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NY 10022. APRIL 23, 2020 March 12, 2020. February 20, 2020. directors, proxies cannot be voted for a greater number of persons than the number of nominees named. The record date for determination of stockholders entitled to vote at the Annual Meeting is the close of business on ” of shares voted "Against" Proposal 3). For purposes of the vote on Proposal 3, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote. Currently, the Board is comprised of eight members, which are divided into three classes serving staggered terms. On March 11, 2020, Mr. Henderson, one of our Class I directors, notified us that he would step down as a director of the Company at the Annual Meeting. Mr. Henderson is expected to continue to serve until the date of the Annual Meeting. Mr. Henderson’s decision not to stand for re-election as director was based on the demands on his time from other professional commitments, and not the result of any disagreement relating to the Company’s operations, policies or practices.April 27, 201620162020 Annual Meeting of Stockholders (the "Annual Meeting"“Annual Meeting”) of Ares Commercial Real Estate Corporation (the "Company"“Company”) to be held on June 27, 2016April 23, 2020 at 11:009:30 a.m., Eastern Daylight Time, at the offices of Proskauer RoseKirkland & Ellis LLP, Eleven Times Square,601 Lexington Avenue, New York, New York 10036.Company'sCompany’s independent registered public accounting firm and (iii) approve, on a non-binding, advisory basis, the compensation of the Company'sCompany’s named executive officers, each as more fully described in the accompanying proxy statement."Notice“Notice and Access"Access” method of providing proxy materials to stockholders. We believe that this process will provide a convenient and quick way to access the proxy materials, including the Company'sCompany’s proxy statement and 20152019 annual report to stockholders, and authorize a proxy to vote your shares, while allowing us to conserve natural resources and reduce the costs of printing and distributing the proxy materials.May 4, 2016,March 12, 2020, the Company will mail to stockholders a Notice of Internet Availability of Proxy Materials, which we refer to as the Notice and Access card, containing instructions on how to access the proxy statement and 20152019 annual report to stockholders and authorize a proxy to vote electronically via the Internet or by telephone. The Notice and Access card also contains instructions as to how stockholders can receive a paper copy of the proxy materials and authorize a proxy to vote by mail.Company'sCompany’s common stock in "street name"“street name” through a broker, bank or other institution or nominee, you must follow the instructions provided by your broker or other financial institution regarding how to instruct your broker or financial institution to vote your shares.yourthe board of directors, thank you for your continued interest and support. Sincerely,
ROBERT L. ROSENWILLIAM S. BENJAMINRobert L. RosenWilliam S. Benjamin
Chairman of the Board of DirectorsJUNE 27, 201620162020 Annual Meeting of Stockholders (the "Annual Meeting"“Annual Meeting”) of Ares Commercial Real Estate Corporation, a Maryland corporation (the "Company"“Company”), will be held on June 27, 2016April 23, 2020 at 11:009:30 a.m., Eastern Daylight Time, at the offices of Proskauer RoseKirkland & Ellis LLP, Eleven Times Square,601 Lexington Avenue, New York, New York 10036NY 10022 for the following purposes:1.To elect two directors to serve until the Company's 2019 annual meeting of stockholders, and until their successors are duly elected and qualify;2.To consider and vote upon the ratification of the selection of Ernst & Young LLP as the Company's independent registered public accounting firm for the year ending December 31, 2016;3.To consider and vote upon the approval, on a non-binding, advisory basis, of the compensation of the Company's named executive officers, as more fully described in the accompanying proxy statement; and4.To consider and take action upon such other matters as may properly come before the Annual Meeting or any adjournment or postponement thereof.1. To elect two directors to serve until the Company’s 2023 annual meeting of stockholders, and until their successors are duly elected and qualify; 2. To consider and vote upon the ratification of the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020; 3. To consider and vote upon a resolution to approve, on a non-binding advisory basis, the compensation of the Company's named executive officers for the fiscal year ended December 31, 2019, as described in the accompanying proxy statement; and 4. To consider and take action upon such other matters as may properly come before the Annual Meeting or any adjournment or postponement thereof. April 15, 2016,February 26, 2020, will be entitled to receive notice of and vote at the Annual Meeting or any adjournment or postponement thereof.Company'sCompany’s common stock in "street name"“street name” through a broker, bank or other institution or nominee, you must follow the instructions provided by your broker or other financial institution regarding how to instruct your broker or financial institution to vote your shares.Company'sCompany’s board of directors. The board of directors recommends that you vote FOR the election of the two directors listed in the accompanying proxy statement to serve until the Company's 2019Company’s 2023 annual meeting of stockholders and until their successors are duly elected and qualify, FOR the ratification of the selection of Ernst & Young LLP as the Company'sCompany’s independent registered public accounting firm20162020, and FOR the resolution to approve, on a non-binding, advisory basis, the compensation of the Company'sCompany’s named executive officers.officers for the fiscal year ended December 31, 2019.
Anton Feingold
General Counsel, Vice President and SecretaryApril 27, 2016June 27, 2016:April 23, 2020: The Proxy Statementproxy statement and the Company's 2015 Annual ReportCompany’s 2019 annual report are available at: http://materials.proxyvote.com/04013V.2016"Board"“Board”) of Ares Commercial Real Estate Corporation, a Maryland corporation (the "Company," "we," "us"“Company,” “we,” “us” or "our"“our”), for use at the Annual Meeting of Stockholders (the "Annual Meeting"“Annual Meeting”) to be held on June 27, 2016April 23, 2020 at 11:009:30 a.m., Eastern Daylight Time, at the offices of Proskauer RoseKirkland & Ellis LLP, Eleven Times Square,601 Lexington Avenue, New York, New York 10036NY 10022 or at any adjournment or postponement thereof. This proxy statement, the notice of annual meeting of stockholders and the related proxy card are first being made available to our stockholders on or about April 27, 2016.2015 Annual Report2019 annual report which includes audited financial statements for the fiscal year ended December 31, 20152019 audited by Ernst & Young LLP, our independent registered public accounting firm, and their report thereon, dated March 1, 2016.20192023 annual meeting of stockholders and until their successors are duly elected and qualify, FOR the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 20162020 and FOR the resolution to approve, on a non-binding, advisory basis, the compensation of our named executive officers.officers for the fiscal year ended December 31, 2019. As to any other business which may properly come before the Annual Meeting or any postponements or adjournments thereof, the persons named as proxy holders on your proxy card will vote the shares of common stock represented by properly submitted proxies in their discretion."of record"“of record” (i.e., stockholders holding shares directly in their name) giving a valid proxy for the Annual Meeting may revoke it before it is exercised by giving a later-datedlater‑dated properly executed proxy, by giving notice of revocation to us in writing before or at the Annual Meeting or by attending the Annual Meeting and voting in person. However, the mere presence of the stockholder at the Annual Meeting does not revoke the proxy. If you hold shares of our common stock in "street name"“street name” through a broker, bank or other institution or nominee, you may vote such shares at the Annual Meeting only if you obtain proper written authority from your broker, bank or other institution or nominee and present it at the Annual Meeting. If your shares are held for your account by a broker, bank or other institution or nominee, to revoke any voting instructions prior to the time the vote is taken at the Annual Meeting, you must contact such broker, bank or other institution or nominee to determine how to revoke your vote in accordance with their policies a sufficient time in advance of the Annual Meeting.dissenters'dissenters’ or appraisal rights in connection with any of the proposals described herein.April 15, 2016.February 26, 2020. As of the close of business on April 15, 2016,February 26, 2020, there were 28,503,77833,389,008 shares of our common stock outstanding. Each share of common stock has one vote. The presence, in person or by proxy, of the holders of shares of common stock entitled to cast a majority of the votes entitled to be cast shall constitute a quorum for the purposes of the Annual Meeting. If there are not sufficient votes for a quorum or to approve or ratify any of the foregoing proposals at the time of the Annual Meeting, the chairman of the meeting may adjourn the Annual Meeting in order to permit further solicitation of proxies. Abstentions and broker non-votesnon‑votes will be deemed to be present for the purpose of determining a quorum for the Annual Meeting. A broker non-votenon‑vote occurs when a nominee holding shares for a beneficial owner (i.e., a broker) does not vote on a particular proposal because such nominee does not have discretionary voting power for that particular matter and has not received instructions from the beneficial owner. Under the rules of the New York Stock Exchange ("NYSE"(“NYSE”), the only item to be acted upon at the Annual Meeting with respect to which a broker or nominee will be permitted to exercise voting discretion is the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016.2020. Therefore, if you hold your shares in "street name"“street name” and do not give the broker or nominee specific voting instructions on the election of the two directors, or on the resolution to approve, on a non-binding, advisory basis, the compensation of our named executive officers, your shares will not be voted on those items, and a broker non-votenon‑vote will occur. Broker non-votesnon‑votes will have no effect on the voting results for such items."Bylaws"“Bylaws”) to approve Proposal 1 (the election of two directors to serve until our 20192023 annual meeting of stockholders and until their successors are duly elected and qualify). This means that the nominees with the most votes are elected. For purposes of the vote on Proposal 1, you may vote "For"“For” or withhold authority to vote for each of the nominees to the Board. "Withheld"“Withheld” votes and broker non-votesnon‑votes will not be counted as votes cast and will have no effect on the result of the vote. However, each director has agreed that if he or she receives more "Withheld"“Withheld” votes than "For"“For” votes, the director will tender his or her resignation for consideration by the nominating and governance committee. For additional details, including a description of our director majority vote resignation policy, see the section of this proxy statement entitled "Proposal“Proposal 1: Election of Directors.""For"“For” or "Against,"“Against,” or abstain from voting on Proposal 2 (to ratify the selection of Ernst & Young LLP as our independent registered public accounting firm). The affirmative vote of at least a majority of all of the votes cast at a meeting at which a quorum is present is required for approval of Proposal 2 (meaning the number of shares voted "For"“For” Proposal 2 must exceed the number of shares voted "Against"“Against” Proposal 2). For purposes of the vote on Proposal 2, abstentions will not be counted as votes cast and will have no effect on the result of the vote.officers)officers for the fiscal year ended December 31, 2019). The affirmative vote of at least a majority of all of the votes cast at a meeting at which a quorum is present is required for approval of Proposal 3 (meaning the number of shares voted "For" Proposal 3 must exceed the number"Manager"“Manager”), without special compensation therefor, may solicit proxies personally, by telephone, by electronic mail or by facsimile, telegram or other electronic means from stockholders.20192023 annual meeting of stockholders and until their successors are duly elected and qualify, FOR the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 20162020 and FOR the resolution to approve, on a non-binding, advisory basis, the compensation of our named executive officers.officers for the fiscal year ended December 31, 2019.In Memoriam: Michael H. Diamond It is with great sadness that we mourn the passing of our colleague and friend, Michael Diamond. Mr. Diamond had served with great distinction as one of our independent directors since our initial public offering. We are grateful for his service and will greatly miss his energy, integrity, wisdom, dedication and commitment to excellence."Charter"“Charter”) and the Bylaws (together with the Charter, the "Charter Documents"“Charter Documents”), our directors are divided into three classes. Directors are elected for a staggered term of three years each, with a term of office of only one of these three classes of directors expiring each year. Each director will hold office for the term to which he or she is elected and until his or her successor is duly elected and qualifies, or until the director'sdirector’s earlier resignation, death or removal.L. BrowningS. Benjamin and John Jardine,Caroline E. Blakely, the Class III directors, will expire at the Annual Meeting, andMeeting. As a result, the nominating and governance committee has recommended, and the Board has nominated, Messrs. BrowningMr. Benjamin and JardineMs. Blakely to stand for re-electionre‑election at the Annual Meeting and to hold office until the annual meeting to be held in 20192023 and until their successors are duly elected and qualify. Messrs.��BrowningMr. Benjamin and JardineMs. Blakely have agreed to continue to serve as directors if elected and have consented to be named as nominees. The Charter Documents provide that directors shall be elected by the affirmative vote of a plurality of the votes cast at the Annual Meeting. This means that Messrs. BrowningMr. Benjamin and JardineMs. Blakely must receive the most votes to be elected as our directors for the term for which they have been nominated.Nominatingnominating and Governance Committeegovernance committee will then review the director'sdirector’s continuation on the Board and recommend to the Board whether the Board should accept such tendered resignation. The Board will promptly and publicly disclose its decision and, if applicable, the reasons for rejecting the tendered resignation.April 27, 2016,March 12, 2020, the name, age, principal occupation or employment of each such person, all positions and offices such person has held with us, and the period during which he or she has served as our director or named executive officer. Messrs. BrowningMr. Benjamin and JardineMs. Blakely have not been proposed for election nor has any director been selected as a director pursuant to any agreement or understanding with us or any other person.
