DEF 14A of TPG RE Finance Trust, Inc.
Filed Apr 3, 2024 · FY20230001193125-24-086036
NOTICE OF 2024 ANNUAL MEETING OF STOCKHOLDERS
| | Page | | Option Exercises and Stock Vested in Fiscal Year 2023 | 28 | | Pension Benefits | 28 | | Nonqualified Deferred Compensation | 28 | | Potential Payments Upon Termination or Change in Control | 29 | | Pay Ratio Disclosure | 29 | | Pay Versus Performance Disclosure | 30 | | Pay Versus Performance Table* | 30 | | DIRECTOR COMPENSATION | 35 | | EQUITY COMPENSATION PLAN INFORMATION | 37 | | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 38 | | CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS | 42 | | Registration Rights Agreement | 42 | | Management Agreement | 42 | | Trademark License Agreement | 43 | | Indemnification Agreements with Directors and Officers | 43 | | Related Party Transaction Policies | 43 | | PROPOSAL 2—RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 45 | | Audit and Non-Audit Fees | 45 | | Audit Committee Pre-Approval Policy | 45 | | Voting Recommendation | 46 | | AUDIT COMMITTEE REPORT | 47 | | PROPOSAL 3—ADVISORY VOTE ON EXECUTIVE COMPENSATION | 48 | | Voting Recommendation | 48 | | PROPOSAL 4—ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION | 49 | | ANNUAL REPORT | 50 | | OTHER MATTERS | 50 | | STOCKHOLDER PROPOSALS FOR THE 2025 ANNUAL MEETING | 50 | | HOUSEHOLDING OF PROXY MATERIALS | 50 |
PROPOSAL 1 — ELECTION OF DIRECTORS
PROPOSAL 1 — ELECTION OF DIRECTORS As of the date of this proxy statement, there are eight members of the board of directors. On March 15, 2024, the board of directors, upon the recommendation of its nominating and corporate governance committee, unanimously nominated the eight incumbent directors listed below for re-election to the board of directors at the Annual Meeting. All of the nominees are willing to serve as directors but, if any of them should decline or be unable to act as a director, the individuals designated in the proxy card as proxies will exercise the discretionary authority provided to vote for the election of such substitute nominee selected by our board of directors, unless the board of directors alternatively acts to reduce the size of the board of directors or maintain a vacancy on the board of directors in accordance with our bylaws. The board of directors has no reason to believe that any such nominees will be unable or unwilling to serve.
Nominees for Election as Directors
Nominees for Election as Directors The names, ages as of April 1, 2024 and existing positions with us of the nominees are as follows:
Nominees for Election as Directors
| Name | Age | Office or Position Held | | Avi Banyasz | 51 | Chairman of the Board of Directors and Director | | Doug Bouquard | 43 | Chief Executive Officer and Director | | Julie Hong | 43 | Director | | Michael Gillmore | 67 | Director | | Todd Schuster | 63 | Director | | Wendy Silverstein | 63 | Director | | Bradley Smith | 56 | Director | | Gregory White | 67 | Director |
Nominees for Election as Directors
The name, principal occupation for the last five years, selected biographical information and the period of service as our director of each of the nominees are set forth below. Avi Banyasz has served as our chairman of the board and one of our directors since December 2014. Mr. Banyasz is a partner of TPG and the co-head of TPG Real Estate, TPG’s real estate investment platform. In this role, Mr. Banyasz co-manages a team of approximately 70 people. Prior to joining TPG in 2011, Mr. Banyasz served as a managing principal and a member of the investment committee of Westbrook Partners, a real estate private equity firm, where he worked for 13 years. Prior to joining Westbrook Partners, Mr. Banyasz worked at Bear Stearns & Co. Mr. Banyasz received a Bachelor of Commerce, with High Distinction, from the University of Toronto. Mr. Banyasz serves on the boards of directors of Strategic Office Partners and Cinespace. Mr. Banyasz’s extensive experience in real estate investment allows Mr. Banyasz to provide valuable insight to us and our board of directors, including with respect to our investing activities, which leads to our conclusion that Mr. Banyasz should serve on our board of directors. Doug Bouquard has served as our chief executive officer and one of our directors since April 2022. Mr. Bouquard is a partner of TPG and TPG Real Estate. Prior to joining TPG in 2022, Mr. Bouquard was a Managing Director and responsible for U.S. Commercial Real Estate Debt within the Global Markets Division of Goldman Sachs. His responsibilities included oversight for commercial real estate debt origination and other real estate securities issuances. Prior to this role, Mr. Bouquard was responsible for various mortgage lending and trading businesses at Goldman Sachs, which he joined in 2004. Mr. Bouquard earned a B.A. degree from Colgate University. Mr. Bouquard’s leadership skills, as well as his deep knowledge and experience in commercial real estate debt origination, securities issuance and mortgage lending and trading lead to our conclusion that Mr. Bouquard should serve on our board of directors. Julie Hong has served as one of our directors since May 2022. Ms. Hong is a partner of TPG, global co-head of the firm’s client and capital formation business, and head of the firm’s equity capital markets business. Since joining TPG in 2013, Ms. Hong has driven more than 230 