DEF 14A of Lument Finance Trust, Inc.
Filed Apr 29, 2025 · FY20240001140361-25-016329
PROPOSAL ONE – ELECTION OF DIRECTORS
PROPOSAL ONE – ELECTION OF DIRECTORS
Information About Director Nominees
Information About Director Nominees The following table sets forth the nominees, their ages, their principal positions and the year in which each became a director. Each of the nominees was recommended for selection by the nominating and corporate governance committee. All of the nominees are currently serving on our board of directors. The biographical information concerning such individuals has been furnished by them to the Company. Age and other information are as of June 12, 2025, which is the date of the Annual Meeting. There are no familial relationships among any director, executive officer and/or director nominee.
Information About Director Nominees
| Name | Age | Position Held with Us | Director Share | | James P. Flynn(1) | 48 | Chairman of the Board and Chief Executive Officer | 2019 | | Neil A. Cummins(2) | 71 | Independent Director | 2013 | | James C. Hunt(3) | 55 | Independent Director | 2018 | | William A. Houlihan(4) | 69 | Independent Director | 2013 | | Walter C. Keenan(2) | 57 | Independent Director | 2015 | | Marie D. Reynolds(1) | 58 | Director | 2022 |
Information About Director Nominees
| (1) Mr. Flynn and Ms. Reynolds have been designated as nominees by Lument Investment Holdings, LLC (“Lument IH”) pursuant to a director designation agreement that we entered into with Lument IH on April 26, 2022. See “Transactions with Related Persons” for more information regarding the director designation agreement with Lument IH. |
Information About Director Nominees
| (2) Currently a member of the audit committee, compensation committee and nominating and corporate governance committee. Mr. Keenan is the chair of our compensation committee. Mr. Cummins is chair of our nominating and corporate governance committee. |
Information About Director Nominees
| (3) Currently a member of the compensation committee. |
Information About Director Nominees
| (4) Currently a member of the audit committee and nominating and corporate governance committee. Mr. Houlihan is the chair of our audit committee and an audit committee financial expert. Mr. Houlihan is also the lead independent director. |
Biographical Information for Nominees
Biographical Information for Nominees James P. Flynn. Mr. Flynn has been our Chief Executive Officer since January 2018, a director since March 2019, and the Chairman of our Board since March 2020. Mr. Flynn has been designated as a nominee by Lument IH pursuant to a director designation agreement that we entered into with Lument IH on April 26, 2022. See “Transactions with Related Persons” for more information regarding the director designation agreement with Lument IH. Mr. Flynn has over 20 years of experience in real estate and financial markets. He currently serves as Chief Executive Officer of Lument Real Estate Capital Holdings, LLC (“Lument”), an affiliate of the Manager. Lument is a subsidiary of ORIX Corporation USA (“ORIX USA”), a diversified financial company and a subsidiary of ORIX Corporation (“ORIX”), a publicly traded, Tokyo-based international financial services company. Lument acquired Hunt Real Estate Capital LLC in January 2020. Mr. Flynn joined Hunt Real Estate Capital (formerly Centerline Capital Group) in 2007 and was a member of its executive management team and investment and credit committees. Prior to joining Hunt Real Estate Capital, he practiced law at Gibson Dunn & Crutcher LLP in its real estate practice group, and prior to that he was an investment banker at Lehman Brothers. Mr. Flynn received a B.S. magna cum laude in Finance and Accounting from the McDonough School of Business at Georgetown University and JD from Columbia University Law School, where he was a Harlan Fiske Stone Scholar. As a consequence of over 20 years of experience in real estate finance, Mr. Flynn is well qualified to provide valuable advice to our board of directors in many important areas. Neil A. Cummins. Mr. Cummins has been an independent director of our board of directors since the closing of our initial public offering in March 2013. Mr. Cummins is chairman of the nominating and corporate governance committee and is a member of the audit and compensation committees. Mr. Cummins has been active in international financial markets for over 40 years. Mr. Cummins is a member of the board of directors of North Square Investments, LLC, a private SEC-registered investment management firm. Mr. Cummins was Chairman of Oak Ridge Investments, LLC, a privately-owned investment manager, from 2013 to 2018. Mr. Cummins held global management roles with Barclays Capital, from 1997 to 2012, including founding Management Committee member, Global Head of Distribution and Research, Global Head of Strategic Relationship Management and voting member of the Barclays Bank Group Credit Committee. Mr. Cummins also served on the board of directors of iBoxx Limited and the International Index Company from 2003 to 2006. From 1985 to 1997, Mr. Cummins was a Managing Director