Check the appropriate box:
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Securities Exchange Act of 1934 o☐ o o ☒ o o
New Residential Investment Corp.
(Name of Registrant as Specified In Its Charter)
Check the appropriate box:
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Securities Exchange Act of 1934 o☐ o o ☒ o o
New Residential Investment Corp.
(Name of Registrant as Specified In Its Charter)
☒ | | | No fee required. | |||
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| | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | ||||
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| | 3) | | | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |
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| | 4) | | | Proposed maximum aggregate value of transaction: | |
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| | 5) | | | Total fee paid: | |
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| | Fee paid previously with preliminary materials. | ||||
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| | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | ||||
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| | 4) | | | Date Filed: | |
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28, 2020
| | Sincerely, | |
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| | /s/ Michael Nierenberg | |
| | Michael Nierenberg | |
| | Chairman of the Board of Directors |
(i) | a proposal to elect three Class |
(ii) | a proposal to approve the appointment of Ernst & Young LLP as independent registered public accounting firm for the Company for fiscal year |
(iii) | a |
any other business properly presented at the Annual Meeting. |
Stockholders of record at the close of business on March 26, 2019April 20, 2020 will be entitled to notice of and to vote at the Annual Meeting. It is important that your shares be represented at the Annual Meeting regardless of the size of your holdings. A Proxy Statement, proxy card and self-addressed envelope are enclosed. Return the proxy card promptly in the envelope provided, which requires no postage if mailed in the United States. You can also vote by telephone or by the Internet by following the instructions provided on the proxy card. Whether or not you plan to attend the Annual Meeting, in person, please vote by one of these three methods. If you are the record holder of your shares and you attend the meeting online, you may withdraw your proxy and vote in person online during the meeting, if you so choose.
| | By Order of the Board of Directors, | |
| | ||
| | /s/ Cameron D. MacDougall | |
| | Cameron D. MacDougall | |
| | Secretary |
1345 Avenue of the Americas
45th Floor
New York, New York 10105
April 11, 2019
28, 2020
JUNE 18, 2020:
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i
PROXY STATEMENT
For the 20192020 Annual Meeting of Stockholders to Be Held on May 23, 2019
June 18, 2020
28, 2020.
(i) | a proposal to elect three Class |
(ii) | a proposal to approve the appointment of Ernst & Young LLP as independent registered public accounting firm for the Company for fiscal year |
(iii) | a |
any other business that may properly come before the annual meeting of stockholders or any adjournment of the annual meeting. |
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materials.
directors.
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directors.
(i) | FOR the election of the Class |
(ii) | FOR the approval of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, |
(iii) | FOR the |
(iv) |
in the discretion of the proxy holder on any other business that properly comes before the Annual Meeting or any adjournment or postponement thereof. |
As of the date of this Proxy Statement, we are not aware of any other matter to be raised at the Annual Meeting.
send written notice of revocation, prior to the Annual Meeting, to our Secretary, Mr. Cameron D. MacDougall, at New Residential Investment Corp., 1345 Avenue of the Americas, 45th Floor, New York, New York 10105; |
Street Name Holders. If you are a street name holder, you must contact your bank or broker to receive instructions as to how you may revoke your proxy instructions.
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without charge to stockholders upon written request to: New Residential Investment Corp., 1345 Avenue of the Americas, 45th45th Floor, New York, New York 10105, Attention: Investor Relations. You can also find an electronic version of our Annual Report on the Investor Relations section of the New Residential website (www.newresi.com).
(i) | FOR the election of the nominees to our Board of Directors; |
(ii) | FOR the approval of the appointment of Ernst & Young LLP as independent registered public accounting firm for the Company for fiscal year |
As discussed below, the Board of Directors makes no recommendation on the non-binding stockholder proposals requesting (i) “majority voting” in uncontested elections of directors and (ii) a report on board diversity.
(iii) | FOR the proposal to amend our Bylaws to implement a majority voting standard for uncontested elections of directors. |
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Class | Term Expiration | Director | Age |
Class I | 2020 | Alan L. Tyson | 62 |
David Saltzman | 57 | ||
Class II | 2021 | Michael Nierenberg | 56 |
Kevin J. Finnerty | 64 | ||
Class III | 2019 | Douglas L. Jacobs | 71 |
Robert J. McGinnis | 65 | ||
Andrew Sloves | 55 |
Class | | | Term Expiration | | | Director | | | Age |
Class I | | | 2020 | | | Pamela F. Lenehan | | | 67 |
| | | | David Saltzman | | | 58 | ||
| | | | Alan L. Tyson | | | 63 | ||
Class II | | | 2021 | | | Kevin J. Finnerty | | | 65 |
| | | | Michael Nierenberg | | | 57 | ||
Class III | | | 2022 | | | Douglas L. Jacobs | | | 73 |
| | | | Robert J. McGinnis | | | 66 | ||
| | | | Andrew Sloves | | | 56 |
The Board of Directors has unanimously proposed DouglasPamela F. Lenehan, David Saltzman and Alan L. Jacobs, Robert J. McGinnis and Andrew SlovesTyson as nominees for election as Class IIII directors. The director nominees currently serve on our Board of Directors. Although our Corporate Governance Guidelines provide for mandatory retirement of directors at age 70, upon the recommendation of its Nominating and Corporate Governance Committee, our Board of Directors waived such provision with respect to Mr. Jacobs, age 71, and nominated him for re-election. Due to Mr. Jacobs’ extensive financial expertise, leadership experience and memberships on various Board committees, the Board of Directors determined that waiving mandatory retirement for Mr. Jacobs is in the Company’s best interests.