Name | | Age | Position(s) Held with Company and Length of Time Served | |||||||
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Rand S. April | Director (Class III Director) since April 2016* | |||||||||
Michael | Director (Class III Director) since September | |||||||||
William S. Benjamin | 56 | Director (Class II Director) and Chairman of the Board since February 2018 | ||||||||
Caroline E. Blakely | Director (Class II Director) since February 2014* | |||||||||
William L. Browning | Director (Class I Director) since February 2014* | |||||||||
| James A. Henderson | 50 | Director (Class | |||||||
| Director (Class I Director) | |||||||||
| ||||||||||
| Director (Class III Director) since April 2016* |
* | Our Board has determined that this director is independent for purposes of the NYSE corporate governance listing requirements. |
Based on the recommendations of the nominating and governance committee, the Board has identified certain desired attributes for directors. Each of the directors has demonstrated high character and integrity, superior credentials and recognition in his or her respective field and the relevant expertise and experience upon which to be able to offer advice and guidance to our management. Each of the directors also has sufficient time available to devote to our affairs, is able to work with the other members of the Board and contribute to our success and can represent the long-termlong‑term interests of our stockholders as a whole. The directors have been selected such that the Board represents a range of backgrounds and experience. There is no familial relationship among any of the members of the Board or named executive officers.
William L. Browning is one of our Class I directors and currently serves as the Chairperson of the audit committee and as a member of the compensation committee. Mr. Browning has dedicated his time to serving on boards of directors since January 2012. From 1999 to January 2012, Mr. Browning was a senior client service partner at Ernst & Young LLP, a global leader in assurance, tax, transaction and advisory services. From 2008 to 2012, Mr. Browning served as the managing partner for Ernst & Young LLP's Los Angeles office, which at the time of his departure was Ernst & Young LLP's second largest practice in the Americas and the largest public accounting firm in Los Angeles with over 1,200
professionals and over $400 million in annual revenues. Mr. Browning's extensive industry sector experience includes: real estate and REITs, financial services (commercial banks, asset management, consumer finance, credit card and mortgage companies), private equity, energy (upstream/downstream, refining and natural gas), engineering and construction, and technology. Before joining Ernst & Young LLP, Mr. Browning began his professional career with Arthur Andersen & Co. in 1976, where he was admitted to partnership in 1987 and named office managing partner of its Oklahoma office in 1994. At Arthur Andersen & Co. in Oklahoma and in Los Angeles, California, Mr. Browning served clients in a wide variety of industries and led the firm's domestic banking practice and regulatory compliance practice. Mr. Browning also serves on the board of directors of (i) McCarthy Holdings, the holding company for McCarthy Building Companies, Inc., one of the top 10 U.S. commercial builders and the oldest American construction company, (ii) Parsley Energy, Inc., an independent oil and natural gas company, (iii) Community Bank, a Regional Business Bank based in Pasadena, California and (iv) Blackbrush Oil and Gas LP, an independent oil and gas exploration and development company that is also a portfolio company of a fund managed by an affiliate of our Manager. Mr. Browning is also an adjunct professor at Southern Methodist University in Dallas, Texas. Mr. Browning volunteers on the board of CARE, a non-profit organization focused on assisting young adults with chemical abuse issues, as well as on the Dallas Summer Musicals board. Mr. Browning holds a B.B.A. from the University of Oklahoma and is a certified public accountant in Oklahoma, California and Texas. Mr. Browning's experience in accounting and auditing, including in the real estate and REIT industries, provides the Board and, specifically, the audit committee, with valuable knowledge, insight and experience in such matters.
John B. Jardine is our President and Co-Chief Executive Officer and is one of our Class I directors. Mr. Jardine is a member of our Manager's Investment Committee and is also a member of Ares Management's Management Committee. Mr. Jardine is a Partner in the Ares Real Estate Group and since joining Ares Management in December of 2013, Mr. Jardine has been responsible for debt originations at the Ares Real Estate Group, including originations by the Company and its mortgage banking subsidiary, ACRE Capital LLC. He is a seasoned real estate investor, having spent more than 20 years at TIAA-CREF, where he negotiated and closed large transactions and oversaw the performance of several multi-billion dollar commercial real estate portfolios. Mr. Jardine also led the formation of TIAA Realty, Inc., a private real estate investment trust. Prior to joining Ares Management, Mr. Jardine was a Managing Director with C-III Asset Management, a primary and special loan servicer, from 2011 to 2013. Additionally, Mr. Jardine worked as a Managing Director focusing on commercial mortgage-related credit strategies for ZAIS Group, an investment management company focused on specialized credit strategies, from 2008 to 2011. Mr. Jardine graduated from Dartmouth College with a B.A., with honors, in English. His credentials provide the Board with extensive relationships and deep practical experience in the commercial real estate finance industry.
The Board recommends that you vote FOR the election of William L. Browning and John B. Jardine as directors of our Company for the term for which they have been nominated.
Directors Continuing in Office
Class II Directors (Current term expires at the 20172020 Annual Meeting of Stockholders)
is one of our Class II directors and the Chairman of the Board. Mr. Benjamin is a Partner and Head of Ares Real Estate Group and a member of the Management Committee of Ares Management. Additionally, Mr. Benjamin serves on the Ares Real Estate Operating Committee, the Ares Real Estate Group’s Debt and U.S. Development and Redevelopment Fund II Investment Committees and serves as Chair of the Ares Real Estate Group’s Global Investment Committee. In 2013, Mr. Benjamin joined Ares Management through its acquisition of AREA Property Partners, where he was a Senior Partner. Mr. Benjamin joined the predecessor of AREA Property Partners from Bankers Trust Corp in 1995, where he worked in the Real Estate Finance Group since 1986. He is a Trustee of Impetus, a UK based charity focused on improving access to education and employment for disadvantaged youth. Mr. Benjamin graduated from Harvard with a Bachelor of Arts degree and holds a Master of Business Administration degree from University of Pennsylvania, Wharton School. Mr. Benjamin’s extensive experience in the global commercial real estate markets and as a senior real estate executive enables him to provide the Board with leadership and financial expertise as well as insight into the current status of the global real estate and financial markets.
strategic direction for Fannie Mae'sMae’s growing asset management and counterparty responsibilities. In addition, Ms. Blakely was
expertise on these matters.
memberTrustees of the NYU SternGill St. Bernard’s School. He received his bachelor’s degree from Hamilton College and MBA from the Darden School of Business at the University of Virginia. Mr. Moriarty’s significant experience in the banking, real estate and asset management industries provides the Board of Overseers. Mr. Rosen holds an M.B.A. in finance from NYU's Stern School of Business. Mr. Rosen's 35 years of experience as a senior executive of financial services, healthcare serviceswith valuable real estate, economic, and private equity funds provides broad financial industry and specific investment management insight and experience to the Board. In addition, Mr. Rosen's expertise in finance, which served as the basis for his appointment as an Adjunct Professor of Finance at Fordham University Graduate School of Business, provides valuable knowledge to the Board.
capital markets experience.
in, investment management, leveraged finance and financial services gives the Board valuable industry-specificindustry specific knowledge and expertise on these and other matters.
Audit Fees Audit-Related Fees Tax Fees All Other Fees Total Fees Tax Fees Meeting for approval on a non-binding, advisory basis: The affirmative vote of at least a majority of the votes cast at the Annual Meeting is required for the approval, on a non-binding, advisory basis, of the Communications with Audit Committees, as currently in effect (which superseded Statement on Auditing Standard No. 16), as adopted by the Public Company Accounting Oversight Board for audits of fiscal years beginning on or after December 15, 2012. governance structure, strikes an appropriate balance between strong and consistent leadership and independent oversight of our business and affairs. However, we 2019 Code of Business Conduct and Ethics (including Director Majority Vote Resignation Policy) Directors have a This review is currently ongoing. Caroline E. Blakely William L. Browning John Hope Bryant Michael H. Diamond Brett White(4) ” officers. 1997, Ares Management has adhered to a disciplined investment philosophy that focuses on delivering strong Ares April 9, 2019. the fiscal year ended December 31, 2019. John Jardine President and Co-Chief Executive Officer Robert L. Rosen(2) Interim Co-Chief Executive Officer Tae-Sik Yoon(3) Chief Financial Officer Todd S. Schuster Former Chief Executive Officer(4) John B. Jardine Robert L. Rosen Tae-Sik Yoon Todd S. Schuster John B. Jardine Robert L. Rosen Tae-Sik Yoon Todd S. Schuster John Jardine Robert L. Rosen Tae-Sik Yoon Todd S. Schuster The named executive officers received no benefits in the Directors and Executive Officers Michael J. Arougheti Rand S. April(3) Caroline E. Blakely William L. Browning John Hope Bryant John B. Jardine Robert L. Rosen James E. Skinner(3) Michael Weiner(4) Tae-Sik Yoon Todd S. Schuster(5) All directors and executive officers as a group (10 persons) 5% or More Beneficial Owners RS Investment Management Co. LLC(6) Antony P. Ressler(7) Boston Partners(8) BlackRock, Inc.(9) Tokio Marine Holdings, Inc.(10) Caroline E. Blakely William L. Browning John Hope Bryant John Jardine Robert L. Rosen(a) Tae-Sik Yoon Todd S. Schuster(b) will generally pay such investment vehicle’s allocable portion of such expense. various factors, including, among others, the relevant investment 2019.20162020 and are submitting the selection of Ernst & Young LLP to our stockholders for ratification. Ernst & Young LLP has audited our financial statements since our inception in September 2011 through the fiscal year endingended December 31, 2015,2019, and has also provided us certain tax services. Neither our Charter Documents nor applicable law requires stockholder ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm. However, the Board is submitting the appointment of Ernst & Young LLP to our stockholders for ratification as a matter of good corporate practice.20152019 and December 31, 2014: Fiscal Year Ended
December 31, 2015 Fiscal Year Ended
December 31, 2014 $ 767,000 $ 773,000 196,000 300,000 — 294,000 — — $ 963,000 $ 1,367,000 Fiscal Year Ended
December 31, 2019 Fiscal Year Ended
December 31, 2018Audit Fees $ 688,000 $ 534,000 Audit‑Related Fees $ 140,000 $ 137,000 Tax Fees $ — $ — All Other Fees $ — $ — Total Fees $ 828,000 $ 671,000 Audit Related The increase in audit fees in 2019 as compared to 2018 was primarily attributable to increased audit costs related to our real estate owned asset and the implementation of new credit loss accounting standard. Audit-relatedareconsist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under "Audit“Audit Fees."” For the years ended December 31, 20152019 and December 31, 2014, audit-related2018, audit‑related fees arewere primarily related to audit related consultations, compliance audits and agreed-upon procedures audits.engagements that are not required by statute or regulation and certain required Securities and Exchange Commission filings.pre-approvepre‑approve all services provided by the independent registered public accounting firm. Any such pre-approvalpre‑approval by the chairperson must be presented to the audit committee at its next regular quarterly meeting. The audit committee has also adopted policies and procedures for pre-approvingpre‑approving certain non-prohibitednon‑prohibited work performed by our independent registered public accounting firm. Specifically, the committee has pre-approvedpre‑approved the use of Ernst & Young LLP for specific types of services within the following categories: audit, audit-related,audit‑related, tax and other. In each case, the committee has also set a specific annual limit, which can be updated, on the amount of such services which we may obtain from our independent registered public accounting firm. The audit committee does not delegate its responsibilities to pre-approvepre‑approve services performed by the independent registered public accounting firm to management.2016.2020. In the absence of instructions to the contrary, it is the intention of the persons named as proxies to vote such proxyFOR this proposal.2016.Notwithstanding anything to the contrary set forth in any of the Company's previous filings under the Securities Act of 1933, as amended (the "Securities Act"), or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that might incorporate future filings, including this proxy statement, in whole or in part, the following Report of the Audit Committee shall not be deemed to be "soliciting material" or to be "filed" with the Securities and Exchange Commission (the "SEC"), nor shall such information be incorporated by reference into any such filings under the Securities Act or the Exchange Act. The role of the audit committee (the "Audit Committee") of the board