of Morgan Stanley, and served on the board of directors of Morgan Stanley Bank Luxembourg SA and the Supervisory Board of Morgan Stanley Bank AG, Frankfurt. Prior to 1985, Mr. Cummins worked in the international financial markets, principally with Mellon Bank N.A. Mr. Cummins graduated with a B.A. in Economics from Indiana University. As a consequence of over 40 years of experience in international financial markets, Mr. Cummins is well qualified to provide valuable advice to our board of directors in many important areas. William A. Houlihan. Mr. Houlihan has been an independent director of our board of directors since the listing of our common stock on the NYSE in March 2013. Mr. Houlihan is the lead independent director and chairman of the audit committee and is a member of the nominating and corporate governance committee. Mr. Houlihan has more than 40 years of diversified financial sector and business experience. Since April 2025, Mr. Houlihan has served as a director, the audit committee chairman, and member of each of the compensation committee and the nominating and governance committee of Webull Corporation (NASDAQ: BULL), an international brokerage firm. Mr. Houlihan served as a member of the board of directors of Angel Pond Holdings Corporation (NYSE: POND) from May 2021 to December 2022. Mr. Houlihan served from June 2018 to July 2019 as the Chief Financial Officer of Thunder Bridge Acquisition Ltd. and served from August 2019 to June 2021 as the Chief Financial Officer of Thunder Bridge Acquisition II, Ltd. Mr. Houlihan served from February 2021 to December 2023 as Chief Financial Officer of Thunder Bridge Capital Partners III Inc. and served from July 2021 to December 2024 as Chief Financial Officer of Thunder Bridge Capital Partners IV Inc. He served from November 2012 to June 2023 as a director and audit committee chairman for MAXEX, LLC, a privately-owned residential mortgage loan trading business. He has served since 2009 as a director and financial expert on the audit committee of Avem Health Partners, previously known as First Physicians Capital Group (“FPCG”), a healthcare investment company, which was publicly traded prior to completion of a going-private transaction in January 2015, from April 2013 to September 2014 as Non-Executive Chairman of its board of directors and since May 2013 as the chairman of its audit committee. Mr. Houlihan served from July 2013 to June 2015 as lead independent director and chairman of the audit committee of Tiptree, Inc., or Tiptree (NASDAQ: TIPT), a publicly-traded financial services holding company; and from August 2010 to July 2013 as lead independent director and chairman of the audit committee for Care Investment Trust, a publicly-traded healthcare REIT, which merged with Tiptree in July 2013. From 2003 to 2010, he was a director of SNL Financial, a privately-owned financial information company, and in addition, from 1998 to 2012 he was a director and shareholder of a family-owned commercial real estate investment partnership. Mr. Houlihan graduated with an M.B.A. in Finance from New York University Graduate School of Business and a B.S. in Accounting from Manhattan College. In addition, he was licensed as a Certified Public Accountant, but his license is currently inactive. From January 2017 to December 2021, he served as an adjunct professor at the Feliciano School of Business at Montclair State University. As a consequence of Mr. Houlihan’s over 40 years of pertinent experience, qualifications and skills, including significant financial expertise and literacy, he is well qualified to provide significant and relevant expertise and advice to our board of directors in relation to many areas, including accounting and financial matters. James C. (“Chris”) Hunt. Mr. Hunt joined our board of directors in January 2018. Mr. Hunt is a member of the compensation committee. Mr. Hunt previously served as our Chairman from January 2019 until January 2020. Mr. Hunt has over 30 years of experience in real estate, real estate finance and corporate governance and management. He currently serves as the Chief Executive Officer and President of Hunt Companies, Inc. (“Hunt”) and has been a member of the Hunt board of directors since 2001. In addition, he serves as Chief Executive Officer and is on the board of directors of various Hunt subsidiaries and affiliates. Mr. Hunt also oversees Hunt’s private market real estate development and acquisition activities, which includes market rate residential properties and mixed-use retail developments. Mr. Hunt is responsible for establishing relationships with development and financial partners. Mr. Hunt began his career at Hunt in 1993 as Project Developer for Hunt’s construction division, was later appointed Vice President, Executive Vice President and subsequently President. Mr. Hunt received a B.A. in Economics and an MBA from the University of Texas, Austin. As a consequence of over 30 years of experience in real estate, real estate finance and corporate governance and management, Mr. Hunt is well qualified to provide valuable advice to our board of directors in many important areas.