If elected at the Annual Meeting, Ms. Lenehan and Messrs. Jacobs, McGinnisSaltzman and SlovesTyson will hold office until the 20222023 annual meeting of stockholders and until their successors are duly elected and qualified, subject to earlier retirement, resignation or removal. Unless otherwise instructed, we will vote all proxies we receive FOR Douglas Pamela F. Lenehan, David Saltzman and Alan L. Jacobs, Robert J. McGinnis and Andrew Sloves.Tyson. If any of the nominees becomes unable to stand for election as a director, an event that our Board of Directors does not presently expect, the proxy will be voted for a replacement nominee if one is designated by our Board of Directors.
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Kevin J. Finnerty Director since April 2013 | | | Mr. Finnerty has been a member of our Board of Directors since April 2013. Mr. Finnerty |
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Douglas L. Jacobs Director since June 2013 | | | Mr. Jacobs has been a member of our Board of Directors since June 2013. Mr. Jacobs was a director of OneMain Holdings Inc. from November 2010 until June 2018, where he was Chairman of the Audit Committee. Mr. Jacobs was a director of Clear Channel Outdoor Holdings, Inc. from May 2010 until February 2018, where he served as Chairman of the Audit Committee and a member of the Compensation Committee. Mr. Jacobs was a director of Fortress Investment Group LLC (“Fortress”) from February 2007 until December 2017, where he served as Chairman of the Audit Committee and a member of the Compensation Committee. From 2009 until 2015, Mr. Jacobs was a director of Doral Financial Corporation, a financial services company. From 2004 to 2008, Mr. Jacobs was also a director of ACA Capital Holdings, Inc., a financial guaranty company, where he was Chairman of the Audit Committee and a member of the Compensation Committee and Risk Management |
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Pamela F. Lenehan Director since April 2019 | | | Pamela F. Lenehan has been a member of our Board of Directors since April 2019, and serves as a member of the Audit Committee. Ms. Lenehan has served as President of Ridge Hill Consulting, LLC, a strategy consulting firm, since June 2002. She formerly served on the board of directors of Monotype Imaging Holdings Inc., a software company, from 2006 to October 2019 when it was acquired in a private equity transaction, and served as its board chair from 2018 to October 2019, and previously served both as a member of its audit committee and as chairperson of its compensation committee from September 2006 to May 2018. She also served on the board of directors of Civitas Solutions, Inc., a health services provider, from December 2008 to March 2019, when it was acquired in a private equity transaction, and as a member of its audit committee from December 2008 to March 2019, including as audit committee chair from January 2009 to January 2016, as a member of its compensation committee from October 2015 to March 2019, and as presiding director from January 2016 to March 2019; on the board of directors and audit committee of American Superconductor Corporation from March 2011 to July 2018, including as its audit committee chair from August 2011 to July 2018; on the board of directors and compensation committee for Spartech Corporation from December 2004 to March 2013, including as its compensation committee chair from March 2007 to March 2013, and a member of its audit committee from January 2005 to March 2007. She currently sits on the board of directors for the Center for Women and Enterprise, the National Association of Corporate Directors of New England and is the co-Chair of the Boston Chapter of Women Corporate Directors, each a not-for-profit organization. Ms. Lenehan holds an Executive Masters Professional Director Certification, Silver Level from the American College of Corporate Directors, a Bachelor’s degree in mathematical economics from Brown University, and a Master’s degree in economics from Brown University. Ms. Lenehan was recommended as a nominee to our Board by another member of our Board. Ms. Lenehan’s extensive knowledge and experience in technology, financial services, corporate advisory, strategic planning and public board environments, including serving on boards of a number of companies in the application software industry, led our Board to conclude that Ms. Lenehan should serve as a director. |
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Robert J. McGinnis Director since December 2016 | | | Robert J. McGinnis has been a member of our Board of Directors since December 2016. Mr. McGinnis was a director of KGS Holdings, which is the parent company of KGS-ALPHA Capital Markets, from 2010 until September 2018. Mr. McGinnis served as a director of Home Loan Servicing Solutions Ltd. from October 2011 through October 2015, and as Chairman from January 2015 through October 2015. Mr. McGinnis served as Managing Director of Greenwich Capital Markets from 1997 to 2008, where he built the Non-Agency Mortgage, Structured Products and Asset Backed business into one of the industry’s preeminent firms. In his role at Greenwich Capital Markets, Mr. McGinnis was responsible for origination, banking and trading of all products and for structuring, client relationships, recruiting, business development and new products. From 1982 to 1997, Mr. McGinnis was a Managing Director at Salomon Brothers Inc., responsible for origination and banking of Salomon’s Non-Agency Mortgage Business. Mr. McGinnis holds a Bachelor’s degree in Civil Engineering from Rochester Institute of Technology, a Master’s degree in Civil Engineering from Manhattan College and a Master’s degree in Business Administration from New York University. Mr. McGinnis’ mortgage-related securities, finance and management expertise, and experience serving on public company boards and committees led our Board of Directors to conclude that Mr. McGinnis should serve as a director. |
