DEF 14A of loanDepot, Inc.
Filed Apr 19, 2024 · FY20230001831631-24-000093
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 6, 2024
| General Information | 1 | | Proposal 1: Election of Class III Directors | 2 | | Director Compensation | 19 | | Our Executive Officers | 21 | | Executive Compensation | 25 | | Outstanding Equity Awards at Fiscal Year End | 30 | | Additional Narrative Disclosure | 31 | | Pay Versus Performance | 35 | | Stock Ownership Information of Certain Beneficial Owners and Management | 37 | | Delinquent Section 16(a) Reports | 39 | | Related Party Transactions | 40 | | Proposal No. 2: Ratification of Appointment of Independent Registered Public Accounting Firm | 47 | | Report of the Audit Committee of the Board | 49 | | Proposal No. 3: Advisory Vote to Approve the Compensation of Our Named Executive Officers | 50 | | Frequently Asked Questions | 51 | | Appendix A: Reconciliation of GAAP to Non-GAAP Financial Measures | 58 |
Proposal 1: Election of Class III Directors
Proposal 1: Election of Class III Directors
Class III Director Nominees Standing for Election
Class III Director Nominees Standing for Election
Class III Director Nominees Standing for Election
| Brian Golson Non-Independent Director | Director Since: February 2021 Committee Memberships: None Age: 53 Skills and Qualifications: Executive Leadership Entrepreneurial Development and Strategy Financial and Audit Specific Mortgage and Lending Experience Technology, Cyber and Innovation Human Capital Management Legal, Regulatory and Public Policy Other Public Company Directorships: Performant Financial Corporation (2004 – 2019) | | Brian Golson is the Co-CEO and Managing Partner at Parthenon Capital, an affiliate of the Parthenon Stockholders, and has been with Parthenon Capital since 2002. He has also served as a director of the company or its affiliate, loanDepot.com, LLC, since December 2009. Prior to joining Parthenon Capital, Golson was the Chief Financial Officer and Vice President of Operations for Everdream, a software company sold to Dell providing outsourced IT infrastructure management. Mr. Golson also held leadership positions with Prometheus Partners, a middle-market private equity fund focused on recurring revenue service businesses, and GE Capital where he focused on acquisitions and divestitures of financial services and insurance businesses. Mr. Golson earned a Bachelor of Arts in Economics from the University of North Carolina, Chapel Hill and a Master of Business Administration from the Harvard Business School. Mr. Golson’s extensive financial and leadership experience qualify him to serve as a member of the Board. | |
Class III Director Nominees Standing for Election
| | 5 |
Class III Director Nominees Standing for Election
| Anthony Hsieh Founder and Chairman | Director Since: February 2021 Committee Memberships: None Age: 59 Skills and Qualifications: Executive Leadership Entrepreneurial Development and Strategy Real Estate Industry Experience Specific Mortgage and Lending Experience Technology, Cyber and Innovation Sustainability/Corporate Responsibility Other Public Company Directorships: None | | Anthony Hsieh founded loanDepot and has served as Chair of the Board since February 2021. Mr. Hsieh served as Executive Chairman from April 2022 to February 2023 and as CEO from February 2021 to April 2022 and as the Chair and CEO of the Company’s affiliate, loanDepot.com, LLC (“LDLLC”), between December 2009 (when the business was formed) until April 2022. Mr. Hsieh has more than 30 years of experience in the lending industry. Prior to starting loanDepot, in 2002, Mr. Hsieh founded Home Loan Center, Inc., the first national online lender to offer a full spectrum of mortgage loan products featuring live interest-rate quotes and loan offerings tailored to borrowers’ needs and credit profiles. He continued to lead the business for three years after it merged with IAC’s subsidiary, LendingTree in 2004. In 1989, he acquired a mortgage brokerage company and transformed it into LoansDirect.com. Mr. Hsieh’s executive leadership experience and extensive knowledge of our business qualify him to serve as a member of the Board. | |
Class III Director Nominees Standing for Election
| 6 | |
Class I Directors – Term Ends 2025
Class I Directors – Term Ends 2025
Class I Directors – Term Ends 2025