of directors (the "Board") of Ares Commercial Real Estate Corporation (the "Company") is to assist the Board in its oversight of: (1) the integrity of the Company's financial statements; (2) the Company's compliance with legal and regulatory requirements; (3) the qualifications and independence of any independent registered public accounting firm engaged by the Company; and (4) the performance of the Company's internal audit function and any independent registered public accounting firm. However, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company's financial statements are complete and accurate, fairly present the information shown or are in accordance with generally accepted accounting principles ("GAAP") and applicable rules and regulations. Nor is it the duty of the Audit Committee to conduct investigations or to assure compliance with any law, regulation or rule of the New York Stock Exchange ("NYSE"), or the Company's Corporate Governance Guidelines or Code of Business Conduct and Ethics. These are the responsibilities of management and the independent registered public accounting firm. Instead, the Audit Committee shall oversee the Company's accounting and financial reporting processes and the audits of the Company's financial statements. The independent accountants are responsible for performing an independent audit of the Company's financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) and expressing an opinion as to the conformity of such financial statements with GAAP. The directors that serve on the Audit Committee have reviewed and discussed the Company's audited financial statements with management and with Ernst & Young LLP, the Company's independent registered public accounting firm for the fiscal year ended December 31, 2015. The Audit Committee has discussed with Ernst & Young LLP the matters required to be discussed by Auditing Standard No. 16,Communications with Audit Committees, as currently in effect (which superseded Statement on Auditing Standards No. 61), as adopted by the Public Company Accounting Oversight Board for audits of fiscal years beginning on or after December 15, 2012. The Audit Committee has received from Ernst & Young LLP the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board Rule 3526,Communication with Audit Committees Concerning Independence, regarding the independent accountant's communications with the Audit Committee concerning independence, and has discussed with the independent registered public accounting firm its independence. The Board has determined that each member of the Audit Committee is independent for purposes of the NYSE Listed Company Manual. The Board has also determined that each member of the Audit Committee is financially literate as required by the NYSE Listed Company Manual, and that William L. Browning has the accounting or related financial management expertise required by the NYSE Listed Company Manual, and is an "audit committee financial expert" within the meaning of the rules and regulations of the Securities and Exchange Commission (the "SEC"). Based on the review and discussions referred to above, the Audit Committee has recommended to the Board that the audited consolidated financial statements for the fiscal year ended December 31, 2015 be included in the Company's Annual Report on Form 10-K for such year for filing with the SEC.In addition, the Audit Committee has approved, and recommended to the Board that it approve, Ernst & Young LLP to serve as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2016 and that the selection of Ernst & Young LLP be submitted to the Company's stockholders for ratification.
2020.The Audit CommitteeWilliam L. Browning (Chairperson)Caroline E. BlakelyJohn Hope BryantRESOLUTION TO APPROVE THE COMPENSATION OF THE COMPANY'SCOMPANY’S NAMED EXECUTIVE OFFICERS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2019vote to approve, on a non-binding, advisory basis, the resolution to approve the compensation of our named executive officers as disclosed in accordance with SEC rules in this proxy statement. This proposal is commonly known as a "say-on-pay" proposal. At the 20132019 annual meeting of stockholders, we asked our stockholders to indicate if we should hold an advisory vote on the compensation of our named executive officers every one, two or three years. Because atAt such 20132019 annual meeting of stockholders our stockholders voted in favor of an advisory vote every three years,year. Accordingly, we again are asking our stockholders to approve the compensation of our named executive officers, this time for the fiscal year ended December 31, 2019, as disclosed in this proxy statement in accordance with the SEC's rules. The compensation of our named executive officers as disclosed in this proxy statement includes the disclosure under "Compensation Discussion and Analysis," the compensation tables and other narrative executive compensation disclosure in this Proxy Statement,proxy statement, as required by SEC rules.Proxy Statementproxy statement are employees of our Manager or one of its affiliates and do not receive cash compensation from us for serving as our named executive officers. We do not reimburse our Manager for the salaries and other compensation of its personnel, except for the allocable share of the salaries and other compensation of (a) our Chief Financial Officer, based on the percentage of his time spent on the Company'sCompany’s affairs and (b) other corporate finance, tax, accounting, internal audit, legal, risk management, operations, compliance and other non-investment professional personnel of our Manager or its affiliates who spend all or a portion of their time managing our affairs based on the percentage of their time spent on the Company'sCompany’s affairs. However, we do not determine the compensation payable by our Manager to Mr. Yoon, our Chief Financial Officer, or the other personnel described above. The amounts payable to our Manager pursuant to the Management Agreement that relate to reimbursement of our Manager for the compensation paid by it to our named executive officers are described in more detail under "Compensation Discussion and Analysis" below.Plan. Our named executive officers are also eligible to receive such grants.Plan (our “Equity Incentive Plan”). Please refer to "Compensation Discussion and Analysis" below for a description of grants made under our 2012 Equity Incentive Plan. non-binding, advisory resolution will be presented to our stockholders at the Annual Meeting:Company'sCompany’s named executive officers for the fiscal year ended December 31, 2019, as disclosed in the Company's Proxy StatementCompany’s proxy statement for the Company's 2016Company’s 2020 Annual Meeting of Stockholders pursuant to Securities and Exchange Commission rules, including the disclosure under "Compensation Discussion and Analysis," the compensation tables and other narrative executive compensation disclosure in the Company's Proxy StatementCompany’s proxy statement for the Company's 2016Company’s 2020 Annual Meeting of Stockholders.resolution to approve the compensation of the Company'sCompany’s named executive officers.officers for the fiscal year ended December 31, 2019. The persons named in the accompanying proxy intend to vote proxies received by them in favor of this proposal unless a choice of "Against" or "Abstain" is specified. Abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote, although they will be considered present for determining the presence of a quorum.resolution to approve the compensation of our named executive officers for the fiscal year ended December 31, 2019, as disclosed in this Proxy Statementproxy statement pursuant to Securities and Exchange Commission rules, including the disclosure under "Compensation Discussion and Analysis," the compensation tables and other narrative executive compensation disclosure in this Proxy Statement.proxy statement.
William L. Browning (Chairperson)
Caroline E. Blakely"independent,"“independent,” as determined by the requirements of the NYSE corporate governance listing requirements and the rules and regulations of the SEC. Our Board has the responsibility for establishing broad corporate policies and for our overall performance and direction, but is not involved in our day-to-dayday‑to‑day operations. Our directors keep informed about our business by attending meetings of the Board and its committees and through supplemental reports and communications with our Manager and our executive officers. Our non-managementnon‑management directors meet regularly in an executive session without the presence of our officers or management directors to review, among other matters, the performance of our Co-ChiefChief Executive OfficersOfficer and senior management. In addition, our non-managementnon‑management directors will meet in executive session at other times at the request of any non-managementnon‑management director. Our independent directors also meet in executive session at least once a year. In accordance withOur Lead Independent Director, Caroline E. Blakely, acts as the Bylawspresiding independent director and the Corporate Governance Guidelines, the chairperson of the nominating and governance committee currently presides at meetings of the independent directors or non-managementnon‑management directors.approves the appointment ofelects our officers and either directly or by delegation to the audit committee or compensation committee reviews and monitors the services and activities performed by our Manager and our officers.RosenBenjamin serves as the Chairman of the Board and as our Interim Co-Chief Executive Officer.Board. We believe that Mr. Rosen's history with our Company, familiarity with the Ares platform, including as an inaugural member of Ares Capital Corporation's (NASDAQ: ARCC) board of directors, and depth of experience as a senior executive and director of financial services, healthcare services, real estate and private equity funds in addition to his previously serving as the chairman of two boards of directors qualifies him to serve as the Chairman of the Board. Moreover, we believe that we are best served through our existing leadership structure with Mr. RosenBenjamin serving as a non-executive Chairman of the Board combined with Ms. Blakely serving as Lead Independent Director. We believe that Mr. Rosen'sBenjamin’s familiarity with the Ares platform, including as Head of Ares Real Estate Group, and depth of experience as a senior real estate executive qualifies him to serve as the Chairman of the Board, and his relationship with Ares provides an effective bridge between the Board and our Manager, thus ensuring an open dialogue between the Board and our Manager and that both groups act with a common purpose.Each of theThe audit committee currently has four directors, the compensation committee currently has three directors and the nominating and governance committee currently has three directors, and eachdirectors. Each of these committees is composed exclusively of independent directors, as defined by the NYSE corporate governance listing requirements and the rules of the SEC. leadership structure must be evaluated on a case by case basis and that our existing Board leadership structure provides sufficient independent oversight over our Manager. In addition, we believe that the current governance structure, when combined with the functioning of the independent director component of the Board and our overall corporatecontinually re-examinere‑examine our corporate governance policies on an ongoing basis to ensure that they continue to meet our needs.committee'scommittee’s risk oversight responsibilities include overseeingoverseeing: (1) the integrity of our financial statements; (2) our compliance with legal and regulatory requirements; (3) the qualifications and independence of any independent registered public accounting firm engaged by us; and (4) the performance of our internal audit function and our independent registered public accounting firm."REIT,"“REIT,” and compliance with our exemption from registration under the Investment Company Act of 1940, as amended. Members of the Board are routinely in contact with our Manager and our executive officers, as appropriate, in connection with their consideration of matters submitted for the approval of the Board or the audit committee and the risks associated with such matters. As described below in more detail under "Nominating“Nominating and Governance Committee” and “Compensation Committee,"” the nominating and governance committee and compensation committee also assistsassist the Board in fulfilling its risk oversight responsibilities.Board'sBoard’s (and its committees'committees’) role in risk oversight complements the Board'sBoard’s leadership structure because it allows our independent directors, through the three fully independent Board committees, executive sessions with the independent auditors, and otherwise, to exercise oversight of risk without any conflict that might discourage critical review.directors'directors’ role in risk oversight must be evaluated on a case by case basis and that the Board'sBoard’s role in risk oversight is appropriate. However, we re-examinere‑examine the manner in which the Board administers its oversight function on an ongoing basis to ensure that it continues to meet our needs.20152015,2019, the Board held ninefour formal meetings, the audit committee held four formal meetings, the nominating and governance committee held twothree formal meetings and the compensation committee held threefive formal meetings. Each director then in office attended at least 75% of the meetings of the Board and of the meetings of the committees of the Board on which such director served. We expect each director serving on the Board to regularly attend meetings of the Board and the committees on which such director serves, and to review, prior to meetings, materials distributed in advance for such meetings. A director who is unable to attend a meeting is expected to notify the Chairman of the Board or the chairperson of the appropriate committee in advance of such meeting. We encourage, but do not require, the directors to attend our annual meetings of stockholders. SixEach of the eight directors then in office