DEF 14A of Cherry Hill Mortgage Investment Corp
Filed Apr 29, 2024 · FY20230001140361-24-023040
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS The Board has fixed the number of directors at four. The four persons named below (each, a “director nominee”) currently serve on the Board and have been recommended by the Nominating and Corporate Governance Committee and nominated by the Board to serve on the Board until our 2024 Annual Meeting of Stockholders and until their respective successors are elected and qualified. The Board has no reason to believe that any of the director nominees will be unable, or will decline, to serve if elected. If any director nominee is unable to stand for election, the persons appointed to vote your proxy may vote at the Annual Meeting for another candidate proposed by the Board, or the Board may choose to reduce the size of the Board, provided that we continue to have a majority of independent directors following any such reduction. In addition, the Board has determined that all of the director nominees, other than Mr. Lown, are independent under applicable rules of the U. S. Securities and Exchange Commission (the “SEC”) and the New York Stock Exchange (the “NYSE”).
Director Nominees
Director Nominees The following table sets forth the name, position with our Company and age at the Annual Meeting of each director nominee:
Director Nominees
| Name | Position | Age | | Jeffrey B. Lown II | President and Chief Executive Officer | 60 | | Robert C. Mercer, Jr. | Independent Director | 76 | | Joseph P. Murin | Independent Director | 74 | | Sharon L. Cook | Independent Director | 64 |
Director Nominees
We believe that all of the director nominees are intelligent, experienced and proactive with respect to management and risk oversight, and that they exercise good judgment. The biographical descriptions below set forth certain information with respect to each director nominee, including the experience, qualifications, attributes or skills of each director nominee that led us to conclude that such person should serve as a director. Jeffrey B. Lown II has served as our President and as a director since the completion of our initial public offering in October 2013 and as our Chief Executive Officer since March 2017. Mr. Lown also served as our Chief Investment Officer through March 2016, at which time Julian Evans was appointed as Chief Investment Officer. Mr. Lown has over 25 years of combined experience in the financial services industry and the residential mortgage markets. Mr. Lown has been employed by Freedom Mortgage Corporation (“Freedom Mortgage”) since April 2012 and served as Executive Vice President in charge of strategic funding projects and capital markets until July 2016, at which time he began to focus his full-time efforts on us and the management of our business. Prior to joining Freedom Mortgage, Mr. Lown served as a Portfolio Manager at Avenue Capital Group from April 2011 to January 2012. Prior to co-founding and serving as a principal of Green Lake Investment Partners, LLC in the fall of 2010, Mr. Lown spent 11 months at New Oak Capital LLC as head of the residential mortgage loan business and as a member of the bank advisory group. Prior to joining New Oak Capital, Mr. Lown was a fellow at the Office of Thrift Supervision (the “OTS”), from March 2008 through September 2009. At the OTS, he served as an advisor to the Senior Deputy Director’s office and focused on residential mortgage loan origination and residential asset valuation and RMBS. Noteworthy assignments included participating in the creation of the Obama administration’s “Making Home Affordable” modification program, the review of TARP Capital Purchase Program applications for OTS thrifts and working with the Acting Deputy Director of Examinations, Supervision, and Consumer Protection and regional staff on troubled institutions. Before OTS, from April 2002 to March 2008, Mr. Lown worked at UBS Securities LLC in mortgage trading. While at UBS Securities, Mr. Lown managed an internal mortgage origination platform specializing in Alt-A mortgage loans, overseeing all units within the organization, including sales, capital markets and operations. Mr. Lown began his career at Salomon Brothers (now Citigroup) in 1991, where he spent 11 years working for the mortgage trading desk. The last six years at Citigroup were in the Mortgage Finance Group where Mr. Lown held several positions both in investment banking and mortgage finance roles. While serving in these positions, he developed strong credit, contract finance and securitization skills. As a consequence of Mr. Lown’s more than 25 years’ experience in the residential mortgage markets, the Board, upon the recommendation of the Nominating and Corporate Governance Committee, believes that he is well qualified to provide valuable advice in many important areas and that he should serve as a director. Robert C. Mercer, Jr. has served as a director, chairperson of the Audit Committee and member of the Compensation Committee and Nominating and Corporate Governance Committee since March 15, 2017. Mr. Mercer has over 40 years of management and executive experience in generating and servicing consumer loans and mortgages. From July 2009 to March 2017, Mr. Mercer served as a Senior Examiner/Subject Matter Expert —Credit Risk, Operations and Counterparty Management at the Federal Housing Finance Agency (“FHFA”) in Washington, D.C. At FHFA, Mr. Mercer monitored Freddie Mac’s seller/servicer and mortgage insurance counterparty risk analysis focusing on concentration of risk, regulatory risk and servicing transfer approvals. He also monitored Freddie Mac’s credit loss forecasting and loan loss reserve adequacy for its single family and multifamily loan portfolios. Prior to his work at FHFA, Mr. Mercer’s experience included managing problem portfolio workouts, managing due diligence processes involving mergers and acquisitions, purchasing mortgage portfolios and developing or enhancing profit and risk models to improve portfolio predictability and profitability. In addition to his operational experience, he also has an extensive credit risk background, having been Chief Credit Officer of Citicorp National Services. Mr. Mercer has been involved in all aspects of credit risk management, including the development of proprietary score cards. As President of American Equity Mortgage, Inc. in St. Louis, Missouri, Mr. Mercer was responsible for expanding the retail branch network and improving operational efficiencies. Mr. Mercer has held senior executive and management positions in consumer lending at a series of financial institutions that ultimately became part of National City Bank, including Equibank, Integra Bank and Altegra Credit Company. Prior to that, Mr. Mercer held positions at Citicorp and Valley National Bank in Phoenix, Arizona after beginning his career spending thirteen-years at Ford Motor Credit Company. Mr. Mercer brings to the Board over 40 years of experience in the consumer lending and mortgage industry sectors. Due to the depth and extent of his financial and credit risk management experience, the Board, upon the recommendation of the Nominating and Corporate Governance Committee, believes that he should serve as a director. Joseph Murin has served as a director, chairperson of the Nominating and Corporate Governance Committee and member of the Audit Committee and Compensation Committee since the completion of our initial public offering in October 2013. Since September 2009, Mr. Murin has served as the Chairman of The Collingwood Group LLC, a Washington, D.C.-based strategic investment and advisory firm serving the financial services industry that he cofounded in 2009. Since September 2012, Mr. Murin has served as President of New Day Financial LLC, a mortgage lender that provides homeowners with FHA, VA and reverse mortgage loans, and as Chairman of the Board of Directors of Chrysalis Holdings, LLC, a private investment firm focused on building and growing successful businesses that provide home financing, data analytics and technology solutions in the mortgage banking and financial services industries. From October 2001 to October 2007, Mr. Murin served, and since December 2009, he has served, as a director of the Point Park University. From July 2011 to August 2012, Mr. Murin served as the Chief Executive Officer of National Real Estate Information Services, a portfolio company owned by funds managed by affiliates of Fortress Investment Group, LLC. President George W. Bush nominated Mr. Murin in October 2007 to serve as President of Ginnie Mae, a position which he held from July 2008 to August 2009. He also served as a consultant to the White House until he was confirmed by the U.S. Senate from January 2008 until May 2008. Prior to his nomination to serve as President of Ginnie Mae, Mr. Murin was with HUD for two years, to which he brought more than 40 years of diverse experience in the financial services, mortgage and banking industries. This experience includes having served as the Chief Executive Officer of a number of financial organizations such as Century Mortgage Co. from September 1986 to January 1989, Lender’s Service Inc. from May 1991 to December 2001, and Mortgage Settlement Network Innovations from September 2004 to August 2007. Mr. Murin served as a director for iGATE Corporation (NASDAQ: IGTE) from August 2009 to April 2013. Mr. Murin holds a bachelor’s degree in business from National Louis University.
