACTORS, cont’d | | | Stockholder/ Investor Focus (20% of Strategic Component) | • Engaged with many equity and fixed income investors through targeted outreach, holding one-on-one meetings, and attending six real estate lending industry and equity/fixed income investor conferences • Maintained a dialogue with our largest institutional investors focused on corporate governance topics and executive compensation • Continued to evolve our proxy disclosure, aimed at improving communication related to executive compensation and other topics • Further improved and expanded the financial disclosures in our quarterly SEC filings with the goal of providing a more informed view of the business • Continued to improve our corporate website with the goal of expanding the discussion of the business and highlighting our corporate governance initiatives • Maintained an active dialogue with research analysts to help expand their knowledge and understanding of our Company and business strategy | | Enhancing Franchise Value (20% of Strategic Component) | • Maintained our highly capable team, both with respect to loan originations and asset management as well as in the legal and financial reporting functions • Prepared smooth transitions of both the Chief Financial Officer and Chief Operating Officer roles • Preserved our franchise value by maintaining positive borrower relationships, collaboratively working with our borrowers during a challenging market environment • Maintained our presence in the CRE lending markets through an active dialogue with industry participants despite a very large decrease in transaction volumes across the real estate market • Attended many industry conferences focused on the commercial real estate market, further solidifying our brand • Maintained an active dialogue with our capital providers and intermediaries in the equity and fixed income markets with the goal of developing new and preserving existing relationships and channels to access capital to support future growth of the business • Further solidified our dedicated asset management function responsible for day-to-day credit surveillance of our portfolio, management of the sub-servicer relationships, and additional oversight of securitization activities by redeploying our team |
Strategic Component of 2024 AIP Awards – Goals and Results
Following this review, our Compensation Committee determined that the NEOs had achieved the objectives of the Strategic Component of the 2024 AIP awards at target levels of performance, or 100%.
Financial Component of 2024 AIP Awards – Goals and Results
Financial Component of 2024 AIP Awards – Goals and Results The Financial Component of the 2024 AIP awards was split evenly between the performance metrics “Run-rate” ROAE and Change in Book Value per Share. We believe that those two metrics are the most significant drivers of market valuation in our industry, thus aligning the NEOs’ compensation to our stockholders’ interests. “Run-rate” ROAE is calculated as the ratio of (i) our Company’s Distributable Earnings (Loss) Before Realized Gains and Losses generated during the performance period, as reported in our Company’s publicly filed financial reports, to (ii) our Company’s average common stockholders’ equity during the performance period, as measured on each of the first and last day of the period. Our AIP awards for 2021 and 2022 used “Core” ROAE, which is the ratio of Distributable Earnings (Loss) to stockholders’ equity. We used Distributable Earnings (Loss) in this calculation instead of GAAP income (loss) because Distributable Earnings (Loss), which excludes the effects of certain non-cash items and one-time charges that we believe are not indicative of our Company’s overall operating performance, is a better measure of a commercial mortgage REIT’s operating performance. Distributable Earnings (Loss) is intended to over time serve as a general, though imperfect, proxy for our taxable income. As such, Distributable Earnings (Loss) is considered a key indicator of our ability to generate sufficient income to pay our dividends, which is the primary focus of income-oriented investors who comprise a meaningful segment of our stockholder base. Starting in 2023 and continuing with the 2024 AIP awards, our Compensation Committee adjusted the ratio used in prior AIP awards by replacing Distributable Earnings (Loss) with Distributable Earnings (Loss) Before Realized Gains and Losses, which excludes realized losses or realized gains related to credit events, asset sales and similar developments within our Company’s portfolio or borrowings. The resulting metric is “Run-rate” ROAE. Our Compensation Committee made this change from “Core” ROAE to “Run-rate” ROAE to reduce the effects of market volatility on the metric and portray results that the committee believes offer a stronger indication of management’s operating performance. For additional information, see Appendix A – Definitions and Calculation of Non-GAAP Measures. Our