attended our 20152019 annual meeting of stockholders.throughout 2015 were Ms. Blakelyduring 2019 and Messrs. Browning and Diamond. Mr. Bryant served as a member of the audit committee from January 11, 2016 to April 25, 2016. Ms. Blakely and Messrs. Browning and Skinner are the current members of the audit committee are Ms. Blakely and Messrs. Browning, Moriarty and Skinner, each of whom is independent for purposes of the NYSE corporate governance listing requirements and rules and regulations of the SEC. Mr. Browning currently serves as Chairperson of the audit committee.engagingthe appointment, compensation, retention and oversight of the work of our independent accountants, reviewing with our independent accountants the plan and results of the audit engagement, approving professional services provided by our independent accountants, reviewing the independence of our independent accountants and reviewing the adequacy of our internal accounting controls. During meetings of the audit committee, members of the audit committee, our independent accountants and other attendees, including members of management, discussed and reviewed, among other matters, the following: our SEC filings, including our annual audited and quarterly unaudited financial statements, our critical accounting policies and practices, the financial reporting process, management’s assessment of the effectiveness of our internal control over financial reporting and the effect of regulatory and accounting initiatives on our financial statements. In addition, the audit committee is responsible for discussingdiscussed with management our major financial risk exposures and enterprise risk management, including our cybersecurity and other risk exposures relevant to our computerized information system controls and security and the steps management has taken to monitor and control such exposures, including our risk assessment and risk management policies. The specific responsibilities of the audit committee are set forth in its written charter, which is available for viewing on our website atwww.arescre.com."audit“audit committee financial expert"expert” within the meaning of the rules and regulations of the SEC. In addition, the Board has determined that all of the members of the audit committee are financially literate as required by the NYSE Listed Company Manual.throughout 2015during 2019 were Ms. Blakely and Messrs. Bryant and Diamond. Ms. Blakely and Messrs.Mr. April and Browning are the current members (as of February 2020) of the nominating and governance committee are Ms. Blakely, Mr. April and Mr. Moriarty, each of whom is independent for purposes of the NYSE corporate governance listing requirements and rules and regulations of the SEC. Ms. Blakely currently serves as Chairperson of the nominating and governance committee.committee'scommittee’s responsibilities include identifying individuals qualified to become Board members (consistent with the criteria approved by the Board) and recommending for selection by the Board the director nominees to stand for election at each annual meeting of our stockholders, recommending to the Board director nominees for each committee of the Board, overseeing the evaluation of the Board and its committees, developing and recommending to the Board a set of corporate governance guidelines and recommending to the Board such other matters of corporate governance as the nominating and governance committee deems appropriate. In addition, theThe nominating and governance committee reviews the independence of Board members and director nominees and monitors all other activities that could interfere with such individuals'individuals’ duties to us.In addition, the nominating and governance committee annually facilitates the assessment of our Board’s performance as a whole, including its committees, and that of the individual directors and reports thereon to our Board. The specific responsibilities of the nominating and governance committee are set forth in its written charter, which is available for viewing on our website atwww.arescre.com.long-termlong‑term interests of our stockholders as a whole; andmaywill consider recommendations for nomination of directors from our stockholders. Nominations made by stockholders must be delivered to or mailed (setting forth the information required by the Bylaws) and received at our principal executive offices not earlier than the 150th day nor later than 5:00 p.m., Eastern Time, on the 120th day prior to the first anniversary of the date on which we first mailed our proxy materials for the previous year'syear’s annual meeting of stockholders; provided, however, that if the date of the annual meeting has changed by more than 30 days from the prior year, the nomination must be received not earlier than the 150th day prior to the date of such annual meeting nor later than 5:00 p.m., Eastern Time, on the later of (1) the 120th day prior to the date of such annual meeting or (2) the 10th day following the day on which public announcement of such meeting date is first made.throughout 2015during 2019 were Messrs. April, Browning, BryantSkinner and Diamond. TheSykes (until February 2019) and the current members of the compensation committee are Messrs. April, Browning Bryant and Skinner, each of whom is independent for purposes of the NYSE corporate governance listing requirements and rules and regulations of the SEC, including the compensation committee requirements of NYSE Rule 303A.05 and Rule 303A.02(a)(ii). Mr. BryantSkinner currently serves as Chairperson of the compensation committee.2012 Equity Incentive Plan and preparing reports on or relating to executive compensation required by the rules and regulations of the SEC. The Compensation Committeecompensation committee, with input from its compensation consultant and our Manager, discusses and considers potential risks that arise from our compensation practices, policies and programs. The compensation committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a sub-committee,sub‑committee, independent director, or committee comprised of independent directors, to the extent permitted by applicable laws, regulations, and NYSE rules. The specific responsibilities of the compensation committee are set forth in its written charter, which is available for viewing on our website atwww.arescre.com.non-managementnon‑management or independent directors as a group or to any particular director, to the following address: c/o Ares Commercial Real Estate Corporation, 245 Park Avenue, 42nd Floor, New York, NY 10167. Stockholders should indicate clearly the director or directors to whom the communication is being sent so that each communication may be forwarded directly to the appropriate director or group of directors. Any such communications may be made anonymously. Unsolicited advertisements, invitations to conferences or promotional materials, in the discretion of our Secretary, are not required, however, to be forwarded to the directors.presiding independent director process,the role of the Lead Independent Director, access to management and independent advisors, director compensation, director orientation and continuing education, management succession, the annual performance evaluation and review of the Board and its committees and our director majority vote resignation policy. For a description of our director majority vote resignation policy, see the section of this proxy statement entitled "Proposal“Proposal 1: Election of Directors."” Our Corporate Governance Guidelines do not prohibit directors from serving simultaneously on multiple companies'companies’ boards but require that, if a director serves on four or more public company boards simultaneously, including our Board, a determination is made by our Board as to whether such simultaneous service impairs the ability of such member to effectively serve our Company. In addition, under our audit committee charter, our Board must determine that the simultaneous service of an audit committee member on the audit committees of more than three public companies would not impair such member'smember’s ability to effectively serve on our audit committee. The Corporate Governance Guidelines can be accessed via our website atwww.arescre.com."Stock“Stock Ownership Guidelines"Guidelines”) requiring (1) each director to achieve an equity ownership level in the Company equal to three times the independent directors' annual cash fees received by the independent directors for serving on the Board.Board and (2) our Chief Executive Officer and Chief Financial Officer to maintain ownership of at least 100,000 and 32,000 shares of our common stock, respectively. Restricted common stock awards, including unvested restricted stock, granted in respect of annual director fees or otherwise are counted toward achieving the Stock Ownership Guidelines.three-yearthree‑year grace period and our Chief Executive Officer and Chief Financial Officer have a six-year grace period to comply with the Stock Ownership Guidelines, commencing on the date which is the later of the adoption of the Stock Ownership Guidelines andupon appointment the election as a director.director or appointment or promotion as an executive officer, as applicable. In the event of any increase to the directors'directors’ annual cash fees, the directors will have a one-yearone‑year grace period from the time of the increase to acquire any additional equity needed to meet the Stock Ownership Guidelines. If, at the end of the applicable grace period, any director or executive officer does not achieve the requisite equity ownership level, we will require such director or executive officer to hold all vested awards of equity, other than awards withheld or sold to pay withholding taxes, until the required ownership level has been satisfied. Additionally, the nominating and governance committee reserves the right to provide exceptions for extenuating personal circumstances on a case-by-casecase‑by‑case basis.COMPENSATION OF DIRECTORSAugust 2014, while evaluatingrecognition of the importance of considering environmental, social and corporate governance (ESG) factors in its investment process, Ares Management has adopted an ESG Policy for the conduct of its business based on guidelines that are principally consistent with the Principles of Responsible Investment (“PRI”) and Private Equity Growth Capital Council’s (“PEGCC”) Guidelines for Responsible Investment.compensation program for 2015,having the compensationexclusive power to amend our Bylaws and our corporate governance policies. See “-Board Leadership Structure” above.engaged FTI Consulting, a nationally recognized compensation consulting firm, to undertake a reviewcharters, rights of our Board compensation program. In October 2014, FTI Consulting met with the compensation committeestockholders, provisions of our Charter and Bylaws and Maryland law which is applicable to provide recommendations regarding our Board compensation program for 2015. Following a recommendation from the compensation committee, the Board approved an increase in the annual fees payable to our independent and outside directors for service as members of the Board, effective on January 1, 2015, taking into account FTI Consulting's recommendations.us. As a result of this increasesuch reexamination and in consideration of the feedback received from our stockholders, we adopted, as part of our insider trading policy, prohibitions against the use of margin accounts and pledging with respect to Company securities. See “—Pledging of Company Securities” above.receivedreceive an annual fee of $120,000, payable 50% in restricted common stock and 50% in cash. The awards of restricted common stock in respect of annual fees, which are granted pursuant to our 2012 Equity Incentive Plan, vest ratably on a quarterly basis over a one-yearone‑year period. Mr. Rosen, who was an outside director at the time the shares of restricted stock were granted, received an annual fee of approximately $60,000 payable in restricted stock so that he received a number of shares of restricted common stock equal to that received by the independent directors in respect of their annual fee. The fees paid to the committee chairs and committee members for 2015 remained unchanged from 2014. For 2015, the chairperson of the audit committee receivedreceives an additional annual fee of $15,000 in cash, and the chairperson of each of the nominating and governance committee and compensation committee receivedreceives an additional annual fee of $5,000 in cash for his or her additional services in these capacities. In addition, each audit committee member, other than the chairperson, receivedreceives an additional annual fee of $10,000 in cash, and each member of the nominating and governance committee and compensation committee (other than the chairperson of such committees) receivedreceives an additional annual fee of $2,000 in cash for his or her services in these capacities. Each of our directors is also entitled to reimbursement of reasonable out of pocket expenses incurred in connection with attending each Board meeting and each committee meeting. Each of our directors who were outside directors at the time of joining the Board received an initial grant of 5,000 restricted shares of our common stock in connection with joining the Board. The In 2020, the Board adopted Stock Ownership Guidelines in connection withengaged FTI Consulting Inc. to review the increase to the annual fees payable tocompensation of our independent and outside directors. See "Corporate Governance—Board of Directors and Committees—Stock Ownership Guidelines."and outside directors for the fiscal year ended December 31, 2015.2019.Name
or Paid
in Cash ($)(1)
Awards ($)(2)(3)(4) Total ($) Rand S. April $ 64,000 $ 60,000 $ 124,000 Caroline E. Blakely $ 75,000 $ 60,000 $ 135,000 William L. Browning $ 77,000 $ 60,000 $ 137,000 Edmond N. Moriarty, III $ 70,000 $ 60,000 $ 130,000 James E. Skinner $ 75,000 $ 60,000 $ 135,000 $ 15,500 $ — $ 15,500 Fees Earned
or Paid
in Cash ($)(2) Restricted Stock
