NMRK.NASDAQNewmark Group, INC
10-K/A: Newmark Group Files Amendment to 2024 Annual Report, Updates Executive Compensation and Governance Details
Sentiment:
Form 10-K/A (Amendment No. 1)
Newmark Group amends its 2024 Annual Report on Form 10-K to include previously omitted information regarding directors, executive officers, corporate governance, and executive compensation.
Summary
- Newmark Group filed an amendment to its 2024 Annual Report on Form 10-K to include information previously omitted in reliance on General Instruction G(3) regarding the filing of a definitive proxy statement.
- The amendment restates Part III, Items 10 through 14, and Item 15 of Part IV of the original Form 10-K.
- The document provides details on the company's directors, executive officers, and corporate governance practices.
- It also includes information on executive compensation, security ownership, related party transactions, and principal accountant fees and services.
- The amendment includes new certifications by the principal executive officer and principal financial officer.
Sentiment
Score: 7
Explanation: The document is factual and informative, with a neutral to slightly positive sentiment due to the company's commitment to ESG and employee well-being. However, the presence of legal proceedings and potential conflicts of interest tempers the overall sentiment.
Positives
- The Board is composed of independent, active, and effective directors.
- The company has implemented various programs to incentivize and support employees, from employee ownership to comprehensive benefits and training.
- Newmark is committed to equal employment opportunity and has policies and practices designed to further the development of a productive and inclusive workplace.
- The company supports sustainable business practices and is focused on developing its sustainability program internally and further developing sustainability-related services for clients.
- The company has a compensation recovery policy (Clawback Policy) in place for executive officers.
- The company actively encourages volunteerism from its people, and supports clients in their charitable efforts.
Negatives
- The document notes an inevitable conflict of interest between the company's compensation structure and certain brokerage, transactional, or similar risks to various portions of its businesses.
- The company is involved in a Consolidated Shareholder Action regarding the December 2021 bonus award granted to Mr. H. Lutnick, though a settlement has been agreed upon pending court approval.
- The company is also involved in a collective action alleging breach of contract and antitrust violations, though the District Court granted the defendants motion to dismiss the Second Amended Complaint.
Risks
- The company faces risks related to strategic, operational, cybersecurity and information security, financial, legal/regulatory, reputational, and market factors.
- There is a risk of potential conflicts of interest between Newmark and Cantor Fitzgerald, given overlapping board and management representation and Cantor's control over Newmark.
- The company's future performance and ability to achieve its goals are subject to various economic, industry, and competitive conditions.
- The company is subject to legal and regulatory risks, including potential liabilities related to litigation and regulatory matters.
- The company's ability to attract and retain talented, productive, and skilled employees is critical to its success.
Future Outlook
As Newmark continues to expand globally, we expect that our ESG programs will add value and enhance the sustainable business solutions for our clients and positively impact the communities in which our clients and we operate.
Industry Context
The document references peer companies such as CBRE Group, Inc., Colliers International Group Inc., Jones Lang LaSalle Incorporated, Cushman & Wakefield plc, and Savills plc for comparison purposes.
Comparison to Industry Standards
- The Committee noted that Newmark outpaced the average for industry peers in terms of our growth in fees from management services, servicing, and other, capital markets fees, non-U.S. revenue, fee revenue, and total revenues.
- The Company volumes in GSE origination, mortgage brokerage and debt placement outperformed relevant industry volumes over the time periods presented.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Executive Chairman | Howard W. Lutnick | Stephen M. Merkel | 2025-02-18 | Mr. H. Lutnick was confirmed as the 41st Secretary of Commerce. |
| Board Member | Howard W. Lutnick | Kyle S. Lutnick | 2025-02-18 | Mr. H. Lutnick was confirmed as the 41st Secretary of Commerce. |
| Principal Executive Officer | Howard W. Lutnick | Barry M. Gosin | 2025-02-18 | Mr. H. Lutnick was confirmed as the 41st Secretary of Commerce. |
| Chief Operating Officer | NA | Luis A. Alvarado | 2025-04-07 | New appointment |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Board Composition | Appointment of Kyle S. Lutnick and Stephen M. Merkel to the Board of Directors. | 2025-02-18 | Potentially impacts board dynamics and decision-making. |
| Board Leadership | Appointment of Stephen M. Merkel as Chairman of the Board and Barry M. Gosin as Principal Executive Officer. | 2025-02-18 | Changes in leadership may influence strategic direction and corporate culture. |
Legal Proceedings
- The parties to the Consolidated Shareholder Action agreed to settle the matter for a cash payment of $50 million to Newmark less any fees awarded to plaintiffs counsel by the Court following a hearing, to be paid by Newmarks directors and officers insurance carriers, within 15 business days after entry of judgment.
