Business Context and Reporting Period
This Form 8-K Current Report was filed by Ladder Capital Corp on June 15, 2023. The filing discloses the execution of new employment agreements for two senior executives: Paul J. Miceli (Chief Financial Officer) and Kelly Porcella (Chief Administrative Officer, General Counsel, and Secretary). The agreements are effective as of June 15, 2023, and are with Ladder Capital Finance LLC, a subsidiary of the registrant.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity metrics. The document focuses exclusively on executive compensation arrangements.
Material Changes and Compensation Details
The filing details the following material changes regarding executive compensation:
- Base Salaries:
- Paul J. Miceli: Not less than $350,000 per year.
- Kelly Porcella: Not less than $225,000 per year.
- Employment Term: The agreements do not provide for a fixed term of employment.
- Variable Compensation: Executives are eligible for annual cash bonuses and annual equity incentive grants based on a framework determined by the CEO and Board of Directors.
- Severance Provisions: Upon termination without cause or resignation for good reason, executives are entitled to:
- Cash Severance: The lesser of $1,000,000 or the sum of the executive's annual base salary plus the average of the prior two years' cash bonuses.
- Payment Structure: 50% lump sum within 60 days; 50% in 12 monthly installments.
- Change in Control Exception: If termination occurs within one year of a change in control, 100% is payable as a lump sum within 60 days.
- Prorated Bonus: A portion of the annual cash bonus based on actual performance, capped such that the total of Cash Severance and Prorated Bonus does not exceed $1,000,000.
- Health Care: Reimbursement for up to three months (or six months if non-competition is extended).
- Cash Severance: The lesser of $1,000,000 or the sum of the executive's annual base salary plus the average of the prior two years' cash bonuses.
- Retirement Vesting: If an executive retires at age 62 with at least 10 years of service, unvested equity awards vest on the five-year anniversary of retirement, provided no competitive activity occurs during that period.
- Restrictive Covenants:
- 90-day post-termination non-competition (extendable by 90 days).
- Two-year post-termination non-solicitation of employees, contractors, investors, and customers.
Guidance, Outlook, and Risks
The filing does not provide financial guidance, outlook, or management commentary on business operations. The primary risk disclosed relates to the potential future cash outflows associated with the severance packages and the operational impact of the non-competition and non-solicitation covenants.
Key Facts for Investor Verification
- Verify the total potential liability for severance payments (capped at $1,000,000 per executive) in the context of the company's current liquidity.
- Review the specific terms of the "framework" for annual bonuses and equity grants to understand variable compensation exposure.
- Confirm the impact of the 90-day non-competition covenants on the company's ability to hire or retain talent in the commercial real estate sector.
- Check subsequent filings for any changes in control that would trigger the lump-sum severance payment provision.