Compensation Committee selected “Run-rate” ROAE as one of the two financial metrics to be used in the 2024 AIP awards because it is an important valuation metric for commercial mortgage REITs like our Company that reflects efficient use of investors’ capital and management’s sound investment decisions. “Run-rate” ROAE emphasizes the efficient generation of earnings from our Company’s equity capital that can be distributed to our Company’s stockholders as dividends, substantially reflects performance over time and encompasses all aspects of investment activities, including interest income received on loans net of borrowing costs, as well as realized gains and losses on investments, if any. Change in Book Value per Share is calculated as the difference between (i) our Company’s total common stockholders’ equity divided by the number of common shares outstanding as measured on the first day of the performance period and (ii) our Company’s total common stockholders’ equity divided by the number of common shares outstanding as measured on the last day of the performance period. For additional information, see Appendix A – Definitions and Calculation of Non-GAAP Measures. Our Compensation Committee added Change in Book Value per Share as a second metric to the AIP award structure starting in 2023 in part to diversify the program (which had used absolute and relative “Core” ROAE for the financial component of previous awards). Our Compensation Committee believed that such diversification of financial metrics would result in more balanced compensation incentives and reduce risk. Change in Book Value per Share was selected as the second metric because book value is linked to investor returns, it reflects the stability of our Company’s investment portfolio and effective balance sheet management, and it accounts for credit losses in a way that is less volatile than in an earnings-based metric. Our Compensation Committee established the following payout matrix to determine achievement under the Financial Component of the 2024 AIP awards. The percentage earned is to be linearly interpolated when the level of performance is between threshold and target levels or between target and maximum levels.
Financial Component of 2024 AIP Awards – Goals and Results
| | | | | | | Level of Performance | “Run-rate” ROAE | Percentage Earned | | | Below Threshold | <2.0% | 0% of Target | | | Threshold | 2.0% | 25% of Target | | | Target | 4.0% | 100% of Target | | | Maximum | ≥8.0% | 200% of Target | | | Actual | (1.2%) | 0% of Target |
Financial Component of 2024 AIP Awards – Goals and Results
| | | | | | | Level of Performance | Change in Book Value per Share | Percentage Earned | | | Below Threshold | <(15.0)% | 0% of Target | | | Threshold | (15.0%) | 25% of Target | | | Target | (5.0%) | 100% of Target | | | Maximum | ≥15.0% | 200% of Target | | | Actual | (34.4%) | 0% of Target |
Financial Component of 2024 AIP Awards – Goals and Results
As indicated above, our Company’s actual “Run-rate” ROAE for 2024 was (1.2%), which is below the threshold level of performance for that metric. Our 2024 “Run-rate” ROAE performance was challenged by our decreasing investment portfolio balance, our loans on nonaccrual status and our high cost of funding. Our Company’s Change in Book Value per Share from 2023 to 2024 was (34.4%), which was below the threshold level of performance for that metric. Increased provision for credit losses recorded during 2024 and distributions in excess of GAAP earnings put downward pressure on our book value per share. The total Financial Component of the 2024 AIP awards was achieved at 0% of target, as shown below:
Financial Component of 2024 AIP Awards – Goals and Results
| Total Financial Component Results | | | | | | “Run-Rate” ROAE Percentage Earned (50% weighting) | Change in Book Value per Share Percentage Earned (50% weighting) | Total Percentage Earned | | | 0% of Target | 0% of Target | 0% of Target |
2024 AIP Award Payouts
2024 AIP Award Payouts The 100% of target earned from the Strategic Component combined with the 0% of target earned from the Financial Component resulted in 2024 AIP payouts equal to 50% of each NEO’s respective target award, as shown below:
2024 AIP Award Payouts
| 2024 AIP Award Payouts | | | | | | Strategic Component Percentage Earned (50% weighting) | Financial Component Percentage Earned (50% weighting) | Total Award Percentage Earned | | | 100% of Target | 0% of Target | 50% of Target |
2024 AIP Award Payouts
The dollar amounts paid to the NEOs in early 2025 for the 2024 AIP awards are reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table and reflected below:
2024 AIP Award Payouts
