ORIGINATIONS • ·Funded 235,18446,751 loans totaling $63.2$12.6 billion
•
·Produced record pretax income of $1.5 billion, 206% higher than 2019$99 million •
·Our direct-to-consumer channel funded $35$5.9 billion in new loans and achieved a refinance recapture rate of 33%77%, which was close to doubleis more than three times the industry average • We expanded our Correspondent
· Our correspondent channel funding $28funded $6.7 billion, and becoming aplacing us in the top 10 Correspondent lender15 correspondent originators as of 9/30/2023 |
| (1) | XOMEAnnex A includes a discussion and reconciliation of non-GAAP measures to the most directly comparable GAAP measures.
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TOTAL SHAREHOLDER RETURN (“TSR”) Under our executive team’s leadership and against the backdrop of an evolving mortgage market and interest rate environment, we have meaningfully and consistently outperformed peers over a three- and five-year period through thoughtful strategic decision-making and successful navigation of management transitions. Our operational focus on growing our Servicing portfolio through accretive acquisitions and enhancing our capabilities and existing infrastructure, as well as our continued investments to bolster efficiency and product roll-outs in Originations, has resulted in outsized shareholder returns when benchmarked against broader market constituencies. • Produced $433 million in revenues, which consisted of 51.1% third-party revenues
• Sold 4,942 properties and completed 905,115 title orders and 2.3 million solutions orders
| (1) | 1-Year TSR shown represents FY2023. |
| (2) | 3-Year TSR shown represents period from FY2021 – FY2023. |
| (3) | 5-Year TSR shown represents period from FY2019 – FY2023. |
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COMPENSATION2024 DIRECTOR NOMINEE HIGHLIGHTS
| | | | | | | | | | | | | | | | | | Name | | Age | | Other Public Company Boards | | Title | | Director Since | | Committees | | | | | | | | Jay Bray | | 57 | | — | | Chair & CEO, Mr. Cooper Group | | 2018 | | — | | | | | | | | Busy Burr | | 62 | | Rite Aid Corporation, SVB Financial Group | | Former Interim CEO, Rite Aid Corporation | | 2019 | | Compensation | | | | | | | | Roy Guthrie | | 70 | | OneMain Holdings, Synchrony Financial | | Former CFO, Discover Financial Services | | 2018 | | Audit & Risk (Chair) | | | | | | | | Daniela Jorge | | 52 | | — | | SVP & Chief Design Officer, Capital One Corporation | | 2022 | | Audit & Risk | | | | | | | Michael Malone (Lead Director) | | 70 | | Walker & Dunlop | | Former Managing Director, Fortress Investment Group | | 2018 | | Nominating & Corporate Governance (Chair), Compensation | | | | | | | | Shveta Mujumdar | | 45 | | — | | SVP, Corporate Development, Intuit | | 2020 | | Nominating & Corporate Governance | | | | | | | | Tagar Olson | | 46 | | — | | Founder, Integrum Holdings LP, and Former Partner, KKR | | 2015 | | Compensation (Chair) | | | | | | | | Steven Scheiwe | | 63 | | Atlas Financial Holdings | | President, Ontrac Advisors | | 2012 | | Audit & Risk, Nominating & Corporate Governance |
This past year was oneBoard Skills
Our Board consists of unprecedented challenges – a pandemic, an economic crisisthe optimal mix of skills and a call for social justice. It was also a year that provided significant economic opportunity forexpertise capable of effectively overseeing the execution of our business. | | | | | | | | | | Board Skills | | Total | $307 Million
Net Income
($3.20 per diluted share) | 42.5%
Operating Return on Tangible
Common Equity | +17%
Tangible Book Value
(to $26.27 per share) |  | | Strategic Leadership and Management | | 8 |  | | Financial Services Industry | | 8 |  | | Accounting and Financial Literacy | | 8 |  | | Risk Management | | 5 |  | | Capital Markets/Mergers & Acquisitions | | 7 |  | | Public Company Board and Corporate Governance | | 6 |  | | Government Relations, Regulatory or Legal | | 3 |  | | Human Capital Management, Talent, Diversity and Inclusion | | 5 |  | | Environmental, Social and Governance Matters | | 3 |  | | Technology and Innovation | | 6 |  | | Branding and Marketing | | 4 |
We responded to the pandemic4
Director Independence, Diversity and navigated unprecedented market volatility, whichTenure  5
COMPENSATION HIGHLIGHTS Compensation Objectives and Pay for Performance Our compensation program is testament to our people, our culture of customer advocacy, and our scalable, digital and highly efficient platform. We worked with customers impacted by the pandemic and helped 364,000 homeowners enter into forbearance plans, which are designed to keep them in their homes,balance three objectives: | · | | Motivate and reward management for creating and executing a strategy that drives stockholder return; |
| · | | Attract, retain and motivate our executive level talent; and |
| · | | Manage the cost of the program by aligning compensation with both Company and executive performance. |
We review our compensation programs and by year-end we helped 186,000 customers exit forbearancerelated governance provisions and resume their monthly payments. We have an obligation to make a positive impact in our communities and focus on social justice activism through community giving and volunteerism, which we participated in during 2020 and will continue to participate in 2021. We recognize that as a company, we have an impact on the world in which we live and the people we interact with, and we wantpractices to ensure weour compensation programs are contributingaligned to progress in diversity and inclusion. Last year we made a commitment to you, our stockholders, to re-design our executive compensation program to more closely align pay with performance. In 2020, the re-designed compensation program complements our strategy, the critical driver of stockholder value. Our strategy also forms the basis for a performance management system which includes how we define and measure success as well as the characteristics of the reward system – how management shares in the wealth they create for investors. As such, we rely heavily on an annual cash-based incentive program tied to our annual financial and strategic objectives, and we rely on performance-based equity tied to Total Shareholder Return (TSR) to align the interests of managementstockholders, provide for appropriate pay for performance alignment, contain risk mitigating features and stockholders in growing the share price.
Corporate Objectivedo not promote unnecessary and Executive Compensation
Our overall corporate objective is to deliver, at a minimum, a fair return to stockholders that is commensurate with the risk of our business. Our critical measure of success is TSR.excessive risk. Our compensation program for senior executives aligns the interests of management and stockholders in growing the value of our company without taking undo risks.Company while managing risk. At the same time, we recognize the competitive market for executive talent. Therefore, our compensation program is designed to balance three, at times competing, objectives – motivate and reward management for creating and executing a strategy that drives TSR, retains our talent and ensures that the cost of the program is reasonable.
Our approach is to provide our executives with a competitive compensation program that is commensurate with the market for executive talent requires competitive remuneration.
Over the course of the past several years, the Compensation Committee, Board and management team have substantially reoriented our compensation program from a framework that was primarily cash-based and discretionary to a framework that directly aligns compensation with the achievement of well-defined financial and strategic goals and increases equity-based compensation. We believe this better aligns the interests of management with those of stockholders and provides the proper incentives for management to focus on long-term stockholder value. Our executive compensation program achieves this primary goal by awarding a substantial majority of annual compensation in the form of variable performance-based incentives or at-risk compensation. 
Compensation Program Enhancements Throughout our sector,discussions over the last few years, we heard broad support for our ongoing compensation programs, which were further enhanced through investor guidance. Specifically, investors expressed a preference for (a) using relative TSR as a performance metric versus absolute TSR and (b) eliminating the sizeone-year vesting option, which rewards annual versus long-term performance. As a result, our 2023 performance share unit program (a) eliminates the one-year vesting period and complexityprovides for a three-year cliff vest and (b) utilizes two evenly weighted key performance metrics: Tangible Book Value and Relative TSR, which is measured against companies of our businesses. Our program consists of three components – salary, annual cash incentive and long-term equity. In combination, the three components should hold a significantS&P 1500 Composite Financials index. Additionally, if the Company’s TSR is negative during the performance period, the relative TSR portion of the totalaward is capped at target and can only be adjusted downward. We are committed to maintaining an active dialogue with stockholders to understand stockholders’ perspectives on our executive compensation opportunity at risk in that actual compensation earned is tied to achieving annual financialprogram and business objectives and stockholder returns over time.provide transparency into our practices.
Below are some highlights of our compensation program: | | | | | | What We Do | | What We Don’t Do | | | | | What We Don’t Do | | | | ✓Align our executive pay with performance ✓ Annual “say on pay”“say-on-pay” advisory vote ✓ Set multiple challenging performance objectives ✓ Stock ownership guidelines for executive officers and directors ✓Caps on director equity awards and fees ✓ Independent compensation consultant engaged by the Compensation Committee
✓ Annual review and approval of our compensation strategy ✓ Significant portion of executive compensation at risk based on corporate performance and TSR ✓ Double trigger equity acceleration default provision upon change of control ✓ Minimum equity award vesting periods for time-based restricted stock units ✓ Clawback of equity awardsincentive compensation under specified circumstances | | | | ✕ X Tax gross-ups for change of control benefits
✕X Permit short sales, hedging, or pledging of stock ownership positions
✕X Strict benchmarking of compensation to a specific percentile of our peer group
✕X Excessive perquisites
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STOCKHOLDER ENGAGEMENT Over the last few years, we have embarked on a robust stockholder outreach program. That feedback has been an important input into the Board’s review and decisions around our Board, governance, compensation and sustainability-related practices. In 2023, we continued to proactively meet with our stockholders to discuss executive compensation and to provide our investors with an opportunity to provide management and the Board with feedback. Our outreach included soliciting ten of our largest investors, representing approximately 50% of our outstanding shares. Three of our largest stockholders, representing approximately 33% of our outstanding shares, accepted our request. Our Compensation Committee Chairman and representatives from our investors relations and corporate governance teams participated in these meetings. 