equity transactions raising over $80 billion in gross proceeds globally. Prior to joining TPG, Ms. Hong served as a director at Bank of America Merrill Lynch, in the equity capital markets division. Ms. Hong received a B.A. in Economics, cum laude, from Harvard University. Ms. Hong serves on the board of Delinea and has previously served on the boards of Univision Communications, TPG Pace Tech Opportunities Corp, and TPG Pace Solutions Corp. Ms. Hong’s extensive capital markets and directorship experience leads to our conclusion that Ms. Hong should serve on our board of directors. Michael Gillmore has served as one of our directors since July 2017. Mr. Gillmore was an audit partner at Ernst & Young LLP (“EY”) and retired on June 30, 2017 after 39 years at EY. Mr. Gillmore served in various leadership positions in EY’s real estate practice during his career, including from 2004 to 2016 as Sector Leader for Real Estate, Hospitality & Construction for the Pacific Southwest Region and the West Region. Mr. Gillmore has served as the lead partner for numerous public and private companies operating in multiple subsectors of the real estate industry. Mr. Gillmore has extensive experience interacting with boards of directors and audit committees. Mr. Gillmore received a B.S. in Business Administration and Accounting from California State University, Fullerton. Mr. Gillmore served on the Advisory Board of the Lusk Real Estate Center at the University of Southern California until September 2017 and on the Board of Directors of the California Hospital Medical Center Foundation until September 2018. Mr. Gillmore is a member of the National Association of Real Estate Investment Trusts and the National Association of Corporate Directors (“NACD”) and in July 2019 became a member of the Board of Directors of the NACD Pacific Southwest chapter. In November 2021, Mr. Gillmore became NACD Directorship Certified (NACD.DC). The NACD Directorship Certification® program is designed to equip directors with the foundation of knowledge sought by boards to effectively contribute in the boardroom. NACD Directorship Certified directors pass a foundational exam developed by experienced directors and, via continuing recertification requirements, commit to continuing education on governance and emerging issues impacting the businesses they serve. Mr. Gillmore’s comprehensive knowledge of accounting and financial disclosure, extensive audit experience and interactions with the boards of directors and audit committees of multiple companies in the real estate and other industries lead to our conclusion that Mr. Gillmore should serve on our board of directors. Todd Schuster has served as one of our directors since July 2020. Mr. Schuster is the founder and head of Rivrock Group, a stakeholder in a company that manages a hedge fund on behalf of a separate account and additionally oversees investments in a diversified and varied portfolio of stocks, bonds, real estate and other investments. From May 2012 to September 2015, Mr. Schuster served in various capacities with Ares Management (NYSE: ARES), an alternative manager with more than $300 billion of assets currently under management. From May 2012 through May 2013, Mr. Schuster served as an independent board member and audit committee member of Ares Commercial Real Estate (NYSE: ACRE), a publicly held commercial mortgage real estate investment trust (“REIT”) externally managed by ARES. In June 2013, Mr. Schuster joined ARES as a Senior Partner and Global Head of Real Estate Credit and remained until September 2015. Concurrently, while at ARES, Mr. Schuster was named Chief Executive Officer of ACRE and remained on the board of ACRE during that time. Mr. Schuster also served on the ARES twelve-member Management Committee, as well as on the Investment Committee for all ARES sponsored real estate debt and equity vehicles in the US and Europe/UK. Prior to joining ARES, Mr. Schuster was the Founder, Chief Executive Officer and a Principal of CW Financial Services from its inception in 1992 until 2009. During this time, Mr. Schuster built and led CW Financial Services which was comprised of 400 employees throughout three subsidiaries: CWCapital, its Fannie Mae and Freddie Mac licensed mortgage banking company, CWCapital Investments, a registered investment advisor with approximately $10 billion of assets under management, and CWCapital Asset Management, one of the nation’s largest special servicers and named on CMBS pools, CDOs, CLOs and investment funds with more than $175 billion of underlying collateral. Prior to founding CW Financial Services, Mr. Schuster served in a variety of positions within the commercial mortgage finance units of Salomon Brothers and Bankers Trust, both in New York City. Mr. Schuster graduated with a B.A. from Tufts University. PE Holder, L.L.C. (“PE Holder”), an affiliate of Starwood Capital Group Global II, L.P., designated Mr. Schuster for appointment to our board of directors subject to the terms and conditions set forth in the Investment Agreement, dated as of May 28, 2020, by and between the Company and PE Holder. Mr. Schuster’s management experience with both public and private real estate investment companies, deep knowledge and relationships in the real estate sector and extensive capital markets experience lead to our conclusion that Mr. Schuster should serve on our board of directors.