| John Lee Non-Independent Director | Director Since: April 2022 Committee Memberships: Compensation Nominating and Corporate Governance Age: 55 Skills and Qualifications: Executive Leadership Entrepreneurial Development and Strategy Financial and Audit Specific Mortgage and Lending Experience Technology, Cyber and Innovation Risk and Compliance Human Capital Management Other Public Company Directorships: None | | John Lee has served as a director of the Company since April 2022. Previously, Mr. Lee has served as the predecessor company’s Chief Analytics Officer, leading financial modeling and analytics across all lending channels, between July 2014 and March 2021. Prior to that, Mr. Lee was the predecessor company’s first Chief Financial Officer, serving between September 2009 and July 2014. Prior to loanDepot, Mr. Lee served in a variety of financial capacities for key lending firms. From June 2007 to September 2009, Mr. Lee served as Chief Financial Officer at Grander Inc., where he directed the company’s financial operations in addition to managing corporate development and acquisition activities. From September 2002 to May 2007, Mr. Lee held the role of Executive Vice President and Chief Financial Officer at Home Loan Center, Inc. (later to become LendingTree). From 1998 to 2001, Mr. Lee managed the west coast office of CIBC World Markets (CIBC Oppenheimer) as director – Investment Banking, Financial Institutions Group (FIG), where he oversaw e-financial services, mortgage banking, specialty finance and community banking, and advised both public and private companies on mergers and acquisitions and private equity. From 1995 to 1998, Mr. Lee managed mergers and acquisitions and joint venture and affinity deal analysis as Vice President, Corporate Development and M&A at Countrywide Home Loans. Mr. Lee holds a Bachelor of Arts in Economics from the University of Rochester in New York with a certificate of Management in Accounting and Finance from the university’s Simon School of Business. He also holds a Masters of Business Administration in Finance from Ohio State University where he was recognized as a Weidler Scholar and Beta Gamma Sigma honors graduate. Mr. Lee’s extensive knowledge of our business and leadership experience qualify him to serve as a member of the Board. | |
Class I Directors – Term Ends 2025
| | 7 |
Class I Directors – Term Ends 2025
| Dawn Lepore Independent Director | Director Since: February 2021 Committee Memberships: Nominating and Corporate Governance (Chair) Compensation (Chair) Audit Age: 70 Skills and Qualifications: Executive Leadership Public Company Governance Entrepreneurial Development and Strategy Financial and Audit Technology, Cyber and Innovation Risk and Compliance Human Capital Management Sustainability/Corporate Responsibility Other Public Company Directorships: Accolade, Inc. RealNetworks, Inc. (2013 – 2022) | | Dawn Lepore has served as a director of the Company since February 2021 and its affiliate, LDLLC, since July 2015. Ms. Lepore previously served as Interim Chief Executive Officer of Prosper Marketplace, Inc., an online peer-to-peer lending platform, from March 2012 to January 2013, and as Chair and Chief Executive Officer of drugstore.com, inc., an online retailer of health and beauty care products, from October 2004 until its sale to Walgreen Co. in June 2011. Prior to joining drugstore.com, Ms. Lepore held various leadership positions during her 21 years with The Charles Schwab Company, an investment services firm that provides brokerage, banking and investment-related services to consumers and businesses. Ms. Lepore previously served on the boards of directors of Coupons.com, AOL Inc., The TJX Companies, Inc., eBay Inc., The New York Times Company, drugstore.com, inc. and Wal-Mart Stores Inc. Ms. Lepore earned a B.A. from Smith College. Ms. Lepore’s extensive operational background and experience as an executive and director at a diverse range of online consumer, internet technology and retail companies qualify her to serve as a member of the Board. | |
Class I Directors – Term Ends 2025
| 8 | |
Class I Directors – Term Ends 2025
| Frank Martell Non-Independent Director and President and CEO | Director Since: April 2022 Committee Memberships: None Age: 64 Skills and Qualifications: Executive Leadership Public Company Governance Entrepreneurial Development and Strategy Financial and Audit Real Estate Industry Specific Mortgage and Lending Experience Technology, Cyber and Innovation Risk and Compliance Human Capital Management Legal, Regulatory, Public Policy Sustainability/Corporate Responsibility Other Public Company Directorships: Compass, Inc. | | Frank Martell has served as a director of the Company and its President and CEO since April 2022. From March 2017 to January 2022, Mr. Martell served as President and Chief Executive Officer of CoreLogic, Inc. a global property information, analytics and data-enabled solutions