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BOARD OF DIRECTORS Proposal 1: Election of Directors Our stockholders will be asked to consider eight nominees for election to our Board to serve for a one-year term until the next annual meeting of stockholders and until their successors have been duly elected and qualified, subject to their earlier death, resignation or removal. The names of the nominees for director and biographical information follow. All of the nominees, with the exception of Mr. Bray, have been determined by the Board to be independent under National Association of Securities Dealers Automatic Quotations (“NASDAQ”) listing standards. Our Nominating & Corporate Governance Committee (the “NCG Committee”) has reviewed the qualifications of each of the nominees and has recommended to the Board that each nominee be submitted to a vote at the 2024 Annual Meeting of Stockholders. In determining whether to nominate our directors for another term, the Board considered the factors discussed under “Corporate Governance – Criteria and Procedures for Selection of Director Nominees” as well as each director’s qualifications as discussed below and concluded that each of the directors possess those talents, backgrounds, perspectives, attributes and skills that will enable him or her to continue to provide valuable insights to our management and play an important role in helping us achieve our goals and objectives. The age, principal occupation and certain other information for our director nominees are set forth below. It is our general policy that no director having obtained the age of 70 years will stand for re-election; however, the Board may waive this requirement and did so for Mr. Guthrie and Mr. Malone. Directors are elected by a majority of the votes present in person or by proxy entitled to vote, meaning that each director nominee must receive more votes cast “for” than “against” his or her election. If an incumbent director does not receive more votes cast “for” than “against” his or her election, then the director must tender his or her resignation to the Board. In that situation, the NCG Committee would make a recommendation to the Board about whether to accept or reject the resignation, or whether to take other action. Within 90 days from the date the election results are certified, the Board would act on the NCG Committee’s recommendation and publicly disclose its decision and rationale behind it. The Board believes that each of the director nominees will be able to stand for election. THE BOARD RECOMMENDS A VOTE FOR THE NOMINEES NAMED BELOW. 8
DIRECTOR NOMINEES Our Amended and Restated Certificate of Incorporation provides that the Board consist of not more than 11 directors, or such greater number as may be determined by the Board. As of the date of this proxy statement, the Board consists of eight members who are elected each year at the Annual Meeting of Stockholders to hold office until the next annual meeting. Our director nominees are: | | | | | | | | | | | | | | | | | | Name | | Age | | Other Public Company Boards | | Title | | Director Since | | Committees | | | | | | | | Jay Bray | | 57 | | — | | Chair & CEO, Mr. Cooper Group | | 2018 | | — | | | | | | | | Busy Burr | | 62 | | Rite Aid Corporation, SVB Financial Group | | Former Interim CEO, Rite Aid Corporation | | 2019 | | Compensation | | | | | | | | Roy Guthrie | | 70 | | OneMain Holdings, Synchrony Financial | | Former CFO, Discover Financial Services | | 2018 | | Audit & Risk (Chair) | | | | | | | | Daniela Jorge | | 52 | | — | | SVP & Chief Design Officer, Capital One Corporation | | 2022 | | Audit & Risk | | | | | | | Michael Malone (Lead Director) | | 70 | | Walker & Dunlop | | Former Managing Director, Fortress Investment Group | | 2018 | | NCG (Chair), Compensation | | | | | | | | Shveta Mujumdar | | 45 | | — | | SVP, Corporate Development, Intuit | | 2020 | | NCG | | | | | | | | Tagar Olson | | 46 | | — | | Founder, Integrum Holdings LP, and Former Partner, KKR | | 2015 | | Compensation (Chair) | | | | | | | Steven Scheiwe | | 63 | | Atlas Financial Holdings | | President, Ontrac Advisors | | 2012 | | Audit & Risk, NCG |
Our Directors’ Experience, Independence, Tenure and Diversity The following charts set forth information regarding our director nominees, illustrating the high level of experience each brings to the Board, as well as the Board’s diversity, independence and tenure: | | | | | | | | | | | | | | | | | | | | | | |  | |  | |  | |  | |  | |  | |  | |  | 
| | Strategic Leadership and Management | | ✓ | | ✓ | | ✓ | | ✓ | | ✓ | | ✓ | | ✓ | | ✓ |
| | Financial Services Industry | | ✓ | | ✓ | | ✓ | | ✓ | | ✓ | | ✓ | | ✓ | | ✓ | 
| | Accounting and Financial Literacy | | ✓ | | ✓ | | ✓ | | ✓ | | ✓ | | ✓ | | ✓ | | ✓ |
| | Risk Management | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | ✓ | 
| | Capital Markets/Mergers & Acquisitions | | ✓ | | ✓ | | ✓ | | | | ✓ | | ✓ | | ✓ | | ✓ | | | Public Company Board and Corporate Governance | | ✓ | | ✓ | | ✓ | | | | ✓ | | | | ✓ | | ✓ | 
| | Government Relations, Regulatory or Legal | | ✓ | | | | ✓ | | | | | | | | | | ✓ |
| | Human Capital Management, Talent, Diversity and Inclusion | | ✓ | | | | | | ✓ | | ✓ | | | | ✓ | | ✓ | 
| | Environmental, Social and Governance Matters | | ✓ | | | | | | | | | | | | ✓ | | ✓ |
| | Technology and Innovation | | ✓ | | ✓ | | | | ✓ | | | | ✓ | | ✓ | | ✓ | 
| | Branding and Marketing | | ✓ | | ✓ | | | | ✓ | | ✓ | | | | | | |
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| | | Skills Definitions | | |
| | Strategic Leadership and Management: Directors bring valuable senior leadership or executive experience relating to strategy formulation, management, operations and achievement of strategic objectives |
| | Financial Services Industry: Directors possess in-depth understanding of our industry and/or have worked in or with the financial services industry | | |
| | Accounting and Financial Literacy: Directors understand public company accounting and financial reporting, auditing process and standards, internal controls and/or preparation, audit, and evaluation of financial statements comparable in complexity to ours | | |
| | Risk Management: Directors have experience with overseeing material risks and understanding risk evaluation, mitigation framework and risk management policies and procedures | | |
| | Capital Markets/Mergers & Acquisitions: Directors understand the essential role that transactional activity, M&A and capital markets and financing plays in the Company’s business and growth strategy | | | | | Public Company Board and Corporate Governance: Directors possess experience serving on the public company boards and, knowledge of public company corporate governance issues, regulatory concerns and policies and governance best practices | | |
| | Government Relations, Regulatory or Legal: Directors have experience with regulated businesses, regulatory requirements, relationships with regulators, managing governmental and regulatory affairs and/or interacting with regulators and members of government | | |
| | Human Capital Management, Talent, Diversity and Inclusion: Directors have experience in senior executive acquisition, development, retention, succession planning and compensation matters and obtaining and retaining the most qualified and satisfied employees with diverse skills and backgrounds | | |
| | Environmental, Social and Governance Matters: Directors possess experience in the evaluation of environmental impact, corporate social responsibility initiatives, sustainability, corporate culture and diversity and inclusion | | |
| | Technology and Innovation: Directors have experience in (a) developing, investing in and adoption of new technologies and ideas and/or (b) innovation systems, including but not limited to research & development and technology acquisition processes and methods of monetizing acquired technologies or intellectual property rights and evaluation of innovation system effectiveness | | |
| | Branding and Marketing: Directors bring experience in brand development, marketing and sales |
| | | | | | | | | | | Diversity | | | | | | Total Number of Directors | | | | 8 | | | | | | | | Female | | Male | | Non- Binary | | | | | | Part I: Gender Identity | |
| Did Not
Disclose Gender |
| | | | | | Directors | | 3 | | 5 | | 0 | | | 0 | | | Part II: Demographic Background | | | | | | | African American or Black | | 0 | | 0 | | – | | | – | | | | | | | Alaskan Native or Native American | | 0 | | 0 | | – | | | – | | | | | | | Asian | | 1 | | 0 | | – | | | – | | | | | | | Hispanic or Latinx | | 1 | | 0 | | – | | | – | | | | | | | Native Hawaiian or Pacific Islander | | 0 | | 0 | | – | | | – | | | | | | | White | | 1 | | 5 | | – | | | – | | | | | | | Two or More Races or Ethnicities | | 0 | | 0 | | – | | | – | | | | | | | LGBTQ+ | | 1 | | 0 | | – | | | – | | | | | | | Did Not Disclose Demographic Background | | 0 | | 0 | | – | | | – | |
10
 Biographical Information of Our Directors Set forth below is detailed biographical information for each of the nominees for director and the qualifications and skills demonstrated by each director’s experience. 11
| | | | | Jay Bray 
Director Since: 2018 (Chair) Age: 57 Committees: None | | Mr. Bray has more than 30 years of experience in the mortgage servicing and originations industry, and played a critical role in leading the servicing market shift to non-banks following the financial crisis and led the growth of our portfolio from a start of $21 billion UPB in 2008 to $992 billion in 2023, establishing us the industry’s largest servicer. Mr. Bray’s in-depth experience and understanding of financial services and Mr. Cooper’s business and operations qualify him to serve as a Mr. Cooper Group director. | | Professional Experience | | • Chief Executive Officer of the Company since July 2018 o Company’s President from July 2018 to June 2021 o Nationstar’s • Director since 2012 and CEO since February 2012 • President from June 2015 to June 2021 • EVP & Chief Financial Officer from May 2011 to February 2012 o Nationstar’s wholly-owned subsidiary, Nationstar Mortgage LLC’s • Chief Executive Officer & Manager since October 2011 • President from July 2011 to June 2021 • Chief Financial Officer from May 2000 until September 2012 o Executive Chairman of Xome Holdings LLC since September 2015 • Various leadership roles at Bank of America and predecessor entities from 1994 to 2000 • Various roles at Arthur Andersen from 1988 to 1994 • In addition to public company Boards noted below, serves on the Boards of: o Swell Financial, Inc., a privately-held financial technology company, since February 2022 o Dallas Area Habitat for Humanity since March 2022 o Sagent M&C, LLC since March 2022 o Mortgage Bankers Association since October 2023 | | Other Public Company Directorships | | • Current o None • Past Five Years o Elevate Credit, Inc. o Nationstar | | | Skills, Experiences and Attributes | | | | | Strategic Leadership and Management | | | | | | | | Financial Services Industry | | | | | | | | Accounting and Financial Literacy | | | | | | | | Risk Management | | | | | | | | Capital Markets/Mergers & Acquisitions | | | | | | | | Public Company Board and Corporate Governance | | | | | | | | Government Relations, Regulatory or Legal | | | | | | | | Human Capital Management, Talent, Diversity and Inclusion | | | | | | | | Environmental, Social and Governance Matters | | | | | | | | Technology and Innovation | | | | | | | | Branding and Marketing | | | | | |
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| | | | | Busy Burr 
Independent Director Since: 2019 Age: 62 Committee: • Compensation | | Ms. Burr is a C-level, cross-industry, marketing, innovation, and strategy leader with a career driving customer-centric growth strategy from Fortune 100 global enterprises to high growth start-ups. She has successes in financial services, technology and retail with depth in business development, branding, innovation, digital technology, and communications. Ms. Burr is a recognized expert in and frequent speaker on driving innovative growth in large corporations through customer-focused strategy and disciplined execution. All of which qualify her to serve as a Mr. Cooper Group Director. | | Professional Experience | | • Former Interim Chief Executive Officer of Rite Aid Corporation from January 2023 to October 2023. Rite Aid Corporation filed for Chapter 11 bankruptcy in October 2023. • President & Chief Commercial Officer of Carrot, Inc., a venture-backed digital health company, from November 2019 to August 2021 • Chief Innovation Officer & Vice President, Healthcare Trend at Humana, Inc., a for-profit health insurance company, from March 2015 to September 2018 o founded Humana Health Ventures, the venture capital investing practice • Managing Director of Citi Ventures and Global Head of Business Incubation of Citigroup, Inc. from January 2011 to January 2015 • Entrepreneur-in-Residence at eBay, Inc. from January 2010 to January 2011 • Various senior-leadership roles at: o Credit Suisse Group AG (formerly Credit Suisse First Boston) o Homestead Technologies Inc. o Gap Inc. • Investment Banker for Morgan Stanley • In addition to the public company Boards of Directors noted below, serves on the Board of Directors of Satellite Healthcare Inc., a not-for-profit provider of kidney dialysis services, since December 2018 • Previously served as an investor in, and board observer of: o Omada Health, Inc. o Aspire Health, Inc. o Livongo Health, Inc. | | Other Public Company Directorships | | • Current o Rite Aid Corporation o SVB Financial Group | | • Past Five Years o None | | | Skills, Experiences and Attributes | | | | | | | | Strategic Leadership and Management | | | | | | | | Financial Services Industry | | | | | | | | Accounting and Financial Literacy | | | | | | | | Capital Markets/Mergers & Acquisitions | | | | | | | | Public Company Board and Corporate Governance | | | | | | | | Technology and Innovation | | | | | | | | Branding and Marketing | | | | | |
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| | | | | Roy Guthrie 
Independent Director Since: 2018 Age: 70 Committee: • Audit & Risk (Chair) | | Mr. Guthrie’s valuable expertise in financial services as well as extensive experience as an executive officer and director of public companies qualify him to serve as a Mr. Cooper Group director. | | Professional Experience | | • Former Chairman of the Executive Committee of Renovate America, Inc. (a privately-held corporation), which provides an energy efficiency and renewable energy home improvement financing platform, from September 2018 to October 2019 o Served as Chief Executive Officer from October 2017 to September 2018 • Independent Lead Director: o Nationstar from July 2017 to July 2018 o Mr. Cooper from July 2018 to March 2021 • Executive Vice President of Discover Financial Services, a direct banking and payment services company, from 2005 to 2012 o Served as Chief Financial Officer from 2005 to 2011 o Served as Treasurer from 2009 to 2010 • President & Chief Executive Officer of CitiFinancial International, LTD, a consumer finance business of Citigroup Inc., from 2000 to 2004 o Served on Management Committee • Chief Financial Officer of Associates First Capital Corporation from 1996 to 2000, while a public company o Served as a member of its Board of Directors from 1998 to 2000 | | Other Public Company Directorships | | • Current o OneMain Holdings, Inc. o Synchrony Financial | | • Past Five Years o Cascade Acquisition Corp. o Lifelock, Inc. o Nationstar | | | Skills, Experiences and Attributes | | | | | | | | Strategic Leadership and Management | | | | | | | | Financial Services Industry | | | | | | | | Accounting and Financial Literacy | | | | | | | | Risk Management | | | | | | | | Capital Markets/Mergers & Acquisitions | | | | | | | | Public Company Board and Corporate Governance | | | | | | | | Government Relations, Regulatory or Legal | | | | | | | | Human Capital Management, Talent, Diversity and Inclusion | | | | | | | | | | |