Director Nominees
As a consequence of Mr. Murin’s more than 40 years’ experience in the financial services, mortgage and banking industries, including his service as President of Ginnie Mae, the Board, upon the recommendation of the Nominating and Corporate Governance Committee, believes that he is well qualified to provide valuable advice to the Board in many important areas and that he should serve as a director. Sharon Lee Cook has served as a director, chairperson of the Compensation Committee and member of the Audit Committee and Nominating and Corporate Governance Committee since March 8, 2023 and is independent in accordance with applicable NYSE and SEC rules. Since March 2022, Ms. Cook has served as the president of OLE Three Consulting, Inc., a management organization advisory firm that she founded. Ms. Cook has also served as a certified private arbitrator for the Financial Industry Regulatory Authority since June 2019. From February 2020 to January 2021, Ms. Cook served as a part-time administrative assistant at the Gulf Coast Community Foundation and during the period from September 2017 through February 2020, Ms. Cook was not employed and was dedicating her time to various personal matters. Ms. Cook has more than 30 years of broad experience in fixed income capital markets and financial services regulation, and her background includes serving as a business consultant for the regulated trading platform FTX US Derivatives from February 2022 to June 2022, serving as a managing director at securities firm Incapital LLC between January 2017 and September 2017, serving as a managing director at investment banking firm D.A. Davidson & Co. from December 2012 to May 2016, serving as a managing director at Sterne, Agee & Leach Inc. from September 2009 to November 2012 and serving as a senior economic and policy advisor to the deputy director of the U.S. Department of Treasury’s Office of Thrift Supervision from May 2007 to September 2009 where she participated in the resolution of failing banks and the development of the Troubled Assets Relief Program (TARP) and the Home Affordable Modification Program (HAMP). Earlier in her career, Ms. Cook spent 12 years as a managing director at investment management firm Legg Mason Wood Walker Inc. and was the deputy assistant director at the Federal Deposit Insurance Corporation (FDIC) for five years. Ms. Cook is a member of the board of directors of the Prevent Cancer Foundation, where she serves on the Finance Committee, and she is a member of the National Association of Corporate Directors. Ms. Cook is a graduate of The George Washington University. Based on Ms. Cook’s over 30 years of experience in fixed income capital markets and financial services regulation, the Board, upon the recommendation of the Nominating and Corporate Governance Committee, believes that she should serve as a director. The Board recommends that you vote “FOR” the election of each director nominee named above.
Criteria and Procedures for Selection of Director Nominees
Criteria and Procedures for Selection of Director Nominees Although the Board retains ultimate responsibility for nominating individuals for election as directors, the Nominating and Corporate Governance Committee conducts the initial screening and evaluation process. As provided in our Corporate Governance Guidelines, director nominees, including those directors eligible to stand for re-election, are selected based on, among other things, the following factors:
Criteria and Procedures for Selection of Director Nominees
| • | requirements of applicable laws and NYSE listing standards, including independence; |
Criteria and Procedures for Selection of Director Nominees
| • | the absence of material relationships with us; |
Criteria and Procedures for Selection of Director Nominees
| • | strength of character; |
Criteria and Procedures for Selection of Director Nominees
| • | diversity; |
Criteria and Procedures for Selection of Director Nominees
| • | age; |
Criteria and Procedures for Selection of Director Nominees
| • | skills; and |
Criteria and Procedures for Selection of Director Nominees
| • | experience. |
Criteria and Procedures for Selection of Director Nominees
In conducting the screening and evaluation of potential director nominees, the Nominating and Corporate Governance Committee considers candidates recommended by directors and our management, as well as recommendations from our stockholders. Subject to the discretion of the Nominating and Corporate Governance Committee, we anticipate that any director candidates submitted to us by our stockholders will be evaluated by the Nominating and Corporate Governance Committee on the same basis as any other director candidate. The Nominating and Corporate Governance Committee evaluates each individual in the context of the Board as a whole, with the objective of recommending a group of directors that can best contribute to the success of the business and represent stockholder interests through the exercise of sound judgment, using its diversity of experience. In determining whether to recommend a director for re-election, the Committee also considers the director’s past attendance at meetings and participation in and contributions to the activities of the Board. We do not have a formal policy about diversity of Board membership, but the Nominating and Corporate Governance Committee will consider a broad range of factors when nominating individuals for election as directors, including differences of viewpoint, professional experience, education, skill, other personal qualities and attributes, race, gender and national origin. The Nominating and Corporate Governance Committee neither includes nor excludes any candidate from consideration solely based on the candidate’s diversity traits. The Nominating and Corporate Governance Committee will consider appropriate nominees for directors whose names are submitted in writing by a stockholder. See “Other Information—Stockholder Proposals and Director Nominations for the 2024 Annual Meeting of Stockholders”.
