Business Context and Reporting Period
This Form 8-K is a current report filed by New York Mortgage Trust, Inc. (the "Company") on March 26, 2013, covering events occurring on March 21, 2013. The filing primarily details the approval of the Company's 2013 Incentive Compensation Plan and an upcoming change to its principal executive office location.
Key Financial Metrics
The filing does not report revenue, profit, cash flow, margins, debt, or liquidity metrics for the reporting period. It focuses exclusively on executive compensation structures and administrative changes.
Material Changes and Compensation Details
On March 21, 2013, the Board of Directors approved the 2013 Incentive Compensation Plan for the fiscal year 2013. The plan applies to two Named Executive Officers (NEOs):
- Steven R. Mumma (CEO and President): Base salary of $425,000.
- Nathan R. Reese (Vice President and Secretary): Base salary of $240,000.
The incentive plan consists of two components:
- Quantitative Component: Based on Adjusted Return on Equity (AROE) hurdles.
- Mr. Mumma's bonus is weighted 80% on this component. Payouts range from 0% to 300% of base salary based on AROE thresholds of 8%, 10%, 14%, and 18%.
- Mr. Reese's bonus is weighted 65% on this component. Payouts range from 0% to 150% of base salary based on the same AROE thresholds.
- Qualitative Component: Based on factors such as leadership, investor relations, and risk management.
- Mr. Mumma's bonus is weighted 20% on this component (potential payout up to 3x base salary multiplied by 20%).
- Mr. Reese's bonus is weighted 35% on this component (potential payout up to 3x base salary multiplied by 35%).
Payment Structure: Bonuses may be paid in cash or restricted stock. Awards under $150,000 are 100% cash; awards between $150,000 and $1,000,000 are 50% cash/50% stock; awards over $1,000,000 are 100% restricted stock. Restricted stock vests ratably over three years.
Other Events and Outlook
Office Relocation: Effective March 28, 2013, the Company's principal executive office will move to 275 Madison Avenue, New York, New York 10016.
Management Commentary: The filing notes that the Compensation Committee has discretion to adjust average Adjusted Stockholders' Equity for capital raises and may authorize payout percentages exceeding the stated maximums for AROE achievements greater than 18%.
Investor Verification Checklist
- Verify the specific AROE calculation methodology, particularly the exclusion of unrealized gains/losses on consolidated multi-family loans.
- Confirm the vesting schedule and restrictions on the restricted stock awards issued under the plan.
- Review the full text of the 2013 Incentive Compensation Plan (Exhibit 10.1) for additional qualitative performance criteria.
- Monitor future filings for actual AROE performance results to determine final bonus payouts.