provider. Prior to that, he served as CoreLogic’s Chief Financial Officer from August 2011 to April 2016 and Chief Operating Officer from July 2014 to March 2017. Before joining CoreLogic, Mr. Martell served as the President and Chief Executive Officer of the Western Institutional Review Board from 2010 to 2011, a leading provider of review, approval and oversight for clinical research studies involving human subjects, and before that as Chief Financial Officer of Information Services Group, Inc. from 2007 to 2009 and Advantage Solutions from 2009 to 2010. From 1996 to 2006, Mr. Martell held various leadership positions at ACNielsen Corporation, including President of Asia Pacific and Emerging Markets, Executive Vice President of the Marketing Information Group, and Chief Operating Officer of ACNielsen and President of Europe, Middle East and Africa. Mr. Martell spent the initial 15 years of his business career in a variety of financial leadership roles at General Electric. Mr. Martell currently serves on the board of Bank of the West, a wholly-owned subsidiary of BNP Paribas. Mr. Martell also serves on the board of Operation HOPE, a provider of financial literacy empowerment for youth and financial capability for communities, and on the national board of Marine Corps Scholarship Foundation, the largest and oldest group supporting the education of the sons and daughters of active and prior service Marines. Mr. Martell’s extensive operational background and experience as an executive and director at various companies qualify him to serve as a member of the Board. | |
Class I Directors – Term Ends 2025
| | 9 |
Class II Directors – Term Ends 2026
Class II Directors – Term Ends 2026
Class II Directors – Term Ends 2026
| Andrew Dodson Non-Independent Director | Director Since: February 2021 Committee Memberships: None Age: 46 Skills and Qualifications: Executive Leadership Entrepreneurial Development and Strategy Financial and Audit Specific Mortgage and Lending Experience Technology, Cyber and Innovation Other Public Company Directorships: None | | Andrew Dodson is Managing Partner at Parthenon Capital, a private equity firm that partners with and invests in management teams and their companies and an affiliate of each of the Parthenon Stockholders (defined below), and has been with Parthenon Capital since 2005. He has also served as a director of the Company since February 2021 and as a director of its affiliate, LDLLC, since December 2009. Prior to joining Parthenon Capital, Mr. Dodson was a consultant with Bain & Co. from 2004 to 2005, where he focused on mergers and acquisitions, cost control and corporate strategy for middle market technology companies. Mr. Dodson was also a financial analyst for Enron Corporation in the company’s retail group and worked for Trilogy, Inc., an enterprise software company, where he focused primarily in business development. Mr. Dodson earned a Bachelor of Arts from Duke University and a Master of Business Administration from Harvard Business School. Mr. Dodson’s extensive business and financial management experience qualify him to serve as a member of the Board. | |
Class II Directors – Term Ends 2026
| 10 | |
Class II Directors – Term Ends 2026
| Steven Ozonian Independent Director | Director Since: April 2023 Committee Memberships: Audit Age: 68 Skills and Qualifications: Executive Leadership Public Company Governance Entrepreneurial Development and Strategy Financial and Audit Real Estate Industry Experience Specific Mortgage and Lending Experience Technology, Cyber and Innovation Human Capital Management Other Public Company Directorships: LendingTree, Inc. Nobilis Health Corp. (2015 – 2019) | | Steven Ozonian has served as the CEO of the Williston Financial Group since 2017 and has served on Williston's Board of Directors since 2011. Mr. Ozonian has also served on the Board of Directors of LendingTree, Inc. since 2011. He is currently Lead Independent Director, Chair of the Audit Committee, and Chair of the Compensation Committee of LendingTree. He also served as the CEO of LendingTree's proprietary full service real estate brokerage business, known as RealEstate.com. Mr. Ozonian serves as Chairman of the Board of Directors of Global Mobility Solutions, a global provider of human resources and real estate services. He has held other high-level positions in the homeownership industry including Chairman and CEO of Prudential's real estate and related businesses, CEO of Realtor.com, and National Homeownership Executive for Bank of America. Mr. Ozonian is also a member of the Board of Directors of Attom Data, a real estate data services company, and a member of the Board of Directors of Inside Real Estate, a real estate software services company. Mr. Ozonian has received numerous awards for service and technology innovation in the residential real estate industry. | |