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION For 2023, our independent directors received the following compensation:
DIRECTOR COMPENSATION
| • | Mr. Mercer and Mr. Murin were each paid a cash retainer of $70,000 and Ms. Cook, who became a director in March 2023, was paid a prorated retainer of $39,667. The cash retainer was paid in quarterly installments in arrears and accrued at an annual rate of $70,000. |
DIRECTOR COMPENSATION
| • | Mr. Mercer was paid an additional cash retainer of $10,000 for serving as the chairperson of the Audit Committee. |
DIRECTOR COMPENSATION
| • | Ms. Cook was paid an additional cash retainer in the prorated amount $2,833 (the additional cash retainer accrues at an annual rate of $5,000) for serving as the chairperson of the Compensation Committee and an additional cash retainer of $1,417 (the additional cash retainer accrues at an annual rate of $2,500) for serving as a member of the Audit Committee. |
DIRECTOR COMPENSATION
| • | Mr. Murin was paid an additional cash retainer of $5,000 for serving as the chairperson of the Nominating and Corporate Governance Committee, an additional cash retainer of $2,500 for serving as a member of the Audit Committee and an additional cash retainer of $10,000 for serving as our lead independent director. |
DIRECTOR COMPENSATION
In addition to the cash compensation described above, our independent directors also receive annual grants of common stock pursuant to our equity incentive plan. On June 29, 2023, we granted each of our independent directors 13,945 restricted shares of common stock pursuant to our 2023 Plan. These restricted shares become non-forfeitable on June 29, 2024. Mr. Lown, our President and Chief Executive Officer, did not receive any cash or equity compensation from us for his service as a director. We reimburse our independent directors for reasonable out-of-pocket expenses incurred in connection with the performance of their duties as directors, including, without limitation, travel expenses in connection with their attendance at in-person board and committee meetings. We have entered into indemnification agreements with each of our current directors and intend to enter into indemnification agreements with each of our future directors. The indemnification agreements provide these directors the maximum indemnification permitted under Maryland law. The agreements provide, among other things, for the advancement of expenses and indemnification for liabilities which such person may incur by reason of his or her status as a present or former director of our company in any action or proceeding arising out of the performance of such person’s services as a present or former director of our company. The table below describes the compensation earned by our directors other than Mr. Lown for 2023. Mr. Lown’s compensation is described below under “Executive Compensation”.
DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash | Stock Awards(1) | Total Compensation | | Sharon L. Cook | $43,917 | $70,004 | $113,921 | | Robert C. Mercer, Jr. | $80,000 | $70,004 | $150,004 | | Joseph P. Murin | $87,500 | $70,004 | $157,504 |
DIRECTOR COMPENSATION
| (1) Represents the aggregate grant date fair value of 13,945 restricted shares of common stock awarded to each of our independent directors pursuant to our 2023 Plan on June 29, 2023. Amounts have been calculated in accordance with FASB ASC Topic 718 and disregard estimated forfeitures. |
What We Do; What We Don’t Do
| What We Do | | | ✔ | We pay our Manager a management fee and reimburse it for certain expenses it incurs in connection with managing our company, including the cash compensation paid to Mr. Hutchby, our Chief Financial Officer, Treasurer and Secretary. | | ✔ | We provide our NEOs with equity compensation in the form of LTIP Units, a special class of limited partnership units in our operating partnership, Cherry Hill Operating Partnership, L.P. | | ✔ | We link the amount of equity compensation awarded to our NEOs directly to our achievement of strategic and operational goals and company-specific financial metrics. | | ✔ | We use both absolute and relative company-specific financial metrics to create balance between company-specific financial performance and industry expectations. | | ✔ | We impose minimum vesting requirements on equity awards made to our NEOs (equity awards vest ratably over 3 years), encouraging long-term alignment and retention. |
What We Do; What We Don’t Do
| ✔ | We have a comprehensive incentive compensation recoupment (clawback) policy for performance-based compensation. | | ✔ | We have an independent Compensation Committee. | | ✔ | We provide stockholders with an opportunity to cast an advisory say-on-pay vote on an annual basis. | | What We Don’t Do | | | ✘ | We do not pay our NEOs any compensation other than LTIP Units awarded pursuant to our equity incentive plan. | | ✘ | We do not reimburse our Manager for the cash compensation paid to our NEOs other than the cash compensation paid to Mr. Hutchby, our Chief Financial Officers, Treasurer and Secretary. | | ✘ | We do not provide any perquisites to our NEOs. | | ✘ | We do not have any employment agreements with our NEOs and are not obligated to make any payments to them upon termination of employment. | | ✘ | None of our NEOs have the right to receive severance payments from us. | | ✘ | We are not required to make payments to our NEOs upon a change of control of our company; however, all LTIP Units granted to our NEOs vest immediately upon a change of control if the recipient of such LTIP Units is still performing services for us at the time of such change of control. | | ✘ | We do not have golden parachute excise or tax gross-up payments for our NEOs. | | ✘ | We do not have liberal recycling of shares under our 2023 Plan. | | ✘ | We do not grant stock options to our NEOs. | | ✘ | We do not permit any transactions in our securities without pre-clearance under our insider trading policy. | | ✘ | We do not permit hedging or pledging of our securities. |
2023 Say-on-Pay Vote Results
| • | The Compensation Committee implemented a more formal structure for determining the amount of equity awards for our NEOs and other personnel who support us by tying 30% of the equity awards to the achievement of certain strategic and operational goals and 70% of the award to the achievement of certain company-specific financial metrics. |
2023 Say-on-Pay Vote Results
| • | The Compensation Committee determined that no increase in the overall size of the pool of LTIP Units awarded in January 2024 was justified and that the overall size of the pool of LTIP Units would be established at 80% of the overall size of the pool in the prior year. |
2023 Say-on-Pay Vote Results
| • | The Compensation Committee engaged Pay Governance LLC as its independent compensation consultant to advise the Compensation Committee on the overall design of our executive compensation program and to advise the Compensation Committee on its executive compensation policies and practices going forward. |
Equity Compensation
Equity Compensation The Compensation Committee is responsible for overseeing the equity compensation component of our executive compensation program and approves and recommends all equity awards granted pursuant to our equity incentive plan, which awards are then ratified by the Board.