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| | | | | Daniela Jorge 
Independent Director Since: 2022 Age: 52 Committee: • Audit & Risk | | Ms. Jorge is a consumer technology executive with experience leading product design at recognizable Fin-tech brands. She is an expert at deepening the customer experience through emerging technologies, and is noted for her customer-centricity and cross-functional leadership. Ms. Jorge is a transformational leader with success unlocking the business value of design to fuel profitable growth. She has deep expertise in customer success and using data to enhance customer relationships and broaden product offerings. All of which qualify her to serve as a Mr. Cooper Group Director. | | Professional Experience | | • Senior Vice President & Chief Design Officer at Capital One Financial Corporation, a financial services holding company, since June 2023 • Chief Design Officer at PayPal, a leading financial technology company and online payments system, from November 2020 to May 2023 o Previously served as Vice President of Design and Research from April 2016 to November 2020 • Vice President of Digital Design and User Experience at AT&T Inc. from April 2014 to April 2016 • Various senior leadership roles at: o eBay Inc. o Intuit Inc. o Yahoo! o Kaiser Permanente o Kodak • Serves on the Board of Directors of BayBrazil, a non-profit technology community • Serves as a board advisor at Loft Brasil, Tecnologia LTDA, a privately-held Brazilian real estate technology company | | Other Public Company Directorships | | • Current o None | | • Past Five Years o None | | | Skills, Experiences and Attributes | | | | Strategic Leadership and Management | | | | Financial Services Industry | | | | Accounting and Financial Literacy | | | | Human Capital Management, Talent, Diversity and Inclusion | | | | Technology and Innovation | | | | Branding and Marketing | | | | | | | | |
15
| | | | | Michael Malone 
Independent Director Since: 2018 (Independent Lead Director) Age: 70 Committees: • NCG (Chair) • Compensation | | Mr. Malone’s extensive experience in financial services and real estate and service on other public companies’ boards qualify him to serve as a Mr. Cooper Group director. | | Professional Experience | | • Former Managing Director of Fortress Investment Group LLC, a global investment management group, from February 2008 until February 2012 o Led Charlotte, North Carolina office o Responsible for the business of the capital formation group in the southeast and southwest regions of the United States • Retired from Bank of America in November 2007, after nearly 24 years of service as Senior Executive Banker and Managing Director o Worked in and ran a number of investment banking businesses for the bank and its subsidiary, Banc of America Securities LLC, including real estate, gaming, lodging, leisure and the financial sponsors businesses | | Other Public Company Directorships | | • Current o Walker & Dunlop, Inc. | | • Past Five Years o Nationstar o New Senior Investment Group | | | Skills, Experiences and Attributes | | | | | | | | Strategic Leadership and Management | | | | | | | | Financial Services Industry | | | | | | | | Accounting and Financial Literacy | | | | | | | | Risk Management | | | | | | | | Human Capital Management, Talent, Diversity and Inclusion | | | | | | | | Capital Markets/Mergers & Acquisitions | | | | | | | | Public Company Board and Corporate Governance | | | | | | | | Branding and Marketing | | | | | | | | | | | | | | | | | | | | |
16
| | | | | Shveta Mujumdar 
Independent Director Since: 2020 Age: 45 Committee: • NCG | | Ms. Mujumdar has extensive strategy, mergers & acquisitions, and operational experience. Her career has spanned multiple industries including financial services, education, and technology, specifically software and consumer internet. She is a transformational leader, and her financial acumen has helped her to scale businesses through strategy and mergers & acquisitions. She has experience in driving a customer obsessed product innovation-oriented culture. All of which qualify her to serve as a Mr. Cooper Group Director. | | Professional Experience | | • Senior Vice President, Corporate Development for Intuit, Inc., a business and financial software company, since February 2022 • Head of Corporate Development for Block, Inc. (formerly Square, Inc.), a financial services and digital payments company from November 2021 to February 2022 • Vice President, Corporate Development for Intuit, Inc. from September 2016 to November 2021 • Vice President, Corporate Development for Lynda.com from February 2013 until its acquisition by LinkedIn in May 2015 o Continued as a consultant for LinkedIn until August 2015 • Various senior-leadership roles at: o QuinStreet o LiveNation/Ticketmaster o Goldman Sachs Group o Deloitte • Member of the Board of the Children’s Discovery Museum | | Other Public Company Directorships | | • Current o None | | | • Past Five Years o None | | | Skills, Experiences and Attributes | | | | | Strategic Leadership and Management | | | | | Financial Services Industry | | | | | Accounting and Financial Literacy | | | | | Capital Markets/Mergers & Acquisitions | | | | | Technology and Innovation | | | | | |
17
| | | | | Tagar Olson 
Independent Director Since: 2015 Age: 46 Committee: • Compensation (Chair) | | Mr. Olson’s extensive experience in corporate financings, mergers, acquisitions, investments and strategic transactions, his relationships in the investment banking and private equity industries and his experience in identifying potential merger and acquisition candidates qualify him to serve as a Mr. Cooper Group director. | | Professional Experience | | • Founder of Integrum Holdings LP, an investment firm focused on partnering with technology-enabled services companies, since 2021 o Management Committee member o Investment Committee chair • Partner at KKR from 2002 to December 2019 o Served as head of financial services and hospitality and leisure industry teams o Served as member of: • Investment Committee (America’s Private Equity platform) • Portfolio Management Committee (America’s Private Equity platform) • Global Investment, Markets and Distribution Committee o Played significant role in many other financial services sector investments • Previous role at Evercore Partners Inc. • Co-founder of the DHPS Foundation, a charitable organization dedicated to the research and treatment of rare genetic diseases • Serves on the boards of directors of a number of privately-held companies | | Other Public Company Directorships | | • Current o None | | • Past Five Years o First Data Corporation (now known as Fiserv, Inc.) | | | Skills, Experiences and Attributes | | | | | Strategic Leadership and Management | | | | | Financial Services Industry | | | | | Accounting and Financial Literacy | | | | | Risk Management | | | | | Capital Markets/Mergers & Acquisitions | | | | | Public Company Board and Corporate Governance | | | | | Human Capital Management, Talent, Diversity and Inclusion | | | | | Environmental, Social and Governance Matters | | | | | Technology and Innovation | | | | | | | | | | |
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| | | | | Steve Scheiwe 
Independent Director Since: 2012 Age: 63 Committees: • Audit & Risk • NCG | | Mr. Scheiwe’s high level of financial literacy, broad experience serving as a board member of public and private companies, his experience in mergers, acquisitions and financing, his legal acumen and his experience serving on audit committees qualify him to serve as a Mr. Cooper Group director. | | Professional Experience | | • President of Ontrac Advisors, Inc., a privately-held company which offers analysis and management services to private equity groups, privately held companies and funds managing distressed corporate debt issues, since 2001 • In addition to the public company Boards of Directors noted below, he serves on the Board of Directors of Penn Treaty American Corporation, a privately-held company operating through three insurance company subsidiaries, since August 2022 • Previously served on the boards of directors of several other public and privately-held companies in the last ten years | | Other Public Company Directorships | | • Current o Atlas Financial Holdings, Inc. | | • Past Five Years o Alimco Financial Corporation o F45 Training Holdings Inc. o Verso Corporation | | | | | Skills, Experiences and Attributes | | | | Strategic Leadership and Management | | | | Financial Services Industry | | | | Accounting and Financial Literacy | | | | Risk Management | | | | Capital Markets/Mergers & Acquisitions | | | | Public Company Board and Corporate Governance | | | | Government Relations, Regulatory or Legal | | | | Human Capital Management, Talent, Diversity and Inclusion | | | | Environmental, Social and Governance Matters | | | | Technology and Innovation | | | | | | | | |
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CORPORATE GOVERNANCE HIGHLIGHTS We believe that good corporate governance promotes the long-term interests of our stockholders, strengthens our Board and management accountability and leads to better business performance. We are committed to maintaining strong corporate governance practices and will continually evaluate these practices. Additionally, we value our stockholders’ continued interest and feedback and are committed to maintaining an active dialogue to understand the priorities and concerns of our stockholders on a variety of topics, as well as to understand stockholders’ perspectives on our executive compensation program, our decision-making processes, our disclosure and recent trends and events. This outreach program ensures that the Committee andour Board considerconsiders the issues that matter most to our stockholders so we can address them effectively. Below are some highlights of our corporate governance practices:practices. | | | | | | | | Unclassified Board | | | | Stockholder Right to Call Special Meetings and Act by Written Consent of Majority | | | | | | | | | | Majority Independent Director Nominees | | | | Year-Round Stockholder
Engagement Process | | | | | | | | | | | Independent Lead Director | | | | Board Risk Oversight | | | | | | | | | Majority Voting for Directors
with Resignation Policy | | | | Stock Ownership Guidelines
for Officers and Directors | | | | | | | | | | Director Attendance
at >75% Of Meetings | | | | Executive Succession Planning Process | | | | | | | | | 100% Board Attendance at
2020 2023 Annual Meeting | | | | Anti-Hedging/Pledging Policy | | | | | | | | | Independent Directors Meet without Management Present | | | | Annual Review of Committee Charters
and Governance Guidelines | | | | | | | | | | | Annual Say-on-Pay Vote | | | | Annual Board and
Committee Evaluations | | | | | | | | | | | CEO Evaluation Process | | | | Demonstrated Board Refreshment | | | | | | | | | | Board Continuing Education Program | | | | Office of Diversity and Inclusion | | | | | | | | | Code of Conduct for Directors,
Officers and Employees | | | | Appointed Diverse Directors
in 2019, 2020 and 20202022 |
20
Key Areas of Board Oversight Our Board is responsible for, and committed to, the oversight of the business and affairs of our company.Company. In carrying out this responsibility, our Board advises our senior management to help drive success for us and for long-term value creation for our stockholders. Our Board discusses and receives regular updates on a wide variety of matters affecting us. Our Board met 1418 times in 2020.2023.  
Stockholder Engagement
We believe that effective corporate governance includes regular, active dialogue with analysts, investors in our equity and senior notes, and other market participants, and we take into account their feedback on our executive compensation program as well as the Company’s strategy, financial results and disclosures, and industry and market trends. Stockholder dialogue is a year-round practice through our investor relations team. We are working to further improve our engagement by increasing our participation in investor conferences and non-deal roadshows, revising selected disclosures to increase clarity, and improving the consistency and effectiveness of our communications.
During 2020, we had over 450 separate meetings and calls with equity investors and analysts, in addition to participation in earnings conference calls. Feedback that we received from stockholders was taken into account in the re-design of our compensation program for 2020. The Compensation Committee believes the compensation program changes implemented in 2020 are directly responsive to feedback we heard from our stockholders and reflect the right incentive structure for our business and for our stockholders. We are committed to maintaining an active dialogue with stockholders to understand stockholders’ perspectives on our executive compensation program, and we plan to continue this dialogue. Stockholders are always welcome to communicate their views as described under “Communications with the Board” in this proxy statement.
DIRECTOR NOMINEES
Our director nominees are:
Name | Director Since | Committees | | | | | | | Jay Bray | 2018 | — | | | | Busy Burr | 2019 | Compensation | | | | Robert Gidel | 2018 | Nominating & Corporate Governance (Chair) | | | Audit & Risk | | | | Roy Guthrie | 2018 | Audit & Risk (Chair) | | | | Michael Malone | 2018 | Audit & Risk | | | Compensation | | | | Shveta Mujumdar | 2019 | Nominating & Corporate Governance | | | | Tagar Olson | 2015 | Compensation (Chair) | | | | Christopher Harrington | 2017 | — | | | | Steven Scheiwe | 2012 | Audit & Risk | | | Nominating & Corporate Governance | | | |
Our Directors’ Experience, Independence, Tenure and Diversity
The following charts set forth information regarding our director nominees, illustrating the high level of experience each brings to the Board, as well as the Board’s independence, tenure and diversity in the aggregate:
|  |  |  |  |  |  |  |  |  | Senior Leadership | ü | ü | ü | ü | | ü | ü | ü | ü | Financial Services Industry | ü | ü | ü | ü | ü | ü | ü | ü | | Accounting and Finance | ü | | ü | ü | | ü | | ü | ü | Risk Management | ü | | ü | ü | | ü | | | ü | Technology | ü | ü | ü | | | | ü | | | Mergers and Acquisitions | ü | ü | ü | ü | ü | ü | ü | ü | ü | Public Company Board and Corporate Governance | ü | | ü | ü | ü | ü | | ü | ü | Government Relations, Regulatory or Legal | ü | ü | ü | ü | ü | ü | | ü | ü | Compensation and Human Resources | ü | | ü | ü | | ü | | ü | ü |
2021 PROXY STATEMENT
In this proxy statement, “Mr. Cooper Group,” “Company,” “we,” “us,” or “our” refers to Mr. Cooper Group Inc. or to it and one or more of its subsidiaries. This proxy statement contains information on the matters to be presented at our 2021 Annual Meeting of Stockholders to be held on May 13, 2021, to assist you in voting your shares.
