Form 4: Rithm Capital Corp. Chief Legal Officer Zeiden Reports Acquisition of Class B Profits Units and Dividend Equivalent Rights

David Zeiden, Chief Legal Officer of Rithm Capital Corp., reports the acquisition of Class B Profits Units and dividend equivalent rights, exchangeable into 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.
• The report indicates the acquisition of 804 Class B Profits Units of Rithm Capital Management LLC on July 26, 2024.
• These units represent dividend equivalent rights accrued on existing Class B Profits Units previously granted.
• The Class B Profits Units are exchangeable into shares of Rithm Capital Corp. common stock on a one-for-one basis under the Rithm Capital Management LLC Long Term Incentive Plan.
• The reporting person also directly owns 37,672 shares of Rithm Capital Corp. common stock.
• A profits interest award in the form of Class B Profits Units in RCM was granted on May 1, 2024, which will vest in two equal installments on January 1 of each of 2025 and 2026, so long as the Reporting Person remains in continued employment with the Issuer.

Sentiment

Score: 7

Explanation: The document reflects standard executive compensation practices and insider ownership, suggesting a neutral to slightly positive sentiment due to alignment of interests.

Positives

• The acquisition of Class B Profits Units indicates continued alignment of the Chief Legal Officer's interests with the company's long-term performance.
• The vesting schedule of the profits interest award incentivizes continued employment with the issuer.

Future Outlook

The Class B Profits Units will vest according to the terms of the Rithm Capital Management LLC Long Term Incentive Plan and the individual award agreement.

Industry Context

Form 4 filings are standard practice for reporting changes in beneficial ownership by company insiders, providing transparency to investors.

Comparison to Industry Standards

• Equity compensation in the form of profits interests is a common practice among REITs and asset managers to align management incentives with shareholder value.
• Companies like Blackstone and Apollo Global Management also utilize similar equity-based compensation plans for their executives.
• The vesting schedule of the Class B Profits Units is typical for long-term incentive plans, designed to retain key personnel.

Stakeholder Impact

• The acquisition of Class B Profits Units aligns the Chief Legal Officer's interests with those of shareholders, potentially encouraging decisions that benefit the company's long-term performance.
• Employees may view the equity compensation as a positive sign of the company's commitment to its leadership team.

Key Dates