Form 4: Rithm Capital CFO Acquires 36,648 Class B Profits Units

Nicola Santoro Jr., CFO of Rithm Capital Corp., reports the acquisition of 36,648 Class B Profits Units of Rithm Capital Management LLC, exchangeable into common stock, based on 2024 performance.

Summary

• Nicola Santoro Jr., the Chief Financial Officer of Rithm Capital Corp., filed a Form 4 on January 29, 2025.
• The report details a transaction that occurred on January 27, 2025, where Santoro acquired 36,648 Class B Profits Units of Rithm Capital Management LLC (RCM).
• These units are exchangeable into shares of Rithm Capital Corp. common stock on a one-for-one basis.
• The acquisition is based on the annual return on equity for the 2024 performance period, as certified by the Compensation Committee on January 27, 2025.
• Performance-based criteria have been satisfied for one of the three tranches.
• The reported amount includes 2,381 dividend equivalent rights accrued with respect to the earned Class B Profits Units.
• These dividend equivalent units vest on the same schedule and are subject to the same terms and conditions as the underlying awards.

Sentiment

Score: 7

Explanation: The sentiment is neutral to positive. The acquisition of equity by the CFO based on performance is generally a good sign, indicating confidence in the company's future.

Positives

• The acquisition of Class B Profits Units by the CFO suggests confidence in the company's performance and future prospects.
• The units are tied to performance metrics, aligning the CFO's interests with those of the shareholders.

Future Outlook

The Class B Profits Units are exchangeable into shares of Common Stock of the Issuer on a one-for-one basis after they have become vested and a sufficient amount of profits have been allocated to the holder of the Class B Profits Units.

Industry Context

This type of equity-based compensation is common in the financial industry to incentivize executives and align their interests with shareholder value creation.

Comparison to Industry Standards

• Equity-based compensation, such as Class B Profits Units, is a standard practice among publicly traded companies, including peers like Blackstone (BX) and Apollo Global Management (APO), to incentivize executives.
• These units often vest based on performance metrics, similar to the return on equity criteria used by Rithm Capital.
• The one-for-one exchange ratio for common stock is also a typical feature of these types of awards.

Stakeholder Impact

• The acquisition of Class B Profits Units by the CFO aligns his interests with those of the shareholders, potentially leading to decisions that benefit shareholder value.
• Employees may view this as a positive sign, indicating confidence in the company's leadership and future prospects.

Key Dates