Equity Compensation Objectives and Philosophy
Equity Compensation Objectives and Philosophy The equity compensation paid to our NEOs is designed to drive and reward corporate performance. We believe our equity compensation program reflects good governance practices and the best interests of our stockholders, while striving to meet the following core objectives:
Equity Compensation Objectives and Philosophy
| • | Strengthen our Ability to Retain our Work Force. We are a specialized company operating in a highly competitive industry, and our continued success depends on retaining our talented executive team. Our equity compensation program is designed to attract and retain highly qualified executives whose abilities and expertise are critical to our long-term success and our competitive advantage. The LTIP Units awarded to our NEOs vest over a three-year period which is particularly important for the Compensation Committee since these individuals do not have employment contracts, and the Compensation Committee does not have control over the level of cash compensation received by these individuals. |
Equity Compensation Objectives and Philosophy
| • | Align Risk and Reward. We are committed to creating an environment that encourages increased profitability for our company without undue risk-taking. We strive to focus our NEOs’ decisions on goals that are consistent with our overall business strategy without threatening the long-term viability of our company. |
Equity Compensation Objectives and Philosophy
| • | Align NEOs’ Interests with Interests of Stockholders. We are committed to using our equity compensation program to focus our NEOs’ attention on creating value for our stockholders. We believe that the use of LTIP Units for our equity compensation program directly aligns the interests of our NEOs with those of our stockholders since the LTIP Units only receive payments if and to the extent cash dividends are paid on shares of our common stock, and encourages our NEOs to focus on creating long-term stockholder value. |
Form of Equity Compensation Awarded to Our NEOs
Form of Equity Compensation Awarded to Our NEOs Pursuant to our equity incentive plan, the Compensation Committee may grant equity awards to our NEOs in the form of LTIP Units, options, stock awards, stock appreciation rights, performance units, incentive awards or other equity-based awards. Although our equity incentive plan provides for the use of these types of instruments, we have used LTIP Units with time-based vesting exclusively as the form of equity awarded to our NEOs. Initially, LTIP Units do not have full parity with our operating partnership’s common units of limited partnership interest (“Common Units”) with respect to liquidating distributions. Under the terms of our operating partnership’s partnership agreement, our operating partnership revalues its assets upon the occurrence of certain specified events, and any increase in our operating partnership’s valuation from the time of grant of LTIP Units until such event is allocated first to the holders of LTIP Units to equalize the capital accounts of such holders with the capital accounts of holders of Common Units. Upon equalization of the capital accounts of the holders of LTIP Units with the holders of Common Units, the LTIP Units achieve full parity with the Common Units for all purposes, including with respect to liquidating distributions. If such parity is reached, vested LTIP Units may be converted into an equal number of Common Units at any time, and thereafter are entitled to all the rights of Common Units, including the right to cause our operating partnership to redeem their Common Units for cash or, at our option, shares of our common stock on a one-for-one basis. However, there are circumstances under which such parity would not be reached. The grant of LTIP Units does not trigger a tax event for either us or our NEOs and limits the financial statement impact due to the three-year vesting feature. LTIP Units also provide an immediate reward to the recipients because LTIP Units receive distributions as and when dividends are paid on our common stock, whether or not the LTIP Units have fully vested. This form of reward also creates an incentive that is fully aligned with that of our stockholders since distributions are only made if and to the extent holders of our common stock receive cash dividends. We believe our compensation policies are particularly appropriate since we are an externally managed REIT. To qualify as a REIT for federal income tax purposes, regulations require us to distribute to our stockholders each calendar year at least 90% of our REIT taxable income (including certain items of non-cash income), determined without regard to the deduction for dividends paid and excluding net capital gain. As a result, we believe that our stockholders are principally interested in receiving attractive risk-adjusted dividends and stability in book value. Accordingly, we want to provide an incentive to our personnel that rewards success in achieving these goals and efforts to build the business over time. We believe that this alignment of interests provides an incentive to our personnel to implement strategies that will enhance our long-term performance and promote growth in dividends while preserving book value.
January 2023 LTIP Awards
January 2023 LTIP Awards On January 10, 2023, the Compensation Committee and the Board approved the grant of an aggregate of 43,700 LTIP Units under our 2013 Plan to our NEOs (the “January 2023 LTIP Awards”). The January 2023 LTIP Awards had an aggregate grant date fair value of $264,822 based on our closing stock price on January 10, 2023 of $6.06. The January 2023 LTIP Awards are set forth in more detail under the heading “Executive Compensation – Grants of Plan-Based Awards”. The individual grants made to each of our NEOs on January 10, 2023 are set forth below:
January 2023 LTIP Awards
| | Number of LTIP Units Granted | Aggregate Grant Date Fair Value of LTIP Units Granted(1) | Year-over-Year Percentage Increase in Aggregate Grant Date Fair Value(2) | Fair Value of LTIP Units at December 31, 2023(3) | | Jeffrey B. Lown II | 19,100 | $115,746 | 10.2% | $77,164 | | Michael A. Hutchby | 12,300 | $74,538 | 10.9% | $49,692 | | Julian B. Evans | 12,300 | $74,538 | 10.9% | $49,692 | | Total/Average | 43,700 | $264,822 | 10.6% | $176,548 |
January 2023 LTIP Awards
| (1) Based on our closing stock price on January 10, 2023 of $6.06. |
January 2023 LTIP Awards
| (2) On January 3, 2022, our NEOs received an aggregate of 28,500 LTIP Units with an aggregate grant date fair value of $239,400 based on our closing stock price on January 3, 2022 of $8.40. Mr. Lown was granted 12,500 LTIP Units with an aggregate grant date fair value of $105,000. Mr. Hutchby was granted 8,000 LTIP Units with an aggregate grant date fair value of $67,200. Mr. Evans was granted 8,000 LTIP Units with an aggregate grant date fair value of $67,200. |