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Michael Nierenberg Chairman of the Board since May 2016; Director since November 2013 | | | Mr. Nierenberg has been Chairman of the Board since May 2016 and a member of our Board of Directors since November 2013, when he was appointed as our Chief Executive Officer and President. Mr. Nierenberg is also a Managing Director at Fortress. Prior to becoming Chief Executive Officer of New Residential, Mr. Nierenberg served as managing director and head of Global Mortgages and Securitized Products at Bank of America Merrill Lynch, with responsibility for all sales and trading activities within the division. Mr. Nierenberg joined Bank of America Merrill Lynch in November 2008 from JP Morgan, where he was head of Global Securitized Products and a member of the management committee of the investment bank. Prior to his tenure at JP Morgan, Mr. Nierenberg held a range of senior leadership positions during fourteen years with Bear Stearns, including head of interest rate and foreign exchange trading operations, co-head of structured products and co-head of mortgage-backed securities trading. From 2006 to 2008, he was a member of Bear Stearns’s Board of Directors. Mr. Nierenberg spent seven years at Lehman Brothers prior to joining Bear Stearns and was instrumental in building the company’s adjustable rate mortgage business. Mr. Nierenberg’s knowledge, skill, expertise of mortgage-related securities, and experience as described above led the Board of Directors to conclude that Mr. Nierenberg should serve as a director. |
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David Saltzman Director since April 2013 | | | David Saltzman has been a member of our Board of Directors since April 2013. Mr. Saltzman |
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Andrew Sloves Director since June 2016 | | | Andrew Sloves has been a member of our Board of Directors since June 2016. Mr. Sloves is currently a trader at Isaak Bond Investments. Previously, Mr. Sloves was a Managing Director of JP Morgan Securities from 2008 to 2015, where he was the head of west coast Securitized Product Sales. Prior to his tenure at JP Morgan Securities, Mr. Sloves joined Bear Stearns in 1989, and was a Senior Managing Director of Bear Stearns from 1993 to 2008 serving in the same capacity. Mr. Sloves is currently a director of Nonstop Administration and Insurance Services, Inc., a privately held company. Mr. Sloves currently serves as a member of the board of directors of Temple Shalom of the South Bay, and as a member of the board of trustees of Rolling Hills Preparatory School, where he also serves as a member of the Finance Committee. Mr. Sloves holds a Bachelor’s degree from Pomona College. Mr. Sloves’ knowledge, skill, expertise in finance, and experience as described above led the Board of Directors to conclude that Mr. Sloves should serve as a director. |
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Alan L. Tyson Director since April 2013 | | | Mr. Tyson has been a member of our Board of Directors since April 2013, and serves as a member of the Audit Committee, Nominating and Corporate Governance Committee, and Compensation Committee. Mr. Tyson was a member of Drive Shack’s board of directors, and a member of its Audit Committee, Nominating and Corporate Governance Committee, and Compensation Committee from November 2011 until May 2018. Mr. Tyson retired as Managing Director of Credit Suisse in October 2011, where he worked for 18 years in the Sales and Trading area of the Fixed Income Department of the Investment Bank. Mr. Tyson began his career at L. F. Rothschild, Unterberg Towbin and subsequently worked at Smith Barney and Lehman Brothers before joining Donaldson, Lufkin and Jenrette in 1994, which was acquired by Credit Suisse in 2000. Mr. Tyson is currently with Gulfstream CM, LLC, a registered investment advisory firm specializing in Municipal Bonds. He is a graduate of Muhlenberg College. Mr. Tyson’s knowledge, skill, securities expertise, and experience as described above led the Board of Directors to conclude that Mr. Tyson should serve as a director. |
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grant. For additional information on director equity compensation, see “Executive and Manager Compensation—Nonqualified Stock Option and Incentive Award Plan.” The remainder of our independent director fees may be paid, at the election of the relevant director, by issuance of Common Stock, based on the value of such Common Stock at the date of issuance, rather than in cash, provided that any such issuance does not prevent such director from being determined to be independent and such shares are granted pursuant to a stockholder-approved plan or the issuance is otherwise exempt from NYSE listing requirements. In addition, an annual fee of $20,000 is paid to the chair of the Audit Committee of the Board of Directors. We also made one payment of $20,000 in 2018 to Mr. Jacobs in connection with his service on a special committee of the Board of Directors, which was created to explore certain transactions.