Biographical Information for Nominees
Walter C. Keenan. Mr. Keenan has been an independent director of our board of directors since 2015. Mr. Keenan is chairman of the compensation committee and is a member of the audit and nominating and corporate governance committees. Mr. Keenan has over 35 years of experience in the financial services industry as an advisor, investor and executive manager. Mr. Keenan has been a private investor since March 2022. From July 2013 to March 2022, he served as Chief Executive Officer of Advantage Insurance Inc. (“Advantage Insurance”), a specialty insurance group serving the insurance needs of high net worth individuals and business owners worldwide. Earlier in his career, Mr. Keenan served as an independent director and audit committee chair of Republic Companies, Inc., a regional property and casualty insurance company. He also served as Chairman of Medicus Insurance Holdings, Inc., a provider of professional liability insurance to physicians, from July 2006 until its sale to NORCAL Mutual Insurance Company in October 2011. Before becoming an insurance industry executive, Mr. Keenan worked in private equity as President of JMP Capital, the principal investments group of JMP Group LLC from 2007 to 2011 and as a Principal of The Cypress Group from 2005 to 2007. Mr. Keenan began his career at Morgan Stanley, where he worked in investment banking from 1989 to 2003. Mr. Keenan received a Bachelor of Arts degree with Honors from Southern Methodist University. As a consequence of over 35 years of experience in financial services, Mr. Keenan is well qualified to provide valuable advice to our board of directors in many important areas. Marie D. Reynolds. Ms. Reynolds has been a director for our board of directors since June 15, 2022. Ms. Reynolds has been designated as a nominee by Lument IH pursuant to a director designation agreement that we entered into with Lument IH on April 26, 2022. See “Transactions with Related Persons” for more information regarding the director designation agreement with Lument IH. Ms. Reynolds is currently Chief Financial Officer and Chief Operating Officer of Boston Financial Investment Management, LP (“Boston Financial”), a leader in the affordable housing industry. Ms. Reynolds joined Boston Financial in 1995 and has over 29 years of progressive experience in financial analysis and reporting within the affordable housing and Low-Income Housing Tax Credit (LIHTC) industry. In her role as CFO and COO, Ms. Reynolds sets financial and organizational policies for Boston Financial and works with senior executives to set strategic direction and develop policies that have organization-wide impact. Ms. Reynolds is a member of Boston Financial’s Executive Committee and Investment Committee and is an active participant in several initiatives sponsored by Boston Financial’s parent company, ORIX USA, which acquired Boston Financial in July 2016. Ms. Reynolds began her career at Boston Financial, first as an Assistant Controller of the Tax Credit Funds, then as a Senior Financial Analyst in the corporate reporting group. From 1999-2009, she served as the Business Unit Controller under the Lend Lease and MuniMae ownerships. She was promoted to Executive Vice President and Director of Finance, Reporting and Treasury in 2009 and subsequently named Chief Financial Officer in 2014 and Chief Operating Officer in 2020 in conjunction with the acquisition of a significant affordable housing portfolio. Prior to joining Boston Financial, Ms. Reynolds worked in the financial reporting functions at Liberty Real Estate Group and Lehman Brothers from 1989-2005. Ms. Reynolds holds an MBA from Suffolk University and a B.B.A. from Siena College. As a consequence of over 35 years of experience in financial services, Ms. Reynolds is well qualified to provide valuable advice to our board of directors in many important areas.
Nominee Recommendations
Nominee Recommendations All director nominees were approved by the nominating and corporate governance committee for inclusion in our proxy card for the Annual Meeting. Our board of directors recommends that the stockholders vote “FOR” the election of each of the nominees named above.
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
Our Board of Directors
Our Board of Directors Our business is managed by the Manager, subject to the supervision and oversight of our board of directors, which has established investment guidelines for the Manager to follow in its day-to-day management of our business. Our directors keep informed about our business by attending meetings of our board of directors and its committees and through supplemental reports and communications. The NYSE requires that a majority of our board of directors must be composed of “independent directors,” which is defined generally as a person other than an officer or employee of the Company or its subsidiaries or any other individual having a relationship which, in the opinion of our board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors undertakes periodic reviews of director independence. In such reviews, the board of directors considers transactions and relationships between (1) each director, entities with which such person is affiliated and/or any member of such person’s immediate family, and (2) the Company and its subsidiaries and affiliates, in order to ascertain whether any such relationships or transactions are inconsistent with a determination that such person is “independent” in accordance with applicable rules and regulations of the NYSE, applicable law, and the rules and regulations of the SEC. The board of directors bases its determinations primarily on a review of the responses of such persons to questions regarding employment and compensation history, affiliations and family and other relationships between the Company, the directors, and entities with which such persons are affiliated, discussions and analyses with respect to the foregoing, and the recommendations of the nominating and corporate governance committee. Our board of directors has affirmatively determined that all persons who served as directors of the Company during any part of the 2024 calendar year, and all current directors, were and are “independent” for