January 2023 LTIP Awards
| (3) Based on our closing stock price on December 29, 2023 of $4.04. |
January 2023 LTIP Awards
Based on a recommendation made by Mr. Lown to the members of the Compensation Committee in the fourth quarter of 2022, the Compensation Committee determined that a 10.6% year-over-year increase in the aggregate grant date fair value of the LTIP Units awarded to our NEOs compared to the aggregate grant date fair value of the LTIP Units awarded to our NEOs in January 2022 was warranted. This determination was made by the Compensation Committee at its discretion and no formulas or specific weightings were assigned to any factor in reaching this determination. The Compensation Committee considered a number of key company results and developments relating to strategic and operational goals in determining whether it was appropriate to grant equity awards to our NEOs in January 2023, including, among other things, that our company:
January 2023 LTIP Awards
| • | Continued dividend payments throughout 2022 and delivered value to stockholders through total cash dividends of $1.08 per share of common stock in 2022, equivalent to an average dividend yield of 18.6%; |
January 2023 LTIP Awards
| • | Developed reliable performance metrics for the Board to assess our absolute performance and our relative performance in our respective peer group; |
January 2023 LTIP Awards
| • | Enhanced our internal portfolio and financial reporting metrics to provide the Board with a better understanding of our performance at any point in time; and |
January 2023 LTIP Awards
| • | Remained compliant with GSE covenants and regulation at our licensed mortgage servicing subsidiary, Aurora Financial Group, Inc. (“Aurora”). |
January 2023 LTIP Awards
In addition to the strategic and operational goals noted above, the Compensation Committee considered certain financial performance metrics included the following:
January 2023 LTIP Awards
| • | Total Economic Return (Loss) on NAV vs. Average Peer Group Total Economic Return (Loss) on NAV. Over a performance period beginning on October 1, 2021 and ending on September 30, 2022, we achieved a total economic return on NAV of (9.8%), compared to an average total economic return on NAV for a peer group of 13 externally and internally managed public mortgage REITs (the “Peer Group”) of (21.1%) over the same period. For an explanation of how we calculate total economic return (loss) on NAV please see “—Overview of Our Business; Company Performance Highlights—Company Performance Highlights”. Total economic return (loss) on NAV for the companies in the Peer Group was determined based on publicly available information. While certain companies in the Peer Group have considerably larger market capitalizations than us, we focused on companies that have investment strategies comparable to ours and companies that are similar to us in asset management and investment complexity. The Peer Group is used by us to assess our financial performance relative to the Peer Group and not for benchmarking purposes. The Peer Group was recommended by our NEOs and approved by the Compensation Committee and consisted of the following companies: |
January 2023 LTIP Awards
| Two Harbors Investment Corp. Ellington Residential Mortgage REIT AG Mortgage Investment Trust, Inc. Chimera Investment Corporation Dynex Capital, Inc. | Ellington Financial Inc. Annaly Capital Management, Inc. AGNC Investment Corp. MFA Financial, Inc. | Armour Residential REIT, Inc. New York Mortgage Trust, Inc. Orchid Island Capital, Inc. Invesco Mortgage Capital, Inc. |
January 2023 LTIP Awards
| • | Total Economic Return (Loss) on GAAP BVPS vs. Average Peer Group Total Economic Return (Loss) on GAAP BVPS. Over a performance period beginning on October 1, 2021 and ending on September 30, 2022, we achieved a total economic return (loss) on GAAP BVPS of (22.4%), compared to an average total economic return (loss) on GAAP BVPS for the Peer Group of (27.0%) over the same period. For an explanation of how we calculate total economic return (loss) on GAAP BVPS, please see “—Overview of Our Business; Company Performance Highlights—Company Performance Highlights”. Total economic return (loss) on GAAP BVPS for companies in the Peer Group was determined based on publicly available information. |
January 2023 LTIP Awards
| • | Price to Book Ratio vs. Average Peer Group Price to Book Ratio. Over a performance period beginning on October 1, 2021 and ending on September 30, 2022, we achieved a price to book ratio of 94.7% compared to an average price to book ratio for the Peer Group of 87.1% over the same period. For an explanation of how we calculate price to book ratio, please see “—Overview of Our Business; Company Performance Highlights—Company Performance Highlights”. Price to book ratio for the companies in the Peer Group was determined based on publicly available information. |
January 2023 LTIP Awards
When determining the number of LTIP Units granted to each of our NEOs, the Compensation Committee took into account the factors described above, as well as the individual’s role and responsibility in attaining the results listed above, the individual’s expected and actual job performance, the individual’s ability to influence the outcome of our company’s future performance, the value of the award in retaining and motivating key personnel and economic and market conditions generally. The Compensation Committee considered all of these factors in exercising its discretion to determine the January 2023 LTIP Awards. The Compensation Committee’s decision on whether to approve any equity awards in future periods will depend on a number of factors, including our company’s performance, market trends and practices, expense implications, tax efficiencies or other considerations in the Compensation Committee’s sole discretion.
Role of Our President and CEO in Equity Compensation Decisions
Role of Our President and CEO in Equity Compensation Decisions The Compensation Committee makes all equity compensation decisions related to our NEOs. The Compensation Committee receives input from Mr. Lown, our President and Chief Executive Officer, regarding the equity compensation and performance of our NEOs other than himself, including recommendations as to the equity compensation levels that he believes are commensurate with an individual’s job performance, skills, experience, qualifications, criticality to our company, as well as with our compensation philosophy, external market data and considerations of internal equity. Mr. Lown regularly attends meetings of the Compensation Committee, except when the Compensation Committee is meeting in executive session or when his own equity compensation arrangements are being considered. The Compensation Committee communicates its views and decisions regarding equity compensation arrangements for our NEOs to Mr. Lown, who is generally responsible for implementing such arrangements.