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Name | Fees Earned or Paid in Cash | Stock Awards | Option Awards(2) | Total | ||||||||
Kevin J. Finnerty(1) | $ | — | $ | 200,000 | $ | — | $ | 200,000 | ||||
Douglas L. Jacobs | $ | 140,000 | $ | 100,000 | $ | — | $ | 240,000 | ||||
Robert J. McGinnis(1) | $ | — | $ | 200,000 | $ | — | $ | 200,000 | ||||
David Saltzman | $ | 100,000 | $ | 100,000 | $ | — | $ | 200,000 | ||||
Andrew Sloves(1) | $ | — | $ | 200,000 | $ | — | $ | 200,000 | ||||
Alan L. Tyson(1) | $ | — | $ | 200,000 | $ | — | $ | 200,000 |
Name | | | Fees Earned or Paid in Cash | | | Stock Awards | | | Option Awards(2) | | | Total |
Kevin J. Finnerty(1) | | | $— | | | $200,023 | | | $— | | | $200,023 |
Douglas L. Jacobs | | | $110,000 | | | $110,007 | | | $— | | | $220,007 |
Pamela F. Lenehan(1) | | | $— | | | $143,894 | | | $— | | | $143,894 |
Robert J. McGinnis(1) | | | $— | | | $200,023 | | | $— | | | $200,023 |
David Saltzman | | | $100,000 | | | $100,012 | | | $— | | | $200,012 |
Andrew Sloves(1) | | | $— | | | $200,023 | | | $— | | | $200,023 |
Alan L. Tyson(1) | | | $— | | | $200,023 | | | $— | | | $200,023 |
(1) | For |
(2) | As of December 31, |
(a) | within the preceding three years: (i) the director was employed by the Company or its Manager; (ii) an immediate family member of the director was employed by the Company or its Manager as an executive officer; (iii) the director or an immediate family member of the director received more than $120,000 per year in direct compensation from the Company, its Manager or any controlled affiliate of its Manager (other than director or committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent on continued service)); (iv) the director was employed by or affiliated with the independent registered public accounting firm of the Company or its Manager; (v) an immediate family member of the director was employed by the independent registered public accounting firm of the Company or its Manager as a partner, principal or manager; or (vi) an executive officer of the Company or its Manager was on the compensation committee of a company which employed the director, or which employed an immediate family member of the director as an executive officer; or |
(b) | he or she is an executive officer of another company that does business with the Company and the annual sales to, or purchases from, the Company is the greater of $1 million, or two percent of such other company’s consolidated gross annual revenues. |
Whether directors meet these categorical independence tests are reviewed and made public annually prior to our annual meeting of stockholders. The Board of Directors may determine, in its discretion, that a director is not independent notwithstanding qualification under the categorical standards. The Board of Directors has determined that each of Ms. Lenehan and Messrs. Finnerty, Jacobs, McGinnis, Saltzman, Sloves and Tyson are independent for purposes of NYSE Rule 303A and that each such director has no material relationship with the Company. In making such determination, the Board of Directors took into consideration that certain directors have invested in the securities of private investment funds or companies managed by or affiliated with the Company’s Manager.
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soon as reasonably practicable after such filing. Our site also contains our Code of Business Conduct and Ethics, Code of Ethics for Principal Executive Officers and Senior Financial Officers, Corporate Governance Guidelines, and the charters of the Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee of our Board of Directors. Our website address is www.newresi.com. You may also obtain these documents by writing the Company at 1345 Avenue of the Americas, 45th45th Floor, New York, New York 10105, Attention: Investor Relations.
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The Board of Directors has determined that Mr. Douglas Jacobs qualifies as an “Audit Committee Financial Expert” as defined by the rules of the SEC. As noted above, our Board of Directors has determined that Mr. Jacobs is independent under NYSE and SEC standards.
2019.
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The Nominating and Corporate Governance Committee believes that the qualifications for serving as a director of the Company are, taking into account such person’s familiarity with the Company, possession of such knowledge, experience, skills, expertise, integrity and diversity as would enhance the Board’s ability to manage and direct the affairs and business of the Company, including, when applicable, the ability of committees of the Board to fulfill their duties and/or to satisfy any independence requirements imposed by law, regulation or NYSE rule.
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The Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by the applicable PCAOB requirements and has discussed with the independent registered public accounting firm their independence.
2020.
Douglas L. Jacobs (Chairperson)
Kevin J. Finnerty
Pamela F. Lenehan
Robert J. McGinnis
Andrew Sloves
Alan L. Tyson
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Name | | | Age | | | Position |
Michael Nierenberg | | | | | Chief Executive Officer and President | |
Nicola Santoro, Jr. | | | | | Chief Financial Officer, Chief Accounting Officer and Treasurer | |
Michael Nierenberg is the Chairman of the Board, Chief Executive Officer and President of the Company. For information regarding Mr. Nierenberg, see above under “Proposal No. 1 Election of Directors – Information Concerning Our Directors, Including the Director Nominees.”
David Schneider has served as the Chief Accounting Officer of the Company since May 2018 and is a Managing Director at Fortress, where he focuses on the financial reporting, internal controls and subservicer oversight for New Residential. Mr. Schneider began his career at Deloitte & Touche LLP where he spent over seven years performing financial statement audits of global investment banks, leading the implementation of SOX 404 compliance and consulting on the SIPC liquidation of Lehman Brothers Inc. Prior to joining Fortress in 2014, Mr. Schneider was a vice president at JPMorgan Chase, where he advised on the structuring of securitizations and MSR transfers and helped to expand the internal control framework within Mortgage Banking. Mr. Schneider earned a bachelor’s degree in Accounting from Fordham University and is a certified public accountant.
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2019.
Name | Number of Securities Underlying Exercisable Options (#) | Number of Securities Underlying Not-Yet Exercisable Options (#)(1) | Option Exercise Price ($) | Option Expiration Date(2) | ||||||||
Michael Nierenberg | — | 400,000 | 13.70 | 8/16/2026 | ||||||||
— | 1,044,110 | 14.50 | 02/03/2027 |
Name | | | Number of Securities Underlying Exercisable Options (#) | | | Number of Securities Underlying Not-Yet Exercisable Options (#)(1) | | | Option Exercise Price ($) | | | Option Expiration Date(2) |
Michael Nierenberg | | | — | | | 1,044,110 | | | 14.09 | | | 02/03/2027 |
| | — | | | 575,000 | | | 16.68 | | | 01/19/2028 | |
| | — | | | 2,551 | | | 18.08 | | | 08/23/2028 | |
| | — | | | 236 | | | 18.03 | | | 08/24/2028 | |
| | — | | | 5,000 | | | 18.12 | | | 08/31/2028 | |
| | — | | | 2,046 | | | 18.15 | | | 09/06/2028 | |
| | — | | | 575,000 | | | 16.90 | | | 11/05/2028 |
(1) | Upon the grant of options to the Manager (or an affiliate), such options are fully vested and become exercisable over a 30-month period (the “Total Exercisability Period”) in monthly installments beginning on the first of each month following the month in which the options were granted. When Tandem Awards are granted, the Manager options become exercisable in monthly installments over a portion of the Total Exercisability Period equal to 30 months, minus the product of (i) the ratio of Manager options not subject to corresponding Tandem Awards to the total number of Manager options (including Manager options subject to corresponding Tandem Awards) multiplied by (ii) 30 (such period, the “Manager Exercisability Period”). Following the Manager Exercisability Period, the Tandem Awards vest in generally monthly installments over the remainder of the Total Exercisability Period and become exercisable only at the end of the Total Exercisability Period. |
(2) | Represents the expiration date of the option held by the Manager (or an affiliate) that is the basis for the Tandem Award held by the officer. In general, the expiration date of the Tandem Award occurs prior to the expiration date of the underlying option. |
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following the date of the grant. Options granted to our Manager are contractually required to be settled in an amount of cash equal to the excess of the fair market value of a share on the date of exercise over the exercise price per share, unless a majority of the independent members of the Board determines to settle the option in shares. If the option is settled in shares, the independent members of the Board will determine whether the exercise price will be payable in cash, by withholding from shares of our Common Stock otherwise issuable upon exercise of such option or through another method permitted under the plan.