purposes of Section 303A of the Listed Company Manual of the NYSE, with the exceptions of Mr. Flynn, who is the Company’s Chairman of the Board and Chief Executive Officer, and Ms. Reynolds, who is employed by Boston Financial, an affiliate of the Manager. Each individual who was a member of the Company’s audit committee, compensation committee, and nominating and corporate governance committee during any part of the 2024 calendar year has been determined by our board of directors to be independent in accordance with such standards as well. In determining the independence of directors, in addition to confirming that none of the automatic disqualifications prescribed by the NYSE are applicable to such persons, the board of directors also affirmatively determined that each person found to be independent has no direct or indirect material relationship with the Company or its subsidiaries. As none of Messrs. Cummins, Houlihan, Keenan or Hunt had or has any direct or indirect relationship with the Company or its subsidiaries, our board of directors affirmatively determined each of them to be independent. Board refreshment over time is critical to ensuring that the board of directors maintains an appropriate balance of tenure and diversity of skills and experience. Our board of directors believes that it is desirable to maintain a mix of longer-tenured, experienced directors, who have developed increased knowledge and insight into our business, and newer directors with fresh perspectives and new ideas. However, our board of directors does not believe that age and term limits on directors’ service are appropriate and does not currently maintain any such standards. In considering whether to nominate an incumbent director for re-election to our board of directors, the nominating and corporate governance committee will consider, among other things, the expertise, experience, background and perspectives of the director and their ongoing contributions to the Board and its committees. Each director’s continued tenure will be considered annually as part of the board’s annual self-evaluation and nomination process. Meetings of Our Board of Directors During our fiscal year ended December 31, 2024, our board of directors held four (4) meetings. During that period, no director attended fewer than 75% of the aggregate of (i) the total number of meetings of our board of directors held during the period for which he or she was a director, and (ii) the total number of meetings held by all committees of our board of directors during the period that he or she served on such committees. Executive Sessions of Independent Directors Our independent directors may meet in executive session at the end of directors’ meetings to consider such matters as they deem appropriate without the Company’s Chief Executive Officer or other management present. Mr. Houlihan, our lead independent director, acts as the chair of the executive sessions of the independent directors.
Committees of Our Board of Directors
| • | preparing and approving (or causing to be prepared and approved), reviewing and discussing the executive compensation and director compensation disclosures for our annual proxy statement filed with the SEC. |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Director Compensation for 2024
Director Compensation for 2024 Mr. Flynn and Ms. Reynolds are considered executive directors and receive no cash or equity compensation from us for serving on our board of directors. The table below sets forth the compensation paid to each independent director for 2024.
Director Compensation for 2024
| Name | Fees Earned or Paid in Cash(1) | Stock Awards | Total | | Neil A. Cummins | $110,000 | $— | $110,000 | | William A. Houlihan | $125,000 | $— | $125,000 | | Walter C. Keenan | $110,000 | $— | $110,000 | | James C. Hunt | $100,000 | $— | $100,000 |
Director Compensation for 2024
| (1) Pursuant to the Independent Directors Stock-for-Fees Program, each of our independent directors may elect to receive all or a portion of their annual retainer and chair fees in the form of shares of our common stock in lieu of payment in cash. As of December 31, 2024, Mr. Cummins elected to receive 18,943 shares of common stock at a weighted average price of $2.4386 in lieu of cash compensation of $46,194.40, Mr. Keenan elected to receive 20,054 shares of common stock at a weighted average price of $2.4307 in lieu of cash compensation of $48,745.23 and Mr. Hunt elected to receive 21,581 shares of common stock at weighted average price of $2.4326 in lieu of cash compensation of $52,497.94. |
Certain Risks Related to Compensation
| Summary Compensation Table Name and Principal Position | Year | Salary ($) | Bonus ($) | Total ($) | | James P. Flynn(1)(2) Chief Executive Officer and Chairman of the Board | 2024 | — | — | — | | | 2023 | — | — | — | | James J. Henson(1)(2)(3) President | 2024 | — | — | — | | | 2023 | — | — | — | | Michael P. Larsen(1)(2)(4) Former President | 2024 | n/a | n/a | n/a | | | 2023 | — | — | — | | James A. Briggs(1)(2) Chief Financial Officer | 2024 | — | — | — | | | 2023 | — | — | — |
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End No stock option awards or stock awards have been granted by the Company to its current named executive officers to date.
Pay Versus Performance
Pay Versus Performance In August 2022, the SEC adopted final pay-versus-performance rules that require registrants to disclose information reflecting the relationship between executive compensation actually paid by a registrant and the registrant’s financial performance. The rules implement a requirement mandated by the Dodd-Frank Act. Disclosure pursuant to such rules is not included herein because we are externally managed and do not have any employees. Our executive officers are employees of an affiliate of the Manager and do not receive cash or equity compensation from us. While the management agreement between us and the Manager requires us to reimburse the Manager for a portion of the total compensation paid by the Manager or its affiliates to Mr. Briggs, our Chief Financial Officer, based on his percentage of time spent managing our affairs, we do not determine what our executive officers are paid by the Manager or its affiliates.