Class II Directors – Term Ends 2026
| | 11 |
Class II Directors – Term Ends 2026
| Pamela Patenaude Independent Director | Director Since: July 2021 Committee Memberships: Audit Age: 63 Skills and Qualifications: Executive Leadership Public Company Governance Financial and Audit Real Estate Industry Experience Specific Mortgage and Lending Experience Risk and Compliance Human Capital Management Legal, Regulatory and Public Policy Sustainability/Corporate Responsibility Other Public Company Directorships: Target Hospitality Corp. CoreLogic, Inc. (June 2020 – June 2021) | | Pamela Patenaude has served as a director of the Company since July 2021 and brings deep real estate and housing policy expertise from her prior executive experience in government, nonprofits and private industry. Since February 2023, she has served as the Chair of the Home Builders Institute’s (HBI) Board of Trustees. HBI is the nation’s leading nonprofit provider of trade skills education for the building industry. Ms. Patenaude was also appointed to the National Housing Conference’s Board of Governors on January 29, 2023, and is a Principal at Granite Housing Strategies, LLC, which provides consultation services for disaster recovery efforts in the U.S., a role she held since April 12, 2019, serving as a strategic advisor for clients engaged in real estate development, affordable housing and disaster recovery management. From 2017 until 2019, Ms. Patenaude served as the deputy secretary of the U.S. Department of Housing and Urban Development (“HUD”). Earlier in her career, Ms. Patenaude served as assistant secretary for community planning and development at HUD. She currently serves on the board of directors for Habitat for Humanity International and the Bipartisan Policy Center. Ms. Patenaude serves as an independent director of Target Hospitality Corp., where she serves as a member of the audit committee and chair of the nominating and corporate governance committee, and recently served as an independent director of CoreLogic, Inc., where she was a member of the audit and compensation committees. Ms. Patenaude previously served as the President of the J. Ronald Terwilliger Foundation for Housing America’s Families, a national nonprofit, education, and research organization dedicated to illuminating America’s affordable housing crisis. Ms. Patenaude earned a Bachelor of Science degree from Saint Anselm College and a Master of Science degree in community economic development from Southern New Hampshire University. Ms. Patenaude’s extensive business, financial management, regulatory and risk management experience qualify her to serve as a member of the Board. | |
Class II Directors – Term Ends 2026
| 12 | |
Director Compensation
Director Compensation The Board has adopted a compensation program for our non-employee directors, or the “Non-Employee Director Compensation Policy,” which was most recently updated in 2022 upon recommendation by the Compensation Committee. Pursuant to the Non-Employee Director Compensation Policy, each non-employee member of our Board receives the following cash compensation for Board services, as applicable: •$250,000 per year for service as a Board member, 50% of which is paid in cash and 50% of which consists of restricted stock units (valued at $125,000 on the date of the 2023 annual meeting of stockholders) that vest in quarterly installments, subject to such director’s continued service on the Board through each vesting date; •$25,000 per year for service as Chair of the Audit Committee; •$20,000 per year of service as Chair of the Compensation Committee; •$15,000 per year of service as Chair of the Nominating and Corporate Governance Committee; and •$75,000 per year for service as Lead Independent Director. Each director is expected to sit on up to two committees for no additional consideration. Any director who sits on more than two committees (other than any special committee) will be provided with an additional $25,000 in annual cash compensation. Pursuant to the Non-Employee Director Compensation Policy, on November 6, 2023, each of Andrew Dodson, John Dorman, Brian Golson, Anthony Hsieh, John Lee, Dawn Lepore, Steven Ozonian and Pam Patenaude, received 58,685 RSUs under the 2021 Omnibus Incentive Plan that vested in equal installments on each of November 6, 2023, November 30, 2023, and February 28, 2024, and the last installment will vest on May 31, 2024.