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SARs issued in tandem with options shall be exercisable only to the extent that the options to which they relate are exercisable. Upon exercise of the tandem SAR, and to the extent of such exercise, the participant’s underlying option shall automatically terminate. Similarly, upon the exercise of the tandem option, and to the extent of such exercise, the participant’s related SAR will automatically terminate.
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(i) | voting power, which includes the power to vote, or to direct the voting of, shares of our Common Stock; and/or |
(ii) | investment power, which includes the power to dispose of, or to direct the disposition of, shares of our Common Stock. |
A person is also deemed to be the beneficial owner of a security if that person has the right to acquire beneficial ownership of such security at any time within 60 days.
Name and Address of Beneficial Owner(1) | Amount and Nature of Beneficial Ownership | Percent of Class(2) | ||||
The Vanguard Group(3) | 33,133,078 | 8.0 | % | |||
BlackRock, Inc.(4) | 22,189,175 | 5.3 | % | |||
Kevin J. Finnerty(5) | 225,346 | *% | ||||
Douglas Jacobs(5) | 27,213 | * | ||||
Robert J. McGinnis(5) | 51,689 | * | ||||
David Saltzman(5) | 25,713 | * | ||||
Andrew Sloves(5) | 54,181 | * | ||||
Alan L. Tyson(5) | 104,473 | * | ||||
Michael Nierenberg(5) | 1,443,602 | * | ||||
Nicola Santoro, Jr.(5) | — | * | ||||
David Schneider(5) | — | * | ||||
All directors, nominees and executive officers as a group (9 persons) | 1,932,217 | * |
Name and Address of Beneficial Owner(1) | | | Amount and Nature of Beneficial Ownership | | | Percent of Class(2) |
The Vanguard Group(3) | | | 37,476,473 | | | 9.01% |
BlackRock, Inc.(4) | | | 26,345,756 | | | 6.3% |
Kevin J. Finnerty(5) | | | 237,608 | | | * |
Douglas Jacobs(5) | | | 33,872 | | | * |
Pamela F. Lenehan(5) | | | 19,865 | | | * |
Robert J. McGinnis(5) | | | 78,451 | | | * |
David Saltzman(5) | | | 45,941 | | | * |
Andrew Sloves(5) | | | 89.243 | | | * |
Alan L. Tyson(5) | | | 126,735 | | | * |
Michael Nierenberg(5) | | | 2,139,229 | | | * |
Nicola Santoro, Jr. | | | 50,000 | | | * |
All directors, nominees and executive officers as a group (9 persons) | | | 2,820,944 | | | * |
* | Denotes less than 1%. |
(1) | The address of all officers and directors listed above, and of Fortress and certain affiliates, if applicable, are in the care of Fortress Investment Group LLC, 1345 Avenue of the Americas, |
(2) | Percentages shown assume the exercise by such persons of all options to acquire shares of our Common Stock that are exercisable within 60 days of March |
(3) | Sole voting power in respect of |
(4) | Sole voting power in respect of |
(5) | Includes with respect to each of these individuals the following number of shares issuable upon the exercise of options that are exercisable within 60 days of March |
Section 16(a) of Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires directors, executive officers and persons beneficially owning more than ten percent of a registered class of a company’s equity securities to file reports of ownership and changes in ownership on Forms 3, 4, and 5 with the SEC.
To our knowledge, based solely on review of the copies of such reports furnished to us during the year ended December 31, 2018, all reports required to be filed by our directors, executive officers and greater-than-ten-percent owners were timely filed in compliance with the Section 16(a) filing requirements.
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2019.