Nominees for Election as Directors
Wendy Silverstein has served as one of our directors since July 2017. Ms. Silverstein is the Founder of Gapview Ventures, which focuses on real estate investment and advisory services. She also co-founded Silver Eagle Advisory Group, which specialized in advising clients on real estate debt restructurings. Ms. Silverstein previously served as Chief Investment Officer of WeWork from August 2018 to September 2019. She served as President and Chief Executive Officer of New York REIT, Inc. (NYSE: NYRT) from March 2017 to July 2018. Prior to NYRT, Ms. Silverstein served as Executive Vice President and Co-Head of Acquisitions and Capital Markets for Vornado Realty Trust (NYSE: VNO) (“Vornado”), an owner of commercial real estate in the United States, from 1998 to 2015. During her tenure at Vornado, Ms. Silverstein oversaw Vornado’s debt and equity financings and was responsible for a variety of real estate as well as corporate acquisitions. Ms. Silverstein was a member of the Investment Committee for Vornado’s private equity fund, Vornado Capital Partners, L.P. On behalf of Vornado, she served on the Board of Directors of Toys R Us, Inc. from its leveraged buyout in 2005 until January 2019 and previously served on the Board of LNR Property, LLC, a loan special servicer. Prior to joining Vornado in 1998, Ms. Silverstein spent 12 years at Citicorp. From 1990 to 1998, she was with Citicorp Real Estate in the Corporate Debt Restructuring Group, which she headed from 1994 to 1998. During this time, she led the negotiation and restructuring of debt and equity transactions involving companies in the airline, hospitality, retail, office and residential real estate industries. She served on the Board of Directors of Shuttle, Inc. (d/b/a US Air Shuttle) from 1992 to 1997, Alexander’s, Inc. (NYSE: ALX) from 1992 to 1995 and NYRT from February 2017 to July 2018. From 1986 to 1990, she was with the Leveraged Capital Group at Citibank, N.A., providing sponsor financing for leveraged buyouts. Ms. Silverstein currently serves on the board of Alexander’s, Inc. Ms. Silverstein has served as an independent advisor to Trinity Church regarding its real estate portfolio and is an active member of the Board of Beit Ruth, an educational and therapeutic village for at risk teenage girls in Israel. Ms. Silverstein earned her B.S. in economics, magna cum laude, from The Wharton School of the University of Pennsylvania and an M.B.A. with distinction from The Wharton Graduate School of Business Administration. She is also a Certified Public Accountant. Ms. Silverstein’s management experience with multiple REITs, deep knowledge and relationships in the real estate sector and extensive capital markets experience lead to our conclusion that Ms. Silverstein should serve on our board of directors. Bradley Smith has served as one of our directors since July 2017. Mr. Smith has been a private investor since June 2015. Since May 2023, Mr. Smith has been a director of the James Campbell Company LLC, a privately held real estate company based in Hawaii. From February 2002 to May 2015, Mr. Smith served as head of Real Estate and Lodging Equity Capital Markets at Bank of America Merrill Lynch. During his tenure at Bank of America Merrill Lynch, Mr. Smith was responsible for the structuring, marketing and pricing of initial public offerings and other public equity offerings for companies in the real estate, lodging, gaming and real estate finance industries. While at Bank of America Merrill Lynch, Mr. Smith was the lead equity advisor on more than three hundred equity offerings, which raised in excess of $100 billion. Mr. Smith began his career at Lehman Brothers in 1989 and worked there prior to joining Bank of America Merrill Lynch in 2000. Mr. Smith served in a variety of investment banking and equity capital markets positions both in New York and in London while at Lehman Brothers, including acting as the co-head of U.S. Equity syndicate. Mr. Smith earned his B.S. in finance, magna cum laude, from The Wharton School of the University of Pennsylvania. Mr. Smith’s deep knowledge and relationships in the real estate sector, including over 15 years of experience working with companies in the real estate finance sector, and extensive capital markets experience lead to our conclusion that Mr. Smith should serve on our board of directors. Gregory White has served as one of our directors since July 2017. Since January 2003, Mr. White has served as a Managing Director and Chief Executive Officer of Prima Capital Advisors LLC (“Prima”), an investment advisory firm that specializes in commercial mortgage investments. At Prima, Mr. White’s responsibilities include loan origination, structuring securitizations and the development and maintenance of client relationships. Prima is the successor entity to Conning Asset Management, which purchased Schroder Mortgage Associates, LP (“Schroder”) in 1998. Mr. White founded Schroder in 1992. Prior to forming Schroder, Mr. White was a Managing Director at Salomon Brothers Inc (“Salomon”) and co-head of the firm’s real estate finance, sales and advisory businesses. While at Salomon, Mr. White was responsible for the origination, negotiation and closing of real estate financings, joint ventures and property sales, as well as commercial mortgage securitizations and assisting with the development of the rating process for commercial mortgages. Prior to his work at Salomon, Mr. White was an Assistant Treasurer in the Real Estate Finance Department of the Chase Manhattan Bank. Mr. White holds a B.S. in Civil Engineering from Tufts University and earned an M.B.A. in Finance and Real Estate from The Wharton Graduate School of Business Administration, University of Pennsylvania. Mr. White previously was a director of New Plan Excel Realty Trust (NYSE: NXL) and Acadia Realty Trust (NYSE: AKR), two NYSE-listed REITs that specialized in retail real estate. Mr. White is a member of the Pension Real Estate Association and the Commercial Real Estate Finance Council. Mr. White is a former Adjunct Professor of Real Estate Finance at New York University. Mr. White’s extensive experience in commercial real estate loan originations and financings allows Mr. White to provide valuable insight to us and our board of directors, including with respect to our investing activities, which leads to our conclusion that Mr. White should serve on our board of directors. Our board of directors unanimously recommends that you vote “for” the election of each of the director nominees named above.
Compensation Committee
| • | evaluates and reviews our financial performance measures used to link executive compensation actually paid, if any, to our chief executive officer and other executive officers for the last completed fiscal year to our performance; |
Compensation Committee
| • | oversees the preparation of the disclosures to be included in response to the “pay versus performance” disclosure requirements as they relate to executive compensation, if applicable; |
Equity-Based Compensation
Equity-Based Compensation In the discretion of our compensation committee, we may also grant equity-based awards pursuant to our 2017 Equity Incentive Plan to our and our affiliates’ directors, officers, employees (if any) and consultants, and the members, officers, directors, employees and consultants of our Manager or its affiliates. Our 2017 Equity Incentive Plan provides for the grant of equity-based awards relating to our common stock, including options to purchase shares of common stock, stock appreciation rights, common stock, restricted stock, restricted stock units, performance awards, substitute awards and other equity-based awards (including LTIP Units (as defined in the 2017 Equity Incentive Plan)) to our and our affiliates’ directors, officers, employees (if any) and consultants, and the members, officers, directors, employees and consultants of our Manager or its affiliates, as well as to our Manager, other entities that provide services to us and our affiliates, and the employees of such entities. These awards are intended to align the recipients’ interests with those of our stockholders. Our compensation committee determines the types and amounts of any equity-based compensation awards to be granted to our named executive officers under our 2017 Equity Incentive Plan. This determination is not based on any fixed performance metrics, but rather is a subjective determination based on a number of factors, such as the overall financial health of the Company in the previous fiscal year, risk management policies of the Company, progress towards achieving the Company’s strategic goals, state of assets, the performance of our common stock, the performance of each named executive officer, and market conditions. In December 2023, our compensation committee made grants of restricted stock units to our named executive officers pursuant to our 2017 Equity Incentive Plan, which generally vest ratably in four annual installments beginning on June 30, 2024 and include tandem rights to dividend equivalent amounts. The compensation committee’s decision to make these grants was based on the process and factors described above but was also informed by discussions with human capital experts from TPG. These grants are described in more detail below under “Executive Compensation – Grants of Plan-Based Awards for 2023.”