| Named Executive Officer | AIP Award Payout for 2024 Performance | Notes | | John (“Jack”) A. Taylor | $500,000 | | | Marcin Urbaszek | $0 | Mr. Urbaszek did not receive an AIP payout for 2024 because he was no longer employed by our Company when the payments were made in early 2025. | | Blake Johnson | $0 | Under his employment agreement, Mr. Johnson received a $250,000 cash bonus for 2024, paid in the first quarter of 2025, in addition to a sign-on bonus of $110,000 (both reported in the “Bonus” column of the Summary Compensation Table). These cash awards were made as an inducement for Mr. Johnson to join our Company and thereby forfeit the potential for a cash bonus for his 2024 performance from his previous employer. He is participating in the AIP for 2025 performance. | | Stephen Alpart | $225,000 | | | Peter Morral | $225,000 | | | Steven Plust | $0 | Mr. Plust received a cash bonus of $250,000 for his 2024 performance, paid in the first quarter of 2025 (reported in the “Bonus” column of the Summary Compensation Table), in lieu of his AIP award payout. He no longer participates in the AIP but is eligible under his amended and restated contract, depending on his performance, for annual non-formulaic bonus payments of decreasing maximum amounts. |
2024 AIP Award Payouts
LTIP AWARDS GRANTED IN 2024 In early 2024, our Compensation Committee granted the NEOs employed by our Company at the time long-term incentive awards under our 2022 Omnibus Incentive Plan to reward key drivers of stockholder value and foster a sense of ownership and commitment to our Company’s long-term success. In addition to these annual LTIP awards, our Compensation Committee granted the NEOs supplemental RSUs in June 2024. The 2024 award values are as follows:
2024 AIP Award Payouts
| Named Executive Officer | Annual RSU Award (March 2024) | Annual PSU Award at Target (March 2024) | Supplemental RSU Award(1) (June 2024) | Total 2024 LTIP Award | | John (“Jack”) A. Taylor | $1,125,000 | $1,125,000 | $800,000 | $3,050,000 | | Marcin Urbaszek | $500,000 | $500,000 | $500,000 | $1,500,000 | | Stephen Alpart | $600,000 | $600,000 | $500,000 | $1,700,000 | | Peter Morral | $500,000 | $500,000 | $250,000 | $1,250,000 | | Steven Plust | $500,000 | $500,000 | $250,000 | $1,250,000 |
2024 AIP Award Payouts
Our Compensation Committee determined the number of RSUs granted on June 21, 2024, based on the average closing share price over the 20-trading-day period that ended on June 18, 2024, which was $3.12. The grant date value of these awards reported in the Summary Compensation Table is lower than the dollar amount listed here because the closing share price on June 21, 2024, was $3.05. Factors influencing the size of each executive’s annual LTIP award include job responsibilities and performance, retention considerations, internal pay equity within the executive group, and market competitiveness. In comparison to their 2023 annual awards, the grant date value of the NEOs’ individual 2024 annual LTIP stayed the same for our CEO and one other NEO, increased modestly for one NEO, and decreased for the other two NEOs. The aggregate value of all the NEOs’ annual awards was down in 2024 from 2023. The even split of the NEOs’ annual LTIP target value between performance-based and time-based awards is designed to motivate achievement of financial objectives while encouraging retention and stock ownership. The ultimate value of both the PSUs and the RSUs is dependent on our long-term success as reflected in the price of our Company’s common stock. In June 2024, our Compensation Committee decided to supplement the annual LTIP awards with grants of additional RSUs out of concern for the low retentive value of the NEOs’ outstanding equity awards. See “Supplemental Equity Awards Granted in 2024” above for more detailed information about the Compensation Committee’s deliberative process and rationale for the supplemental awards. The annual awards granted in early 2025 reverted to our standard mix of 50% PSUs and 50% RSUs, and our Compensation Committee does not plan to make future off-cycle grants. When Mr. Johnson joined our Company in October 2024, he received an award of RSUs with a grant date value of $200,000. These RSUs vest ratably over three years and were provided in his employment agreement as an inducement to join our Company, thereby forfeiting unvested equity he had been granted by his previous employer. The employment agreement also provided that Mr. Johnson’s equity award to be granted in early 2025 would have an aggregate value of $250,000 (which is significantly lower than the value granted to any other NEO in March 2024 or early 2025) and would be in the same split of 50% PSUs and 50% RSUs as our other executive officers would receive. The treatment of these awards upon an NEO’s termination of employment in connection with death, disability, retirement or a change of control of our Company is described in detail in “Executive Compensation – Potential Payments Upon Termination or Change of Control” later in this proxy statement. The award agreements provide for “double trigger” vesting, meaning that vesting is not accelerated upon a change of control unless the change of control is accompanied by a qualifying termination of employment.