2018 | |||
Management Fee(1) | $ | 62,594,000 | |
Incentive Compensation(2) | $ | 94,900,000 | |
Expense Reimbursements(3) | $ | 500,000 |
| | 2019 | |
Management Fee(1) | | | $79,472 |
Incentive Compensation(2) | | | $91,892 |
Expense Reimbursements(3) | | | $500 |
(1) | We pay our Manager an annual management fee equal to 1.5% of our gross equity, as defined in our management agreement. Our Manager uses the proceeds from its management fee in part to pay compensation to its officers and employees who, notwithstanding that certain of them also are our officers, receive no cash compensation directly from us. |
(2) | Our Manager is entitled to receive the incentive compensation pursuant to the terms of the Management Agreement with us. The purpose of the incentive compensation is to provide an additional incentive for our Manager to achieve targeted levels of funds from operations (including gains and losses) and to increase our stockholder value. Our Board of Directors may request that our Manager accept all or a portion of its incentive compensation in shares of our Common Stock, and our Manager may elect, in its discretion, to accept such payment in the form of shares, subject to limitations that may be imposed by the rules of the NYSE or otherwise. |
(3) | The Management Agreement provides that we will reimburse our Manager for various expenses incurred by our Manager or its officers, employees and agents on our behalf, including costs of legal, accounting, tax, auditing, administrative and other similar services rendered for us by providers retained by our manager or, if provided by our Manager’s employees, in amounts which are no greater than those which would be payable to outside professionals or consultants engaged to perform such services pursuant to agreements negotiated on an arm’s-length basis; certain of such services are provided by our Manager. The Management Agreement provides that such costs shall not be reimbursed in excess of $500,000 per annum. We also pay all of our operating expenses, except those specifically required to be borne by our manager under the Management Agreement. Our Manager is responsible for all costs incident to the performance of its duties under the management agreement, including compensation of our Manager’s employees, rent for facilities and other “overhead” expenses. The expenses required to be paid by us include, but are not limited to, issuance and transaction costs incident to the acquisition, disposition and financing of our investments, legal and auditing fees and expenses, the compensation and expenses of our independent directors, the costs associated with the establishment and maintenance of any credit facilities and other indebtedness of ours (including commitment fees, legal fees, closing costs, etc.), expenses associated with other securities offerings of ours, the costs of printing and mailing proxies and reports to our stockholders, costs incurred by employees of our Manager for travel on our behalf, costs associated with any computer software or hardware that is used solely for us, costs to obtain liability insurance to indemnify our directors and officers, the compensation and expenses of our transfer agent and fees payable to the NYSE. |
Transactions with Nationstar
AsSale of September 30, 2018, 99.2%, 25.7%Non-Agency Residential Mortgage-Backed Securities
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approximately $38.3 billion as of September 30, 2018. New Residential holds a limited right to cleanup call optionsPurchasers included an entity affiliated with respect to certain securitization trusts serviced or master serviced by Nationstar whereby, when the outstanding balance of the underlying residential mortgage loans falls below a pre-determined threshold, it can effectively purchase the underlying mortgage loans at par, plus unreimbursed servicer advances, and repay all of the outstanding securitization financing at par, in exchange for a fee of 0.75% of UPB paid to Nationstar at the time of exercise. In connection with New Residential’s exercise of certain of these call rights, and certain other call rights acquired by New Residential, New Residential has made, and expects to continue to make, payments to funds managed by an affiliate of Fortress in respect of Excess MSRs held by the funds affected by the exercise of the call rights (“MSR Fund Payments”). During 2018, New Residential accrued MSR Fund Payments in an aggregate amount of approximately $0.2 million, and has also caused an aggregate of $0.5 million of securities to be transferred to such funds in 2018. New Residential continues to evaluate the call rights it purchased from Nationstar, and its ability to exercise such rights and realize the benefits therefrom are subject to a number of risks. The actual UPB of the mortgage loans on which New Residential can successfully exercise call rights and realize the benefits therefrom may differ materially from its initial assumptions. As of September 30, 2018, $878.8 million UPB of New Residential’s residential mortgage loans and $13.1 million of New Residential’s real estate owned properties (which are properties underlying loans that were acquired via foreclosure as result of borrower default) were being serviced or master serviced by Nationstar. Additionally, in the ordinary course of our business, we engage Nationstar to administer the termination of securitization trusts that we collapse pursuant to our call rights. As a result of these relationships, New Residential routinely has receivables from, and payables to, Nationstar.
Nationstar was previously majority owned by private equity funds managed by an affiliate of our Manager; however, as of December 31, 2018, such ownership of the outstanding interests in Nationstar was 0.0%.
Transactions with OneMain
In April 2013, New Residential, OneMain and funds managed by Blackstone Tactical Opportunities Advisors L.L.C. (“Blackstone”) completed, through newly formed limited liability companies (together, the “Consumer Loan Companies”Company’s manager (the “Fortress Purchaser”), a co-investmentwhich purchased approximately $1.85 billion of Securities in a portfolio of consumer loans with a UPB of approximately $4.2 billion as of December 31, 2012. After a servicing transition period, OneMain became the servicer of the loans and provides all servicing and advancing functions for the portfolio. On March 31, 2016, New Residential, through several of its wholly owned subsidiaries (together, the “NRZ Buyers”), and funds managed by Blackstone, entered into a purchase agreement (the “Purchase Agreement”) with certain indirect wholly owned subsidiaries of OneMain (the “Sellers”), pursuant to which the Sellers sold their collective 47% limited liability company interests in the Consumer Loan Companies to the NRZ Buyers and Blackstone for an aggregate purchase price of approximately $111.6 million (the “Purchase”). Prior to entering into the Purchase Agreement, the NRZ Buyers and Blackstone owned 30% and 23% limited liability company interests in the Consumer Loan Companies, respectively, and, following entry into the Purchase Agreement, own 53.5% and 46.5% limited liability company interests in the Consumer Loan Companies, respectively. As a result of the Purchase, the Company consolidates the Consumer Loan Companies, and OneMain is the servicer for a significant portion of the consumer loans in which the Company has invested. The Consumer Loan Companies have agreed to pay OneMain a servicing fee equal to 2.5% of the outstanding UPB of the related consumer loans, which amounted to $29.8 million during the year ended December 31, 2018.
