Rithm Capital restructures CEO’s pay into incentive-friendly deal

Key Takeaways:

– Rithm Capital has changed Michael Nierenberg’s compensation package by reducing his base salary, bonus, and time-based equity award
– Nierenberg’s target annual compensation has increased from $15 million to $17 million
– His base salary will be reduced from $1.25 million to $1 million, and his cash bonus and equity award targets will also be decreased
– The performance-based share of Nierenberg’s total equity award has increased
– Nierenberg has repositioned Rithm Capital from a REIT into a global asset manager
– He led the company during the acquisition of Sculptor Capital Management and Computershare Mortgage Services
– Rithm subsidiary Newrez restructured its mortgage business, resulting in cuts to managers and reduced compensation for loan officers
– Nierenberg has held executive positions at Bank of America Merrill Lynch, J.P. Morgan, Bear Stearns, and Lehman Brothers
– Rithm announced a $532.7 million GAAP net income in 2023, lower than the prior year

HousingWire:

New York-based Rithm Capital has changed the compensation package of its top executive, Michael Nierenberg, by reducing his annual base salary, bonus and time-based equity award. But the company also increased the performance-based share of the total equity award.

As a result, Nierenberg’s target annual compensation rose from $15 million to $17 million, according to a March 15 filing with the Securities and Exchange Commission (SEC). 

A spokesperson for Rithm Capital declined to provide more details on the decision.

Nierenberg, the chairman, CEO and president of Rithm Capital, will have his base salary reduced from $1.25 million to $1 million, effective April 1, per the amendment to the compensation agreement signed in June 2022.

The parties agreed that Nierenberg’s annual target cash bonus will be reduced from $5 million to $4 million. And the time-based yearly equity award target will be cut from $4.375 million to $3 million. 

Meanwhile, Nierenberg’s annual performance-based equity award will increase from $4.375 million to $9 million, “such that 75% of the target value of Executive’s annual equity award grants will now be in the form of performance-based units,” the filing states. 

Nierenberg joined the company in 2013 and has recently repositioned it from a real estate investment trust (REIT) into a leading global asset manager. 

He led the company during the tumultuous acquisition of Sculptor Capital Management in 2023, bringing in $34 billion in assets under management. 

In the same year, Rithm also struck a deal to acquire Computershare Mortgage Services, including Specialized Loan Servicing (SLS), adding $136 billion in unpaid principal balance (UPB) of mortgage servicing rights (MSRs)

In the mortgage space, Rithm subsidiary Newrez restructured its distributed retail mortgage business, resulting in cuts to regional and divisional managers. It also included reduced compensation for loan officers, sources told HousingWire in February.

Nierenberg has been the president and CEO of Rithm since November 2013 and chairman since May 2016. Prior to joining Rithm, he held executive positions at Bank of America Merrill Lynch, J.P. Morgan, Bear Stearns, and Lehman Brothers

In 2023, Rithm announced a $532.7 million GAAP net income, lower than its figure of $864.8 million in the prior year.

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Property Chomp’s Take:

Have you heard about the recent changes to the compensation package of Michael Nierenberg, the top executive at Rithm Capital? It seems like the company is shaking things up by adjusting his salary, bonus, and equity awards.

According to a filing with the Securities and Exchange Commission, Nierenberg’s target annual compensation has actually increased from $15 million to $17 million. While his base salary and bonus have been reduced, the performance-based share of his equity award has been increased.

It’s interesting to see how companies like Rithm Capital are reevaluating their compensation structures to align with performance and shareholder value. Nierenberg, who has been with the company since 2013, has played a key role in transforming Rithm into a global asset manager.

Under his leadership, Rithm made significant acquisitions, such as Sculptor Capital Management and Computershare Mortgage Services, which have boosted the company’s assets under management and mortgage servicing portfolio.

Despite facing challenges in the mortgage space, including restructuring efforts at subsidiary Newrez, Rithm seems to be on a solid growth trajectory under Nierenberg’s leadership. His background in finance and his experience at major financial institutions like Bank of America Merrill Lynch and J.P. Morgan have certainly been assets to the company.

It will be interesting to see how these changes in Nierenberg’s compensation package impact Rithm’s performance in the coming years. As the company continues to evolve and grow, Nierenberg’s leadership will undoubtedly play a crucial role in shaping its future success.