Form 4: Rithm Capital Corp. Chief Legal Officer Zeiden Receives Profits Interest Award

David Zeiden, Chief Legal Officer of Rithm Capital Corp., reports the acquisition of Class B Profits Units in Rithm Capital Management LLC, exchangeable for 21,026 shares of common stock, as part of a long-term incentive plan.

Summary

• David Zeiden, the Chief Legal Officer of Rithm Capital Corp., filed a Form 4 detailing changes in beneficial ownership.
• On February 24, 2025, Zeiden was granted 21,026 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 profits interest award vests in three equal annual installments on February 24 of 2026, 2027, and 2028, contingent upon continued employment.
• The Class B Profits Units will be exchangeable into common stock after vesting and when a sufficient amount of profits have been allocated to the holder.

Sentiment

Score: 7

Explanation: The sentiment is neutral to positive. The granting of profits interests is a standard practice and indicates confidence in the company's future performance. It aligns management's interests with shareholders.

Positives

• The award aligns the Chief Legal Officer's interests with the long-term performance of the company.
• The vesting schedule encourages continued employment and commitment to Rithm Capital Corp.
• The structure of the award incentivizes profitability within Rithm Capital Management LLC.

Risks

• The value of the profits interest award is dependent on the future profitability of Rithm Capital Management LLC.
• The award is subject to forfeiture if the Reporting Person's employment is terminated before vesting is complete.

Future Outlook

The Class B Profits Units will vest over the next three years, contingent on continued employment, and will be exchangeable for common stock once vested and a sufficient amount of profits have been allocated.

Industry Context

Granting profits interests and stock options is a common practice in the financial industry to incentivize key executives and align their interests with those of the shareholders.

Comparison to Industry Standards

• Many REITs and asset management companies use similar long-term incentive plans, including restricted stock units (RSUs), stock options, and profits interests, to retain and motivate key personnel.
• Companies like Blackstone and Apollo Global Management frequently use profits interests to reward executives based on the performance of specific funds or business units.
• The vesting schedule of three years is fairly standard in the industry, aligning with typical performance evaluation cycles.

Stakeholder Impact

• Shareholders may view the award positively as it aligns management's interests with the company's long-term success.
• Employees may see the award as a sign of the company's commitment to its leadership team.

Next Steps

• The Reporting Person will continue to hold and vest in the Class B Profits Units, subject to continued employment.
• The Reporting Person may exchange vested units for common stock in the future, subject to the terms of the incentive plan.

Key Dates