- On December 2, 2024, the District Court granted the defendants motion to dismiss the Second Amended Complaint in the collective action filed in the U.S. District Court for the District of Delaware (Civil Action No. 1:23-cv-00265).
Related Party Transactions
- The document details various related party transactions with Cantor Fitzgerald, including the intercompany credit agreement, the tax receivable agreement, and the administrative services agreement.
- The document details various related party transactions with Cantor Fitzgerald, including the sublease to Cantor Fitzgerald, L.P.
- The document details various related party transactions with Cantor Fitzgerald, including the referral payment to Newmark from CF&Co, or an affiliate thereof.
- The document details various related party transactions with Cantor Fitzgerald, including the placement agent authorization with CF&Co.
- The document details various related party transactions with Cantor Fitzgerald, including the services agreement with Cantor Fitzgerald Europe for the Provision of Real Estate Investment Banking Services.
Stakeholder Impact
- Shareholders: The amendment provides additional transparency regarding executive compensation and corporate governance, which may influence investor confidence.
- Employees: Changes in executive leadership and compensation structures may impact employee morale and incentives.
- Customers: The company's commitment to ESG and sustainable business practices may enhance its appeal to environmentally conscious customers.
- Suppliers: The company's supplier and vendor practices are outlined in the Corporate Responsibility Report, potentially influencing relationships with suppliers.
- Creditors: The company's financial performance and debt management strategies may impact its creditworthiness and relationships with creditors.
Next Steps
- The Court of Chancery will consider the proposed settlement and all related matters, including the plaintiffs fee award applications, at a hearing on May 5, 2025, at 11:00 a.m.
- If the Court approves the settlement, the Court will enter judgment, at which time the action will be dismissed with prejudice.
Key Dates
| Date | Description |
|---|---|
| 2001-09-11 | Ms. Bauer's husband died on September 11, 2001, and her family received payments and health care coverage from The Cantor Fitzgerald Relief Fund. |
| 2003 | Ms. Bauer served as Director of the New Jersey Lottery Commission from 2003 to 2004. |
| 2004 | Ms. Bauer served as the Secretary of Commerce for the State of New Jersey from 2004 to 2008. |
| 2008 | Ms. Bauer has served on the board of directors of the National September 11 Memorial & Museum since 2008. |
| 2008 | The separation of BGC Partners from Cantor occurred in 2008. |
| 2008 | Ms. Bauer previously served on the Board of Commissioners of The Port Authority of New York and New Jersey from 2008 to 2012. |
| 2009 | Ms. Bauer served as Senior Vice President of Covenant House International from 2009 to 2010. |
| 2009 | Ms. Bauer has served on the Foundation Board of Monmouth Medical Center since 2009. |
| 2010 | Ms. Bauer served as Chief Executive Officer of GTBM, Inc. from 2010 to 2022. |
| 2012 | Ms. Bauer previously served on the Board of Commissioners of The Port Authority of New York and New Jersey from 2008 to 2012. |
| 2012 | Mr. McIntyre has been the Founder and Managing Principal of PassPort Real Estate, LLC since 2012. |
| 2012 | Michael J. Rispoli has served as our Chief Financial Officer since 2012. |
| 2013 | Mr. Itzkowitz served as Senior Vice President and General Counsel for Los Angeles-based Anuvu Operations LLC from 2013 to 2016. |
| 2014 | Mr. Itzkowitzs prior partnership interest in Cantor ended in 2014. |
| 2014 | Mr. McIntyre was a Senior Vice President and Head of Commercial Real Estate at Hudson City Savings Bank from May 2014 to May 2016. |
| 2015 | Luis A. Alvarado joined Newmark in 2015 as Executive Vice President and Boston Market Leader. |