Summary Compensation Table
Summary Compensation Table The following table sets forth the compensation paid to or accrued by those named executive officers for whom we are able to quantify such compensation for services the named executive officer rendered to us during the fiscal years presented.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($) | Non-qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | | Doug Bouquard | | | | | | | | | | Chief Executive Officer | 2023 | — | — | $2,574,570 | — | — | — | $2,574,570 | | | 2022 | — | — | $3,250,000 | — | — | — | $3,250,000 | | | 2021 | — | — | — | — | — | — | — | | Matthew Coleman | | | | | | | | | | President | 2023 | — | — | $274,299 | — | — | — | $274,299 | | | 2022 | — | — | $1,000,000 | — | — | — | $1,000,000 | | | 2021 | — | — | $1,220,000 | — | — | — | $1,220,000 | | Robert Foley(2) | | | | | | | | | | Chief Financial Officer | 2023 | $101,715 | $289,845 | $960,052 | — | — | $7,554 | $1,359,166 | | | 2022 | $117,000 | $541,502 | $1,000,000 | — | — | $7,835 | $1,666,337 | | | 2021 | $135,000 | $405,000 | $750,000 | — | — | $11,449 | $1,301,449 | | Brandon Fox | | | | | | | | | | Chief Accounting Officer | 2023 | — | — | $137,149 | — | — | — | $137,149 |
Summary Compensation Table
| (1) Amounts reported in this column represent the aggregate grant date fair value, determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”), of restricted stock units awarded in 2021, 2022 and 2023 under our 2017 Equity Incentive Plan to our named executive officers. For purposes of this disclosure, it was assumed that 100% percent of these awards are for compensation for services rendered to us, although the actual aggregate services rendered to us by each named executive officer may vary from year to year. The amounts in this column do not correspond to the actual value that will be recognized by the named executive officers. See “Note 2 — Summary of Significant Accounting Policies” and “Note 13 — Stock-based Compensation” to the consolidated financial statements in our 2023 Annual Report on Form 10-K filed with the SEC on February 20, 2024 for additional details regarding assumptions underlying the value of these awards. Pursuant to SEC rules, the amounts shown in the table above exclude the effect of estimated forfeitures. |
Summary Compensation Table
| (2) Mr. Foley is an employee of an affiliate of our Manager and is not paid compensation by us. Amounts in the columns entitled “Salary,” “Bonus,” and “All Other Compensation” are based on a ratio of Mr. Foley’s compensation paid by an affiliate of our Manager to the total compensation expenses incurred by an affiliate of our Manager for services rendered to us. The amount in the column entitled “All Other Compensation” includes our allocable share of the expenses associated with employer-paid insurance premiums and healthcare benefits in the amount of $11,449, $7,835 and $7,554 for the fiscal years ended December 31, 2021, December 31, 2022 and December 31, 2023, respectively. |
Grants of Plan-Based Awards for 2023
Grants of Plan-Based Awards for 2023
Grants of Plan-Based Awards for 2023
| Name | Committee Approval Date | Grant Date(1) | All Other Stock Awards: Number of Shares of Stock or Units (#)(2) | Grant Date Fair Value of Stock Awards ($)(3) | | Doug Bouquard | 12/11/23 | 12/20/23 | 386,572 | $2,574,570 | | Matthew Coleman | 12/11/23 | 12/20/23 | 41,186 | $274,299 | | Robert Foley | 12/11/23 | 12/20/23 | 144,152 | $960,052 | | Brandon Fox | 12/11/23 | 12/20/23 | 20,593 | $137,149 |
Grants of Plan-Based Awards for 2023
| (1) The dates included in this column reflect the dates that the equity awards disclosed in the table were granted. |
Grants of Plan-Based Awards for 2023
| (2) Represents restricted stock units subject to time-based vesting conditions granted by us under our 2017 Equity Incentive Plan. The terms of these grants are described under “Compensation Discussion and Analysis — Equity-Based Compensation” and under “Potential Payments Upon Termination or Change in Control.” |
Grants of Plan-Based Awards for 2023
| (3) See Note 1 to the Summary Compensation Table above for information on the value of the restricted stock unit awards granted to our named executive officers by us in 2023. |
Outstanding Equity Awards at 2023 Fiscal Year End
Outstanding Equity Awards at 2023 Fiscal Year End
Outstanding Equity Awards at 2023 Fiscal Year End
| | Stock Awards | | | Name | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | | Doug Bouquard | 673,051 | $4,374,832 | | Matthew Coleman | 210,560 | $1,368,640 | | Robert Foley | 278,179 | $1,808,164 | | Brandon Fox | 49,884 | $324,246 |
Outstanding Equity Awards at 2023 Fiscal Year End
| (1) This column reflects the number of unvested restricted stock units granted by us pursuant to our 2017 Equity Incentive Plan and held by each named executive officer on December 31, 2023. These restricted stock units are generally scheduled to vest ratably in four annual installments beginning on the June 30 following the grant date (except as otherwise specified below) and include the following unvested restricted stock units: |
Outstanding Equity Awards at 2023 Fiscal Year End
| • | Mr. Bouquard — 90,144 restricted stock units (granted May 2022), 196,335 restricted stock units (granted December 2022) and 386,572 restricted stock units (granted December 2023); |
Outstanding Equity Awards at 2023 Fiscal Year End
| • | Mr. Coleman — 21,000 restricted stock units (granted December 2020), 50,206 restricted stock units (granted December 2021), 98,168 restricted stock units (granted December 2022) and 41,186 restricted stock units (granted December 2023); |
Outstanding Equity Awards at 2023 Fiscal Year End
| • | Mr. Foley — 4,995 restricted stock units (granted December 2020), 30,864 restricted stock units (granted December 2021), 98,168 restricted stock units (granted December 2022) and 144,152 restricted stock units (granted December 2023); and |
Outstanding Equity Awards at 2023 Fiscal Year End
| • | Mr. Fox — 7,203 restricted stock units (granted December 2021), 22,088 restricted stock units (granted December 2022) and 20,593 restricted stock units (granted December 2023). |
Outstanding Equity Awards at 2023 Fiscal Year End
