UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant x Filed by a Party other than the Registrant ¨
Check the appropriate box:
¨ | Preliminary Proxy Statement | |
¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
x | Definitive Proxy Statement | |
¨ | Definitive Additional Materials | |
¨ | Soliciting Material Pursuant to Rule 14a-12 |
New Residential Investment Corp.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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¨ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
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¨ | Fee paid previously with preliminary materials. | |||
¨ | 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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Sincerely, | |
/s/ Michael Nierenberg | |
Michael Nierenberg | |
Chairman of the Board of Directors |
(i) | a proposal to elect two Class I directors to serve until the 2020 annual meeting of stockholders and until their successors are elected and duly qualified; |
(ii) | a proposal to approve the appointment of Ernst & Young LLP as independent registered public accounting firm for the Company for fiscal year 2017; and |
(iii) | any other business properly presented at the Annual Meeting. |
By Order of the Board of Directors, | |
/s/ Cameron D. MacDougall | |
Cameron D. MacDougall | |
Secretary |
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(i) | a proposal to elect two Class I directors to serve until the 2020 annual meeting of stockholders and until their successors are elected and duly qualified; |
(ii) | a proposal to approve the appointment of Ernst & Young LLP as independent registered public accounting firm for the Company for fiscal year 2017; and |
(iii) | any other business that may properly come before the annual meeting of stockholders or any adjournment of the annual meeting. |
(i) | FOR the election of the Class I nominees to our Board of Directors; |
(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, 2017; and |
(iii) | in the discretion of the proxy holder on any other business that properly comes before the Annual Meeting or any adjournment or postponement thereof. |
• | 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; |
• | sign, date and mail a new proxy card to our Secretary; |
• | dial the number provided on the proxy card and vote again; |
• | log onto the Internet site provided on the proxy card and vote again; or |
• | attend the Annual Meeting and vote your shares in person. |
(i) | FOR the election of the nominees to our Board of Directors; and |
(ii) | FOR the approval of the appointment of Ernst & Young LLP as independent registered public accounting firm for the Company for fiscal year 2017. |
Class | Term Expiration | Director | Age | |||
Class I | 2017 | Alan L. Tyson | 60 | |||
David Saltzman | 55 | |||||
Class II | 2018 | Michael Nierenberg | 54 | |||
Kevin J. Finnerty | 62 | |||||
Class III | 2019 | Douglas L. Jacobs | 69 | |||
Robert J. McGinnis | 63 | |||||
Andrew Sloves | 53 |
Kevin J. Finnerty Director since April 2013 | Mr. Finnerty has been a member of our Board of Directors since April 2013. Mr. Finnerty has been a member of the board of Drive Shack Inc. (formerly Newcastle Investment Corp., “Drive Shack”) and its Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee since August 2005. Mr. Finnerty is an employee of Mariner Investment Group and is the Founding Partner of Galton Capital Group, a residential mortgage credit fund manager. Mr. Finnerty is a former founder and the Managing Partner of F.I. Capital Management, an investment company focused on agency-mortgage related strategies. Previously, Mr. Finnerty was a Managing Director at J.P. Morgan Securities Inc., where he headed the Residential Mortgage Securities Department. Mr. Finnerty joined Chase Securities Inc. in December of 1999. Prior to joining Chase Securities Inc., Mr. Finnerty worked at Union Bank of Switzerland from November 1996 until February 1998, where he headed the Mortgage Backed Securities Department, and at Freddie Mac from January 1999 until June 1999, where he was a Senior Vice President. Between 1986 and 1996, Mr. Finnerty was with Bear Stearns & Co. Inc., where he was a Senior Managing Director and ultimately headed the MBS Department and served as a member of the board of directors from 1993 until 1996. Mr. Finnerty was Co-Chair of the North American People Committee at JPMorganChase and Chairman of the Mortgage and Asset-Backed Division of the Bond Market Association for the year 2003. Mr. Finnerty’s knowledge, skill, expertise and experience as described above, led the Board of Directors to conclude that Mr. Finnerty should serve as a director. |