| 2016 | Mr. Itzkowitz has been the Executive Vice President and General Counsel of S.D. Malkin Properties since 2016. |
| 2016 | Mr. McIntyre was a Senior Vice President and Head of Commercial Real Estate at Hudson City Savings Bank from May 2014 to May 2016. |
| 2017 | Newmark's Energy and Sustainability Services team has led energy management initiatives for Newmark clients since 2017. |
| 2017-12-13 | Date of the Separation and Distribution Agreement, Tax Matters Agreement, Tax Receivable Agreement, Exchange Agreement, and the Amended and Restated Agreement of Limited Partnership of Newmark Holdings. |
| 2018 | Ms. Bauer has been a director of our Company since June 2018. |
| 2018 | Beginning in 2018, Mr. Alvarado served as Newmarks Chief Revenue Officer and East Region Market Leader. |
| 2018-03 | The Compensation Committee and Audit Committee approved a standing policy that gave Mr. H. Lutnick the same right, subject to certain conditions, to accept or waive opportunities that have previously been offered, or that may be offered in the future, to other executive officers. |
| 2018-11-30 | BGC Partners completed the Spin-Off to its stockholders of all of the shares of our common stock owned by BGC Partners. |
| 2019 | Mr. Merkel has served as our Executive Vice President and Chief Legal Officer since 2019. |
| 2019 | Mr. K. Lutnick graduated from Stanford University with a Bachelors degree in Psychology in 2019. |
| 2019-01 | Newmark organized a drive with The Cantor Fitzgerald Relief Fund for victims of the Los Angeles wildfires in January 2019. |
| 2020 | Mr. McIntyre has been a director of our Company since January 2020. |
| 2020 | From 2020 to 2021 Mr. K. Lutnick was part of Newmarks market-leading retail advisory team, where he advised clients in New York City. |
| 2021 | Newmark was named by GlobeSt.com as one of commercial real estates Best Places to Work in 2021 and 2024. |
| 2021 | Mr. McIntyre has served on the Board of Trustees of Acadia Realty Trust since March 2021. |
| 2021 | The Compensation Committee approved a one-time bonus award to Mr. H. Lutnick (the Lutnick Award) on December 27, 2021. |
| 2022 | Newmark was ranked #1 on LinkedIns 2022 Top Companies in Real Estate list. |
| 2022 | Mr. Itzkowitz has been a director of our Company since August 2022. |
| 2022 | Newmark launched the Homeless Assistance Fund in 2022. |
| 2022 | From 2022 to 2024 he also previously held positions within Knotel, including General Manager of UK & EMEA and Vice President of Business Development. |
| 2022-09-29 | Mr. Rispoli entered into an employment agreement with Newmark OpCo and Newmark Holdings on September 29, 2022. |
| 2023 | Newmark published its first Corporate Responsibility Report in 2023. |
| 2023 | Since 2023, Newmark has retained a nationally certified women-owned firm to assist our leadership in this endeavor. |
| 2023 | Newmark announced that it would match 100% of employee, broker and client donations up to $1 million to The Cantor Fitzgerald Relief Fund to support direct relief efforts in Israel in 2023. |
| 2023-12-01 | The Company adopted the Clawback Policy for its executive officers effective as of December 1, 2023, with retroactive applicability to October 2, 2023. |
| 2024 | From 2024 to 2025 he served as Global Managing Director of Knotel, Inc. (Knotel), Newmarks flexible office and workspace business. |
| 2024 | Newmark was named by GlobeSt.com as one of commercial real estates Best Places to Work in 2021 and 2024. |
| 2024 | In 2024, we supported hospitals, universities, food banks and community-based organizations. |
| 2024 | During 2024, each independent director attended 100% of the total number of meetings of the Board and the committees of which he or she was a member. |
| 2024 | The Committee held 15 meetings during the year ended December 31, 2024. |
| 2024 | The Committee held 13 meetings during the year ended December 31, 2024. |
| 2024 | The Committee held seven meetings during the year ended December 31, 2024. |