| (2) This column reflects the aggregate market value of all unvested restricted stock units granted by us pursuant to our 2017 Equity Incentive Plan and held by each named executive officer on December 31, 2023, which value is calculated by multiplying the number of restricted stock units outstanding on December 31, 2023 by the closing price of our common stock on December 29, 2023, the last day of trading on the NYSE for the 2023 fiscal year, which was $6.50 per share. |
Option Exercises and Stock Vested in Fiscal Year 2023
Option Exercises and Stock Vested in Fiscal Year 2023 The following table provides information concerning equity awards granted by us pursuant to our 2017 Equity Incentive Plan that vested or were exercised in 2023. None of the named executive officers hold any stock option awards.
Option Exercises and Stock Vested in Fiscal Year 2023
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($)(2) | | Doug Bouquard | 95,493 | $707,603 | | Matthew Coleman | 80,471 | $596,290 | | Robert Foley | 58,144 | $430,847 | | Brandon Fox | 10,962 | $81,228 |
Option Exercises and Stock Vested in Fiscal Year 2023
| (1) The equity awards that vested during the 2023 fiscal year consist of restricted stock units previously granted by us pursuant to our 2017 Equity Incentive Plan and outstanding on January 1, 2023. |
Option Exercises and Stock Vested in Fiscal Year 2023
| (2) The amounts reflected in this column represent the aggregate market value realized by each named executive officer upon vesting of the restricted stock units granted by us pursuant to our 2017 Equity Incentive Plan and held by such named executive officer, computed based on the closing price of our common stock on the applicable vesting date (or if the applicable vesting date was not a trading date, on the immediately preceding trading date). |
Pension Benefits
Pension Benefits Our named executive officers received no benefits in the 2023 fiscal year from us under any defined benefit or defined contribution plans.
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation The Company does not have a nonqualified deferred compensation plan that provides for deferral of compensation on a basis that is not tax-qualified for our named executive officers.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control Since our named executive officers are employees of our Manager or its affiliates, we generally do not have any obligation to make any payments to any of our named executive officers upon a termination of employment or upon a change of control. However, pursuant to the restricted stock unit award agreements that the Company entered into with certain of our named executive officers in 2019 (the “2019 award agreements”), upon a qualifying termination of employment, the holder of the restricted stock unit award will either become 100% vested or be allowed to continue to vest in such award throughout the original vesting schedule (depending on the nature of the termination), subject to the named executive officer’s compliance with certain restrictive covenants. More specifically, pursuant to the 2019 award agreements, if the executive’s termination is under circumstances characterizing him or her as a “Type I Leaver” (which is defined as a termination (i) due to the executive’s death, disability, or qualifying retirement or (ii) by the Company or our Manager or any of their respective subsidiaries or affiliates for any reason other than for “cause,” a breach of restrictive covenants, or as a result of a “constructive departure”), the executive will be permitted to continue to vest in the restricted stock units granted by us pursuant to our 2017 Equity Incentive Plan, subject to the executive’s compliance with certain confidentiality, non-solicitation, non-competition, and other restrictive covenants, except in the case of the executive’s death or disability occurring during his or her employment or following retirement, in which case vesting will be immediately accelerated. All outstanding restricted stock unit awards subject to the 2019 award agreements vested in 2023 and, accordingly, no outstanding restricted stock unit awards remain subject to the 2019 award agreements. Beginning in 2020, we entered into new restricted stock unit award agreements (the “2020 award agreements”) with certain of our named executive officers that narrowed the scope of a qualifying termination such that if the executive incurs a disability or upon the cessation of the executive’s services as a result of executive’s death, the restricted stock unit award will become 100% vested immediately. Assuming that a qualifying termination had occurred on December 31, 2023, the value for each of our named executive officers of the number of the restricted stock units granted by us pursuant to our 2017 Equity Incentive Plan that would be eligible for the accelerated or continued vesting described in this paragraph is the value reported above in the “Outstanding Equity Awards at 2023 Fiscal Year End” table. For purposes of the foregoing, “cause” means (i) an indictment of a felony or other crime involving moral turpitude, (ii) a material breach of any employment agreement, offer letter, or similar agreement governing the executive’s services with our Manager or its affiliates, (iii) a material failure to perform the duties reasonably assigned to the executive (other than as a result of death or disability), (iv) any misconduct, fraud, embezzlement, theft or misappropriation, or (v) gross negligence in connection with the executive’s services. A “constructive departure” occurs when there is a material and sustained dereliction of duties or other egregious conduct that would customarily result in a termination of services. “Disability” means an executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or be expected to last for a continuous period of not less than 12 months. An executive will be eligible for “retirement” after reaching age 65 with at least five years of service. As of December 31, 2023, the number of restricted stock units granted by us pursuant to our 2017 Equity Incentive Plan that are subject to the provisions of the 2020 agreements are as follows: Mr. Bouquard (673,051), Mr. Coleman (210,560), Mr. Foley (278,179), and Mr. Fox (49,884). We are not obligated to make any payments or accelerate vesting of any outstanding equity-based compensation awards upon a change in control.
