DEF 14A: Ladder Capital Corp Unveils Proxy Statement for 2024 Annual Meeting

Ladder Capital Corp has released its proxy statement, outlining key proposals for the upcoming Annual Meeting of Stockholders on June 6, 2024.

Summary

• Ladder Capital Corp has published its proxy statement for the Annual Meeting of Stockholders, scheduled for June 6, 2024.
• The meeting will address the election of directors, ratification of the appointment of Ernst & Young LLP as the independent registered public accounting firm, and advisory votes on executive compensation (Say on Pay) and the frequency of such votes (Say on Frequency).
• The Board of Directors recommends voting FOR the election of Douglas Durst and Jeffrey Steiner as directors, FOR the ratification of Ernst & Young LLP, FOR the approval of executive compensation, and FOR a frequency of every 3 YEARS for future Say on Pay votes.
• As of the record date, April 10, 2024, there were 127,888,375 shares of Class A common stock outstanding and entitled to vote.
• The company's distributable EPS for 2023 was $1.34 per share, compared to $1.16 per share in 2022.
• Distributable earnings for 2023 were $167.7 million, compared to $148.4 million in 2022.
• The after-tax distributable return on average equity (ROAE) for the twelve months ended December 31, 2023, was 10.9%.

Sentiment

Score: 7

Explanation: The document presents a generally positive outlook, highlighting improved financial performance and strong alignment between management and stockholders. However, it also acknowledges past challenges and potential risks, resulting in a moderately positive sentiment score.

Positives

• Distributable EPS increased from $1.16 in 2022 to $1.34 in 2023.
• Distributable earnings increased from $148.4 million in 2022 to $167.7 million in 2023.
• The after-tax distributable ROAE was 10.9% for the twelve months ended December 31, 2023.
• The Board collectively owns 10.7% of Ladder's Class A common stock, aligning their interests with stockholders.
• The company has a robust stockholder engagement program, seeking and considering stockholder feedback.
• Ladder's credit ratings were re-affirmed by all three rating agencies during the year, with two agencies still having Ladder rated just one notch below investment grade.

Negatives

• The 2021 Say-on-Pay vote received only 34.2% support, indicating stockholder concerns about executive compensation.
• The company acknowledges the COVID-19 pandemic's impact on distributable earnings in 2020, requiring discretionary decisions on equity-only incentives.

Risks

• The proxy statement mentions the potential risk of breaching existing agreements with Named Executive Officers if compensation terms are altered.
• The company acknowledges the potential impact of external factors, such as market conditions and regulatory changes, on its stock price and performance.

Future Outlook

The Board and management believe that the proactive development and oversight of the ESG factors that matter most to our business is accretive to long-term value creation for our stockholders, employees, clients, communities, and other stakeholders.

Management Comments

• The Board believes that Mr. Fishman, who owns approximately one percent (1%) of Ladders Class A common stock, is aligned with his fellow stockholders and has the in-depth knowledge of the issues, challenges and opportunities facing Ladder to assure that the Boards time and attention are focused on what it views as the most critical matters.
• The Board believes that seeking and considering stockholder feedback is critical to driving long-term growth and creating stockholder value.

Industry Context

The proxy statement provides insight into Ladder Capital's performance relative to its peers in the commercial real estate finance REIT sector, highlighting its differentiated liability structure and focus on senior secured assets.

Comparison to Industry Standards

• The Compensation Committee evaluates Ladder's performance compared to a group of Business Comparables, consisting of internallyand externally-managed commercial finance REITs.
• Ladder's total return meaningfully exceeded that of its Business Comparables in 2023.
• Unlike over 60% of its Business Comparables, Ladder is internally managed, with its Named Executive Officers and employees singularly focused on delivering returns for Ladder stockholders.
• The aggregate base salaries of Ladder's Named Executive Officers fell within the 32nd percentile when compared to its Comparable Companies.
• Ladder has among the highest credit ratings and lowest cost of funds in the space, contributing to its strong performance.

Related Party Transactions

• McDermott Will & Emery (MWE), of which Mr. Steiner is currently a Partner, provides legal services to the Company.
• Mr. Fishman serves on the board of directors of Santander Holdings USA, Inc. but does not have a material interest ownership in that firm.
• In November 2022, a subsidiary of Ladder entered into a Master Repurchase Agreement (MRA) with Amherst Pierpont Securities LLC (Amherst), a subsidiary of Santander Holdings USA, Inc.

Stakeholder Impact

• The company's performance and governance practices impact stockholders, employees, clients, communities, and other stakeholders.
• The Board believes that seeking and considering stockholder feedback is critical to driving long-term growth and creating stockholder value.

Next Steps

• Stockholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will hold its Annual Meeting of Stockholders on June 6, 2024.
• The Board and Compensation Committee will consider the outcome of the advisory votes on executive compensation and Say on Frequency when making future decisions.

Key Dates

Keywords

proxy statement, annual meeting, executive compensation, board of directors, stockholders, corporate governance, distributable earnings, ROAE, Ernst & Young, Say on Pay, Ladder Capital