Director Compensation
| | 19 |
Director Compensation
| Director Compensation |
Director Compensation
The following table sets forth certain information with respect to non-employee director compensation for the fiscal year ended December 31, 2023 with respect to our Directors. Mr. Martell did not receive any additional compensation for his service on the Board during 2023.
Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation | Total ($) | | John Dorman(2) | $175,000 | $83,333 | $— | $258,333 | | Dawn Lepore | 185,000 | 83,333 | — | 268,333 | | Pam Patenaude | 125,000 | 83,333 | — | 208,333 | | Andrew Dodson(3) | 125,000 | 83,333 | — | 208,333 | | Brian Golson(3) | 125,000 | 83,333 | — | 208,333 | | John Lee | 125,000 | 83,333 | — | 208,333 | | Steven Ozonian | 92,813 | 83,333 | — | 176,146 | | Anthony Hsieh(4) | 112,351 | 83,333 | 180,385 | 376,069 | | Frank Martell | — | — | — | — |
Director Compensation
(1)Represents the grant date fair value, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”), of restricted stock units (“RSUs”) granted to the directors during the fiscal year ended December 31, 2023, calculated based on the closing price of the Class A common stock on November 6, 2023, the date of grant, of $1.42. These amounts do not reflect the actual economic value that may be realized by the non-employee director. (2)Mr. Dorman is not standing for re-election to the Board at the Annual Meeting. (3)Pursuant to multiple Assignment and Acknowledgement Agreements, Messrs. Dodson and Golson’s stock awards are held for the benefit of PCP Managers, L.P. and disclaim all right, title and interest in the stock awards. PCP Managers GP, LLC is the general partner of PCP Managers, L.P., an affiliate of Parthenon Capital Partners. (4)Mr. Hsieh’s “All Other Compensation” reports his compensation received for services as an employee, including salary and accrued but unused paid time off paid in connection with the termination his employment in accordance with his Amended and Restated Executive Employment Agreement dated April 21, 2022.
Director Compensation
| 20 | |
Summary Compensation Table
Summary Compensation Table The following table sets forth certain information with respect to compensation of our named executive officers for the fiscal years ended December 31, 2023 and December 31, 2022.