Pay Ratio Disclosure
Pay Ratio Disclosure As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of Doug Bouquard, our chief executive officer, to the median annual total compensation of other employees providing services to us. As disclosed in the “Compensation Discussion and Analysis” section above, Mr. Bouquard did not receive any direct cash compensation from us or our Manager allocated solely for services as our chief executive officer, and we did not reimburse our Manager or any of its affiliates for the compensation paid to Mr. Bouquard. Because we did not pay or provide reimbursement of any direct compensation provided to Mr. Bouquard, nor to all other employees providing services to us, we are unable to calculate and provide a ratio of the median employee’s annual total compensation to the total annual compensation of Mr. Bouquard.
Pay Versus Performance Disclosure
Pay Versus Performance Disclosure As required by Item 402(v) of Regulation S-K, we are providing the following information regarding the relationship between executive compensation and our financial performance for each of the last four completed calendar years. The following disclosure does not include a “Company-Selected Measure,” as outlined by Item 402(v)(2)(vi), or a discussion of any other financial measures that are used to link executive compensation actually paid, as outlined by Item 402(v)(6), as executive compensation decisions are made based on a holistic look of the overall health of the Company and are not based on any fixed performance metrics.
Pay Versus Performance Table*
Pay Versus Performance Table*
Pay Versus Performance Table*
| Year (a) | Summary compensation table total for PEO** (b) | Summary compensation table total for PEO*** (b) | Compensation actually paid to PEO** (c) (10) | | Compensation actually paid to PEO*** (c) (10) | Average summary compensation table total for non-PEO named executive officers (d) | Average compensation actually paid to non-PEO named executive officers (e) (10) | Value of initial fixed $100 investment based on: | | Net income (h) | | | | | | | | | | Total shareholder return (f) (8) | Peer group total shareholder return (g) (8)(9) | | | 2023 | —(1) | $2,574,570(2) | — | (1) | $2,902,479(2) | $590,205(4) | $724,842(4) | 7.18% | 10.87% | $(116,630,000) | | 2022 | $1,000,000(1) | $3,250,000(2) | $363,660 | (1) | $2,891,924(2) | $1,055,446(5) | $665,110(5) | (63.54)% | (34.49)% | $(60,066,000) | | 2021 | —(3) | $1,220,000(1) | $666,471 | (3) | $1,508,762(1) | $900,483(6) | $1,092,387(6) | 22.55% | 17.55% | $138,550,000 | | 2020 | $713,510(3) | — | $(2,124,395 | ) (3) | — | $498,072(7) | $146,195(7) | (62.91)% | (28.11)% | $(136,826,000) |
Pay Versus Performance Table*
| * As previously noted, the Summary Compensation Table totals include only the amounts of compensation that we are able to quantify for services rendered to us during the fiscal year. As such, for all PEOs and non-PEOs, it includes only the grant date fair value of the equity compensation awards granted by us, while for the non-PEOs, it also includes amounts (including base salary and bonus) based on a ratio of Mr. Foley’s compensation paid by an affiliate of our Manager to the total compensation expenses incurred by an affiliate of our Manager for services rendered to us. Due to Mr. Foley being the only individual whose compensation numbers include cash compensation, the non-PEO compensation amounts appear higher in certain years than the PEO compensation amounts. Throughout this table, parentheses denote negative numbers. |
Pay Versus Performance Table*
| ** For years in which more than one individual served as PEO for different portions of the year, this column represents disclosure for the individual who served as PEO as of January 1 of such year. |
Pay Versus Performance Table*
| *** For years in which more than one individual served as PEO for different portions of the year, this column represents disclosure for the individual who served as PEO as of December 31 of such year. |
Pay Versus Performance Table*
| (1) Represents disclosure for Matt Coleman, who served as our principal executive officer, as defined in Item 402(a)(3) of Regulation S-K under the Exchange Act (“PEO”), from April 1, 2021 to April 24, 2022. |
Pay Versus Performance Table*
| (2) Represents disclosure for Doug Bouquard, our PEO since April 25, 2022, and as previously noted, includes for 2022, the value of his one-time sign-on equity compensation grant in addition to his annual equity compensation grant. |
Pay Versus Performance Table*
| (3) Represents disclosure for Greta Guggenheim, our PEO from January 2016 to March 31, 2021. |
Pay Versus Performance Table*
| (4) Non-PEO named executive officers for 2023 are Matthew Coleman, Robert Foley, and Brandon Fox. |
Pay Versus Performance Table*
| (5) Non-PEO named executive officers for 2022 are Robert Foley, Peter Smith, and Deborah Ginsberg. |
Pay Versus Performance Table*
| (6) Non-PEO named executive officers for 2021 are Robert Foley, Peter Smith, and Deborah Ginsberg. |
Pay Versus Performance Table*
| (7) Non-PEO named executive officers for 2020 are Matthew Coleman, Robert Foley, Peter Smith, and Deborah Ginsberg. |
Pay Versus Performance Table*
| (8) Represents the cumulative total shareholder return since January 1, 2020. |
Pay Versus Performance Table*
| (9) Represents the total shareholder return for the Bloomberg REIT Mortgage Index since January 1, 2020. |
Pay Versus Performance Table*