Mr. Jacobs served on the board of directors of OneMain until June 2018, and approximately 40.5% of the outstanding shares of OneMain common stock were previously held by a private equity fund managed by an affiliate of our Manager, which divested its ownership of outstanding interests in OneMain to 0.0% in June 2018.
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2020.
Year | Audit Fees | Audit- Related Fees | Tax Fees | All Other Fees | ||||||||
2018 | $ | 5,271,931 | $ | 190,000 | $ | 1,283,838 | — | |||||
2017 | $ | 3,919,021 | $ | 60,135 | $ | 1,288,181 | $ | 88,700 |
Year | | | Audit Fees | | | Audit- Related Fees | | | Tax Fees | | | All Other Fees |
2019 | | | $4,669,133 | | | $664,000 | | | $954,153 | | | $— |
2018 | | | $5,271,931 | | | $190,000 | | | $1,283,838 | | | $— |
Audit Fees. Audit fees are fees and out-of-pocket expenses for the consolidated financial statements, including the audit of internal control over financial reporting and the review of the Company’s quarterly reports on Form 10-Q, as well as required audits of certain subsidiaries and required review of SEC filings, including with respect to equity offerings.
debt and attest services related to servicing operations.
All Other Fees. For 2017, all other fees are related to financial due diligence and services rendered in connection with certain transactions, including potential acquisitions.
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The Secretary
“RESOLVED, that the shareowners of New Residential Investment Corp. (Company) hereby requestrequesting that the Board of Directors initiate the appropriate process to amend the Company’s articles of incorporation and/or bylaws to provide that directors shall be elected by the affirmative voteadopt a majority voting standard in uncontested director elections. After careful consideration of the majority of votes cast at an annual meeting of shareowners in uncontested elections. A plurality2019 stockholder vote standard, however, will apply to contested director elections; that is, when the number of director nominees exceeds the number of board seats.
Supporting Statement
Is accountability byand this issue, the Board of Directors importantdecided to you? Asfurther strengthen the Company’s approach to governance and, upon the recommendation of the Nominating and Corporate Governance Committee, unanimously approved, subject to stockholder approval, an amendment to the Company’s Bylaws to implement a long-term shareownermajority voting standard in uncontested elections (the “Majority Voting Amendment”). The Majority Voting Amendment changes the voting standard applicable to the election of directors in uncontested elections from a plurality of the votes cast to a majority of the votes cast. In contested elections, directors will continue to be elected by a plurality of the votes cast. The full text of the proposed Majority Voting Amendment is set forth in the Appendix to this Proxy Statement.
Under the Company’sits current voting system, a director may be elected with as little as one affirmative vote because “withheld” votes have no legal effect. This scheme deprives shareowners of a powerful tool to hold directors accountable because it makes it impossible to defeat directors who run unopposed. Conversely, a majority voting standard allows shareowners to actually vote “against” candidatesform.
A substantial number of companies have already adopted this form of majority voting. More than 90% of the companies in the S&P 500 have adopted a form of majority voting for uncontested director elections. We believe the Company should join the growing number of companies that have adopted a majority voting standard requiring incumbent directors who do not receive a favorable majority vote to submit a letter of resignation, and not continue to serve, unless the Board declines the resignation and publicly discloses its reasons for doing so.
Majority voting in director elections empowers shareowners to clearly say “no” to unopposed directors who are viewed as unsatisfactory by a majority of shareowners casting a vote. Incumbent board members serving in a majority vote system are aware that shareowners have the ability to determine whether the director remains in office. The power of majority voting, therefore, is not just the power to effectively remove poor directors, but also the power to heighten director accountability through the threat of a loss of majority support. That is what accountability is all about.
CalPERS believes that corporate governance procedures and practices, and the level of accountability they impose, are closely related to financial performance. It is intuitive that, when directors are accountable for their actions, they perform better. We therefore ask you to join us in requesting that the Board of Directors promptly adopt the majority voting standard for uncontested director elections. We believe the Company’s shareowners will substantially benefit from the increased accountability of incumbent directors and the power to reject directors shareowners believe are not acting in their best interests. Please vote FOR this proposal.”
StatementRecommendation of the Board of Directors
Our Board of Directors has considered the proposal set forth above relating to majority voting for director elections,
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use this proposal as an opportunity for stockholders to express their views on this subject without being influenced by any recommendation the Board might make.
Supporters of plurality voting contend, among other things, that plurality voting is the default standard for director elections under Delaware law, that adopting a majority voting standard would unnecessarily complicate director elections, and that adoption of majority voting could lead to unintended consequences such as no directors being elected, the Company not being in compliance with applicable NYSE or SEC rules regarding independent directors or the potential loss of a person whose service the Board believes would make a valuable contribution to the Board’s oversight of the Company’s business and affairs. Supporters of a majority voting standard often make arguments such as those set forth above in the proponent’s supporting statement.
Approval of this proposal requires the affirmative vote of a majorityat least 80% of the voting power of our issued and outstanding shares present, in person or by proxy, and entitled to vote on the matter at the Annual Meeting once a quorum is present. Such approval would not, by itself, implement majority voting. In order to implement majority voting, the Company’s Bylaws would need to be amended. If stockholders approve the proposal at the Annual Meeting, the Board intends to adoptthereon. Any abstentions or present, for a vote of stockholders at the 2020 annual meeting of stockholders, an amendment to the Bylaws that would implement majority voting in director elections.