CORPORATE GOVERNANCE
Governing Documents The following primary documents make up our corporate governance framework: Corporate Governance Guidelines Audit & Risk Committee Charter Compensation Committee Charter Nominating & Corporate Governance Committee Charter Code of Business Conduct and Ethics Code of Ethics for our CEO and Senior Financial Officers These documents are accessible on our website at www.mrcoopergroup.com by clicking on “Corporate Governance”“Governance” under the “Investor”“Investors” tab. You may also obtain a free copy of any of these documents by sending a written request to Mr. Cooper Group Inc., 8950 Cypress Waters Boulevard, Coppell, Texas 75019, Attention: Corporate Secretary. Any substantive amendment to or grant of a waiver from a provision of our codes of ethics requiring disclosure under applicable Securities and Exchange Commission (SEC)(“SEC”) or National Association of Securities Dealers Automatic Quotations (NASDAQ)NASDAQ rules will be posted on our website. 21
Corporate Governance Guidelines This document sets forth the Company’s primary principles and policies regarding corporate governance. The Corporate Governance Guidelines are reviewed from time to time as deemed appropriate by the Board. The matters covered by the Corporate Governance Guidelines include the following: | | | | | | | | | Board Leadership | | | | Board and Committee Compensation | | | | | | | | | | Size of the Board | | | | Board Self-Evaluation | | | | | | | | | | Board Membership Criteria | | | | Strategic Direction of the Company | | | | | | | | | | Other Public Company Directorships | | | | Board Access to Management | | | | | | | | | | Independence of Directors | | | | Attendance of Management at Board Meetings | | | | | | | | | | Ethics and Code of Conduct | | | | Director Interaction with Outside Constituencies | | | | | | | | | | Conflicts of Interest | | | | Confidentiality | | | | | | | | | | | Director’s Change of Job Responsibility | | | | Board Orientation and Continuing Education | | | | | | | | | | Director Retirement Age and Tenure | | | | Director Attendance at Annual Meetings of Stockholders | | | | | | | | | | | Director Resignations | | | | Succession Planning | | | | | | | | | Executive Sessions for Non-Management and Independent Directors | | | | Leadership Development, including Evaluation of the Chief Executive Officer |
Board’s Role in Risk Oversight Senior management has the responsibility to develop and implement our strategic plans and to identify, evaluate, manage and mitigate the risks inherent in those plans. It is the responsibility of the Board to understand and oversee our strategic plans, the associated risks and the steps that our Chief Risk & Compliance Officer and senior management are taking to manage and mitigate those risks. The Board takes an active approach to its role in overseeing the development and execution of our business strategies as well as its risk oversight role. This approach is bolstered by the Board’s leadership and committee structure, which ensures proper consideration and evaluation of potential enterprise risks by the full Board. In addition to receiving information from its committees, the Board also receives updates directly from Mr. Bray, who due to his position as both Chairman of the Board and Chief Executive Officer of the Company, effectively communicates with other members of management and updates the Board on important aspects of our operations. As part of its strategic risk management oversight, the full Board conducts several reviews throughout the year to ensure that our strategy and risk management is appropriate and prudent, including: 22
| · | | A comprehensive annual review of our overall strategic plan with updates throughout the year. | |
| · | | Direct discussions with our Chairman and Chief Executive Officer in executive sessions held at our Board meetings about the state of the business. | |
| · | | Reviews of the strategic plans and results for our business segments, including the risks associated with these strategic plans, at Board meetings during the year. | |
| · | | Reviews of other strategic focus areas for the Company, such as innovation, information technology, ESG initiatives, cybersecurity and organizational management. The Board also has overall responsibility for leadership succession for our most senior officers and our Board and reviews succession plans on an ongoing basis. | |
| · | | Annual review of the conclusions and recommendations generated by management’s enterprise risk management process. This process involves a cross-functional group of the Company’s senior management and the Internal Audit team who identify on a continual basis current and future potential risks facing the Company and provide direction on actions to appropriately manage and mitigate those potential risks. In conjunction with our enterprise risk management process, management also analyzes emerging cybersecurity threats and data privacy laws, as well as our plans and strategies to address them. | |
The Board has delegated certain risk management oversight responsibilities to specific Board committees, each of which reports regularly to the full Board as follows: 
Information Security, Cybersecurity and Data Privacy Maintaining the privacy and security of the information we create and receive about the Company, our team members, customers, vendors and others is a component of our enterprise risk management program. We have systems in place to safely receive and store that information and to detect, contain and respond to data security incidents. While everyone at Mr. Cooper Group plays a part in information security and data privacy, oversight responsibility is shared by the Board, its committees and management. For additional information on our Information Security program please see “Environmental, Social and Governance – Information Security” on page 34. 23
| | | | Responsible Party | | Oversight area | | | | | | | Board | | Oversight of these topics within the Company’s enterprise-wide risk management program | | | | Audit & Risk Committee | | Primary oversight responsibility for information security and cybersecurity, including internal controls designed to mitigate risks related to these topics | | | | Management | | Our Chief Information Officer, Chief Information Security Officer, Chief Risk & Compliance Officer and senior members of our information security, enterprise risk management and compliance teams are responsible for identifying and managing risks related to these topics and promptly reporting to the Audit & Risk Committee and/or the full Board |
Our program and practices in these areas include the following: | · | | Frequent Board and Committee Education. Management provides regular updates to the Board and the Audit & Risk Committee on these topics throughout the year, including an information security program review. | |
| · | | Systems and Processes. We use a combination of industry-leading tools and technologies to protect the Company and the personal information we maintain and operate a proactive threat intelligence program to identify and assess risk. | |
| · | | Understanding Evolving Threats. Our information security team works to understand evolving threats and industry trends. | |
| · | | Tabletop Exercises. We engage in tabletop exercises to simulate real-life cybersecurity and data privacy threats to provide our management team with the opportunity to practice crisis response and implement policies and processes. | |
| · | | Operations Based on Best Practices.We have adopted the National Institute of Standards and Technology (NIST) Cybersecurity Framework to better understand, manage, and reduce our cybersecurity risk and protect our networks and data. | |
| · | | Program Evaluation and Testing.In addition to our internal evaluation and audit of our information security programs, we engage external experts, including cybersecurity assessors, consultants and auditors, to evaluate and test our risk management systems. | |
| · | | Data Privacy Program. We have invested in resources and technology to meet the evolving data privacy regulatory requirements. | |
| · | | Regular Training and Compliance Activities for Our Team Members. Our team members receive training to understand the behaviors necessary to protect company and personal information and receive training on privacy laws and requirements. We also offer ongoing practice and education for team members to recognize and report suspicious activity, including phishing campaigns. | |
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Criteria and Procedures for Selection of Director Nominees and Board Diversity Although the Board retains ultimate responsibility for nominating members for election to the Board, the NCG Committee conducts the initial screening and evaluation process. As provided in our Corporate Governance Guidelines, director nominees, including those directors eligible to stand for re-election, are selected based upon requirements of applicable laws and NASDAQ listing standards and among other things, the following factors: | | | | | | | | | | | | | | Strength of Character | | Business Experience and Areas of Expertise | | Judgment | | Composition of the Board | | Principles of Diversity | | Time Availability and Dedication | | Conflicts of Interest |
Although we do not have a formal policy on diversity, the NCG Committee appreciates the benefits that diversity, such as diversity of gender, race and national origin, education, professional experience and differences in viewpoints and skills, can bring to a board of directors and considers diversity in recruitment and nominations of directors. In the past five years, the Board appointed three female directors, representing 38% of our total Board members, who also have diverse demographic backgrounds and business experiences, which reflects the importance of diversity to the Board. In conducting the screening and evaluation of potential director nominees, the NCG Committee considers candidates recommended by directors and our management, as well as recommendations from our stockholders. To recommend a candidate for election to the Board, a stockholder must submit the information required by our Bylaws, including, among other things, the following information, to Mr. Cooper Group Inc., 8950 Cypress Waters Boulevard, Coppell, Texas 75019, Attention: Corporate Secretary, generally not less than 90 days nor more than 120 days in advance of the one-year anniversary of the date on which our proxy statement was released to stockholders in connection with the previous year’s annual meeting of stockholders: the name, age, business and residence address and the principal occupation and employment of the nominee; a completed written questionnaire regarding the background and qualification of the nominee; | • | | the nominee’s consent to being named in the proxy statement as a nominee and all information that would be required to be disclosed in a proxy statement or other filings about the nominee; | |
| • | | a written representation and agreement regarding voting arrangements that have not been disclosed; compliance with applicable laws; intention to serve a full term if elected and that the nominee will provide true, correct and non-misleading information in all material respects; and | |
| • | | a description of all monetary arrangements during the past three years and any other material relationships between the nominee and a stockholder. | |
In considering candidates recommended by stockholders, the NCG Committee will take into consideration the needs of the Board and the qualifications of the candidate. Board Leadership Structure We have a strong and active Board composed predominantly of independent directors who understand our business and who work closely with our Chairman President & Chief Executive Officer and other members of senior management. The Board has no fixed policy on whether to have an independent chairman. Currently, Jay Bray, our President & Chief Executive Officer, serves as Chairman of the Board. Our Board has determined that, at this time, this current structure, with a combined Chairman & Chief Executive Officer role and an independent lead director, is in the best interests of the Company and its stockholders. The Board believes the combined role of Chairman of the Board & Chief Executive Officer promotes unified leadership and execution of our strategic plan, facilitates information flow between management and the Board and enables Mr. Cooper Group to benefit from Mr. Bray’s significant institutional and industry knowledge and experience. This combined role is both supplemented and enhanced by the effective oversight and independence of our Board and the leadership provided by our independent lead director. As part of its regular refreshment process,Our Board has appointed Michael Malone, who has extensive leadership experience in March 2021, our Board appointed Mike Malonethe financial services industry, to serve as independent lead director. 25
The independent lead director has broad responsibility and has authority to: serve as chair during executive sessions of the Board;
| · | | serve as chair during executive sessions of the Board; |
call meetings of the independent directors when necessary;
| · | | call meetings of the independent directors when necessary; |
preside at meetings of the Board when the Chairman is not present;
| · | | preside at meetings of the Board when the Chairman is not present; |
act as liaison between the Chairman, President & Chief Executive Officer and the Board;
| · | | act as liaison between the Chairman & Chief Executive Officer and the Board; |
manage intra-board relationships;
| · | | manage intra-board relationships; |
set meeting agendas; and
| · | | set meeting agendas; and |
| · | | if requested by major stockholders, ensure that he is available for consultation and direct communication. |
In general, our independent lead director serves as the liaison between our Chairman and our independent directors. He is available to consult with our Chairman about the concerns of the Board and is available to consult with senior management regarding their concerns. Having an independent lead director fosters a Board culture of open discussion and deliberation, with a thoughtful evaluation of risk, to support sound decision-making. It encourages communication among the directors, and between management and the Board, to facilitate productive working relationships. Working with our Chairman and other Board members, our independent lead director also ensures there is an appropriate balance and focus among key Board responsibilities such as strategy development, review of operations, risk oversight and management succession planning. The Board believes it is important to maintain flexibility with the Board’s leadership structure. The Board will continue to regularly review its leadership structure and exercise its discretion in recommending an appropriate and effective framework to assure effective governance and accountability, taking into consideration the needs of the Board and the Company. Board’s Role in Risk Oversight
Senior management has the responsibility to develop and implement our strategic plans and to identify, evaluate, manage, and mitigate the risks inherent in those plans. It is the responsibility of the Board to understand and oversee our strategic plans, the associated risks, and the steps that our Chief Credit & Risk Officer and senior management are taking to manage and mitigate those risks. The Board takes an active approach to its role in overseeing the development and execution of our business strategies as well as its risk oversight role. This approach is bolstered by the Board’s leadership and committee structure, which ensures proper consideration and evaluation of potential enterprise risks by the full Board. In addition to receiving information from its committees, the Board also receives updates directly from Mr. Bray who due to his position as both Chairman of the Board and President & Chief Executive Officer of the Company is particularly important in communicating with other members of management and keeping the Board updated on the important aspects of our operations. As part of its strategic risk management oversight, the full Board conducts a number of reviews throughout the year to ensure that our strategy and risk management is appropriate and prudent, including:
A comprehensive annual review of our overall strategic plan with updates throughout the year.
Direct discussions with our Chairman, President and CEO in executive sessions held at our Board meetings about the state of the business.
Reviews of the strategic plans and results for our business segments, including the risks associated with these strategic plans, at Board meetings during the year.
Reviews of other strategic focus areas for the Company, such as innovation, information, ESG initiatives and cybersecurity, and organizational management. The Board also has overall responsibility for leadership succession for our most senior officers and reviews succession plans on an ongoing basis.
Annual review of the conclusions and recommendations generated by management’s enterprise risk management process. This process involves a cross-functional group of the Company’s senior management and the Internal Audit team who identify on a continual basis current and future potential risks facing the Company on actions to appropriately manage and mitigate those potential risks. In conjunction with our enterprise risk management process, management also analyzes emerging cybersecurity threats and data privacy laws, as well as our plans and strategies to address them.