| (10) The amounts reported represent the amounts of “compensation actually paid” to our PEO and “average compensation actually paid” to our other NEOs, as calculated in accordance with Item 402(v) of Regulation S-K. In accordance with the requirements of Item 402(v) of Regulation S-K the following adjustments were made to our PEO’s compensation and the average of our other NEO’s compensation as reported in the Summary Compensation Table for each year: |
Pay Versus Performance Table*
| | 2023 | | | Adjustments | PEO (Bouquard) | Average of Other NEOs | | Deduction for amounts reported under the “Stock Awards” column in the Summary Compensation Table for 2023 | $(2,574,570.00) | $(457,166.67) | | Increase/deduction based on ASC 718 Fair Value of awards granted during 2023 that remain unvested as of year-end 2023, determined as of 12/31/2023 | $2,512,718.00 | $446,183.83 | | Increase/deduction for awards granted during prior fiscal years that were outstanding and unvested as of 12/31/2023, determined based on change in ASC 718 Fair Value from 12/31/2022 to 12/31/2023 | $(83,078.91) | $(32,160.23) | | Increase/deduction for awards granted during prior fiscal years that vested during 2023, determined based on change in ASC 718 Fair Value from 12/31/2022 to the vesting date | $59,205.66 | $30,912.58 | | Increase based on dividends or other earnings paid during the year prior to the vesting date of an award | $413,633.76 | $146,868.24 | | Total Adjustments | $327,908.51 | $134,637.76 | | Summary Compensation Table Total | $2,574,570.00 | $590,204.67 | | Compensation Actually Paid | $2,902,478.51 | $724,842.43 |
Pay Versus Performance Table*
| | 2022 | | | | Adjustments | PEO (Coleman) | PEO (Bouquard) | Average of Other NEOs | | Deduction for amounts reported under the “Stock Awards” column in the Summary Compensation Table for 2022 | $(1,000,000.00) | $(3,250,000.00) | $(833,333.33) | | Increase/deduction based on ASC 718 Fair Value of awards granted during 2022 that remain unvested as of year-end 2022, determined as of 12/31/2022 | $939,790.20 | $2,742,558.96 | $783,158.50 | | Increase/deduction for awards granted during prior fiscal years that were outstanding and unvested as of 12/31/2022, determined based on change in ASC 718 Fair Value from 12/31/2021 to 12/31/2022 | $(606,670.50) | — | $(319,450.40) | | Increase/deduction for awards granted during prior fiscal years that vested during 2022, determined based on change in ASC 718 Fair Value from 12/31/2021 to the vesting date | $(137,988.83) | — | $(94,602.22) | | Increase based on dividends or other earnings paid during the year prior to the vesting date of an award | $168,528.96 | $149,365.44 | $102,022.32 | | Total Adjustments | $(636,340.17) | $(358,075.60) | $(362,205.14) | | Summary Compensation Table Total | $1,000,000.00 | $3,250,000.00 | $1,055,446 | | Compensation Actually Paid | $363,659.83 | $2,891,924.40 | $665,109.86 |
Pay Versus Performance Table*
| | 2021 | | | | Adjustments | PEO (Guggenheim) | PEO (Coleman) | Average of Other NEOs | | Deduction for amounts reported under the “Stock Awards” column in the Summary Compensation Table for 2021 | — | $(1,220,000.00) | $(716,666.67) | | Increase/deduction based on ASC 718 Fair Value of awards granted during 2021 that remain unvested as of year-end 2021, determined as of 12/31/2021 | — | $1,233,059.36 | $724,335.80 | | Increase/deduction for awards granted during prior fiscal years that were outstanding and unvested as of 12/31/2021, determined based on change in ASC 718 Fair Value from 12/31/2020 to 12/31/2021 | $140,902.48 | $100,760.80 | $55,307.73 | | Increase/deduction for awards granted during prior fiscal years that vested during 2021, determined based on change in ASC 718 Fair Value from 12/31/2020 to the vesting date | $315,434.51 | $71,781.48 | $67,550.59 | | Increase based on dividends or other earnings paid during the year prior to the vesting date of an award | $210,134.00 | $103,160.82 | $61,376.42 | | Total Adjustments | $666,470.99 | $288,762.46 | $191,903.87 | | Summary Compensation Table Total | $0.00 | $1,220,000.00 | $900,483.00 | | Compensation Actually Paid | $666,470.99 | $1,508,762.46 | $1,092,386.87 |
Pay Versus Performance Table*
| | 2020 | | | Adjustments | PEO | Average of Other NEOs | | Deduction for amounts reported under the “Stock Awards” column in the Summary Compensation Table for 2020 | $(713,510.00) | $(435,328.50) | | Increase/deduction based on ASC 718 Fair Value of awards granted during 2020 that remain unvested as of year-end 2020, determined as of 12/31/2020 | $694,783.96 | $423,903.65 | | Increase/deduction for awards granted during prior fiscal years that were outstanding and unvested as of 12/31/2020, determined based on change in ASC 718 Fair Value from 12/31/2019 to 12/31/2020 | $(1,795,082.25) | $(254,565.19) | | Increase/deduction for awards granted during prior fiscal years that vested during 2020, determined based on change in ASC 718 Fair Value from 12/31/2019 to the vesting date | $(1,429,561.07) | $(139,879.81) | | Increase based on dividends or other earnings paid during the year prior to the vesting date of an award | $405,464.00 | $53,993.15 | | Total Adjustments | $(2,837,905.36) | $(351,876.70) | | Summary Compensation Table Total | $713,510.00 | $498,071.75 | | Compensation Actually Paid | $(2,124,395.36) | $146,195.05 |
Narrative Disclosure to Pay Versus Performance Table
Narrative Disclosure to Pay Versus Performance Table The following charts illustrate the relationship between “Compensation Actually Paid” and performance on the measures identified in the Pay Versus Performance Table above. As previously noted, Mr. Bouquard’s 2022 compensation also includes the value of a one-time sign-on equity compensation grant and does not represent normal cycle annual compensation amounts.