Summary Compensation Table
| Name and Principal Position | Year | Salary | Bonus(1) | Stock Awards(2) | Option Awards(3) | All Other Compensation(4) | Total | | Frank Martell President and Chief Executive Officer | 2023 | $800,000 | $1,100,000 | $6,355,634 | $— | $9,900 | $8,265,534 | | | 2022 | $532,308 | $900,000 | $13,209,200 | $1,770,000 | $— | $16,411,508 | | Jeff Walsh President, LDI Mortgage | 2023 | $750,000 | $2,200,000 | $— | $— | $2,596 | $2,952,596 | | | 2022 | $750,000 | $1,375,000 | $2,402,687 | 1,980,000 | $377,490 | $6,885,177 | | Jeff DerGurahian Chief Capital Markets Officer and Head Economist | 2023 | $600,000 | $1,900,000 | $— | $— | $— | $2,500,000 | | | 2022 | $600,000 | $1,225,000 | $2,278,401 | 1,980,000 | $304,307 | $6,387,708 |
Summary Compensation Table
(1)The amounts reported in this column for 2023 reflect discretionary annual bonuses for 2023, as described below under “Narrative Disclosure to Summary Compensation Table—2023 Annual Bonuses” and retention bonuses, as described below under “Narrative Disclosure to Summary Compensation Table—Employment Agreements with Named Executive Officers—Messrs. Walsh and DerGurahian Employment Agreements.” (2)Represents the grant date fair value, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”), of RSUs and performance stock units (“PSUs”) granted to the named executive officers. For 2023, the grant date fair value of the RSUs is calculated based on the closing price of the Class A common stock on July 19, 2023 and August 16, 2023, the date of grants, of $2.27 and $1.96, respectively. The grant date fair value of the PSUs is separately identified in the table below and is based on the probable outcome of the stock price vesting conditions, which is less than maximum performance. If the probable outcome as of the grant date was maximum performance, the aggregate grant date fair value of the PSUs granted during the years indicated would be as set forth below in the right-hand columns:
Summary Compensation Table
| | | Grant Date Fair Value | | Maximum Performance | | | Year Granted | Name | 2021 Plan PSUs | 2022 Inducement Plan PSUs | 2021 Plan PSUs | CEO Inducement PSUs | | 2023 | Frank Martell | $3,606,836 | $— | $7,213,671 | $— | | 2022 | Frank Martell | $— | $10,489,200 | $— | $20,978,400 | | 2022 | Jeff Walsh | $1,299,104 | $— | $1,948,654 | $— | | 2022 | Jeff DerGurahian | $1,201,364 | $— | $1,802,046 | $— |
Summary Compensation Table
| | 25 |
Summary Compensation Table
These amounts do not reflect the actual economic value that may be realized by the named executive officers. Please see Note 16 to our audited consolidated financial statements for the fiscal year ended December 31, 2023 included in our Annual Report on Form 10-K for more information. See “Narrative Disclosure to Summary Compensation Table—Equity Awards” for more information regarding the RSUs and PSUs granted. (3)Represents the aggregate grant date fair value, calculated in accordance with FASB ASC Topic 718 of non-qualified stock options granted to the named executive officers during the years indicated. These amounts do not reflect the actual economic value that may be realized by the named executive officers. Please see Note 16 to our audited consolidated financial statements for the fiscal year ended December 31, 2023 included in our Annual Report on Form 10-K for more information. See “Narrative Disclosure to Summary Compensation Table—Equity Awards” for more information regarding the non-qualified stock options. (4)For 2023, this column includes 401(k) Plan matching contributions. For 2022, this column included (i) 401(k) Plan matching contributions and (ii) payments made related to taxable income generated to Messrs. Walsh and DerGurahian related to equity awards at our IPO under the Ninth Amended and Restated Limited Liability Company Agreement of loanDepot.com, LLC in the amounts of $367,740 and $302,230, respectively.
Outstanding Equity Awards At 2023 Fiscal Year End
Outstanding Equity Awards At 2023 Fiscal Year End The following table sets forth certain information with respect to all outstanding equity awards held by our named executive officers as of December 31, 2023.