Awards ($)(3) Total ($) $ 72,000 $ 59,748 $ 131,748 77,000 59,748 136,748 67,000 59,748 126,748 77,000 59,748 136,748 — — — (1) Amounts in this column represent the total annual Board and committee fees paid to independent directors in 2019. (2) Amounts in this column represent the aggregate grant date fair value of awards of restricted stock calculated in accordance with FASB ASC Topic 718. The grant date fair values of awards have been determined based on the assumptions and methodologies set forth in Note 7 to our financial statements included in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2019. (3) As of December 31, 2019, the following directors had the following amounts of shares of outstanding unvested restricted common stock: Mr. April, 1,966, Ms. Blakely, 1,966, Mr. Browning, 1,966, Mr. Moriarty, 4,468, Mr. Skinner, 1,966 and Mr. Sykes, 0. (4) Mr. Sykes resigned as a director in February 2019. (1)The restricted stock awards granted to Mr. Rosen are reflected in "Executive Compensation—Summary Compensation Table" below.(2)Amounts in this column represent annual Board and committee fees paid to independent directors in 2015.(3)Amounts in this column represent the aggregate grant date fair value of awards of restricted stock calculated in accordance with FASB ASC Topic 718. The grant date fair values of awards have been determined based on the assumptions and methodologies set forth in Note 10 to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015.(4)Departed the Board of Directors in January 2015.April 27, 2016.March 12, 2020. The information set forth below was furnished to us by each named executive officer. No named executive officer has been selected as ana named executive officer pursuant to any agreement or understanding with us or any other person. For our President and Co-Chiefformer Chief Executive Officer's, John B. Jardine and our Interim Co-Chief Executive Officer's, Robert L. Rosen,Officer’s, James A. Henderson, biographical information, please see "Proposal“Proposal 1: Election of Directors."”Name Age Position(s) Held with Company and Length of Time Served John B. JardineBryan P. Donohoe 6341 Director (Class I Director), Co-Chief Executive Officer and President since August 2015)Robert L. Rosen69Chairman of the Board since October 2014 and Director (Class II Director) since April 2012; Interim Co-ChiefChief Executive Officer since August 2015December 2019Michael D. Weiner63Vice President since September 2011 and General Counsel since March 2012Tae-SikTae‑Sik Yoon 4852 Chief Financial Officer since July 2012 and2012; Treasurer since June 2015David A. Roth 53 President since July 2019 Anton Feingold 39 Vice President and Secretary since April 2014; General Counsel since April 2019 Michael D. WeinerBryan P. Donohoe was appointed as our General CounselChief Executive Officer in March 2012 and has been serving as our Vice President since September 2011. Mr. Weiner is Executive Vice President and Chief Legal Officer ofDecember 2019. Since joining Ares Management GP LLC, Ares' general partner,Corporation in December 2019, Mr. Donohoe has served as a Partner and General Counsel in the Ares LegalReal Estate Group, Head of Real Estate Debt and a member of the Management Committee of Ares Management. Mr. Weiner joined Ares Management in September 2006 and is a member of its Management Committee. He may from time to time serve as an officer, director or principal of entities affiliated with Ares Management or of investment funds managed by Ares Management and its affiliates. Mr. Weiner has been an officer of Ares Capital Corporation (NASDAQ: ARCC) since 2006, including General Counsel from September 2006 to January 2010, and also serves as Vice President and Assistant Secretary of Ares Dynamic Credit Allocation Fund, Inc. and Ares Multi-Strategy Credit Fund, Inc.Corporation. Previously, Mr. Weiner served as General Counsel to Apollo Management L.P. and had been an officerDonohoe, was a Managing Director for Commercial Real Estate Debt in the Real Estate Investment Group of the corporate general partner of Apollo since 1992.AllianceBernstein, a global investment management firm. Prior to joining Apollo,AllianceBernstein, from 2010 to 2013, Mr. WeinerDonohoe was a partnersenior professional at Ranieri Real Estate Partners. Prior to that, Mr. Donohoe spent approximately 10 years at Deutsche Bank, where he originated, structured and closed first mortgage loans in the law firmaddition to structuring, pricing and disposing of Morgan, Lewis & Bockius specializingover $4 billion of B-notes and mezzanine debt. Mr. Donohoe earned a B.A. degree in corporate and alternative financing transactions, securities law, as well as general partnership, corporate and regulatory matters. Mr. Weiner has servedPolitical Science from time to time on the boards of directors of several corporations. Mr. Weiner also serves on the Board of Governors of Cedars-Sinai Medical Center in Los Angeles. Mr. Weiner graduated with a B.S. in Business and Finance from the University of California at Berkeley and a J.D. from the University of Santa Clara.Middlebury College.Tae-SikTae‑Sik Yoon is our Chief Financial Officer and Treasurer and also serves on our Manager'sManager’s Investment Committee. Mr. Yoon has more than 20 years of commercial real estate finance, investment banking and legal experience with private and public companies. Mr. Yoon also serves as Partner and Chief Financial Officer of Ares Real Estate Group, and is on the Ares Real Estate Group's U.S. Equity,Group’s Europe Equity and Real Estate Debt Investment Committees.Committees and serves as a member of the Management Committee of Ares Management Corporation. Prior to joining Ares Management in July 2012, Mr. Yoon served as Senior Vice President of Akridge, a privately held commercial real estate investment and services company, where he was responsible for its capital markets activities since 2010, including the development of funds, joint ventures and capital relationships. From 1999 to 2009, Mr. Yoon held various positions at J.E. Robert Companies, Inc. and its affiliates, including as Managing Director from 2003 to 2005 and Chief Financial Officer from 2005 to 2009, and was involved in the formation and management of several real estate private equity funds, a public commercial mortgage REIT (JER Investors Trust Inc.) and the firm'sfirm’s operating platforms in the U.S. and abroad. Mr. Yoon also served in the real estate investment banking group at Morgan Stanley & Co. from 1989 to 1991, and again from 1997 to 1999, and was an attorney at the law firm of Williams & Connolly LLP from 1994 to 1997. He is a graduate of Johns Hopkins University and Harvard Law School."Certain“Certain Relationships and Related Transactions—Management Agreement."operations (other than the operations of our subsidiary, ACRE Capital LLC, which has employees that provide certain services in connection with our mortgage banking business).operations. As highlighted in the table below, we do not provide cash compensation to any of our named executive officers or other officers or employees (other than compensation provided by ACRE Capital LLC to certain of its employees (none of which are named executive officers)).non non‑investment professional personnel of our Manager or its affiliates who spend all or a portion of their time managing our affairs based on the percentage of their time spent on our affairs. We have reported the compensation that we reimburse to our Manager for our named executive officers in “Summary Compensation Table” set forth below.Management Agreement and Compensation Structure
Management•Base Management Fee—Our Manager receives a management fee equal to 1.5% of our stockholders' equity, subject to certain adjustments, which is used, in part, to pay the compensation of our Manager's employees, with no specific portion allocated to our executive officers. For 2015, the management fee was approximately $5.9 million.•Incentive Fee—Our Manager is eligible for performance-based fees if our Core Earnings exceed certain thresholds set forth in the Management Agreement with our Manager. For 2015, no incentive fees were earned.•Role of our Executive Officers—All of our executive officers are employees of our Manager or one of its affiliates and are engaged in additional capacities for our Manager and its affiliates. Our Manager is responsible for the compensation of our executive officers and other employees of our Manager who support the services our Manager provides to us. We do not determine the compensation payable by our Manager to our Chief Executive Officer, Chief Financial Officer or the other personnel described above. See "Compensation of ourNamed Executive Officers by Ares Management" below.•Allocation of Fees by our Manager—Other than the reimbursed amounts otherwise disclosed herein, our Manager and its affiliates cannot segregate and identify that portion of the compensation awarded to, earned by or paid to each of our executive officers that relates exclusively to their services to us.Compensation of our Executive Officers by Ares Management2015,2019, Ares Management had approximately 8701,200 employees in over 15 principal and originating20 offices across the United States, Europe and Asia.in more than 10 countries. Since its inception inrisk-adjustedrisk‑adjusted investment returns throughout market cycles.Management'sManagement believes each of its three distinct but complementary investment groups in Credit, Private Equity and Real Estate is a market leader based on assets under management and investment performance. Ares Management was built upon the fundamental principle that each group benefits from being part of the greater whole.Management'sManagement’s compensation policy has several primary objectives:Performance-Based Compensation: Performance‑Based Compensation: Establish a clear relationship between performance and compensation;Alignment: Alignment: Align the interests of key employees with fund investors and unitholders to maximize value; and
• •PayPay: : Provide competitive incentive opportunities, with an appropriate balance between short-termshort‑term and long-termlong‑term incentives.salariessalaries: : Dictated by employee proficiency and experience in their roles. In addition to base salary, Ares Management utilizes a blend of variable and long-termlong‑term pay vehicles to further incentivize and retain talent and provide an overall compensation package that is competitive with the market.
• •Performance-basedPerformance‑based discretionary bonusesbonuses: : Generally paid annually to employees based on Ares Management'sManagement’s profitability, market analysis and employee performance. Select senior professionals may also receive carried interest or incentive fee participation. Our Manager and its affiliates take into account our performance as a factor in determining the compensation of certain of our named executive officers. For example, to the extent that our Manager was to earn theearns additional incentive feefees under the Management Agreement in the future, certain of our named executive officers may be eligible to receive a portion of such incentive fee.
• •grantsgrants: : Ares Management'sManagement’s grants equity to incentivize its key employees'employees’ continued employment and to align the interests of management with fund investors and unitholders, including options to purchase common units and grants of restricted units.Part III, Item 11 of their Form 10-KExecutive Compensation in Ares Management’s Proxy Statement filed with Securities and Exchange Commission on February 29, 2016. 2012 Equity Incentive Plan, the compensation committee may, from time to time, grant awardsequity-basedequity‑based awards to qualified directors, officers, advisors, consultants and other personnel, including the named executive officers. These equity-basedThe compensation committee’s objectives in developing and administering equity‑based awards are to create incentives to improve long-termlong‑term stock price performance and focus on long-termlong‑term business objectives, create substantial retention incentives for award recipients and enhance our ability to pay compensation based on our overall performance, each of which further align the interests of the awardees with our stockholders. These equity-basedThe equity‑based awards are generally subject to time-basedtime‑based vesting requirements designed to achieve strong performance for our Company. The Board has delegated its administrative responsibilities When issuing equity‑based awards, the compensation committee considers the value and terms of such awards in light of the level of risk that was taken to generate those returns to ensure that compensation decisions neither encourage nor reward excessive or inappropriate risk taking. Further the compensation committee seeks to support a culture committed to paying for performance where compensation is commensurate with the level of performance achieved while maintaining flexibility and discretion to allow us to recognize the unique characteristics of our operations and strategy, and our prevailing business environment, as well as changing employment market dynamics. While the compensation committee implements and approves all awards granted under our 2012Equity Incentive Plan related to our named executive officers and approves recommendations related to incentive compensation for our other employees, the compensation committee seeks and considers the advice and counsel of Mr. Benjamin, our Chairman, given his familiarity with Ares Management’s compensation philosophy as Head of Ares Real Estate Group.compensation committee. The charternamed executive officer’s continued service through the applicable vesting date. In determining each of these equity-based awards for 2019, the compensation committee providesdid not apply any fixed metrics. Rather, the compensation committee took into consideration a range of factors, including financial performance such as the performance of our common stock and our return on equity, as well as operational performance such as our investment activity, management of our financing facilities, our operations, policies and practices, as well as the performance of each of our named executive officers.it shall approve all awards grantedordinary cash dividends are paid to holders of shares of our common stock, outstanding RSUs are entitled to a corresponding dividend equivalent payment.plan.Equity Incentive Plan.