2024 RSU Awards
2024 RSU Awards The RSUs granted to the NEOs in March 2024 and the RSUs granted to Mr. Johnson when he joined our Company in October 2024 vest ratably over a three-year period from the grant date, and the supplemental RSUs granted to the NEOs in June 2024 cliff-vest three years after the grant date. The RSU awards are accompanied by DERs that, upon the payment of any dividend (other than non-cash extraordinary dividends) by our Company to its common stockholders, pay out with respect to all outstanding RSUs.
2024 PSU Awards (2024-2026 Performance Period)
2024 PSU Awards (2024-2026 Performance Period) The PSU awards granted to the NEOs in March 2024 have a three-year performance period of January 1, 2024, through December 31, 2026. All the PSUs that have been earned through satisfaction of the applicable performance metrics will vest at the conclusion of the performance period on a one-for-one basis of one share of common stock per PSU, subject to the NEO’s continued employment and other terms and conditions contained in the respective award agreement. The percentage of the target number of PSUs granted in 2024 that will be earned is dependent on our Company’s absolute and relative performance with respect to “Run-Rate” ROAE and Change in Book Value per Share during the three-year performance period, with each measure weighted at 25%. Actual units earned will be between 0% and 200% of target levels. The significance and calculation of both “Run-Rate” ROAE and Change in Book Value per Share are described above under “2024 AIP Awards.” We believe that they are critical metrics for our Company and its stockholders, and our Compensation Committee used them to measure corporate performance on both an annual and long-term basis to align pay and performance. For the PSU awards, the Committee included relative measures that are weighted evenly with the absolute measures to account for independent economic and real estate market forces over the three-year performance period while aligning the NEOs’ focus on execution of our Company’s long-term plan. To measure relative “Run-Rate” ROAE and relative Change in Book Value per Share performance, our Company’s absolute result for each metric is compared to the respective results of a comparator group of companies that share the following characteristics: • All are mortgage REITs; • All have investment portfolios focused on commercial mortgages; • They constitute our Company’s primary public commercial mortgage REIT competitors for investment; • They have long-term capital and return profiles similar to our Company’s profiles; and • External market conditions generally affect them in ways similar to how our Company is affected. The comparator group that will be used to measure relative results for the PSU awards granted in 2024 consists of the following companies: • ACRES Commercial Realty Corp. • Apollo Commercial Real Estate Finance, Inc. • Ares Commercial Real Estate Corp • Blackstone Mortgage Trust, Inc. • BrightSpire Capital, Inc. • KKR Real Estate Finance Trust Inc. • Ladder Capital Corp • TPG RE Finance Trust, Inc. The performance goals for the PSUs granted in early 2024 are set forth below. The specific threshold, target and maximum values for absolute “Run-Rate” ROAE and absolute Change in Book Value per Share will not be publicly disclosed until the three-year performance period is completed due to the proprietary nature and competitive sensitivity of that information. The target values for these metrics are intended to be challenging but achievable. There is a 0% earnout for performance below threshold levels, and earnouts for performance in excess of the maximum levels are capped at 200%; earnouts for performance between threshold and target levels or target and maximum levels will be calculated through linear interpolation.
