Form 4: Rithm Capital CFO Boosts Holdings via Dividends

Rithm Capital Corp.'s CFO, Nicola Santoro Jr., increased his beneficial ownership of common stock and Class B Profits Units through dividend equivalent rights.

Summary

• Nicola Santoro Jr., Chief Financial Officer of Rithm Capital Corp. (RITM), reported an increase in his beneficial ownership.
• Acquired 629 shares of Common Stock through dividend equivalent rights accrued on existing time-based restricted stock units.
• Beneficially owns a total of 108,126 shares of Common Stock, which includes 28,312 unvested restricted stock units and 1,249 shares from dividend reinvestments.
• Acquired 2,824 Class B Profits Units of Rithm Capital Management LLC (RCM) through dividend equivalent rights.
• These Class B Profits Units are exchangeable into RITM Common Stock on a one-for-one basis after vesting and sufficient profit allocation.
• The acquired Class B Profits Units relate to previously reported awards with various vesting schedules, including time-based and performance-based criteria.

Sentiment

Score: 7

Explanation: The filing indicates an increase in the CFO's beneficial ownership through dividend equivalent rights and vesting schedules, which generally signals management's alignment with shareholder interests and confidence in the company's long-term prospects. The satisfaction of performance-based criteria for a portion of the awards is also a positive indicator.

Positives

• Increased beneficial ownership by the CFO aligns management interests with shareholders.
• Acquisition of shares and units through dividend equivalent rights indicates ongoing participation in company performance and compensation plans.
• Performance-based criteria for a tranche of Class B Profits Units for the 2024 period have been satisfied, indicating strong company performance in that area.

Risks

• Vesting of both restricted stock units and Class B Profits Units is contingent upon the Reporting Person's continued employment with the Issuer.
• Exchangeability of Class B Profits Units into Common Stock is also subject to sufficient profits being allocated to the holder.

Future Outlook

Future vesting of restricted stock units and Class B Profits Units is scheduled through February 2028, contingent on continued employment and, for profits units, sufficient profit allocation. One tranche of performance-based Class B Profits Units for the 2024 period has satisfied its criteria and is set to vest in February 2027.

Industry Context

The use of restricted stock units and profits interest units as part of executive compensation, with vesting tied to continued employment and performance, is a common practice in the financial services industry. This structure aims to align the interests of executives with long-term shareholder value creation.

Related Party Transactions

• The Class B Profits Units are issued by Rithm Capital Management LLC (RCM), which is a related entity to Rithm Capital Corp., as part of the executive compensation plan.

Stakeholder Impact

• Shareholders: Increased alignment of management's financial interests with shareholder returns through equity ownership and performance-based incentives.
• Employees (specifically the CFO): Continued incentive for long-term performance and retention through multi-year vesting schedules.

Next Steps

• Continued vesting of restricted stock units and Class B Profits Units according to their respective schedules through February 2028.
• Future dividend equivalent rights may accrue on existing awards.

Key Dates

Keywords

Rithm Capital, RITM, Form 4, Insider Transaction, Executive Compensation, Stock Ownership, Dividend Equivalent Rights, Class B Profits Units, Nicola Santoro Jr., CFO