January 2024 LTIP Awards
January 2024 LTIP Awards On January 16, 2024, the Compensation Committee and the Board approved the grant of an aggregate of 41,925 LTIP Units under our 2023 Plan to our NEOs (the “January 2024 LTIP Awards”). The January 2024 LTIP Awards had an aggregate grant date fair value of $164,346 based on our closing stock price on January 16, 2024 of $3.92. The January 2024 LTIP Awards do not appear in the stock awards column of the summary compensation table or the grants of plan-based awards table appearing under the heading “Executive Compensation – Summary Compensation Table” and “– Grants of Plan Based Awards”. The individual grants made to each of our NEOs on January 16, 2024 are set forth below:
January 2024 LTIP Awards
| | Number of LTIP Units Granted | Aggregate Grant Date Fair Value of LTIP Units Granted(1) | Year-over-Year Percentage Decrease in Aggregate Grant Date Fair Value(2) | | Jeffrey B. Lown II | 11,700 | $45,864 | 60.3% | | Michael A. Hutcbhy | 15,600 | $61,152 | 18.0% | | Julian B. Evans | 14,625 | $57,330 | 23.1% | | Total/Average | 41,925 | $164,346 | 37.9% |
January 2024 LTIP Awards
| (1) Based on our closing stock price on January 16, 2024 of $3.92. |
January 2024 LTIP Awards
| (2) As described in more detail above, our NEOs received an aggregate of 43,700 LTIP Units on January 10, 2023. These LTIP Units had an aggregate grant date fair value of $264,822 based on our closing stock price on January 10, 2023 of $6.06. Mr. Lown was granted 19,100 LTIP Units with an aggregate grant date fair value of $115,746. Mr. Hutchby was granted 12,300 LTIP Units with an aggregate grant date fair value of $74,538. Mr. Evans was granted 12,300 LTIP Units with an aggregate grant date fair value of $74,538. |
January 2024 LTIP Awards
In December 2023, the Compensation Committee exercised discretion and determined the overall size of the pool of LTIP Units to be awarded in January 2024 (the “2024 LTIP Unit Pool”) to our NEOs and other personnel who support us. The overall size of the 2024 LTIP Unit Pool was set at $436,668, or 80% of the overall size of the pool of LTIP Units awarded in January 2023 to our NEOs and other personnel who support us (the “2023 LTIP Unit Pool”). The Compensation Committee determined that an increase in the overall size of the 2024 LTIP Unit Pool was not warranted because our say-on-pay proposal at the 2023 annual meeting received less than 70% support from our stockholders. The Compensation Committee set the overall size of the 2024 LTIP Unit pool at 80% of the overall size of the 2023 LTIP Unit Pool based on our achievement of certain strategic and operational goals and certain company-specific financial performance metrics. The Compensation Committee assigned a 30% weighting to the strategic and operational goals and a 70% weighting to the company-specific financial performance metrics. The Compensation Committee then determined that the strategic and operational goals had been earned at the 100% level and the company-specific financial performance metrics had been achieved on a weighted average basis of 70%. Based on the achievement of the strategic and operational goals and the company-specific financial performance metrics, and after considering the results of the 2023 say-on-pay advisory vote, the Compensation Committee established the overall size of the January 2024 Pool at $436,668 (80% of the overall size of the January 2023 LTIP Unit Pool). After establishing the overall size of the January 2024 LTIP Unit Pool, the Compensation Committee authorized Mr. Lown to allocate the LTIP Units to the NEOs and other personnel who support us at his discretion, with the final allocation subject to approval by the Compensation Committee. The Compensation Committee approved the final allocation of the LTIP Units in January 2024. In December 2023, the Compensation Committee determined that we had achieved the following strategic and operational goals, which had been assigned a 30% weighting, at the 100% level:
January 2024 LTIP Awards
| • | We maintained funding diversification to ensure sufficient availability and capacity maintenance. |
January 2024 LTIP Awards
| • | We provided comprehensive and transparent public financial disclosure and enhanced operational efficiencies by developing new tools and processes across all investment ventures with the intention of modernizing and streamlining our systems and operations. |
January 2024 LTIP Awards
| • | We took steps to improve our capital structure through various mechanisms to enhance return potential to our common stockholders. These steps included publicly announcing our intention to repurchase shares of our outstanding preferred stock through a $50 million preferred stock repurchase program. We |
January 2024 LTIP Awards
intend to fund these repurchases with net proceeds from the issuance and sale of our common stock pursuant to our existing at-the-market offering program. During the year ended December 31, 2023, we issued and sold 6,470,004 shares of common stock under our at-the-market offering program. The shares were sold at a weighted average price of $4.87 per share for aggregate gross proceeds of approximately $31.5 million before fees of approximately $631,000.
January 2024 LTIP Awards
| • | We identified and integrated a new sub-servicer to replace Roundpoint Mortgage Servicing Corporation due to its recent acquisition by Matrix Financial Services Corporation, a wholly owned subsidiary of another publicly traded REIT, to ensure consistent and independent servicing quality to our portfolio of servicing-related assets. |
January 2024 LTIP Awards
| • | We continued building on our advances with respect corporate social responsibility initiatives in the previous year and taking further steps to improve our corporate governance profile with institutional investors. |
January 2024 LTIP Awards
| • | We minimized any material adverse audit issues, remained compliance with GSE covenants and regulation at Aurora, adhered to our investment risk reporting framework in order to mitigate exposure to market volatility and reduced liquidity in a rising interest rate environment. |
January 2024 LTIP Awards
| • | We took steps to fortify our information technology infrastructure to bolster information security and resilience and our ability to respond to threats from material cybersecurity incidents. |
January 2024 LTIP Awards
| • | We leveraged innovative data analytics tools to extract valuable insights from business and market data to enhance our decision-making processes and facilitate insightful strategic resolutions. |
January 2024 LTIP Awards
In December 2023, the Compensation Committee determined that we had achieved certain company-specific financial performance metrics, which had been assigned a weighting of 70%, over a performance period beginning on October 1, 2022 and ending on September 30, 2023, on weighted average basis of 70%. The Compensation Committee exercised discretion and determined that financial performance should be measured over the four-quarter period ended September 30, 2023 because these metrics were used by the Compensation Committee in December 2023 to establish the overall size of the January 2024 LTIP Unit Pool. The company-specific financial metrics considered by the Compensation Committee consisted of the following:
January 2024 LTIP Awards
| Performance Metric | Metric Weight | Below Threshold | Threshold | Target | Out- Performance | Actual Performance (October 1, 2022 to September 30, 2023) | | Economic Return on NAV vs. Peer Group(1) | 40% | < -0.25 | -0.25 | 0.25 | > 0.50 | 0.13 | | Economic Return on GAAP BVPS vs. Peer Group(1) | 25% | < -0.25 | -0.25 | 0.25 | > 0.50 | -0.39 | | Absolute Economic Return on NAV | 20% | < 0.0% | 0.0% | 9.0% | > 15.0% | 1.2% | | Price to Book Ratio vs. Peer Group(1) | 15% | < -0.25 | -0.25 | 0.25 | > 0.50 | 0.39 | | | Payout Continuum (% of Target) | | | | | | | | 100% | 0% | 50% | 100% | 200% | 70.0% |
January 2024 LTIP Awards
| (1) The peer group for purposes of the January 2024 LTIP Awards was the same as the Peer Group used for purposes of the January 2023 LTIP Awards. For an explanation of how we calculate economic return (loss) on GAAP BVPS, economic return (loss) on NAV and price to book ratio, please see “—Overview of Our Business; Company Performance Highlights—Company Performance Highlights”. |
January 2024 LTIP Awards
Based on our actual performance and the actual performance of the peer group over the period from October 1, 2022 to September 30, 2023 and applying linear interpolation, the Compensation Committee determined that we earned the relative economic return on NAV component between threshold and target at 88.0%, the relative economic return on GAAP BVPS component at below threshold, the absolute economic return on NAV component between threshold and target at 56.8% and the relative price to book ratio component between target and out-performance at 156.6%. This resulted in achievement of the company-specific financial metrics on a weighted average basis of 70.0%.
