Form 4: Rithm Capital CFO Awarded Class B Profits Units Exchangeable for Common Stock

Rithm Capital Corp.'s Chief Financial Officer has been granted Class B Profits Units that are exchangeable for common stock, vesting over three years.

Summary

• Rithm Capital Corp.'s Chief Financial Officer, Nicola Santoro Jr., was awarded 44,155 Class B Profits Units in Rithm Capital Management LLC on February 24, 2025.
• These units are part of the Rithm Capital Management LLC Long Term Incentive Plan.
• The units will vest in three equal annual installments on February 24 of 2026, 2027, and 2028, contingent on Santoro's continued employment.
• Once vested, and sufficient profits have been allocated, the Class B Profits Units can be exchanged for shares of Rithm Capital Corp. common stock on a one-for-one basis.

Sentiment

Score: 7

Explanation: The sentiment is positive, as the award aligns the CFO's interests with shareholders, but it's not overwhelmingly positive as it's a standard practice and the ultimate value depends on future performance.

Positives

• The award aligns the CFO's interests with those of shareholders by tying compensation to company performance.
• The vesting schedule encourages long-term retention of the CFO.

Negatives

• There are no immediate negatives, but the award does represent potential future dilution of existing shares upon conversion.

Risks

• If the company does not generate sufficient profits, the Class B units may not achieve full value.
• The value of the award is tied to the performance of Rithm Capital's common stock, which can be volatile.

Future Outlook

The future value of the award is dependent on the company's future profitability and stock performance.

Industry Context

This type of equity-based compensation is common for executives in the financial services industry, serving as a performance incentive and retention tool.

Comparison to Industry Standards

• This award is in line with standard industry practice for executive compensation in the financial sector.
• Many financial firms use similar performance-based equity awards to align executive compensation with shareholder returns and company performance.
• Comparable companies, such as Annaly Capital Management (NLY) and AGNC Investment Corp (AGNC) utilize similar long-term incentive plans for their executives, although the specific structures and metrics may vary.

Stakeholder Impact

• Shareholders may experience minor dilution if all units are converted to common stock.
• The award incentivizes the CFO to improve company performance, potentially benefiting all stakeholders.

Next Steps

• The next steps involve the annual vesting of the Class B Profits Units on February 24 of 2026, 2027, and 2028, contingent on continued employment.

Key Dates