Total Shareholder Return and “Compensation Actually Paid”
Total Shareholder Return and “Compensation Actually Paid”
Net Income and “Compensation Actually Paid”
Net Income and “Compensation Actually Paid”
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
2023 Director Compensation
2023 Director Compensation Our director compensation program during the fiscal year ended December 31, 2023 consisted of an annual base director’s fee of $183,504 for each of our non-management directors. These annual base director’s fees were paid in cash and equity-based awards under our 2017 Equity Incentive Plan. In addition, each non-management director who chaired the audit, compensation, and nominating and corporate governance committees received an additional annual cash payment of $15,000, $10,000 and $10,000, respectively. Members of the audit, compensation, and nominating and corporate governance committees also received an additional annual cash payment of $10,000, $5,000 and $2,500, respectively. We also reimbursed all members of our board of directors for their travel expenses incurred in connection with their attendance at full board and committee meetings and for other expenses incurred in the performance of their duties, such as participation in director education programs. Our directors are also eligible to receive equity-based awards under our 2017 Equity Incentive Plan. Our lead independent director also received an additional annual cash payment of $10,000. The following table reflects information concerning the compensation of our directors earned during the last completed fiscal year ended December 31, 2023. Directors who are also officers of the Company do not receive any additional compensation for their services on our board of directors.
2023 Director Compensation
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards(2) | Total ($) | | Avi Banyasz | — | $96,004 | $96,004 | | Doug Bouquard(3) | — | — | — | | Julie Hong | — | $96,004 | $96,004 | | Michael Gillmore | $110,000 | $96,004 | $206,004 | | Todd Schuster | $95,000 | $96,004 | $191,004 | | Wendy Silverstein | $110,000 | $96,004 | $206,004 | | Bradley Smith | $122,500 | $96,004 | $218,504 | | Gregory White | $105,000 | $96,004 | $201,004 |
2023 Director Compensation
| (1) For additional information regarding the amounts reflected in this column, see “—Fees Earned or Paid in Cash” below. |
2023 Director Compensation
| (2) For additional information regarding the amounts reflected in this column, see “—Stock Awards” below. |
2023 Director Compensation
| (3) Mr. Bouquard did not receive any additional compensation for service on our board of directors. For a description of Mr. Bouquard’s compensation with respect to his services rendered to us as our chief executive officer during 2023, see the Summary Compensation Table above. |
Change to Director Compensation Program
Change to Director Compensation Program In the first quarter of 2024, the compensation committee undertook a review of our director compensation program for non-management directors in comparison to our peer group. Based on this review, and after consulting with FTI Consulting, Inc., an independent compensation consultant, the compensation committee recommended, and the Board subsequently unanimously approved, effective as of April 1, 2024, an increase in: the total annual base director’s fee for each non-management director from $175,000 to $217,500, compensation for service as lead independent director from $10,000 to $20,000, compensation for service as chair of the audit committee from $15,000 to $20,000, compensation for service as chair of the compensation committee from $10,000 to $15,000, compensation for service as a member of the compensation committee from $5,000 to $7,500 and compensation for service as a member of the nominating and corporate governance committee from $2,500 to $5,000. Additionally, effective as of April 1, 2024, $100,000 of the annual base director’s fee for non-management directors shall be paid in cash and $117,500 shall be paid in equity-based awards under our 2017 Equity Incentive Plan. The other elements of our director compensation program have not been changed.
Indemnification Agreements with Directors and Officers
Indemnification Agreements with Directors and Officers We have entered into customary indemnification agreements with each of our directors and officers that obligate us to indemnify them to the maximum extent permitted under Maryland law. The agreements require us to indemnify the director or officer, or the indemnitee, against all judgments, penalties, fines and amounts paid in settlement and all expenses actually and reasonably incurred by the indemnitee or on his or her behalf in connection with a proceeding other than one initiated by or on our behalf and in which the indemnitee is determined in a final adjudication to be liable to us. The indemnitee will not be entitled to indemnification if it is established that one of certain prohibitions on indemnification under Maryland law exists. In addition, each indemnification agreement requires us to advance reasonable expenses incurred by the indemnitee within ten days of the receipt by us of a statement from the indemnitee requesting the advance, provided that the statement evidences the expenses and is accompanied by:
Indemnification Agreements with Directors and Officers
| • | a written affirmation of the indemnitee’s good faith belief that he or she has met the standard of conduct necessary for indemnification; and |
Indemnification Agreements with Directors and Officers
| • | a written undertaking by or on behalf of the indemnitee to repay the amount if it is ultimately determined that the standard of conduct necessary for indemnification was not met. |
Indemnification Agreements with Directors and Officers
Each indemnification agreement also provides for procedures for the determination of entitlement to indemnification, including requiring that such determination be made by independent counsel after a change in control of us.