The Board has delegated certain risk management oversight responsibilities to specific Board committees, each of which reports regularly to the full Board as follows:
Further, the Audit & Risk Committee has engaged certain third-party consultants to review and assess our compliance and risk management structure, programs and practices, including our enterprise-wide compliance risk management system.
Independent Directors We recognize the importance of having an independent Board that is accountable to Mr. Cooper Group and its stockholders. Accordingly, our Corporate Governance Guidelines provide that a majority of our directors shall be independent in accordance with NASDAQ listing standards. Currently, nearly 90% of our Board is independent. Board, Committee and Annual Meeting Attendance The Board held 1418 meetings during 2020.2023. Each director attended at least 75% of the total number of meetings of the Board and committees held during the period he or she served. Directors are invited and encouraged but are not required to attend our annual meeting of stockholders. In 2020,2023, all of our directors attended our annual meeting of stockholders. Presiding Non-Management Director and Executive Sessions Our non-management and independent directors meet in executive session without management at least twice per year. Our independent lead director presides at each executive session. 26
Committees of the Board The Board currently has three principal standing committees – Audit & Risk, Compensation and NCG. The Board, upon recommendation from the NCG Committee, reviews committee assignments and determines whether rotation of committee members and committee chairs is appropriate to introduce fresh perspectives and to broaden and diversify the views and experiences represented on the committees. The Board has determined that each member of these committees is “independent,” as defined under NASDAQ’s listing standards and for the purpose of the committees upon which such directors serve. Nominating & Corporate Governance Committee Michael Malone, Chair The current members of the NCG Committee are Michael Malone, Shveta Mujumdar and Steven Scheiwe. Each member of our NCG Committee is independent, as defined under NASDAQ’s listing standards. The NCG Committee met twice in 2023. The NCG Committee’s purpose is to: 12 | · | | assist the Board in identifying individuals qualified to serve as members of the Board and its committees; |
| · | | develop and recommend to the Board a set of corporate governance guidelines for the Company; |
| · | | oversee the evaluation of the Board and its committees; |
| · | | review, approve or ratify related-party transactions and other matters which may pose conflicts of interest; and |
| · | | otherwise taking a leadership role in shaping our corporate governance. |
A copy of the NCG Committee Charter is available on our website. For more information about the process for identifying and evaluating nominees for director, see the “Corporate Governance – Criteria and Procedures for Selection of Director Nominees” section above. Audit & Risk Committee Roy Guthrie, Chair The current members of the Audit & Risk Committee are Roy Guthrie, Daniela Jorge and Steven Scheiwe. The Board has determined that (a) each is “independent”; (b) each is financially literate; and (c) Mr. Guthrie is an “audit committee financial expert,” as these terms are defined by the Securities Exchange Act of 1934 (the “Exchange Act”) and NASDAQ. The Audit & Risk Committee met five times in 2023. The Audit & Risk Committee’s purpose is to assist the Board in its oversight of: | · | | our accounting and financial reporting processes and the audits of our financial statements; |
| · | | the qualifications, independence and performance of our independent registered public accounting firm; |
| · | | our internal audit function and the performance of our internal accounting and financial controls; |
| · | | risk management, including information security and cyber risks; and |
| · | | our compliance with legal, ethics and regulatory requirements. |
A copy of the Audit & Risk Committee’s Charter is available on our website. 27
Compensation Committee Tagar Olson, Chair The current members of the Compensation Committee are Tagar Olson, Busy Burr and Michael Malone. Each member of our Compensation Committee is independent, as defined under NASDAQ’s listing standards. All directors are also “non-employee” directors as defined in Rule 16b-3(b)(3) under the Exchange Act. The Compensation Committee met seven times in 2023. The Compensation Committee’s purpose is to: | · | | discharge the Board’s responsibilities relating to the compensation of our Chairman & Chief Executive Officer and other executive officers; |
| · | | oversee our compensation policies and programs for our executive officers and directors of the Board; |
| · | | review and discuss with management our compensation discussion and analysis to be included in our annual proxy statement and annual report filed with the SEC; and |
| · | | prepare the Compensation Committee Report as required by the rules of the SEC. |
A copy of the Compensation Committee Charter is available on our website. For additional information regarding the Compensation Committee’s processes and procedures for consideration of director compensation and executive compensation see “Director Compensation” and “Compensation Discussion and Analysis,” respectively. Incentive Awards Committee The Compensation Committee has delegated to the Incentive Awards Committee, which consists of Jay Bray, our Chairman & Chief Executive Officer, the authority to make certain awards under our incentive compensation plan to our employees who are not executive officers. Compensation Advisor The Compensation Committee has the authority, in its sole discretion, to retain and terminate compensation advisors, including approval of the terms and fees of any such arrangement. In March 2023, the Compensation Committee retained Korn Ferry (US) (“Korn Ferry”) to serve as the Compensation Committee’s independent compensation advisor. Total fees paid to Korn Ferry by the Company for Executive and Director Compensation consulting services were approximately $251,500. During 2023, Korn Ferry did not perform other services for the Company. Additionally, based on (a) standards promulgated by the SEC and NASDAQ to assess compensation advisor independence, which are identified in the Compensation Committee’s Charter and (b) the analysis conducted by Korn Ferry in its independence review, the Compensation Committee concluded that Korn Ferry is an independent advisor to Mr. Cooper Group and that the work performed by Korn Ferry did not raise any conflicts of interest. For more information on the compensation advisor, see “Role of Compensation Advisor” in the “Compensation Discussion and Analysis” section of this proxy statement. Compensation Committee Interlocks and Insider Participation There is not, nor was there during 2023, any compensation committee interlock or insider participation on the Compensation Committee. 28
Board and Committee Evaluations Our Board is committed to continuous improvement and recognizes the importance of a robust evaluation process to enhance board performance and effectiveness. Our Nominating & Corporate GovernanceNCG Committee (the NCG Committee) oversees the annual performance evaluation of the Board and ensures that each of the Board’s committees conducts an annual self-evaluation. In general, covered areas include Board alignment, governance, strategy, culture, composition, information received, meetings and leadership. In 2020,2023, the NCG Committee engaged a third-party provider to administer online assessment questionnaires for both the Board and its committees. After completing the questionnaire, the Board and its committees received a full report with tailored analyses, summarized assessment results, including areas of concern for discussion, and highlights of effective practices and recommendations for ongoing development. The Board and its committees met to discuss the results. 20202023 Evaluations: A Multi-Step Process:
 |  |  |  |  | • NCG Committee reviews the design and format of the evaluation process
• Ensures directors have opportunity to provide constructive feedback about board and director performance
| • Directors complete written questionnaire on various measures of the Board’s strengths, deficits, and areas of alignment
| • NCG Committee receives summarized director responses
• NCG Committee receives tailored analysis and recommendations for ongoing development
| • Closed session discussion with the Board and its committees | • Feedback informs changes to policies, practices and procedures, as appropriate
• Results requiring further consideration are addressed at subsequent board or committee meetings
|
Communications with the Board Any Mr. Cooper Group stockholder or other interested party who wishes to communicate with the Board or any of its members, including our independent lead director, may do so by writing to: Board of Directors (or one or more named directors) c/o Mr. Cooper Group Inc., 8950 Cypress Waters Boulevard, Coppell, Texas 75019, Attention: Corporate Secretary. Relevant communications will be distributed to the Board, or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communication. Communications that are unrelated to the duties and responsibilities of the Board will not be forwarded, such as annual report requests, business solicitations, advertisements and job inquiries. Any communication that is screened as described above will be made available to any director upon his or her request. Communications with the Audit & Risk Committee Complaints and concerns relating to our accounting, financial reporting, internal accounting controls or auditing matters (together, Accounting Matters)“Accounting Matters”) should be communicated to the Audit & Risk Committee of the Board. Any such communications may be made on an anonymous basis. Employee concerns or complaints may be reported to the Audit &Risk Committee through a third-party vendor, The Network, Inc., which has been retained by the Audit & Risk Committee for this purpose. The Network, Inc. may be contacted toll-free at 866-919-3222 or via NAVEX Global’s website at www.mrcooper.ethicspoint.com. Outside parties, including stockholders, may bring issues regarding Accounting Matters to the attention of the Audit & Risk Committee by writing to: Audit & Risk Committee c/o Executive Vice President & Chief Legal Officer, Mr. Cooper Group Inc., 8950 Cypress Waters Boulevard, Coppell, Texas 75019. All complaints and concerns will be reviewed under the direction of the Audit & Risk Committee and oversight by the Chief Legal Officer and other appropriate persons as determined by the Audit & Risk Committee. The Chief Legal Officer reports to the Audit & Risk Committee on such communications. 29
Stockholder Engagement Criteria and Procedures for Selection of Director Nominees and Board Diversity
Although the Board retains ultimate responsibility for nominating members for election to the Board, the NCG Committee conducts the initial screening and evaluation process. As providedWe believe that effective corporate governance includes regular, active dialogue with analysts, stewardship teams, investors in our Corporate Governance Guidelines, director nominees, including those directors eligible to stand for re-election, are selected based upon requirements of applicable lawsequity and NASDAQ listing standardssenior notes, and among other things, the following factors:
Strength of
Character | Business
Experience
market participants, and Areas of
Expertise | Judgment | Composition
of the Board | Principles of
Diversity | Time
Availability
and
Dedication | Conflicts of
Interest |
Although we do not have a formal policyconsider their feedback on diversity, the NCG Committee appreciates the benefits that diversity, such as diversity of gender, race and national origin, education, professional experience, and differences in viewpoints and skills, can bring to aour executive compensation program, governance, board of directors and considers diversity in recruitment and nominations of directors. In the past two years, the Board appointed two female directors, representing 22% of our total Board members, who also have diverse backgrounds and experiences, which reflects the importance of diversity to the Board.
In conducting the screening and evaluation of potential director nominees, the NCG Committee considers candidates recommended by directors and our management, as well as recommendations from our stockholders. To recommend a candidate for election to the Board, a stockholder must submit the information required by our Bylaws, including, among other things, the following information, to Mr. Cooper Group Inc., 8950 Cypress Waters Boulevard, Coppell, Texas 75019, Attention: Corporate Secretary, generally not less than 90 days nor more than 120 days in advance of the one-year anniversary of the date on which our proxy statement was released to stockholders in connection with the previous year’s annual meeting of stockholders:Company’s strategy, financial results and disclosures, and industry and market trends.
the name, age, business and residence address and the principal occupation and employment of the nominee;
a completed written questionnaire regarding the background and qualification of the nominee;
the nominee’s consent to being named in the proxy statement as a nominee and all information that would be required to be disclosed in a proxy statement or other filings about the nominee;
a written representation and agreement regarding voting arrangements that have not been disclosed; compliance with applicable laws; intention to serve a full term if elected and that the nominee will provide true, correct and non-misleading information in all material respects; and
a description of all monetary arrangements during the past three years and any other material relationships between the nominee and a stockholder.
In considering candidates recommended by stockholders, the NCG Committee will take into consideration the needs of the Board and the qualifications of the candidate. While a stockholder may submit a director nominee pursuant to these criteria and procedures, the nomination would continue to remain subject to the rights of Kohlberg Kravis Roberts & Co. L.P. (KKR) as discussed below under the caption “Certain Relationships and Related-Party Transactions—Our Relationship with KKR.”
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
Environmental Practice
We are committed to conducting operations and activities in a manner that provides and maintains safe and healthful working conditions, protects the environment and conserves natural resources. We maintain practices so that our operations are managed and operated in compliance with applicable laws and regulations. As part of our green initiatives, we promote environment-friendly solutions within our buildings, including a recycling program and a reduction in paper products. For example, we eliminated the availability of paper cups in our office buildings, converted lighting to more energy-efficient LED lights across approximately 360,000 square feet of our office buildings, and our headquarters building was Energy Star Certified. Additionally, we regularly promote and encourage the use of technology for meetings and presentations as opposed to printing paper handouts. Last year, with the move of over 95% of our team to remote work during the COVID-19 pandemic, we consolidated our office buildings by 305,700 total square feet, ultimately reducing the total energy use in our office buildings and greatly decreasing the amount of paper printing.
For our customers, we actively encourage electronic communications including campaigns tied to non-profit group donations as customers chose to go “paperless.” In 2020, we organized a paperless campaign for customers and donated more than 750,000 meals to Feeding America. Our efforts to encourage digital communication have resulted in year-over-year increases in both customers who have a registered digital account with Mr. Cooper (78%, up from 73% at the end of 2019) and customers who have signed up for paperless communications (45%, up from 40% at the end of 2019).
Social Responsibility
Social Responsibility plays an important role in our business as we aim to foster our company’s team culture, meet the evolving needs of our customers, and be good stewards of our communities. As a company, we are grounded in a set of three intangible core values – being challengers of convention, champions for our customers and cheerleaders for our team.