Outstanding Equity Awards At 2023 Fiscal Year End
| | Option Awards | | | | Stock Awards | | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | | Frank Martell | | | | | | | | | | | Inducement NQSOs(2) | 250,000 | 750,000 | — | 2.72 | 5/25/2032 | | | | | | Inducement RSUs(3) | | | | | | 750,000 | 2,640,000 | | | | Inducement PSU(4) | | | | | | | | 750,000 | 2,640,000 | | 7/2023 RSUs(5) | | | | | | 969,162 | 3,411,450 | | | | 7/2023 PSUs(6) | | | | | | | | 969,162 | 3,411,450 | | 8/2023 RSUs(5) | | | | | | 280,000 | 985,600 | | | | 8/2023 PSUs(6) | | | | | | | | 280,000 | 985,600 | | Jeff Walsh | | | | | | | | | | | 12/2022 NQSOs | 2,000,000 | — | — | 1.57 | 12/23/2032 | | | | | | TMI Units(7) | | | | | | 301,821 | 1,062,410 | | | | 3/2022 RSUs(8) | | | | | | 36,874 | 129,796 | | | | 3/2022 PSUs(9) | | | | | | | | 55,310 | 194,690 | | 12/2022 RSUs(10) | | | | | | 250,000 | 880,000 | | | | 12/2022 PSUs(11) | | | | | | | | 125,000 | 440,000 | | Jeff DerGurahian | | | | | | | | | | | 12/2022 NQSOs | 2,000,000 | — | — | 1.57 | 12/23/2032 | | | | | | TMI Units(7) | | | | | | 452,717 | 1,593,564 | | | | 3/2022 RSUs(8) | | | | | | 33,801 | 118,980 | | | | 3/2022 PSUs(9) | | | | | | | | 50,701 | 178,466 | | 12/2022 RSUs(10) | | | | | | 250,000 | 880,000 | | | | 12/2022 PSUs(110) | | | | | | | | 125,000 | 440,000 |
Outstanding Equity Awards At 2023 Fiscal Year End
(1)Amounts in these columns represent the market value of unvested RSUs, PSUs and TMI Units as of December 31, 2023, determined based on the closing price of an LDI Class A Share on December 29, 2023 (the last trading day of 2023) of $3.52. The estimated market fair value of unvested PSUs as of December 31, 2023 was determined using the Monte Carlo simulation model, which used multiple input variables to determine the probability of satisfying the market condition requirements. (2)The unexercisable NQSOs vest in equal installments on each of April 27, 2024, April 27, 2025, and April 27, 2026. (3)These RSUs vest in equal installments on each of April 27, 2024, April 27, 2025, and April 27, 2026. (4)Represents the threshold amount of PSUs originally granted in May 2022 that are eligible to vest from 0% to 200% of target based on the average closing price of the Company’s Class A common stock over any 30-consecutive trading day period during the performance period beginning May 25, 2022 and ending May 25, 2027. (5)These RSUs vest in equal installments on each of July 19, 2024, July 19, 2025, and July 19, 2026. (6)Represents the target amount of PSUs originally granted in July 2023 and August 2023 that are eligible to vest from 0% to 200% of target based on the average closing price of the Company’s Class A common stock over any 30-consecutive trading day period during the performance period beginning July 19, 2023 and ending July 19, 2028. (7)These TMI Units (as described below under “Additional Narrative Disclosure—Potential Payments Upon a Termination or Change in Control—Incentive Units”) vest in equal monthly installments on the last day of each calendar month through May 1, 2025. (8)These RSUs vest in equal installments on each of July 28, 2024 and July 28, 2025. (9)Represents the threshold amount of PSUs originally granted in March 2022 that are eligible to vest from 0% to 150% of target based on the highest closing price average for any 20-consecutive days during the performance period beginning March 29, 2022 and ending March 29, 2026. (10)These RSUs vest on June 30, 2024. (11)Represents the threshold amount of PSUs originally granted in December 2022 that are eligible to vest from 0% to 150% of target based on the average closing price of the Company’s Class A common stock over any 30-consecutive trading day period during the period between the date of grant and June 30, 2024.
Outstanding Equity Awards At 2023 Fiscal Year End
| 30 | |
Potential Payments Upon a Termination or Change in Control
Potential Payments Upon a Termination or Change in Control
Pay Versus Performance
Pay Versus Performance In accordance with the requirements of Item 402(v) of Regulation S-K, the following tables and graphs along with the accompanying footnotes and narrative provide information required by the SEC regarding executive compensation and certain measures of our performance in the fiscal years since our IPO. The amount of compensation “actually paid” set forth in the initial table is calculated in the manner set forth in the SEC regulations and may not reflect amounts realized or realizable with respect to the covered compensation.