Say on Pay VoteSay-on-Pay Vote2013,2019, we provided our stockholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of the named executive officers.officers for the fiscal year ended December 31, 2018. A substantial majority of our stockholders (99.8%(96%) that voted on this matter at thethat annual meeting of stockholders approved the compensation of the named executive officers as described in our proxy statement for our annual meeting of stockholders during 2013.2019. The Board and compensation committee reviewed the results of this non-binding,non binding, advisory "say-on-pay"“say on pay” vote and consider the results supportive of our compensation policies and decisions.Say-on-Frequencyduring 2013,in 2019, our stockholders recommendedvoted that we hold a non-binding,non‑binding, advisory stockholder vote on the compensation of the named executive officers every three years. In light of this recommendation from our stockholders, as well as other factors,year. Consistent with such stockholder vote, we will holdhave decided to include a non-binding, advisory vote at the Annual Meeting and expect to next hold a stockholder advisory vote with respect to the compensation of theour named executive officers at our annual meeting of stockholders in 2019. We will also holdevery year. At this Annual Meeting, we are holding a non-binding, advisory stockholder advisory vote with respect to the frequency with which we conduct our "say-on-pay" votes no later than our annual meeting of stockholders in 2019.2016 Compensation Review In 2016, the compensation committee engaged FTI Consulting, Inc. as its independent compensation consultant. The compensation committee, in consultation with FTI Consulting, is in the process of reviewing a range of options with respect to our compensation program and the methods available to us to further align the interests of our Manager and its personnel who support our Manager in providing services to us under the Management Agreement with those of our stockholders, including by means of granting equity-based awards to enable our Manager and its personnel, including to ournamed executive officers to participate in value created for our stockholders.Company'sCompany’s previous filings under the Securities Act or the Exchange Act that might incorporate future filings, including this proxy statement, in whole or in part, the following Compensation Committee Report shall not be deemed to be "soliciting material"“soliciting material” or to be "filed"“filed” with the SEC, nor shall such information be incorporated by reference into any such filings under the Securities Act or the Exchange Act."Compensation Committee"“Compensation Committee”) of the board of directors (the "Board"“Board”) of Ares Commercial Real Estate Corporation (the "Company"“Company”) is responsible for administering the Company's 2012Company’s Equity Incentive Plan and overseeing the performance of Ares Commercial Real Estate Management LLC (the "Manager"“Manager”) and the management fees and other compensation payable to the Manager pursuant to the Management Agreement between the Company and the Manager dated April 25, 2012, as amended. The directors that serve on the Compensation Committee have reviewed and discussed with management the Compensation Discussion and Analysis included in this proxy statement. Based on that review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement. John Hope BryantJames E. Skinner (Chairperson)
Rand S. April2013, 20142017, 2018 and 20152019 that were allocable to us, except that no disclosure is provided for any named executive officer, other than our principal executive officersofficer and principal financial officer, whose total compensation did not exceed $100,000. No other executive officers are included as named executive officers in the table below because we did not reimburse our Manager for any amounts in excess of $100,000 with respect to any compensation received by any other executive officer for the fiscal year ended December 31, 2015.2018. As noted elsewhere herein, the named executive officers do not receive any direct cash compensation from us. See "—“—Compensation of our Executive Officers by Ares Management"Management” above.Name and Principal Position Year Salary ($) Bonus ($) All Other
Compensation ($) Total ($) Bryan P. Donohoe 2019 $ — $ — $ — $ — $ — Chief Executive Officer 2019 $ 239,456 $ 150,658 $ 377,476 $ — $ 767,590 Chief Financial Officer and Treasurer 2018 $ 299,923 $ 153,294 $ 302,380 $ — $ 755,597 2017 $ 303,436 $ 182,062 $ 60,310 $ — $ 545,808 2019 $ 172,863 $ 108,415 $ 119,360 $ — $ 400,638 General Counsel, Vice President and Secretary James A. Henderson 2019 $ — $ — $ 701,240 $ — $ 701,240 2018 $ — $ — $ 559,600 $ — $ 559,600 2017 $ — $ — $ 1,133,318 $ — $ 1,133,318 Year Salary
($) Bonus
($) Stock
Awards ($)(1) All Other
Compensation
($) Total ($) 2015 — — — — —
2015
—
—
$
59,748
—
$
59,748
2015
$
289,424
$
225,108
—
—
$
514,532 2014 $ 279,077 $ 264,167 — — $ 543,243 2013 $ 260,435 $ 215,281 — — $ 475,716
2015
—
—
—
—
— 2014 — — — — — 2013 — — — — — (1) Amounts in this column represent the aggregate grant date fair value of awards of restricted shares of common stock computed in accordance with FASB Accounting Standards Codification (“ASC”) Topic 718. The grant date fair values of awards have been determined based on the assumptions and methodologies set forth in Note 7 to our financial statements included in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2019. (2) Amounts in the columns entitled “Salary” and “Bonus” for Messrs. Feingold and Yoon represent the allocable share of the compensation, including annual base salary and bonus, which we reimbursed to our Manager. (1)Amounts in this column represent the aggregate grant date fair value of awards of restricted shares of common stock computed in accordance with FASB Accounting Standards Codification ("ASC") Topic 718. The grant date fair values of awards have been determined based on the assumptions and methodologies set forth in Note 10 to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015.(2)Amounts in the columns entitled "Stock Awards" for Mr. Rosen represent restricted shares of common stock with respect to annual Board fees received by Mr. Rosen, which were granted to him when he was an outside director.(3)Amounts in the columns entitled "Salary" and "Bonus" for Mr. Yoon represent the allocable share of the compensation, including annual base salary and bonus, which we reimbursed to our Manager.(4)Mr. Schuster resigned from the Board of Directors and as Chief Executive Officer in August 2015.Plan-BasedPlan‑Based Awards20152019 fiscal year to our named executive officers.Name and Principal Position Grant Date Bryan P. Donohoe — — — $ — Anton Feingold March 7, 2019 March 7, 2019 8,000 $ 119,360 Tae‑Sik Yoon March 7, 2019 March 7, 2019 25,300 $ 377,476 James A. Henderson March 7, 2019 March 7, 2019 47,000 $ 701,240 Grant Date All Other
Stock
Awards:
Number of
Shares of
Stock or
Units (#) Grant Date
Fair Value
of Stock and
Option
Awards ($)(2) — — — 6/24/2015 5,111 (1) $ 59,748 — — — — — — (1) The amount in this column represents a grant of restricted shares of common stock pursuant to our Equity Incentive Plan. The restricted shares vest in three equal annual installments on each of April 1, 2020, 2021 and 2022. (2) The amount in this column represents the aggregate grant date fair value of the award granted in 2019 computed in accordance with FASB ASC Topic 718. (1)Represents shares of restricted stock granted to Mr. Rosen with respect to annual Board fees, which were granted to him when he was an outside director and which vest ratably on a quarterly basis over a one-year period that began on July 1, 2015, subject to certain conditions set forth in the applicable award agreement.(2)The amount in this column represents the aggregate grant date fair value of the award granted in 2015 computed in accordance with FASB ASC Topic 718.20152019 Outstanding Equity Awards at Fiscal Year Endequity-incentiveequity‑incentive plan awards outstanding as of the end of the 20152019 fiscal year to the named executive officers. Stock Awards Name and Principal Position
Stock That Have Not
Vested (#)(1)
Stock That Have Not
Vested ($)(2)Bryan P. Donohoe — $ — Anton Feingold 12,202 $ 193,280 Tae‑Sik Yoon 39,709 $ 628,991 James A. Henderson 100,902 $ 1,598,288 Stock Awards Number of Shares of
Stock That Have Not
Vested (#) Market Value of Shares of
Stock That Have Not
Vested ($)(3) — — 2,555 (1) $ 29,229 4,686 (2) $ 53,608 — — Represents The amount in this column represents a grant of restricted shares of restrictedcommon stock granted to Mr. Rosen with respect to annual Board fees, which were granted to him when he was an outside director and which vest ratably on a quarterly basis over a one-year period that began on July 1, 2015, subject to certain conditions set forth in the applicable award agreement.(2)Represents shares of restricted stock granted to Mr. Yoon pursuant to our 2012 Equity Incentive Plan, which vest ratably on a quarterly basis over a four-year period that began on October 1, 2012, subject to certain conditions set forth in accordance with the terms of the applicable award agreement.agreements.(2) Based on the closing price of our common stock on the last business day of the fiscal year ended December 31, 2019 of $15.84. (3)Based on the closing price of our common stock on the last business day of the fiscal year ended December 31, 2015 of $11.44.201520152019 fiscal year with respect to the named executive officers. Stock Awards Name Number of Shares Acquired on Vesting (#)
on Vesting ($)(1)Bryan P. Donohoe — $ — Anton Feingold 2,102 $ 31,089 Tae‑Sik Yoon 7,205 $ 106,562 James A. Henderson 40,571 $ 611,757 Stock Awards Number of Shares
Acquired on Vesting
(#) Value Realized
on Vesting
($)(1) — — 4,857 (1) $ 55,978 6,250 (1) $ 71,970 — — (1) The Value Realized on Vesting column reflects the aggregate value realized with respect to all restricted shares of common stock that vested in fiscal year 2019. The value realized in connection with each vesting of shares of restricted stock is calculated as the number of vested restricted shares multiplied by the closing price of our common stock on the vesting date. The value realized amounts are calculated in accordance with the rules and regulations of the SEC and may not reflect the amounts ultimately realized by the named executive officer. (1)The Value Realized on Vesting column reflects the aggregate value realized with respect to all restricted stock awards that vested in fiscal year 2015. The value realized in connection with each vesting of shares of restricted stock is calculated as the number of vested restricted shares multiplied by the closing price of our common stock on the vesting date. The value realized amounts are calculated in accordance with the rules and regulations of the SEC and may not reflect the amounts ultimately realized by the named executive officer.Pension Benefits20152019 fiscal year from us under defined pension or defined contribution plans.tax-qualifiedtax‑qualified for the named executive officers.TheseOther than as noted below, these agreements provide that any unvested portion of the award shall be immediately and irrevocably forfeited upon a termination of employment. Upon a change in control (as defined in our 2012 Equity Incentive Plan), the compensation committee may make such adjustments as it, in its discretion, determines are necessary or appropriate in light of the change in control, but only if the compensation committee determines that the adjustments do not have a substantial adverse economic impact on the participants (as determined at the time of the adjustments). The restricted stock award granted to Mr. Henderson in April 2017, as amended, will fully vest if (a) the Company terminates Mr. Henderson’s services due to his termination of employment with Ares Operations LLC without Cause (as defined in the restricted stock award agreement) or (b) Mr. Henderson’s services are terminated by or at the direction of the Company within six months following a Change in Control of the Company (as defined in the restricted stock award agreement), other than related to a Cause termination by Ares Operations LLC. If the Company terminates Mr. Henderson’s services due to his termination of employment with Ares Operations LLC for Good Reason (as defined in the restricted stock award agreement) or if circumstances giving rise to Good Reason exist within 30 days following Mr. Henderson’s resignation, 25,226 restricted shares subject to such restricted stock award will vest. In addition, the restricted stock granted to the named executive officers in 2018 and 2019 will fully vest if (i) such named executive officer incurs a termination of service due to death or disability or (ii) there is a Change of Manager Event (as defined in the restricted stock award agreement) prior to the termination of such named executive officer’s service. If the Company terminates such named executive officer’s services due to his termination of employment with Ares Operations LLC without Cause (as defined in the restricted stock award agreement), the portion of such restricted stock award that would have vested during the 12 months following such termination will vest. Feingold Yoon Henderson Termination due to termination of employment with Ares Operations LLC without Cause $ 75,525 $ 247,722 $ 890,778 Termination in connection with a Change in Control $ — $ — $ 431.418 Termination due to termination of employment with Ares Operations LLC for Good Reason $ — $ — $ 399,580 Death or Disability $ 193,280 $ 628,991 $ 1,166,869 Termination in connection with a Change in Manager Event $ 193,280 $ 628,991 $ 1,166,869 (1) Reflects the value of the acceleration of the named executive officer’s restricted stock, determined based on the closing price of a share of our common stock on December 31, 2019 (the last trading day of the fiscal year), which was $15.84. (2) In connection with Mr. Henderson’s departure from Ares on January 1, 2020, except for any awards that vested under the Equity Incentive Plan prior to Mr. Henderson’s departure from Ares, Mr. Henderson forfeited, without compensation therefor, 75,676 shares of common stock that were previously issued to him under the Equity Incentive Plan and vested into 25,226 shares of common stock that were previously issued to him under the Equity Incentive Plan. April 15, 2016,February 26, 2020, the record date, regarding the ownership of each class of our capital stock by:person'sperson’s beneficial ownership includes:Company'sCompany’s common stock is based upon Schedule 13D, Schedule 13G or other filings by such persons with the SEC and other information obtained from such persons.Name and Address