 For Our Team Members
We empower our more than 9,000 team members across the U.S. and India because we believe that a happy team leads to happy customers, and that is good for everyone. Our most recent engagement survey, which led to our second Great Place to Work certification, shows how these intentional efforts are making a difference, with our overall EmployeeStewardship Engagement Index measuring 88% participation, and approximately 87% of team members have said that Mr. Cooper Group is a great place to work.
Over the last few years, we transformed from the inside and cultivated a people-first culture, utilizing team member feedback to drive new initiatives and have focused on the following: Talent Management: We invest in attracting, developing and retaining the best talent, and we know that focusing on holistic training, development and onboarding experiences will continue to be key in our journey from better to best, so we operate an overarching Talent Management function, which combines our Training, Leadership Development and Talent Acquisition teams in one group. Over the past year, we offered our employees approximately 437,000 hours of training across a broad range of categories, including leadership, inclusion, professional skills, and performance management.
Performance Management: To drive transparency in ratings and team member performance, our performance management process is basedembarked on a five-point scale, which simplifies the review process and makes it easier for team members to evaluate themselves, while improving the process for managers in evaluating their teams. In the evaluation and goal setting processes, every team memberrobust stockholder outreach program. That feedback has strategic goals that align with the Company’s priorities. Additionally,
every team member is rated on our three core values, helping to ensure that all team members are striving to reflect our values every day through their work. Leaders are also encouraged to have more frequent touchpoints to share feedback on performance and createbeen an open dialogue on career goals.
Total Rewards: We are proud to offer team members competitive pay and a variety of benefits to attract and retain top talent. We abide by a pay for performance philosophy, which is a model in which rewards are linked to a team member’s performance. Rewards are differentiated, which results in top performers receiving higher rewards, showing team members they are being compensated based on their individual contributions. To ensure our compensation practices are fair and market competitive, we evaluate our pay ranges every year using data from several industry surveys. We are also committed to giving our team greater transparency and choice in the benefits available to them. To provide more insightimportant input into the valueBoard’s review and decisions around our Board, governance, compensation and sustainability-related practices.In 2023, we continued to proactively meet with our stockholders and provide management and the Board with feedback heard during these engagement meetings. Our outreach included soliciting ten of all benefits they receive, each team member has access to a personalized Total Rewards statement, which provides a simple, complete pictureour largest investors, representing approximately 50% of a team member’s pay, medical benefits, life insurance, retirement plan, tax-free spending accounts, family benefits, career development opportunitiesour outstanding shares. Three of our largest stockholders, representing approximately 33% of our outstanding shares, accepted our request. Our Compensation Committee Chairman and more. Attractive Benefits: We believe thatrepresentatives from our benefits help us to attractinvestors relations and retain top talent, including some of the following offerings – Healthcare Exchange, which provides a choice of competitive insurance options; Team Member Mortgage Loan Program; Down Payment Assistance Program; Fertility and Adoption Benefits; and a Team Member Relief Fund, which is a company-funded program that provides cash grants to our team members who may be experiencing catastrophic disasters or personal hardship.
Diversity and Inclusion Initiativescorporate governance teams participated in these meetings.
Our success as
Additional Engagements Stockholder dialogue is also a business is directly tiedyear-round practice through our investor relations team. We are working to further improve our ongoing effortsengagement by increasing our participation in investor conferences and non-deal roadshows, revising selected disclosures to attractincrease clarity, and retain diverse talentimproving the consistency and maintain an inclusive and progressive environment where each team member can thrive. To formalize our values of embracing and leveraging diversity, we established our internal Office of Diversity and Inclusion to serve as a driver and a resource for our team members. Since its inception, the Office of Diversity and Inclusion has spearheaded numerous programs including the formation of nearly 20 Resource Teams comprised of team members who have similar interests and backgrounds. These teams are core to our culture and serve as a resource for their members and the Company by fostering a diverse and inclusive workplace aligned with our mission, values, goals, business practices and objectives. In 2020, the Office of Diversity and Inclusion and the Resource Teams facilitated more than 500 team member events and trainings. In addition, beginning in 2020, all people leaders and individual contributors in an equivalent leadership role have a diversity and inclusion performance action for each quarter included in their performance goals. We know our work in Diversity and Inclusion is a journey, and in our ongoing commitment to advancing diversity and inclusion, we focus our efforts in four key areas:
Transparent Communications: By committing to open and accessible communications through information sharing and feedback, we believe we can cultivate an inclusive environment.
Inclusive Processes: To ensure our processes are equitable and impartial for every team member, we continuously review and enhance them.
Increased Opportunities: Through inclusive hiring practices and expanded development offerings, we create increased opportunities for potential and current team members.
Social Justice Activism: We have an obligation to make a positive impact in our communities and focus on social justice activism through community giving and volunteerism. We recognize that as a company, we have an impact on the world in which we live and the people we interact with, and we want to ensure we are contributing to progress in diversity and inclusion. In 2020, we contributed more than $350,000 to social justice organizations.
In Our Communities
Alongside government and non-profit housing organizations, in 2020, we regularly partnered with local communities to virtually connect with homeowners to assist with their housing questions and provide helpful resources. Through these partnerships, we were able to help customers with more than 1,400 loans and apply over $11 million in funds to accounts in need. We also encourage team members to volunteer their time and efforts to support their local communities through company initiatives.
As a company, we are a premier sponsor of local United Way and Habitat for Humanity events, earning the United Way Volunteer of the Year award in Dallas-Fort Worth in 2019. We also encourage team members to volunteer with the non-profit organization of their choice by giving all team members paid time off each year for volunteer activities. Though over 95%effectiveness of our team members worked remotelycommunications. During 2023, we had over 300 separate meetings and calls with equity investors and analysts, in 2020, dueaddition to the COVID-19 pandemic,participation in earnings conference calls.
Feedback that we came together to participate in nearly 20 virtual volunteer events. As the largest non-bank servicer, we are committed to working alongside other industry leaders to ensure we keep the dream of homeownership alive. We have played a key leadership rolereceived from stockholders was taken into account in the COVID-19 housing crisis. We strongly support the forbearancedesign of our executive compensation program, included in the CARES Act, which has made it possible for servicers like us to continue to keep millions of people in their homes. Since the CARES Act was first signed, we’ve helped approximately 364,000 homeowners go on forbearance, and we’ve helped 186,000 of them resolve and exit forbearance.
Additionally, at the request of the industry, we played a significant leadership role in the creation of a national consumer awareness campaign designed to reach homeowners who have missed one or more mortgage payments as a result of the COVID-19 pandemic and may be eligible for forbearance assistance under the CARES Act. We led the discussion, and our brand marketing team created the campaign materials now being used by mortgage companies, the Consumer Finance and Protection Bureau and organizations across the industry.
We operate two locations in India, and those teams have worked to advance local CSR initiatives helping to further broaden our impact. The team coordinates regular volunteer efforts, giving campaigns and partners with the city of Chennai to help develop critical government technologies. In response to the COVID-19 pandemic, we partnered with the Greater Chennai Corporation (GCC) to support the technology needs required to create a positive impact on the community, by designing and developing the Corona Monitoring app. The Corona Monitoring app helps the GCC monitor the COVID-19 situation in the city, allowing government officials to complete contact tracing, monitor for outbreaks and ensure the health of their community through social distancing efforts.
BOARD OF DIRECTORS
Our Amended and Restated Certificate of Incorporation provides that the Board consist of not more than 11 directors, or such greater number as may be determined by the Board. As of the date of this proxy statement, the Board consists of nine members who are elected each year at the Annual Meeting of Stockholders to hold office until the next annual meeting. Our current Board is as follows:
Jay Bray | Michael Malone | Busy Burr | Shveta Mujumdar | Robert Gidel | Tagar Olson | Roy Guthrie | Steven Scheiwe | Christopher Harrington | |
The Board has determined that each of the directors, other than Mr. Bray, satisfies our independence standards and further that each of them is independent of us and our management within the meaning of NASDAQ’s listing standards.
Our Amended and Restated Certificate of Incorporation does not provide for cumulative voting in the election of directors, and our Bylaws provide that directors are elected by a majority of the votes present in person or by proxy entitled to vote.
Committees of the Board
The Board currently has three principal standing committees – Audit & Risk, Compensation and NCG. The Board, upon recommendation from the NCG Committee, reviews committee assignments and determines whether rotation of committee members and committee chairs is appropriate to introduce fresh perspectives and to broaden and diversify the views and experiences represented on the committees. In March 2021, the Board rotated the membership of the Compensation and NCG Committees as reflected below. The Board has determined that each member of these committees is “independent,” as defined under NASDAQ’s listing standards and for the purpose of the committees upon which such directors serve.
Nominating & Corporate Governance Committee
Rob Gidel, Chair
The current members of the NCG Committee are Rob Gidel, Shveta Mujumdar and Steve Scheiwe. Each member of our NCG Committee is independent, as defined under NASDAQ’s listing standards. The NCG Committee met twice in 2020.
The NCG Committee’s purpose is to:
• assist the Board in identifying individuals qualified to serve as members of the Board and its committees;
• develop and recommend to the Board a set of corporate governance guidelines for the Company;
• oversee the evaluation of the Board and its committees;
• review, approve or ratify related-party transactions and other matters which may pose conflicts of interest; and
• otherwise taking a leadership role in shaping our corporate governance.
A copy of the NCG Committee Charter is available on our website. For more information about the process for identifying and evaluating nominees for director, see the “Corporate Governance – Criteria and Procedures for Selection of Director Nominees” section above.
|
Audit & Risk Committee
Roy Guthrie, Chair
The current members of the Audit & Risk Committee are Roy Guthrie, Rob Gidel, Mike Malone and Steve Scheiwe. The Board has determined that (a) each is “independent”; (b) each is financially literate; and (c) Mr. Guthrie is an “audit committee financial expert,” as these terms are defined by the Securities Exchange Act of 1934 (the Exchange Act) and NASDAQ. The Audit & Risk Committee met five times in 2020.
The Audit & Risk Committee’s purpose is to assist the Board in its oversight of:
• our accounting and financial reporting processes and the audits of our financial statements;
• the qualifications, independence and performance of our independent registered public accounting firm;
• our internal audit function, and the performance of our internal accounting and financial controls;
• risk management, including information security and cyber risks; and
• our compliance with legal, ethics and regulatory requirements.
A copy of the Audit & Risk Committee’s Charter is available on our website.
| | Compensation Committee
Tagar Olson, Chair
The current members of the Compensation Committee are Tagar Olson, Busy Burr and Mike Malone. Each member of our Compensation Committee is independent, as defined under NASDAQ’s listing standards. All directors are also “non-employee” directors as defined in Rule 16b-3(b)(3) under the Exchange Act. The Compensation Committee met six times in 2020.
The Compensation Committee’s purpose is to:
• discharge the Board’s responsibilities relating to the compensation of our Chairman, President & Chief Executive Officer and other executive officers;
• oversee our compensation policies and programs for our executive officers and directors of the Board;
• review and discuss with management our compensation discussion and analysis to be included in our annual proxy statement and annual report filed with the SEC;
• develop a succession plan for our executive officers; and
• prepare the Compensation Committee Report as required by the rules of the SEC.
A copy of the Compensation Committee Charter is available on our website. For additional information regarding the Compensation Committee’s processes and procedures for consideration of director compensation and executive compensation see “Director Compensation” and “Compensation Discussion and Analysis,” respectively.
|
Incentive Awards Committee
The Compensation Committee has delegated to the Incentive Awards Committee, which consists of Jay Bray, our Chairman, President & Chief Executive Officer, the authority to make certain awards under our incentive compensation plan to our employees who are not executive officers.
Compensation Advisor
The Compensation Committee has the authority, in its sole discretion, to retain and terminate compensation advisors, including approval of the terms and fees of any such arrangement. The Compensation Committee retained Gressle & McGinley LLC (Gressle & McGinley) to serve as the Compensation Committee’s independent compensation advisor. Gressle & McGinley does not provide other services to Mr. Cooper Group. Additionally, based on (a) standards promulgated by the SEC and NASDAQ to assess compensation advisor independence, which are identified in the Compensation Committee’s Charter and (b) the analysis conducted by Gressle & McGinley in its independence review, the Compensation Committee concluded that Gressle & McGinley is an independent advisor to Mr. Cooper Group and that the work performed by Gressle & McGinley did not raise any conflicts of interest. For more information on the compensation advisor, see “Role of Compensation Advisor”discussed in the Compensation Discussion and Analysis section of this proxy statement.