If stockholders return a validly executed proxy solicited by the Board of Directors, the shares represented by the proxy will be voted on this proposal in the manner specified by the stockholder. If stockholders do not specify the manner in which their shares represented by a validly executed proxy solicited by the Board are to be voted on this proposal, such shares will be counted as abstentions. However, since approval of the proposal requires a majority of the shares present, in person or by proxy, and entitled to vote on the matter, abstentionsbroker non-votes will have the same effect as a vote “against” the proposal.
votes AGAINST this Proposal.
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The Secretary of the Company has received a written notice, dated December 6, 2018, from the Comptroller of the State of New York, Thomas P. DiNapoli, trustee of the New York State Common Retirement Fund and administrative head of the New York State and Local Retirement System (the “NYS Comptroller”), as a stockholder, submitting a proposal for inclusion in the Company’s proxy materials pursuant to SEC Rule 14a-8 to introduce a resolution at the Annual Meeting. In addition, the Secretary also received a written notice, dated December 11, 2018, of an identical proposal from the California State Teachers’ Retirement System (“CalSTRS” and, together with the NYS Comptroller, the “Proponents”), as co-sponsor of such proposal.
The proposed resolution and a supporting statement are presented verbatim below. Each of the Proponents has represented that it is the beneficial owner of more than $2,000 in market value of shares of our Common Stock and intends to continue to hold the requisite number of shares of our Common Stock through the date of the Annual Meeting. We will provide the address of either Proponent and the number of shares of Common Stock owned by such Proponent upon receiving an oral or written request by a stockholder for this information. The Proponents have requested that we include the following proposal in this Proxy Statement for consideration by our stockholders:
“WHEREAS: New Residential Investment Corp. has no women on its Board of Directors and no women in its Executive Officer ranks.
A June 2018 study by Ferguson Partners reported during the 2018 proxy season, over half of the newly elected outside directors at REITS were women and less than 17% of REITS had no women on their boards. It appears that New Residential Investment Corp is lagging behind its peers.
Numerous institutional investors believe that diversity on boards, as well as in senior management, is an indicator of good corporate governance. BlackRock, the world’s largest asset manager, published updated proxy voting guidelines earlier this year that stated, “we would normally expect to see at least two women directors on every board.” State Street Global Advisors reported in March 2018 that it voted against director nominees on the proxy statements of more than 500 companies over the course of the previous year due to inadequate board diversity. State pension plans from Massachusetts, New York, and Rhode Island have adopted proxy voting policies with minimum board diversity thresholds, resulting in votes against directors at more than one thousand companies cumulatively. Proxy Insight, a leading source on global voting practices, reported that 60 percent of U.S. institutional investor proxy voting policy changes in 2018 related to board diversity.
We believe that diversity, inclusive of sex, race, ethnicity, age, gender identity, gender expression, and sexual orientation, is a critical attribute of a well-functioning board and a measure of sound corporate governance.
Corporate leaders recognize the strong business case for board diversity. The Guiding Principles of Corporate Governance of the Business Roundtable, state: “Diverse backgrounds and experiences on corporate boards, including those of directors who represent the broad range of society, strengthen board performance and promote the creation of long-term shareholder value. Boards should develop a framework for identifying appropriately diverse candidates that allows the nominating/corporate governance committee to consider women, minorities and others with diverse backgrounds as candidates for each open board seat.” Benefits associated with board and management diversity include a larger candidate pool from which to pick top talent, better understanding of consumer preferences, a stronger mix of leadership skills, and improved risk management.
Resolved: Shareholders request that the Board of Directors prepare a report by September 2019, at reasonable expense and omitting proprietary information, on steps the Company is taking to enhance board diversity beyond current levels, such as:
We believe this request will help build Board accountability on this issue.”
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Statement of the Board of Directors
Our Board of Directors has considered the proposal set forth above requesting a report on board diversity and has determined to make no voting recommendation to stockholders. The proposal, which is advisory in nature, would constitute a recommendation to the Board if approved by stockholders.
While our Board of Directors has determined not to make a recommendation either in favor of or opposed to the shareholder proposal, our Board of Directors believes that diversity can strengthen board performance and is actively searching for women and other candidates with diverse backgrounds and experiences. In addition, we believe that our current practices, including recent enhancements to our director candidate selection process, support board diversity. Specifically, our Corporate Governance Guidelines provide that the Nominating and Corporate Governance Committee is committed to actively seeking out highly qualified women and other diverse candidates. Accordingly, the Nominating and Corporate Governance Committee includes, and has any search firm that it engages include, diverse candidates with respect to characteristics such as gender, race, ethnicity and sexual orientation in the pool of potential candidates from which Board nominees are chosen.
Approval of this proposal requires the affirmative vote of a majority of the shares present, in person or by proxy, and entitled to vote on the matter at the Annual Meeting once a quorum is present. If stockholders return a validly executed proxy solicited by the Board of Directors, the shares represented by the proxy will be voted on this proposal in the manner specified by the stockholder. If stockholders do not specify the manner in which their shares represented by a validly executed proxy solicited by the Board are to be voted on this proposal, such shares will be counted as abstentions. However, since approval of the proposal requires a majority of the shares present, in person or by proxy, and entitled to vote on the matter, abstentions will have the same effect as a vote “against” the proposal.
The Board of Directors makes no recommendation on this proposal.
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| | By Order of the Board of Directors, | |
| | ||
| | /s/ Cameron D. MacDougall | |
| | Cameron D. MacDougall | |
| | Secretary |
New York, New York
April 11, 2019
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