Form 4: Redwood Trust Director Converts Deferred Stock Units to Common Stock

Douglas B. Hansen, a Director at Redwood Trust Inc. (RWT), has converted 13,984 Deferred Stock Units into common stock at a price of $5.44 per share, increasing his total beneficial ownership.

Summary

• Douglas B. Hansen, a Director of Redwood Trust Inc. (RWT), acquired a total of 13,984 shares of common stock on May 27, 2025.
• These shares were acquired through the conversion of Deferred Stock Units (DSUs) under the Executive Deferred Compensation Plan.
• The conversions occurred at a price of $5.44 per share.
• Specifically, 1,203 shares were acquired from DSUs with an original fair value of $12.46 per unit, and 12,781 shares were acquired from DSUs with an original fair value of $9.78 per unit.
• Following these transactions, Mr. Hansen's beneficial ownership of Redwood Trust common stock stands at 13,418 shares held directly, 31,517 shares held indirectly by IRA, and 396,973 shares held indirectly by a Trust, totaling 441,908 shares.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the significant decline in the stock price at the time of DSU conversion compared to their original grant values, indicating underperformance of the stock. However, the mandatory nature of the conversion and the director's continued holding of a substantial number of shares prevent a strongly negative score.

Positives

• The Director, Douglas B. Hansen, increased his beneficial ownership of Redwood Trust common stock by 13,984 shares, which can be seen as a positive signal of alignment with shareholder interests, even though it was a mandatory conversion.
• The conversion of Deferred Stock Units into common stock indicates the vesting and delivery of previously granted compensation, fulfilling the terms of the Executive Deferred Compensation Plan.

Negatives

• The common stock was acquired at a price of $5.44 per share, which is significantly lower than the original grant date fair market values of the Deferred Stock Units ($9.78 and $12.46), indicating a substantial decline in Redwood Trust's stock price since the DSUs were granted.

Related Party Transactions

• The transaction relates to the distribution and/or conversion of Deferred Stock Units to common stock under the Executive Deferred Compensation Plan, which is a standard compensation arrangement between the company and its director.

Stakeholder Impact

• Shareholders: The transaction provides transparency into insider ownership changes. The lower conversion price compared to DSU grant values may reflect negatively on the company's stock performance since the grant dates.
• Employees (specifically, the reporting person): The transaction represents the fulfillment of deferred compensation, converting previously earned units into liquid common stock.

Key Dates

Keywords

Redwood Trust, RWT, SEC Form 4, Insider Transaction, Director Stock Ownership, Deferred Stock Units, Common Stock, Executive Compensation Plan, Beneficial Ownership