We are committed to maintaining an active dialogue with stockholders to understand stockholders’ perspectives, and we plan to continue this dialogue. Stockholders are always welcome to communicate their views as described under “Communications with the Board” in this proxy statement. Compensation Committee Interlocks and Insider Participation
There is not, nor was there during 2020, any compensation committee interlock or insider participation on the Compensation Committee.
Director Compensation The Compensation Committee reviews and recommends to our Board the form and level of director compensation and seeks outside advice from its compensation advisor on market practices whenpractice and reviews independent director compensation to confirm the compensation we offer is market appropriate without being excessive. Under this assessment, the Compensation Committee determines if it should recommend that the Board make any changes are contemplated.to the compensation for our independent directors. No changes were made to the compensation for the independent directors for 2023. The independent director fees are payable in semi-annual installments in arrears, based on the following annual fees:framework for 2023: | Cash
Retainer | Lead
Director | Audit & Risk
Committee
Chair | Compensation
Committee
Chair | NCG
Committee
Chair | Audit & Risk
Committee
Member | Compensation
Committee
Member | NCG
Committee
Member | | Lead Director | | Audit & Risk Committee Chair | | Compensation Committee Chair | | NCG Committee Chair | | Audit & Risk Committee Member | | Compensation Committee Member | | NCG Committee Member | | Annual Equity Award | | | | | | $125,000 | $85,000 | $85,000 | $60,000 | $45,000 | $35,000 | $25,000 | $20,000 | | $85,000 | | $85,000 | | $60,000 | | $45,000 | | $35,000 | | $25,000 | | $20,000 | | | $110,000 | |
On May 17, 2018, Messrs. Gidel, Guthrie and Malone were granted restricted stock units from Nationstar with a fair market value of $330,000. Upon30
Our Directors had the merger with Nationstarfollowing responsibilities in July 2018 (the Merger), these awards were converted to restricted stock unit awards for Mr. Cooper Group common stock that continued to vest on each of the first three anniversaries of the grant of the award. This award covered equity award grants for 2018, 2019 and 2020. In May 2020, each of Messrs. Gidel, Guthrie and Malone received an equity award to match the number of shares received by the independent directors who received annual awards. 2023: | | | | | | | | | | | | Name | | Lead Independent
Director | | Audit & Risk
Committee | | Compensation
Committee | | NCG Committee | | | | | | | | | | | | | | | | | Busy Burr | | | | | | M | | | | | | | | | | Roy Guthrie | | | | C | | | | | | | | | | | | Daniela Jorge | | | | M | | | | | | | | | | | | Michael Malone | | X | | | | M | | | C | | | | | | | Shveta Mujumdar | | | | | | | | | M | | | | | | | Tagar Olson | | | | | | C | | | | | | | | | | Steven Scheiwe | | | | M | | | | | M | | (X denotes Lead Independent Director; C = Committee Chair; M = Committee Member) | |
All of our independent directors except for Mr. Harrington, will receivereceived a grant of $110,000 of restricted stock units on May 11, 2023, the date of our 2021 annual stockholders meeting,2023 Annual Meeting of Stockholders, which vest the earlier of (a) the first anniversary of the grant date or (b) the date of our 2022 annual stockholders meeting following the grant date. on May 11, 2024. The independent directors have the option to defer the date that some or all vested restricted stock units are converted into shares of common stock and delivered to the director. Our 2019 Omnibus Incentive Plan (“Omnibus Incentive Plan”) places an aggregate yearly limit of $750,000 for the value of awards that can be granted together with cash fees paid to our non-employee directors. The following table sets forth certain information regarding the compensation paid in 20202023 to our independent directors. Mr. Harrington, as a member of KKR, does not receive any compensation for his services on our Board: | Name | | Fees earned or paid
in cash ($)(1) | | Stock Awards ($)(2) | | Total ($) | | | | | | | | | | Busy Burr | | 132,158 | | 110,000 | | 242,158 | | Robert H. Gidel | | 240,000 | | 47,991 | | 287,991 | | Roy A. Guthrie | | 320,000 | | 47,991 | | 367,991 | | Christopher J. Harrington | | — | | — | | — | | Michael D. Malone | | 230,000 | | 47,991 | | 277,991 | | Shveta Mujumdar | | 44,740 | | 128,500 | | 173,240 | | Tagar C. Olson | | 75,000 | | — | | 75,000 | | Steven D. Scheiwe | | 180,000 | | 110,000 | | 290,000 |
| | | | | | | | | | | | | | Name | | Fees earned or paid in cash ($)(1) | | | Stock Awards ($)(2)(3) | | | Total ($) | | | | | | | | | | | | | | | | | | | Busy Burr | | | 150,000 | | | | 110,000 | | | | 260,000 | | | | | | Roy Guthrie | | | 210,000 | | | | 110,000 | | | | 320,000 | | | | | | Daniela Jorge | | | 150,267 | | | | 110,000 | | | | 260,267 | | | | | | Michael Malone | | | 289,685 | | | | 110,000 | | | | 399,685 | | | | | | Shveta Mujumdar | | | 145,000 | | | | 110,000 | | | | 255,000 | | | | | | Tagar Olson | | | 185,000 | | | | 110,000 | | | | 295,000 | | | | | | Steven Scheiwe | | | 180,000 | | | | 110,000 | | | | 290,000 | |
| (1) | Represents fees actually paid in 2020.2023. |
| (2) | On May 11, 2023, each independent director received 2,559 restricted stock units which vest on May 11, 2024. | |
| (3) | Represents the aggregate grant date fair value, as computed in accordance with Financial Accounting Standards Board (FASB)(“FASB”) Accounting Standards Codification (ASC)(“ASC”) Topic 718, Compensation—Stock Compensation excluding the effect of estimated forfeitures during the applicable vesting periods of (a) restricted stock units granted to each of Ms. Burr, Ms. Mujumdar and Mr. Scheiwe and (b) an equity award received by Messrs. Gidel, Guthrie and Malone to match the number of shares received by the independent directors who received annual awards.directors. The aggregate number of stock awards outstanding aton December 31, 20202023, for our directors can be found in the “Security Ownership of Certain Beneficial Owners and Management”Owners” section below. | |
Fees to independent directors may be made by issuance of Mr. Cooper Group common stock, based on the value of common stock at the date of grant, rather than in cash, provided that any such issuance does not prevent a director from being independent and the shares are granted pursuant to a stockholder approved plan. Directors who are also our employees receive no additional compensation for their services on the Board. All members of the Board are reimbursed for reasonable costs and expenses related to attending Board or committee meetings or other meetings with management and for expenses related to director education programs. Director Stock Ownership Guidelines Our stock ownership guidelines provide that non-employee directors are expected to accumulate, within five years of their election to the Board, shares of Mr. Cooper Group stock equal in value to at least five times the amount of their annual cash retainer. Shares counted toward these guidelines include any shares held by the director directly or indirectly, including deferred vested awards and unvested restricted stock units. Our Board established this particular level of stock ownership for our non-employee directors to have the interests of our non-employee directors to be aligned with the investment interests of our stockholders. 31
PROPOSAL 1: ELECTION OF DIRECTORS
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”) Our stockholders will be asked to consider nine nominees for election to our Board to serve for a one-year term until the next annual meetingoversees ESG-related matters as part of stockholders and until their successors have been duly elected and qualified, subject to their earlier death, resignation or removal. The names of the nominees for director and biographical information follow. All of the nominees, with the exception of Mr. Bray, have been determined by the Board to be independent under NASDAQ listing standards.its risk management oversight responsibilities. Our NCG Committee has reviewed the qualifications of each of the nominees and has recommendedEVP & Chief Administrative Officer raises relevant ESG topics to the Board on an ongoing basis.
Environmental Practice We are committed to conducting operations and activities in a manner that each nominee be submittedprovides and maintains safe and healthful working conditions, protects the environment and conserves natural resources. We maintain practices so that our operations are managed and operated in compliance with applicable laws and regulations. As part of our green initiatives, we promote environment-friendly solutions within our buildings, including a recycling program and a reduction in paper products. Our corporate headquarters building is Energy Star Certified and Leadership in Energy and Environmental Design (LEED) Certified by the United States Green Building Council (USGBC). Beginning in 2020, we shifted more than 95% of our team to remote work allowing us to consolidate the space utilized by essential workers in our office buildings by 663,000 square feet over the past 4 years. This reduction in utilized square footage resulted in lower total energy use in our office buildings and significantly decreased the amount of paper printing, which has continued through 2023. Our team members continue to operate in a votehome-centric model of work that encourages the routine use of technology for meetings and presentations as opposed to printing paper handouts and reduces the environmental impacts associated with daily employee commuting. For our customers, we actively encourage electronic communications including campaigns tied to non-profit group donations as customers chose to go “paperless.” In 2023, we continued our tradition of organizing a paperless campaign for customers. Our efforts to encourage digital communication have resulted in year-over-year increases in both customers who have a registered digital account with us (87.4%, up from 86.1% at the 2021 Annual Meeting.end of 2022) and customers who have signed up for paperless communications (59.5%, up from 55% at the end of 2022). Social Responsibility In determining whether to nominate our directors for another term, the Board considered the factors discussed above under “Corporate Governance – Criteria and Procedures for Selection of Director Nominees” as well as each director’s qualifications as discussed below and concluded that each of the directors possess those talents, backgrounds, perspectives, attributes and skills that will enable him or her to continue to provide valuable insights to our management and playSocial Responsibility plays an important role in helping us achieve our goalsbusiness as we aim to foster our team culture, meet the evolving needs of our customers and objectives. The age, principal occupation and certain other informationbe good stewards of our communities. We are grounded in a set of three intangible core values – being challengers of convention, champions for our director nominees are set forth below. It iscustomers and cheerleaders for our general policy that no director having obtained the age of 70 years will stand for re-election.team.
For Our Team Members Directors are elected by a majority of the votes present in person or by proxy entitled to vote, meaning that each director nominee must receive more votes cast “for” than “against” his or her election. If an incumbent director does not receive more votes cast “for” than “against” his or her election, then the director must tender his or her resignation to the Board. In that situation, the NCG Committee would make a recommendation to the Board about whether to accept or reject the resignation, or whether to take other action. Within 90 days from the date the election results are certified, the Board would act on the NCG Committee’s recommendation and publicly disclose its decision and rationale behind it.
The Board believes that the each of the director nominees will be able to stand for election.
THE BOARD RECOMMENDS A VOTE FOR THE NOMINEES NAMED BELOW.
| Jay Bray | BACKGROUND | Age 54
Director Since 2018 (Chair)
Committees
None
| Mr. Bray has served asWe want our approximately 6,800 team members across the Company’s ChairmanU.S. and India to be engaged and inspired by purposeful work. Our most recent engagement survey, which led to our fifth Great Place to Work® certification and inclusion on the 2023 Great Place to Work® and Fortune Best in Financial Services and Insurance and Best Workplaces in Texas and India lists, shows how these intentional efforts are making a difference, with 88% of the Board, President & Chief Executive Officer since the Merger in July 2018. Mr. Bray has also served as a director of Nationstar since 2012. He has also served as Nationstar’s President since June 2015 and as Chief Executive Officer since February 2012, prior to which he served as Nationstar’s Executive Vice President & Chief Financial Officer from May 2011 to February 2012. In addition, he has served as the President of Nationstar’s wholly-owned subsidiary, Nationstar Mortgage LLC, since July 2011, as the Chief Executive Officer of Nationstar Mortgage LLC since October 2011, as the Chief Financial Officer of Nationstar Mortgage LLC from the time he joined Nationstar in May 2000 until September 2012, as a Manager of Nationstar Mortgage LLC since October 2011, as the Executive Chairman of Xome Holdings LLC since September 2015. Mr. Bray has more than 30 years of experience in the mortgage servicing and originations industry. From 1988 to 1994, he worked with Arthur Andersen in Atlanta, Georgia, where he served as an audit manager from 1992 to 1994. From 1994 to 2000, Mr. Bray held a variety of leadership roles at Bank of America and predecessor entities, where he managed the Asset Backed Securitization process for mortgage-related products, developed and implemented a secondary execution strategy and profitability plan and managed investment banking relationships, secondary marketing operations and investor relations. Additionally, Mr. Bray led the portfolio acquisition, pricing and modeling group at Bank of America.
QUALIFICATIONS
Mr. Bray played a critical role in leading the servicing market shift to non-banks following the financial crisis and led the growth of our portfolio from a start of $21 billion UPB in 2008 to $626 billion today, making us the largest nonbank servicer. Mr. Bray’s in-depth experience and understanding of financial services and Mr. Cooper’s business and operations qualify him to serve as asurvey participants having said that Mr. Cooper Group director.is a great place to work.