of Common Stock
Beneficially Owned(1)
Class(2)Name of Beneficial Owner Michael J Arougheti 352,776 1.23 % Rand S. April 32,616 * 18,596 * 24,819 * William L. Browning 17,980 * James A. Henderson 47,401 * Edmond N. Moriarty, III 13,394 * James E. Skinner 30,706 * - * Anton Feingold 16,541 * 76,388 * All directors and executive officers as a group (12 persons) 631,217 2.19 % 5% or More Beneficial Owners 2,631,862 9.2 % 2,337,520 7.0 % Number of Shares
of Common Stock
Beneficially Owned(1) Percentage of
Class(2) 322,776 1.13 % — — 13,333 * 13,333 * 17,334 * — — 46,002 * — — 17,882 * 25,000 * 71,610 * 455,660 1.60 % 2,605,033 9.14 % 2,319,511 8.14 % 1,872,369 6.57 % 1,747,469 6.13 % 1,469,769 5.16 % * Represents less than 1% of the shares of common stock outstanding. Chief Financial OfficerExecutive Officers pursuant to our 2012 Equity Incentive Plan as of April 15, 2016February 26, 2020 as follows: Vested
Restricted
Shares Unvested
Restricted
SharesRand S. April 21,903 983 Caroline E. Blakely 26,171 983 William L. Browning 26,171 983 Anton Feingold 4,330 12,202 Edmond N. Moriarty, III 10,326 43,064 James E. Skinner 21,903 983 Tae‑Sik Yoon 36,679 39,709 (2) Based on 33,389,008 shares of common stock outstanding on February 26, 2020. (3) Consists of shares of common stock held by William S. Benjamin 2017 No. 1 Trust of which a family member of Mr. Benjamin is a trustee. (4) Includes 13,008 shares of common stock held by the Caroline E. Blakely Living Trust of which Ms. Blakely is a trustee. (5) Does not include restricted stock units granted under the Equity Incentive Plan as follows: (a) Mr. Donohoe—37,750; and (b) Mr. Yoon —7,865. (6) On its Schedule 13G filed with the SEC on February 3, 2020, BlackRock, Inc. reported sole voting power with respect to 2,706,856 shares of common stock beneficially owned by it and sole dispositive power with respect to 3,020,242 shares of common stock beneficially owned by it. The Schedule 13G reports a beneficial ownership percentage of shares of common stock of 10.5% based on our number of shares of common stock then outstanding, which does not include any shares acquired or sold since such percentage was calculated for the purposes of the Schedule 13G. BlackRock, Inc.’s address is 55 East 52nd Street, New York, New York 10055. (7) Includes (1) 829,966 shares of common stock held by Greek Associates, a California general partnership, of which Mr. Ressler is the general partner, and (2) 1,507,554 shares of common stock held by the Ressler/Gertz Family Foundation, of which Mr. Ressler is a co‑trustee and shares voting and dispositive power with his spouse and children. Mr. Ressler is the Co‑Founder and Executive Chairman of Ares Management. The business address of Mr. Ressler is 2000 Avenue of the Stars, 12th Floor, Los Angeles, California 90067. Vested
Restricted
Shares Unvested
Restricted
Shares 12,082 1,251 12,082 1,251 18,002 — — — 18,002 — 23,438 1,562 4,110 — (a)The restricted shares of common stock granted to Mr. Rosen were with respect to annual Board fees during the period when he was an outside director.(b)The restricted shares of common stock granted to Mr. Schuster were with respect to annual Board fees during the period when he was an independent director.(2)Based on 28,503,778 shares of common stock outstanding on April 15, 2016.(3)Each of Messrs. April and Skinner was appointed as a director on April 25, 2016.(4)Consists of (1) 11,111 shares of common stock held directly by Mr. Weiner and (2) 6,771 shares of common stock held by the Amended and Restated Weiner Living Trust, dated May 29, 2009, of which Mr. Weiner is the trustee.(5)Mr. Schuster resigned from the Board of Directors and as Chief Executive Officer in August 2015. Based entirely on information filed with the SEC in a Form 4 on May 13, 2015, Mr. Schuster's beneficial ownership includes (1) 40,000 shares of common stock held by SBHWD LLC, a limited liability company, of which Mr. Schuster is the managing member, (2) 5,000 shares of common stock held by Mr. Schuster as custodian of an account for the benefit of Mr. Schuster's child under the Uniform Transfers to Minors Act (3) 5,000 shares of common stock held by Mr. Schuster's spouse, and (4) 12,500 shares of common stock held by Lauren B. Schuster 1992 Trust, of which Mr. Schuster's spouse is the trustee and Mr. Schuster and his children are the beneficiaries.(6)On its Schedule 13G filed with the SEC on February 12, 2016, RS Investment Management Co. LLC reported sole voting power with respect to 2,602,343 shares of common stock beneficially owned by it and sole dispositive power with respect to 2,605,033 shares of common stock beneficially owned by it. The Schedule 13G reports a beneficial ownership percentage of shares of common stock of 9.11%, which does not include any shares acquired or sold since such percentage was calculated for the purposes of the Schedule 13G. RS Investment Management Co. LLC's address is One Bush Street, Suite 900, San Francisco, CA 94104.(7)Includes (1) 811,957 shares of common stock held by Greek Associates, a California general partnership, of which Mr. Ressler is the general partner, and (2) 1,507,554 shares of common stock held by the Ressler/Gertz Family Foundation, of which Mr. Ressler is the trustee. Mr. Ressler is the Co-Founder and Chief Executive Officer of Ares Management. The business address of Mr. Ressler is 2000 Avenue of the Stars, 12th Floor, Los Angeles, California 90067.(8)On its Schedule 13G filed with the SEC on February 11, 2016, Boston Partners reported sole voting power with respect to 1,528,724 shares of common stock and shared voting power with respect to 30,037 shares of common stock beneficially owned by it and sole dispositive power with respect to 1,872,369 shares of common stock beneficially owned by it. The Schedule 13G reports a beneficial ownership percentage of shares of common stock of 6.54%, which does not include any shares acquired or sold since such percentage was calculated for the purposes of the Schedule 13G. Boston Partners' address is One Beacon Street—30th Floor, Boston, MA 02108.(9)On its Schedule 13G filed with the SEC on January 25, 2016, BlackRock, Inc. reported sole voting power with respect to 1,718,429 shares of common stock beneficially owned by it and sole dispositive power with respect to 1,747,469 shares of common stock beneficially owned by it. The Schedule 13G reports a beneficial ownership percentage of shares of common stock of 6.1%, which does not include any shares acquired or sold since such percentage was calculated for the purposes of the Schedule 13G. BlackRock, Inc.'s address is 55 East 52nd Street, New York, New York 10022.(10)On a Schedule 13G filed with the SEC on February 17, 2015, Tokio Marine Holdings, Inc. ("Marine Holdings") and Tokio Marine & Nichido Fire Insurance Co., Ltd. ("Nichido Fire") reported shared voting and dispositive power with respect to 1,469,769 shares of common stock. Based solely on the Schedule 13G, Marine Holdings is the parentcompany of Nichido Fire and each of the other members of the filing group. Each member of the filing group reported that it had shared voting and dispositive power with respect to the shares of common stock it beneficially owned. The Schedule 13G reports a beneficial ownership percentage of 5.14%, which does not include any shares acquired or sold since such percentage was calculated for the purpose of the Schedule 13G. The address of Marine Holdings and Nichido Fire is Tokio Marine Nichido Building Shinkan, 2-1 Marunouchi 1-chome, Chiyoda-ku, Tokyo, 100-0005, Japan.SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Pursuant to Section 16(a) of the Exchange Act our directors and executive officers, and any persons holding 10% or more of our common stock, are required to report their beneficial ownership and any changes therein to the SEC and us. Specific due dates for those reports have been established and we are required to report herein any failure to file such reports by those due dates. Based solely upon a review of Forms 3, 4 and 5 filed by such persons, we believe that each of our directors and executive officers and any persons holding 10% or more of our common stock during the fiscal year ended December 31, 2015 complied with all Section 16(a) filing requirements applicable to them during the relevant period.individual'sindividual’s personal interest and our interests. In addition, the audit committee is required to review and approve or ratify all related party transactions (as defined in Item 404 of Regulation S-K)S‑K), unless such transactions are separately approved by a majority of our independent directors. In determining whether to approve or ratify a transaction, the members of the audit committee and our other independent directors will take into account such factors as they deem appropriate. The charter for the audit committee, Code of Business Conduct and Ethics and Corporate Governance Guidelines can be accessed via our website atwww.arescre.com.day-to-dayday‑to‑day management of our operations. The Management Agreement requires our Manager to manage our business affairs in conformity with the policies and the investment guidelines that may be approved and monitored by the Board. The Management Agreement has a one-yearone‑year term that expires on May 1, 2016,2020, and will be automatically renewed for successive one-yearone‑year terms thereafter, unless terminated by either us or our Manager. Our Manager is entitled to receive a termination fee from us under certain circumstances.non-investmentnon‑investment professional personnel of our Manager or its affiliates who spend all or a portion of their time managing our affairs based on the percentage of their time spent on our affairs. In addition, we are required to pay our pro rata portion of rent, telephone, utilities, office furniture, equipment, machinery and other office, internal and overhead expenses of our Manager and its affiliates required for our operations. Pursuant to the terms of the Management Agreement, our Manager is paid a base management fee equal to 1.5% per annum of our stockholders' equity (as defined in our Management Agreement), calculated and payable quarterly in arrears. For the fiscal year ended December 31, 2015, we incurred approximately $5.9 million in base management fees payable to our Manager pursuant to the Management Agreement. In addition,2019, we reimbursed our Manager for approximately $3.9$3.0 million, which amount represented the portion of the allocable expenses payable by us under the Management Agreement for which our Manager sought reimbursement. Our Manager did not earnAres Management, from time to time, incurs fees, costs, and expenses on behalf of more than one investment vehicle. To the extent such fees, costs, and expenses are incurred for the account or benefit of more than one fund, each such investment vehicle will typically bear an allocable portion of any incentive compensationsuch fees, costs, and expenses in proportion to the size of its investment in the activity or entity to which such expense relates (subject to the terms of each fund’s governing documents) or in such other manner as Ares Management considers fair and equitable under the circumstances such as the relative fund size or capital available to be invested by such investment vehicles. Where an investment vehicle’s governing documents do not permit the payment of a particular expense, Ares Management Agreement for the fiscal year ended December 31, 2015.vehicles'vehicles’ available capital, diversification, their investment objectives or strategies, their risk profiles and theiras well astheir potential conflicts of interest, the nature of the opportunity and market conditions. Theconditions, as well as the rotation of investment allocation policy may be amendedopportunities.ator its affiliates and their portfolio companies, including by means of splitting investments, participating in investments or other means of syndication of investments. For such co-investments, we generally expect to act as the administrative agent for the holders of such investments provided that we maintain a majority of the aggregate investment. No fees will be received by us for performing such service. Our investment in such co-investments are generally made on a pari-passu basis with the other Ares managed investment vehicles and we are not obligated to provide, nor have we provided, any time withoutfinancial support to the other Ares managed investment vehicles. As such, our consent.Credit Support for City National Bank Facility On July 30, 2014,risk is limited to the carrying value of our investment and we entered into a $75.0 million revolving funding facility (the "CNB Facility") with City National Bank ("City National Bank"). recognize only the carrying value of our investment in its consolidated balance sheets.LLC,maintains a subsidiary$200 million real estate debt warehouse investment vehicle that holds Ares Management originated real estate loans, which are made available for purchase by other investment vehicles, including, us and other Ares managed investment vehicles. We are not obligated to purchase any loans originated by the warehouse investment vehicle. Loans purchased by our Company from the warehouse investment vehicle are purchased at fair value as determined by an independent third-party valuation expert and are subject to approval by a majority of our independent directors. Although our Manager will approve the purchase of such loans only on terms, including the consideration to be paid, that are determined by our Manager in good faith to be appropriate for us, it is possible that the interests of Ares Management could be in conflict with ours and an affiliatethe interests of our Manager, agreed to provide credit support in connection with the CNB Facility andstockholders. Our opportunity to purchase all loans from such vehicle may be on different and potentially less favorable economic terms than other obligations outstanding under the CNB Facility upon (i) an acceleration or certain events of default or (ii) in the event that, among other things, Ares Management LLC's corporate credit rating is downgraded to below investment grade. On July 30, 2014, we entered into a Credit Support Fee Agreement with Ares Management LLC under which we agreed to pay Ares Management LLC a credit support fee in an amount equal to 1.50% per annum times the average amount of the loans outstanding under the CNB Facility and to reimburse Ares Management LLC for its out-of-pocket costs and expenses in connection with the transaction. In connection with the Credit Support Fee Agreement on July 30, 2014, we entered into a Pledge Agreement pursuant to which we pledged to Ares Management LLCmanaged vehicles if our ownership interestsManager deems such purchase as being otherwise in our wholly owned direct subsidiary, ACRC Holdings LLC,best interests. For additional detail on the holding entitypurchase of such loans see the discussion of related party transactions set forth in Note 11 to our financial statements included in our Annual Report on Form 10‑K for our principal lending business ("Pledge Agreement"). This Pledge Agreement was subsequently terminated on December 9, 2015. For the fiscal year ended December 31, 2015, we paid approximately $1.0 million in a credit support fees to Ares Management LLC pursuant to the Credit Support Fee Agreement.Manager's servicer, which is a Standard & Poor's-ranked commercial special servicer that is included on Standard & Poor's Select Servicer List.Manager’s servicer. Our Manager'sManager’s servicer has agreed that no servicing fees pursuant to these servicing agreements would be charged to us or our subsidiaries for so long as the Management Agreement remains in effect, but that our Manager'sManager’s servicer will continue to receive reimbursement for overhead related to servicing and operational activities pursuant to the terms of the Management Agreement. In addition, certain of our subsidiaries perform primary loan servicing activites for investment vehicles managed by affiliates of our Manager and receive market-based primary servicing fees related thereto.("(“Ares Investments"Investments”), a subsidiary of Ares Management, and its affiliates, which we refer to as the registrable shares. Pursuant to the registration rights agreement, we granted Ares Investments and its direct and indirect transferees:"piggy-back"“piggy‑back” the registrable shares in registration statements we might file in connection with any future public offering."blackout“blackout periods."”"Ares"“Ares” License Agreementnon-exclusive, royalty-freenon‑exclusive, royalty‑free license to use the name "Ares."“Ares.” Under this agreement, we have a right to use this name for so long as Ares Commercial Real Estate Management LLC remains our Manager. This license agreement may be terminated by either party without penalty upon 180 days'days’ written notice to the other.directors'directors’ and officers'officers’ liability insurance on behalf of our directors and officers. In addition, we have entered into indemnification agreements with each of our current directors and executive officers and intend to enter into indemnification agreements with each of our future directors and executive officers. The indemnification agreements provide these directors and executive officers the maximum indemnification permitted under Maryland law. The agreements provide, among other things, for the advancement of expenses and indemnification for liabilities which such person may incur by reason of his or her status as a present or former director of our Company in any action or proceeding arising out of the performance of such person'sperson’s services as a present or former director or executive officer of our Company.20172021 ANNUAL MEETING14a-8(e)14a‑8(e) of the Exchange Act, applicable state law and our Charter and Bylaws.Company'sCompany’s Proxy Statement and Proxy Card14a-8(e)14a‑8(e) of the Exchange Act for inclusion in our proxy statement and proxy card for a regularly scheduled annual meeting, a stockholder'sstockholder’s proposal must be received at our principal executive offices not less than 120 calendar days before the anniversary of the date our proxy statement was released to stockholders for the previous year'syear’s annual meeting. Accordingly, a stockholder'sstockholder’s proposal must be received no later than December 28, 2016November 12, 2020 in order to be included in our proxy statement and proxy card for the 20172021 annual meeting of stockholders.Company's 2017Company’s 2021 Annual Meetingstockholder'sstockholder’s nomination of a candidate for director or other proposal for consideration at the 20172021 annual meeting of stockholders under the current Bylaws, is not earlier than the 150th day prior to the first anniversary of the date of release of the proxy statement for the preceding year'syear’s annual meeting nor later than 5:00 p.m., Eastern Time, on the 120th day prior to the first anniversary of the date of release of the proxy statement for the preceding year'syear’s annual meeting;provided,however, that in the event that the date of the annual meeting is advanced or delayed by more than 30 days from the anniversary of the date of the preceding year'syear’s annual meeting, notice by the stockholder to be timely must be delivered not earlier than the 150th day prior to the date of such annual meeting and not later than 5:00 p.m., Eastern Time, on the later of (1) the 120th day prior to the date of such annual meeting or (2) the tenth day following the day on which public announcement of the date of such meeting is first made. Accordingly, a stockholder'sstockholder’s nomination of a candidate for director or other proposal must be received no earlier than November 28, 2016October 13, 2020 and no later than 5:00 p.m., Eastern Time, on December 28, 2016November 12, 2020 in order to be considered at the 20172021 annual meeting of stockholders. In order to be considered timely, such notice shall be delivered to the Secretary at our principal executive office and shall set forth all information required under Section 11 of Article II of the Bylaws.2015 Annual Report2019 annual report containing audited financial statements accompanies this proxy statement.Annual Reportannual report free of charge. Requests should be directed to the Investor Relations Department at Ares Commercial Real Estate Management, 245 Park Avenue, 42nd Floor, New York, NY 10167. Copies of these documents may also be accessed electronically by means of the SEC'sSEC’s home page on the internet at http://www.sec.gov. The Annual Reportannual report is not part of the proxy solicitation materials."householding,"“householding,” potentially means extra convenience for stockholders and cost savings for companies."householding"“householding” its proxy materials. A single proxy statement will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. If you have received notice from your broker that it will be "householding"“householding” communications to your address, "householding"“householding” will continue until you are notified otherwise or until you revoke your consent. We will promptly deliver a separate copy of these documents to you upon written or oral request to our Investor Relations Department at Ares Commercial Real Estate Management, 245 Park Avenue, 42nd Floor, New York, NY 10167 or 888-818-5298.888‑818‑5298. If, at any time, you no longer wish to participate in "householding"“householding” and would prefer to receive a separate proxy statement and annual report, please notify your broker. Stockholders who currently receive multiple copies of the proxy statement and annual report at their addresses and would like to request "householding"“householding” of their communications should contact their brokers.June 27, 2016:April 23, 2020: The Notice of Annual Meeting, Proxy Statementproxy statement and the Company's 2015 Annual ReportCompany’s 2019 annual report are available at: http://materials.proxyvote.com/04013V.
Anton Feingold
General Counsel, Vice President and SecretaryApril 27, 2016TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. Signature (Joint Owners) Date Date Signature [PLEASE SIGN WITHIN BOX] AUTHORIZE YOUR PROXY BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to authorize your proxy using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. AUTHORIZE YOUR PROXY BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. AUTHORIZE YOUR PROXY BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. ARES COMMERCIAL REAL ESTATE CORP. 245 PARK AVENUE, 42ND FLOOR NEW YORK, NY 10167 E08822-P77928 To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and write the number(s) of the nominee(s) on the line below. ARES COMMERCIAL REAL ESTATE CORPORATION Withhold All For All For All Except The Board of Directors recommends you vote "FOR" Proposal 1 to elect the following Directors: ! ! ! 1. Election of Directors Nominees: 01) William L. Browning* 02) John Jardine* *Persons to serve as Class I Directors until the Company’s 2019 Annual Meeting of Stockholders, and until their successors are duly elected and qualify. For Against Abstain The Board of Directors recommends a vote "FOR" Proposal 2. ! ! ! 2. To ratify the selection of Ernst & Young LLP as the Company's independent registered public accounting firm for the year ending December 31, 2016. The Board of Directors recommends a vote "FOR" Proposal 3. For Against Abstain ! ! ! 3. Approval, on a non-binding, advisory basis, of the compensation of the Company's named executive officers as more fully described in the 2016 Proxy Statement. NOTE: The proxies are hereby authorized to vote in their discretion and otherwise represent the undersigned on such other matters as may properly come before the meeting or any adjournment or postponement thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and 2015 Annual Report are available at http://materials.proxyvote.com/04013V. E08823-P77928 ARES COMMERCIAL REAL ESTATE CORPORATION Annual Meeting of Stockholders June 27, 2016 at 11:00 AM Eastern Daylight Time This proxy is solicited by the Board of Directors The undersigned hereby appoints Tae-Sik Yoon and Anton Feingold, or any one of them, and each with full power of substitution, to act as attorneys and proxies for the undersigned to attend the Annual Meeting of Stockholders of Ares Commercial Real Estate Corporation (the "Company") to be held on June 27, 2016 at 11:00 a.m., Eastern Daylight Time, at the offices of Proskauer Rose LLP, Eleven Times Square, New York, New York 10036, and any adjournments or postponements thereof, to cast on behalf of the undersigned all votes that the undersigned is entitled to cast at such meeting, and any adjournments or postponements thereof, and otherwise to represent the undersigned at the meeting with all powers possessed by the undersigned if personally present at the meeting. The undersigned acknowledges receipt from the Company prior to the execution of this proxy of a Notice of Annual Meeting of Stockholders and a Proxy Statement, the terms of which are incorporated herein by reference, and revokes any proxy heretofore given with respect to such meeting, and any adjournments or postponements thereof. THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST AS INSTRUCTED HEREIN. IF THIS PROXY IS EXECUTED BUT NO INSTRUCTION IS GIVEN, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST "FOR" EACH OF THE NOMINEES FOR DIRECTOR IN PROPOSAL 1, "FOR" PROPOSAL 2 AND "FOR" PROPOSAL 3. The votes entitled to be cast by the undersigned will be cast in the discretion of the proxy holder on any other matter that may properly come before the meeting or any adjournment or postponement thereof. At the present time, the Board of Directors of the Company knows of no other business to be presented at the meeting. Your vote is important. Please vote immediately. CONTINUED AND TO BE SIGNED ON REVERSE SIDEREPORT OF THE AUDIT COMMITTEECORPORATE GOVERNANCE—BOARD OF DIRECTORS AND COMMITTEESCOMPENSATION OF DIRECTORSEXECUTIVE OFFICERSEXECUTIVE COMPENSATIONCOMPENSATION COMMITTEE REPORTSECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERSSECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCECERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSSTOCKHOLDER NOMINATIONS AND PROPOSALS FOR THE 2017 ANNUAL MEETINGANNUAL REPORT AVAILABLEHOUSEHOLDING OF PROXY MATERIALSOTHER MATTERS