Douglas L. Jacobs Director since June 2013 | Mr. Jacobs has been a member of our Board of Directors since June 2013. Mr. Jacobs is a director of Clear Channel Outdoor Holdings, Inc., an outdoor advertising company, where he serves as Chairman of the Audit Committee and a member of the Compensation Committee. Mr. Jacobs is a director of Fortress Investment Group LLC (“Fortress”), where he serves as Chairman of the Audit Committee and a member of the Compensation Committee. Mr. Jacobs is also a director of OneMain Holdings Inc. (“OneMain”), where he is Chairman of the Audit Committee. From November 2004 to mid-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 Committees. From 2009 until 2015, Mr. Jacobs was a director of Doral Financial Corporation, a financial services company. Mr. Jacobs was a director and Chairman of the Audit Committee for Global Signal Inc. from February 2004 until January 2007. Mr. Jacobs has also been a director of Hanover Capital Mortgage Holdings, Inc. from 2003 until 2007. From 1988 to 2003, Mr. Jacobs was at FleetBoston Financial Group, where he became an Executive Vice President and Treasurer responsible for managing the company’s funding, securitization, capital, and asset and liability management activities in addition to its securities, derivatives, and mortgage loan portfolios. Prior to joining FleetBoston, Mr. Jacobs was active in a variety of positions at Citicorp over 17 years, culminating in his role as Division Executive of the Mortgage Finance Group. Mr. Jacobs holds a Bachelor’s degree from Amherst College and a Master’s degree in Business Administration from the Wharton School of Business at the University of Pennsylvania. Mr. Jacobs’ finance and management expertise, experience serving on public company boards and committees led our Board of Directors to conclude that Mr. Jacobs should serve as a director. |
Robert J. McGinnis Director since December 2016 | Robert J. McGinnis has been a member of our Board of Directors since December 2016. Mr. McGinnis serves as a member of the Board of Managers of KGS Holdings, which is the parent company of KGS-ALPHA Capital Markets. 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’ finance and management expertise, experience serving on public company boards and committees led our Board of Directors to conclude that Mr. McGinnis should serve as a director. |
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 and experience as described above led the Board of Directors to conclude that Mr. Nierenberg should serve as a director. |
David Saltzman Director since April 2013 | David Saltzman has been a member of our Board of Directors since April 2013. Mr. Saltzman is the Executive Director of The Robin Hood Foundation since 1989. Prior to joining Robin Hood, Mr. Saltzman served as the Special Assistant to the President of the Board of Education of the City of New York for three years. Before working at the Board of Education, he ran AIDS education programs for the New York City Department of Health. Mr. Saltzman began his career in public service working with homeless families for the Human Resources Administration of the City of New York, the city’s Department of Social Services. Mr. Saltzman earned a Masters of Public Policy and Administration from Columbia University and a Bachelor’s degree from Brown University. In 2001, Mr. Saltzman was named as one of Time Magazine’s 100 Innovators. Mr. Saltzman’s knowledge, skill, expertise and experience as described above led the Board of Directors to conclude that Mr. Saltzman should serve as a director. |
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 and experience as described above led the Board of Directors to conclude that Mr. Sloves should serve as a director. |
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. He is also a member of the board of directors of Drive Shack and serves on the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. 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, expertise and experience as described above led the Board of Directors to conclude that Mr. Tyson should serve as a director. |
Name | Fees Earned or Paid in Cash | Stock Awards | Option Awards(4) | Total | ||||||||||||
Kevin J. Finnerty(1) | $ | — | $ | 150,000 | $ | — | $ | 150,000 | ||||||||
Douglas L. Jacobs | $ | 85,000 | $ | 75,000 | $ | — | $ | 160,000 | ||||||||
Robert J. McGinnis | $ | 6,967 | $ | — | $ | 1,160 | $ | 8,127 | ||||||||