2024 PSU Awards (2024-2026 Performance Period)
| Absolute “Run-Rate” ROAE (25%) | | Relative “Run-Rate” ROAE (25%) | | | Performance | Percentage Earned | Performance | Percentage Earned | | Target value -2% | 25% of target (threshold) | 25th percentile | 25% of target (threshold) | | Target value | 100% of target | 50th percentile | 100% of target | | Target value +3% | 200% of target (maximum) | 75th percentile | 200% of target (maximum) |
2024 PSU Awards (2024-2026 Performance Period)
| Absolute Change in Book Value per Share (25%) | | Relative Change in Book Value per Share (25%) | | | Performance | Percentage Earned | Performance | Percentage Earned | | Target value -10.0% | 25% of target (threshold) | 25th percentile | 25% of target (threshold) | | Target value | 100% of target | 50th percentile | 100% of target | | Target value +10.0% | 200% of target (maximum) | 75th percentile | 200% of target (maximum) |
2024 PSU Awards (2024-2026 Performance Period)
The PSU awards are accompanied by DERs that accrue during the performance period but are paid out upon vesting only with respect to shares that have been earned through satisfaction of the performance metrics. Upon the payment of any dividend (other than non-cash extraordinary dividends) by our Company to its common stockholders, DERs accrue with respect to all outstanding PSUs. No DERs are paid out with respect to shares not earned or PSUs that have terminated before vesting. 2022 PSU AWARD RESULTS (2022-2024 PERFORMANCE PERIOD) The results for the PSUs granted in 2022 are shown below. They were calculated by comparing actual average corporate performance for each metric for the performance period of January 1, 2022, through December 31, 2024, against the performance goals established by our Compensation Committee near the beginning of the performance period. The PSUs granted in 2022 differ from the ones granted in 2024, described above, in that the performance metrics were absolute and relative “Core” ROAE, weighted equally. “Core” ROAE is calculated as the ratio of (i) our Company’s Distributable Earnings (Loss) generated during the performance period to (ii) our Company’s average common stockholders’ equity during the performance period, as measured on each of the first and last day of the period. For these purposes, Distributable Earnings (Loss) are as reported in our Company’s publicly filed financial reports, excluding the effects of certain non-cash items and one-time charges that we believe are not indicative of our Company’s overall operating performance. For additional information, see Appendix A – Definitions and Calculation of Non-GAAP Measures. The comparator companies used to measure relative “Core” ROAE results are the same as those listed above with respect to the PSUs granted in 2024.
2024 PSU Awards (2024-2026 Performance Period)
| | | | | | | Level of Performance | Absolute “Core” ROAE | Percentage Earned | | | Below Threshold | <5.5% | 0% of Target | | | Threshold | 5.5% | 25% of Target | | | Target | 7.0% | 100% of Target | | | Maximum | ≥8.5% | 200% of Target | | | Actual | (9.2)% | 0% of Target |
2024 PSU Awards (2024-2026 Performance Period)
| | | | | | | Level of Performance | Relative “Core” ROAE | Percentage Earned | | | Below Threshold | <25th percentile | 0% of Target | | | Threshold | 25th percentile | 25% of Target | | | Target | 50th percentile | 100% of Target | | | Maximum | ≥75th percentile | 200% of Target | | | Actual | <25th percentile | 0% of Target |
2024 PSU Awards (2024-2026 Performance Period)
| PSU Awards Vested (2022-2024 Performance Period) | | | | | | Absolute “Core” ROAE (50% weighting) | Relative “Core” ROAE (50% weighting) | Total Award Percentage Earned | | | 0% of Target | 0% of Target | 0% of Target |
2024 PSU Awards (2024-2026 Performance Period)