Summary Compensation Table
Summary Compensation Table The following table sets forth information concerning the compensation of our NEOs for the past three fiscal years.
Summary Compensation Table
| Name | Year | Salary(1) | Stock Awards(2) | Total | | Jeffrey B. Lown II President and Chief Executive Officer (Principal Executive Officer) | 2023 | __ | $115,746 | $115,746 | | | 2022 | __ | $105,000 | $105,000 | | | 2021 | __ | __ | __ | | Michael A. Hutchby Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer) | 2023 | $580,000 | $74,538 | $654,538 | | | 2022 | $510,000 | $67,200 | $577,200 | | | 2021 | $450,000 | $61,670 | $511,670 | | Julian B. Evans Chief Investment Officer | 2023 | __ | $74,538 | $74,538 | | | 2022 | __ | $67,200 | $67,200 | | | 2021 | __ | $59,908 | $59,908 |
Summary Compensation Table
| (1) Amounts in this column represent the costs of the salary paid to Mr. Hutchby and reimbursed by us to our Manager. |
Summary Compensation Table
| (2) Effective January 10, 2023, (a) Mr. Lown was granted 19,100 LTIP Units, (b) Mr. Hutchby was granted 12,300 LTIP Units and (c) Mr. Evans was granted 12,300 LTIP Units. These LTIP Units were granted pursuant to our 2013 Plan and vest ratably over a three-year period beginning on the one-year anniversary of the grant date, subject to continued employment. With respect to the LTIP Units, the dollar amounts indicated in the table under “Stock Awards” represent the aggregate grant date fair value of the awards computed in accordance with FASB ASC Topic 718, disregarding estimated forfeitures. For additional information regarding the valuation of LTIP Units, see Note 6 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table summarizes each equity award granted to our NEOs pursuant to our 2013 Plan during the fiscal year ended December 31, 2023:
Grants of Plan-Based Awards
| Name | Grant Date | All Other Stock Awards: Number of Shares of Stock or Units(1) | Grant Date Fair Value of Stock and Option Awards(2) | | Jeffrey B. Lown II | 1/10/2023 | 19,100 | $115,746 | | Michael A. Hutchby | 1/10/2023 | 12,300 | $74,538 | | Julian B. Evans | 1/10/2023 | 12,300 | $74,538 |
Grants of Plan-Based Awards
| (1) See also “Summary Compensation Table” above. The LTIP Units were granted pursuant to our 2013 Plan and will vest in three equal annual installments beginning on the first anniversary of the grant date, so long as the named executive officer remains employed and complies with the terms and conditions of his LTIP Unit award agreement. |
Grants of Plan-Based Awards
| (2) The amounts in this column represent the aggregate grant date fair value of the awards computed in accordance with FASB ASC Topic 718, disregarding estimated forfeitures. For additional information regarding the valuation of LTIP Units, see Note 6 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table The LTIP Units described above were granted to our NEOs pursuant to the 2013 Plan. Our Manager, our operating partnership and Freedom Mortgage were not eligible to participate in the 2013 Plan because participation in the 2013 Plan is limited to individuals. The 2013 Plan was administered by the Compensation Committee, except that the 2013 Plan was administered by the Board with respect to awards made to directors who are not employees. Our officers, employees and directors and the officers and employees of our affiliates were eligible to participate in the 2013 Plan. In addition, individuals who provide services to us or an affiliate through our Manager were eligible to receive awards under the 2013 Plan. The 2013 Plan expired by its terms in October 2023. Our stockholders approved the adoption of the 2023 Plan at the 2023 Annual Meeting and the 2023 Plan became effective on June 15, 2023 and no new awards were to be granted under the 2013 Plan after that date.
Outstanding Equity Awards at December 31, 2023
Outstanding Equity Awards at December 31, 2023 The following table sets forth information concerning equity incentive plan awards for each of our NEOs outstanding at December 31, 2023.
Outstanding Equity Awards at December 31, 2023
| Name | Number of Shares That Have Not Vested(1) | Market Value of Share That Have Not Vested(2) | | Jeffrey B. Lown II | 27,433 | $110,829 | | Michael A. Hutchby | 19,965 | $80,659 | | Julian B. Evans | 19,899 | $80,392 |
Outstanding Equity Awards at December 31, 2023
| (1) Represents shares of common stock underlying unvested LTIP Units granted to our NEOs pursuant to our 2013 Plan. The LTIP Units will vest ratably over the three-year period beginning on the one-year anniversary of the grant date, subject to continued employment. Vesting dates of these shares are January 3, 2024, January 4, 2024, January 10, 2024, January 3, 2025, January 10, 2025 and January 10, 2026. |
Outstanding Equity Awards at December 31, 2023
| (2) Pursuant to SEC rules, for purposes of this table the market value per share of common stock underlying unvested LTIP Units is assumed to be $4.04, which was the closing market price per share of our common stock on December 31, 2023. |
Outstanding Equity Awards at December 31, 2023
| Name | Number of Shares Acquired on Vesting(1) | Value Realized in Vesting | | Jeffrey B. Lown II | 6,667 | $39,083 | | Michael A. Hutchby | 6,583 | $38,590 | | Julian B. Evans | 6,517 | $38,199 |
Outstanding Equity Awards at December 31, 2023
| (1) This number represents the vesting during 2023 of previously granted service-based LTIP Units. An individual, upon the vesting of an equity award, does not receive cash equal to the amount contained in the Value Realized on Vesting column of this table. Instead, the amounts contained in the Value Realized on Vesting column reflect the market value of our common stock on the applicable vesting date. For purposes of this table, it is assumed that one LTIP Unit represents the economic equivalent of one share of Common Stock. The LTIP Units do not realize their full economic value until certain conditions are met as described in this proxy statement under the caption “—Compensation Discussion and Analysis—Equity-Based Compensation”. |
Pension Benefits and Nonqualified Deferred Compensation
Pension Benefits and Nonqualified Deferred Compensation We do not provide any of our NEOs with pension benefits or nonqualified deferred compensation.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control We do not have any employment agreements with any of our NEOs and are not obligated to make any payments to them upon termination of employment. None of our NEOs have the right to receive severance payments from us, and we are not required to make payments to any named executive officer upon a change of control of our company. However, all LTIP Units granted pursuant to our 2013 Plan and 2023 Plan vest immediately upon a change of control if the recipient of such LTIP Units is still performing services for us at the time of such change of control. The value, based on the closing price of our common stock on December 31, 2023, as reported by the NYSE of the LTIP Units held by our NEOs as of December 31, 2023 that would be accelerated assuming a change in control was approximately $1.1 million of which approximately $455,000, $290,000 and $319,000 would be allocated to Messrs. Lown, Hutchby and Evans, respectively.