David Saltzman | $ | 85,000 | $ | 75,000 | $ | — | $ | 160,000 | ||||||||
Andrew Sloves(2) | $ | — | $ | 80,492 | $ | 1,173 | $ | 81,665 | ||||||||
Alan L. Tyson(3) | $ | — | $ | 160,000 | $ | — | $ | 160,000 |
(1) | In 2016, Mr. Finnerty elected to receive $150,000 of compensation for his services as a director in the form of Common Stock in lieu of cash. |
(2) | In 2016, Mr. Sloves elected to receive $80,492 of compensation for his services as a director in the form of Common Stock in lieu of cash. |
(3) | In 2016, Mr. Tyson elected to receive $160,000 of compensation for his services as a director in the form of Common Stock in lieu of cash. |
(4) | As of December 31, 2016, the following directors held the following numbers of outstanding options: Mr. Finnerty: 1,000; Mr. Jacobs: 1,000; Mr. McGinnis: 1,000; Mr. Saltzman: 1,000; Mr. Sloves: 1,000; and Mr. Tyson: 1,000. |
(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 $1 million, or two percent of such other company’s consolidated gross annual revenues. |
Name | Age | Position | ||
Michael Nierenberg | 54 | Chief Executive Officer and President | ||
Nicola Santoro, Jr. | 48 | Chief Financial Officer and Treasurer | ||
Jonathan R. Brown | 50 | Chief Accounting Officer |
Name | Number of Securities Underlying Exercisable Options (#) | Number of Securities Underlying Not-Yet Exercisable Options (#) (1) | Option Exercise Price ($) | Option Expiration Date (2) | |||||||||||
Michael Nierenberg | — | 258,750 | 12.20 | 4/30/2024 | |||||||||||
— | 1,150,000 | 15.25 | 4/13/2025 | ||||||||||||
— | 558,708 | 15.88 | 6/15/2025 | ||||||||||||
Nicola Santoro, Jr. | — | — | N/A | N/A | |||||||||||
Jonathan R. Brown | 1,210 | — | 33.80 | 1/23/2017 | |||||||||||
2,280 | — | 29.92 | 4/11/2017 |
(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 equal 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 equal 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 equal 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 FOE I 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. |
(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. |
Name and Address of Beneficial Owner(1) | Amount and Nature of Beneficial Ownership | Percent of Class(2) | ||||||
BlackRock, Inc.(3) | 21,705,685 | 8.7 | % | |||||
The Vanguard Group(4) | 19,247,476 | 7.7 | % | |||||
Kevin J. Finnerty(5) | 203,951 | * | ||||||
Douglas Jacobs(5) | 17,156 | * | ||||||
Robert J. McGinnis(5) | 28,000 | * | ||||||
David Saltzman(5) | 15,656 | * | ||||||
Andrew Sloves(5) | 30,492 | |||||||
Alan L. Tyson(5) | 80,784 | * | ||||||
Michael Nierenberg(5) | 1,242,352 | * | ||||||
Nicola Santoro, Jr.(5) | — | * | ||||||
Jonathan R. Brown (5) | 2,280 | * | ||||||
All directors, nominees and executive officers as a group (9 persons) | 1,620,671 | * |
* | Denotes less than 1%. |
(1) | The address of all officers and directors listed above, and of Fortress and certain affiliates, are in the care of Fortress Investment Group LLC, 1345 Avenue of the Americas, 45th Floor, New York, New York 10105. |
(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 31, 2017, and no exercise by any other person. |
(3) | Sole voting power in respect of 21,124,303 shares and sole investment power in respect of 21,705,685 shares, as stated in a Schedule 13G/A filed with the SEC on January 25, 2017. BlackRock, Inc.’s address is 55 East 52nd Street, New York, NY 10055. |
(4) | Sole voting power in respect of 294,683 shares; shared voting power in respect of 25,167 shares; sole investment power in respect of 18,941,424 shares; and shared investment power in respect of 306,052 shares, as stated in a Schedule 13G/A filed with the SEC on February 10, 2017. The Vanguard Group’s address is 100 Vanguard Blvd., Malvern, PA 19355. |
(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 31, 2017: Finnerty—1,000; Jacobs—1,000; McGinnis—1,000; Saltzman—1,000; Sloves—1,000; Tyson—1,000; Nierenberg—258,750; Santoro—0; and Brown—2,280. |
2016 | ||||
Management Fee(1) | $ | 41,610,000 | ||
Incentive Compensation(2) | $ | 42,197,000 | ||
Expense Reimbursements(3) | $ | 500,000 |
(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. |
APPROVAL OF APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Year | Audit Fees | Audit - Related Fees | Tax Fees | All Other Fees | ||||||||||||
2016 | $ | 3,962,610 | $ | 75,000 | $ | 1,339,803 | $ | 26,500 | ||||||||
2015 | $ | 3,310,232 | $ | 30,000 | $ | 1,084,745 | $ | 592,935 |
By Order of the Board of Directors, | |
/s/ Cameron D. MacDougall | |
Cameron D. MacDougall | |
Secretary |