| 2024-01-02 | Mr. Merkel sold 35,006 shares of Class A common stock to the Company on January 2, 2024. |
| 2024-02-18 | Howard W. Lutnick was confirmed by the United States Senate as the 41st Secretary of Commerce on February 18, 2025. |
| 2024-03-03 | On March 3, 2025, Newmark filed its Original Form 10-K for the fiscal year ended December 31, 2024. |
| 2024-03-15 | 14,290 of Mr. Rispolis RSUs vested pursuant to the vesting schedule of the RSUs granted under the Rispoli Employment Agreement on March 15, 2024. |
| 2024-04-07 | The Board appointed Luis Alvarado to serve as our Chief Operating Officer on April 7, 2025. |
| 2024-04-30 | The Company does not anticipate that its definitive proxy statement involving the election of directors in connection with its 2025 annual meeting of stockholders will be filed by April 30, 2025. |
| 2024-08-07 | Mr. Gosin entered into a Second Amended and Restated Employment Agreement on August 7, 2024. |
| 2024-08-13 | 1,145,476 of Mr. Gosins NPSUs were converted into 1,238,620 PSUs as adjusted by the then applicable exchange ratio of 0.9248 pursuant to the 2024 Gosin Employment Agreement on August 13, 2024. |
| 2024-09-23 | The Company purchased 795,376 of Mr. Gosins previously awarded limited partnership interests at a price per unit of $14.19 on September 23, 2024. |
| 2024-10-01 | Mr. Rispoli received exchangeability on 4,378 PSUs and 4,378 PPSUs, and 14,285 of Mr. Rispolis RSUs vested pursuant to the vesting schedule of the RSUs granted under the Rispoli Employment Agreement on October 1, 2024. |
| 2024-10-17 | At the 2024 Annual Meeting of Stockholders, held on October 17, 2024, all of the Companys directors were in attendance. |
| 2024-12-31 | Mr. Gosin received exchange rights on 1/7th of the (i) 1,237,644 PSUs converted on April 1, 2023, and (ii) 1,240,901 PSUs converted on December 31, 2023, resulting in an aggregate of 354,076 exchangeable PSUs on December 31, 2024. |
| 2025 | Newmark organized a drive with The Cantor Fitzgerald Relief Fund for victims of the Los Angeles wildfires in 2025. |
| 2025-01-13 | Our Compensation Committee made awards to the participating executive officers for 2024 under our Incentive Plan on January 13, 2025. |
| 2025-02-05 | The Compensation Committee granted Mr. H. Lutnick 1,148,970 exchange rights with respect to 1,148,970 previously awarded PSUs that were previously non-exchangeable on February 5, 2025. |
| 2025-02-18 | Howard W. Lutnick was confirmed by the United States Senate as the 41st Secretary of Commerce on February 18, 2025. |
| 2025-02-18 | On February 18, 2025, the Board appointed Mr. K. Lutnick, son of Mr. H. Lutnick, to serve as a member of the Board. |
| 2025-02-18 | On February 18, 2025, the Board appointed our Executive Vice President and Chief Legal Officer, Mr. Stephen M. Merkel to serve as a member of the Board and as Chairman of the Board. |
| 2025-02-18 | On February 18, 2025, the Board appointed our Chief Executive Officer, Mr. Barry M. Gosin, as Principal Executive Officer of the Company and as Chairman of Newmark & Co. |
| 2025-02-18 | On February 18, 2025, Mr. Merkel entered into a Change of Control Agreement with the Company. |
| 2025-04-07 | On April 7, 2025, the Board appointed Luis Alvarado to serve as our Chief Operating Officer. |
| 2025-04-29 | The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis, which we refer to as the CD&A, set forth in this document with management of the Company and, based on such review and discussions, the Compensation Committee recommended to the Companys Board of Directors that the CD&A be included in this document. Dated: April 29, 2025 |
| 2025-04-30 | Date of certifications by the Principal Executive Officer and Principal Financial Officer. |
Keywords
executive compensation, corporate governance, directors, financial reporting, risk management, ESG, sustainability, related party transactions, internal controls, clawback policy
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