As indicated above, the Company’s actual average “Core” ROAE for the three-year performance period that ended on December 31, 2024, was (9.2)% (below the threshold level for the absolute measure), which was outside the range of the comparator companies’ results (i.e., below the threshold level for the relative measure). Consequently, 0% of the target number of PSUs granted in 2022 were earned, no shares were issued to the NEOs upon the awards’ settlement in early 2025, and no DERs were paid. BENEFITS Our NEOs receive the same benefits package available to our other employees, which consists primarily of health and wellness offerings, a 401(k) savings plan with a Company contribution and paid time off. Executive Compensation Policies and Practices STOCK OWNERSHIP GUIDELINES Our Compensation Committee believes that ownership of our Company’s common stock by our executive officers directly aligns their interests with those of our other stockholders and helps balance the incentives for risk taking inherent in equity-based awards. Accordingly, our Compensation Committee has adopted the following stock ownership guidelines:
2024 PSU Awards (2024-2026 Performance Period)
| Executive Officer | Minimum Ownership Level | | Chief Executive Officer | Market value of stock held ≥5x base salary | | Other executive officers | Market value of stock held ≥3x base salary |
2024 PSU Awards (2024-2026 Performance Period)
All outstanding shares and unvested RSUs are included in determining whether an executive officer satisfies the applicable minimum ownership level. Shares underlying unvested PSUs are not included. An executive officer is expected to attain the minimum ownership level within five years of appointment. If the minimum amount is not attained by such date – or is not maintained after such date – the officer is expected to retain at least 75% of the shares issued upon settlement of equity awards (net of shares withheld to satisfy tax obligations) until attaining the ownership level. Our Compensation Committee reviews executive stock ownership annually to confirm compliance with these ownership and retention requirements. PROHIBITION AGAINST HEDGING AND PLEDGING Our Board has adopted, as part of our Insider Trading Policy, prohibitions against our officers, directors and employees engaging in transactions designed to profit from fluctuations in the price of our securities, such as short sales or purchasing our securities on margin. In addition, such persons are prohibited from purchasing or selling puts or calls or other derivative securities on our securities, pledging our securities as collateral for a loan, or entering into hedging or monetization transactions or similar arrangements with respect to our securities. EQUITY GRANTING PRACTICES Our Compensation Committee does not grant equity awards in anticipation of the release of material nonpublic information. In addition, no stock options or other option-like instruments have been granted by our Company, and we have no plans to grant stock options or other option-like instruments. CLAWBACK POLICY In compliance with the NYSE listing standards issued in connection with the SEC rules promulgated under the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, our Compensation Committee adopted a Clawback Policy in October 2023 that supersedes the clawback provisions contained in our 2017 Equity Incentive Plan and 2022 Omnibus Incentive Plan. The Clawback Policy provides that upon a required accounting restatement, any incentive-based compensation received by current or former executive officers during the three years preceding the restatement that exceeded amounts owed based on the restated financials will be recovered by the Company. COMPENSATION RISK ASSESSMENT Our Compensation Committee reviewed our Company’s compensation programs and plans for both executive officers and other employees in early 2025 to assess whether those programs and plans create incentives for risk-taking behavior that could damage our Company and its stockholders. Following this assessment, our Compensation Committee concluded that the risks arising from our Company’s compensation programs and plans for executive officers and other employees are not reasonably likely to have a material adverse effect on our Company. When making this determination, our Compensation Committee specifically considered the following features of our executive compensation program:
2024 PSU Awards (2024-2026 Performance Period)