Pay Versus Performance
| Year | Summary Compensation Table Total for First PEO ($)(1) | Summary Compensation Table Total for Second PEO ($)(1) | Compensation Actually Paid to First PEO ($)(2) | Compensation Actually Paid to Second PEO ($)(2) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(3) | Average Compensation Actually Paid to Non-PEO NEOs ($)(2) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return ($)(4) | Net Income (Loss) ($) | | 2023 | — | 8,265,534 | | 24,854,604 | 2,726,298 | 8,602,154 | 27.37 | (235,512,810) | | 2022 | 4,256,105 | 16,411,508 | 2,364,455 | 8,432,308 | 6,636,443 | 3,460,105 | 12.83 | (610,385,250) | | 2021 | 30,977,314 | — | 30,977,314 | — | 6,492,451 | (1,337,269) | 36.57 | 623,146,480 |
Pay Versus Performance
(1)Represents the amounts reported for Mr. Hsieh (the “First PEO”) and Mr. Martell (the “Second PEO”) in the “Total” column of the “Summary Compensation Table” in each applicable year. Mr. Hsieh served as Chairman and Chief Executive Officer in 2021 and until April 27, 2022, at which point he became the Executive Chairman through February 6, 2023. Mr. Martell joined the company as President and Chief Executive Officer on April 27, 2022. (2)SEC rules require certain adjustments be made to the “Summary Compensation Table” totals to determine “compensation actually paid” as reported in the “Pay Versus Performance” table above. For purposes of the equity award adjustments shown below, no equity awards were cancelled as result of a failure to meet vesting conditions. The valuation assumptions used to calculate fair values for purposes of the compensation actually paid calculation did not materially differ from those disclosed at the time of grant (as applicable). For purposes of the dividends paid on equity awards, the compensation actually paid amount includes dividends paid upon the vesting of RSUs during the period, that were previously declared on unvested awards, and RSUs that are paid upon meeting the service period requirement and vesting. The following table details the applicable adjustments to the amount in the “Total” column of the “Summary Compensation Table” in 2023 that were made to determine “compensation actually paid” (amounts are averages for the Other NEOs):
Pay Versus Performance
| Year | Name | Summary Compensation Table Total ($) | Deduct “Stock Awards” and “Option Awards” reported in Summary Compensation Table ($) | Add Year- End Fair Value of Outstanding and Unvested Equity Awards Granted in the Year ($) | Add (Deduct) Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years ($) | Add Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Add (Deduct) Year over Year Change in Fair Value of Equity Awards Granted in Prior Years which Vested in the Year ($) | Add Value of any Dividends or Other Earnings Paid in the Year ($) | Compensation Actually Paid ($) | | 2023 | Frank Martell (PEO) | 8,265,534 | (6,355,633) | 11,607,824 | 10,521,879 | — | 815,000 | — | 24,854,604 | | | Other NEOs | 2,726,298 | — | — | 1,872,197 | — | 3,729,989 | 273,670 | 8,602,154 |
Pay Versus Performance
The compensation actually paid related to 2021 was determined based on the change in fair value from the Company’s share price on February 11, 2021, the date of the company’s initial public offering (3)Represents the average of the amounts reported for the named executive officers (NEOs) as a group (excluding the First PEO and Second PEO) in the “Total” column of the “Summary Compensation Table” in each applicable year. The names of each of the NEOs included for these purposes for 2023, 2022, and 2021 are Messrs. Walsh and DerGurahian. (4)Total shareholder return is calculated by dividing (a) the sum of (i) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (ii) the difference between the Company’s share price at the end of each fiscal year shown and the beginning of the measurement period by (b) the Company’s share price at the beginning of the measurement period. The beginning of the measurement period for each year in the table is February 11, 2021, the date of the company’s initial public offering.
Relationship Between Pay and Performance
| Pay Versus Performance |