Pay Versus Performance
Pay Versus Performance As required by Item 402(v) of Regulation S-K, we are providing the information below regarding the relationship between executive compensation and our financial performance for each of 2023, 2022 and 2021. The table below summarizes the (i) compensation values reported in the Summary Compensation Table for our President and Chief Executive Officer, and average for our other NEOs excluding the Chief Executive Officer (our “Non-CEO NEOs”) as compared to the “Compensation Actually Paid”, calculated pursuant to the applicable rules and (ii) our financial performance for the years ended December 31, 2023, 2022 and 2021.
Pay Versus Performance
| Year | Summary Compensation Total for Chief Executive Officer(1) | Compensation Actually Paid to Chief Executive Officer(2) | Average Summary Compensation Table Total for Named Executive Officers Excluding Chief Executive Officer(3) | Average Compensation Actually Paid to Named Executive Officers Excluding Chief Executive Officer(2)(3) | Total Shareholder Return(4) | Net Income (Loss)(5) | | 2023 | $115,746 | $62,915 | $364,538 | $326,665 | $67.66 | ($35,455,000) | | 2022 | $105,000 | $67,170 | $322,200 | $286,871 | $84.75 | $22,189,000 | | 2021 | — | ($6,178) | $285,789 | $278,052 | $101.61 | $12,530,000 |
Pay Versus Performance
| (1) For each of the years included above, our Chief Executive Officer was Mr. Lown. We are an externally managed company, and we did not pay any cash compensation to Mr. Lown. Accordingly, compensation information for Mr. Lown is limited to stock awards. |
Pay Versus Performance
| (2) As required by Item 402(v) of Regulation S-K, reconciliation tables illustrating the calculation of Compensation Actually Paid are presented under “Pay versus Performance Supplemental Information – Reconciliation of Summary Compensation to Compensation Actually Paid” immediately below. |
Pay Versus Performance
| (3) Individuals comprising our Non-CEO NEOs are Mr. Hutchby, our Chief Financial Officer, Treasurer and Secretary, and Mr. Evans, our Chief Investment Officer. Compensation information for our Non-CEO NEOs includes stock awards and the costs of the salary paid to Mr. Hutchby and reimbursed by us to our Manager. |
Pay Versus Performance
| (4) Total Shareholder Return assumes $100 invested at December 31, 2021 in our common stock and the reinvestment of dividends. |
Pay Versus Performance
| (5) Represents GAAP net income before allocation to noncontrolling interests as reported in our Annual Report on Form 10-K for the year ended December 31, 2023. |
Pay versus Performance Supplemental Information – Reconciliation of Summary Compensation to Compensation Actually Paid
Pay versus Performance Supplemental Information – Reconciliation of Summary Compensation to Compensation Actually Paid “Compensation actually paid” represents totals from the Summary Compensation Table above, adjusted for certain items as detailed in the following table for the years ended December 31, 2023, 2022 and 2021:
Pay versus Performance Supplemental Information – Reconciliation of Summary Compensation to Compensation Actually Paid
| Adjustments to Summary Compensation Tables to Determine Compensation Actually Paid to Chief Executive Officer | 2023 | 2022 | 2021 | | Reported Summary Compensation Table for Chief Executive Officer | $115,746 | $105,000 | — | | Deduction of Amounts Reported under the “Stock Awards” column in the Summary Compensation Table | ($115,746) | ($105,000) | — | | Equity Award Adjustments | | | | | Year End Fair Value of Unvested Equity Awards Granted in the Covered Year | $77,164 | $72,500 | — | | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | ($14,666) | ($6,175) | ($7,830) | | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Covered Year | $417 | $845 | $1,652 | | Compensation Actually Paid to Chief Executive Officer | $62,915 | $67,170 | ($6,178) |
Pay versus Performance Supplemental Information – Reconciliation of Summary Compensation to Compensation Actually Paid
| Adjustments to Summary Compensation Tables to Determine Average Compensation Actually Paid to Non-CEO NEOs | 2023 | 2022 | 2021 | | Average Reported Summary Compensation Table for Non-CEO NEOs | $364,538 | $322,200 | $285,789 | | Deduction of Average Amounts Reported under the “Stock Awards” Column in the Summary Compensation Table | ($74,538) | ($67,200) | $(60,789) | | Equity Award Adjustments | | | | | Average Year End Fair Value of Unvested Equity Awards Granted in the Covered Year | $49,692 | $46,400 | $57,063 | | Average Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | ($13,432) | ($15,268) | $(4,784) | | Average Year over Year Change in Fair Value of Equity Awards Granted in Prior Years and Vested in the Covered Year | $405 | $739 | $773 | | Average Compensation Actually Paid to Non-CEO NEOs | $326,665 | $286,871 | $278,052 |
Relationship Between “Compensation Actually Paid” and Performance Measures
Relationship Between “Compensation Actually Paid” and Performance Measures The graph below illustrates the relationship of “compensation actually paid” to our Chief Executive Officer and “average compensation actually paid” to our Non-CEO NEOs, in either case, to total shareholder return for the years ended December 31, 2021, 2022 and 2023. The graph below illustrates the relationship of “compensation actually paid” to our Chief Executive Officer and “average compensation actually paid” to our Non-CEO NEOs, in either case, to net income (loss) for the years ended December 31, 2021, 2022 and 2023.
CEO PAY RATIO DISCLOSURE
CEO PAY RATIO DISCLOSURE The SEC has issued final rules implementing the provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) that require U.S. publicly-traded companies to disclose the ratio of their chief executive officer’s compensation to that of their median employee. As noted above, our President and Chief Executive Officer does not receive any direct cash compensation or benefits from us, and we do not reimburse our Manager for the cash compensation and benefits paid to Mr. Lown. Because we do not pay, or provide reimbursement for, any direct cash compensation to Mr. Lown and we have no employees, we are not able to calculate and provide a ratio of the median employee’s annual total compensation to the total annual compensation of Mr. Lown.