| Risk-Mitigating Features of Executive Compensation Program | | | • Earnout of performance-based equity (PSU) and annual cash (AIP) awards is capped at 200% of target • Performance-based awards have a sliding scale earnout structure, not an all-or-nothing structure • A significant percentage of the executives’ total direct compensation is paid as equity with three-year vesting • PSUs have a three-year performance period • All officers and employees are prohibited from hedging Company securities through our Insider Trading Policy • Executive stock ownership levels and retention requirements are governed by stock ownership guidelines • Performance-based awards use multiple performance metrics, both absolute and relative • Our clawback policy requires recoupment of excess cash or equity paid pursuant to incentive-based awards upon a financial restatement | |
2024 PSU Awards (2024-2026 Performance Period)
Compensation Committee Report Compensation Committee Report Our Compensation Committee has reviewed and discussed the “Compensation Discussion and Analysis” required by Item 402(b) of Regulation S-K with management. Based on such review and discussions, our Compensation Committee recommended to our Board that the “Compensation Discussion and Analysis” be included in this proxy statement. Submitted by the Compensation Committee of the Company’s Board: Hope B. Woodhouse (Chair) Tanuja M. Dehne Patrick G. Halter Summary Compensation Table The following table shows the cash and equity compensation awarded to or earned by our NEOs for services rendered to us during the fiscal years presented:
2024 PSU Awards (2024-2026 Performance Period)
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards(1) ($) | Non-Equity Incentive Plan Compensation(2) ($) | All Other Compensation(3) ($) | Total ($) | | John (“Jack”) A. Taylor President and Chief Executive Officer | 2024 | 1,000,000 | — | 3,032,044 | 500,000 | 13,550 | 4,545,594 | | | 2023 | 1,000,000 | — | 2,249,997 | 786,923 | 12,900 | 4,049,820 | | | 2022 | 1,000,000 | — | 2,249,979 | 500,000 | 12,150 | 3,762,129 | | Marcin Urbaszek(4) Former Vice President, Chief Financial Officer and Treasurer | 2024 | 550,000 | — | 1,488,776 | — | 13,283 | 2,052,059 | | | 2023 | 600,000 | — | 969,998 | 354,115 | 12,900 | 1,937,013 | | | 2022 | 560,000 | — | 969,980 | 210,000 | 12,150 | 1,752,130 | | Blake Johnson(5) Vice President, Chief Financial Officer and Treasurer | 2024 | 119,318 | 360,000 | 200,000 | — | 7,680 | 686,998 | | Stephen Alpart Vice President and Chief Investment Officer | 2024 | 600,000 | — | 1,688,781 | 225,000 | 13,550 | 2,527,331 | | | 2023 | 600,000 | — | 1,199,994 | 354,115 | 12,900 | 2,167,009 | | | 2022 | 600,000 | — | 1,199,984 | 225,000 | 12,150 | 2,037,134 | | Peter Morral Vice President and Chief Development Officer | 2024 | 600,000 | — | 1,244,386 | 225,000 | 10,350 | 2,079,736 | | | 2023 | 600,000 | — | 1,199,994 | 354,115 | 9,900 | 2,164,009 | | | 2022 | 600,000 | — | 1,199,984 | 225,000 | 9,150 | 2,034,134 | | Steven Plust(6) Vice President and Chief Operating Officer | 2024 | 600,000 | 250,000 | 1,244,386 | — | 13,550 | 2,107,936 | | | 2023 | 600,000 | — | 1,199,994 | 354,115 | 12,900 | 2,167,009 | | | 2022 | 600,000 | — | 1,199,984 | 225,000 | 12,150 | 2,037,134 |
Other Terms
| Year | Summary Compensation Table Total for PEO(1) ($) | Compensation Actually Paid to PEO(2) ($) | Average Summary Compensation Table Total for Non-PEO NEOs(3) ($) | Average Compensation Actually Paid to Non-PEO NEOs(2) ($) | Value of Initial Fixed $100 Investment Based On: | | Net Income (Loss) (in thousands)(6) ($) | “Run- rate” ROAE7(8) | | | | | | | Total Shareholder Return(4) ($) | Peer Group Total Shareholder Return(5) ($) | | | | 2024 | 4,545,594 | 1,326,969 | 1,731,682 | 773,976 | 25.13 | 79.96 | (207,051) | (1.2%) | | 2023 | 4,049,820 | 4,599,551 | 2,108,760 | 2,403,221 | 49.26 | 79.79 | (63,198) | 5.2% | | 2022 | 3,762,129 | 219,887 | 1,965,133 | 170,832 | 38.30 | 69.27 | (40,825) | 5.0% | | 2021 | 4,730,154 | 5,205,864 | 2,333,208 | 2,602,997 | 74.00 | 94.05 | 68,353 | 7.0% | | 2020 | 3,199,995 | 1,921,617 | 1,682,491 | 1,116,462 | 58.43 | 81.38 | (40,439) | 8.4% |