Over the last few years, we transformed from the inside and cultivated a people-first culture, utilizing team member feedback to drive new initiatives and have focused on the following: | |  |
Busy Burr | BACKGROUND | Age 59
Independent Director Since 2019
Committees
Compensation
| Ms. Burr has been President & Chief Commercial Officer of Carrot, Inc., a venture-backed digital health company, since November 2019. Prior to which Ms. Burr was at Humana, Inc., a for-profit health insurance company, from March 2015 to September 2018, where she served as the Chief Innovation Officer and Vice President of Healthcare Trend. Prior that that, she was Managing Director of Citi Ventures and Global Head of Business Incubation of Citigroup, Inc. from January 2011 to January 2015. Ms. Burr also served as an Entrepreneur-in-Residence at eBay, Inc. from January 2010 to January 2011. Prior to joining eBay, she co-founded and served as Chief Executive Officer of Lucy & Lily (Alterdot) from March 2004 to June 2009. Ms. Burr has held various senior-leadership roles at Credit Suisse Group AG (formerly Credit Suisse First Boston), Homestead Technologies Inc. and Gap Inc., and was an investment banker for Morgan Stanley. She has served on the Board of Directors of Satellite Healthcare Inc., a not-for-profit provider of kidney dialysis and related services, since December 2018 and has previously served as a board observer for three healthcare companies, Omada Health, Inc. Aspire Health, Inc. and Livongo Health, Inc.
QUALIFICATIONS
Ms. Burr’s experience in innovation, marketing, product development and technology, including customer-centric platforms and the financial services industry qualify her to serve as a Mr. Cooper Group director.
OTHER PUBLIC COMPANY BOARDS
| Current
Rite Aid Corporation
| Past Five Years
None
| | | • | | Talent Development: We invest in attracting, developing and retaining the best talent, and we know that focusing on holistic training, development and onboarding experiences will continue to be key in our journey from better to best. Over the past year, we offered our employees 272,000 hours of training across a broad range of categories, including leadership, inclusion professional skills, and performance management. Ensuring we have the next generation of leaders ready to take on more comprehensive roles is also a priority for our development initiatives. Comprehensive talent reviews across the organization are conducted annually to ensure we have ready successors for our most important roles. | |
32
| • | | Performance Management: To drive transparency in ratings and team member performance, our performance management process is based on a five-point scale, which simplifies the review process and makes it easier for team members to evaluate themselves, while improving the process for managers in evaluating their teams. In the evaluation and goal setting processes, every team member has strategic goals that align with our priorities. Additionally, every team member is rated on our three core values, helping to ensure that all team members are striving to reflect our values every day through their work. Leaders are also encouraged to have more frequent touchpoints to share feedback on performance and create an open dialogue on career goals. | |
Robert Gidel | BACKGROUND | Age 69
Independent Director Since 2018
Committees
Audit & Risk
NCG (Chair)
| Mr. Gidel served as an independent director of Nationstar from 2012 until the Merger in July 2018. Mr. Gidel has been a principal in Liberty Partners, LLC, a company that invests in both private and publicly-traded real estate and finance focused operating companies, since 1998. Mr. Gidel has served on multiple private and publicly-held companies’ boards of directors, including American Industrial Properties, Brazos Asset Management, certain registered investment companies of Fortress Investment Group, Global Signal Inc., LNR Property Holdings, Lone Star Funds, Meridian Point Realty Trust VIII, Paragon Group, Inc. and US Restaurant Properties.
QUALIFICATIONS
Mr. Gidel is a National Association of Corporate Directors Board Leadership Fellow, and his extensive experience in real estate finance and private equity, as well as wide-ranging prior experience as a director qualify him to serve as a Mr. Cooper Group director.
OTHER PUBLIC COMPANY BOARDS
| Current
None
| Past Five Years
Nationstar
DDR Corp. (now known as SITE Centers Corp.)
| | • | | |
Roy Guthrie | BACKGROUND | Age 67
Independent Director Since 2018
Committees
Audit & Risk (Chair)
| Mr. Guthrie served as an independent directorTotal Rewards: We are proud to offer team members competitive pay and a variety of Nationstarbenefits to attract and retain top talent. To provide more insight into the value of all benefits they receive from 2012 until the Merger in July 2018 and was its independent lead director from 2017 until the Merger. Mr. Guthriecompensation to medical benefits, each team member has been the Chairman of the Executive Committee of Renovate America, Inc. (a privately-held corporation),access to a personalized Total Rewards statement, which provides an energy efficiencya simple, complete picture of a team member’s pay, medical benefits, life insurance, retirement plan, tax-free spending accounts, family benefits, career development opportunities and renewable energy home improvement financing platform, since September 2018, and served as Chief Executive Officer from October 2017 to September 2018. Prior to this Mr. Guthrie was the Executive Vice President of Discover Financial Services, a direct banking and payment services company, from 2005 to 2012; he previously served as Chief Financial Officer from 2005 to 2011 and as Treasurer from 2009 to 2010. Mr. Guthrie was President & Chief Executive Officer of CitiFinancial International, LTD, a consumer finance business of Citigroup Inc., from 2000 to 2004, serving on Citigroup’s Management Committee throughout this period. Mr. Guthrie was also Chief Financial Officer of Associates First Capital Corporation from 1996 to 2000, while it was a public company, and he served as a member of its board of directors from 1998 to 2000.more.
QUALIFICATIONS
Mr. Guthrie’s valuable expertise in financial services as well as extensive experience as an executive officer and director of public companies qualify him to serve as a Mr. Cooper Group director.
OTHER PUBLIC COMPANY BOARDS
| Current
Cascade Acquisition Corp.
OneMain Holdings, Inc.
Synchrony Financial
| Past Five Years
Nationstar
Garrison Capital, Inc.
Lifelock, Inc.
| | | |
Christopher Harrington | BACKGROUND | Age 39
Independent Director Since 2017
Committees
None
o | Mr. Harrington has served asCompensation: We abide by a director since June 2017 andpay for performance philosophy, which is a Member of KKR,model in which rewards are linked to a global asset manager workingteam member’s performance. Rewards are differentiated, which results in private equitytop performers receiving higher rewards, showing team members they are being compensated based on their individual contributions. To ensure our compensation practices are fair and fixed income. He joined KKR in 2008 and leads the firm’s financial servicesmarket competitive, we evaluate our pay ranges every year using data from several industry team within the Americas Private Equity platform. Mr. Harrington has been involved with KKR’s investments in multiple companies, including Mr. Cooper Group. Mr. Harrington currently serves on the boards of directors of several public and privately-held companies. Previously, Mr. Harrington was with Merrill Lynch & Co. in New York, where he was involved in a variety of acquisitions, divestitures, and other corporate advisory transactions.surveys.
QUALIFICATIONS
Mr. Harrington’s extensive experience in corporate financings, mergers, acquisitions, investments and strategic transactions qualify him to serve as a Mr. Cooper Group director.
OTHER PUBLIC COMPANY BOARDS
| Current
Focus Financial Partners Inc.
| Past Five Years
None
| | | |
Michael Malone | BACKGROUND | Age 67
Independent Director Since 2018
(Independent Lead Director)
Committees
Audit & Risk
Compensation
| Mr. Malone served as an independent director of Nationstar from 2012 until the Merger in July 2018. Mr. Malone is the former Managing Director of Fortress Investment Group LLC, a global investment management group, a position he held from February 2008 until February 2012, where he led the Charlotte, North Carolina office and was responsible for the business of the capital formation group in the southeast and southwest regions of the United States. Mr. Malone retired from Bank of America in November 2007, after nearly 24 years of service as Senior Executive Banker and Managing Director. Over those years Mr. Malone worked in and ran a number of investment banking businesses for the bank and its subsidiary, Banc of America Securities LLC, including real estate, gaming, lodging, leisure and the financial sponsors businesses.
QUALIFICATIONS
Mr. Malone’s extensive experience in financial services and real estate and service on other public companies’ boards qualify him to serve as a Mr. Cooper Group director.
OTHER PUBLIC COMPANY BOARDS
| Current
New Senior Investment Group
Walker & Dunlop, Inc.
| Past Five Years
Nationstar
| | | |
Shveta Mujumdar | BACKGROUND | Age 42
Independent Director Since 2020
Committees
NCG
o | Ms. Mujumdar has served as Vice President, Corporate Development for Intuit, Inc.,Attractive Benefits: We believe that our benefits help us to attract and retain top talent, including some of the following offerings – Healthcare Exchange, which provides a businesschoice of competitive insurance options; Team Member Mortgage Loan Program; Down Payment Assistance Program; Student Debt Repayment Program; Fertility and financial software company, since September 2016. PriorAdoption Benefits; and a Team Member Relief Fund, which is a Company-funded program that provides cash grants to which she served as the Vice President, Corporate Development for Lynda.com from February 2013 until its acquisition by LinkedIn in May 2015, after which she continued as a consultant for LinkedIn until August 2015. Ms. Mujumdar has held various senior-leadership roles at QuinStreet, LiveNation/Ticketmaster, Goldman Sachs Group and Deloitte.our team members who may be experiencing catastrophic disasters or personal hardship.
QUALIFICATIONS
Ms. Mujumdar’s experience in strategy, corporate development and data and technology qualify her to serve as a Mr. Cooper Group director.
| | | | | |
Diversity, Equity and Inclusion Initiatives Our success as a business is directly tied to our ongoing efforts to attract and retain diverse talent, promote fairness and equity and maintain an inclusive environment where each team member can thrive. To formalize our values of embracing and leveraging diversity, we established our internal Office of Diversity, Equity and Inclusion to serve as a driver and a resource for our team members and the community. The Office of Diversity, Equity and Inclusion has spearheaded numerous programs and had 11 Employee Resource Teams, as of December 31, 2023. These teams are core to our culture and play a vital role for their members and the Company by fostering a diverse, equitable and inclusive workplace aligned with our mission, values, goals, business practices and objectives. In 2023, the Office of Diversity, Equity and Inclusion realigned its focus to prioritize education for our team members and service within our communities. As part of these efforts, the Office of Diversity, Equity and Inclusion facilitated 30 events honoring Heritage Months, while the Company’s Employee Resource Teams sponsored 17 events, comprised of speaking engagements, career development workshops and community service. In addition, all people leaders and individual contributors in an equivalent leadership role have Diversity, Equity and Inclusion performance actions included in their performance goals. We know our work in Diversity, Equity and Inclusion is a journey. In our ongoing commitment to our journey, we focus our efforts in four key areas: Tagar Olson | BACKGROUND• | Age 43
Independent Director Since 2015
Committees
Compensation (Chair)
| Mr. Olson has served as a director since May 2015 and was most recently a Member of KKR. He joined KKR in 2002 and prior to his departure in December 2019, served as head of KKR’s financial services and hospitality and leisure industry teams. He served as a member of the Investment Committee and Portfolio Management Committees within the KKR America’s Private Equity platform and also served as a member of KKR’s Global Investment, Markets and Distribution Committee. Mr. Olson played a significant role in many of KKR’s other investments in the financial services sector. Mr. Olson currently serves on the boards of directors of a number of privately-held companies. Prior to joining KKR, Mr. Olson was with Evercore Partners Inc. He is also a member of the Board of Overseers at NYU Langone Medical Center.
QUALIFICATIONS
Mr. Olson’s extensive experience in corporate financings, mergers, acquisitions, investments and strategic transactions, his relationships in the investment banking and private equity industries and his experience in identifying potential merger and acquisition candidates qualify him to serve as a Mr. Cooper Group director.
OTHER PUBLIC COMPANY BOARDS
| Current
None
| Past Five Years
First Data Corporation (now known as Fiserv Inc.)
| | | Employee Resource Teams – We want participation in our Employee Resource Teams to elevate their members personally and professionally, and we want their work to advance our business, impact our communities and foster a strong culture. | |
Steven Scheiwe | BACKGROUND• | Age 60
Independent Director Since 2012
Committees
Audit & Risk
NCG
| ‘
Mr. Scheiwe has been President of Ontrac Advisors, Inc., a privately-held company which offers analysis and management services to private equity groups, privately held companies and funds managing distressed corporate debt issues, since 2001. Mr. Scheiwe has also served on the boards of directors of several public and privately-held companies in the last ten years.
QUALIFICATIONS
Mr. Scheiwe’s high level of financial literacy, broad experience serving as a board member of public and private companies, his experience in mergers, acquisitions and financing, his legal acumen and his experience serving on audit committees qualify him to serve as a Mr. Cooper Group director.
OTHER PUBLIC COMPANY BOARDS
| Current
None
| Past Five Years
Alimco Financial Corporation
Hancock Fabrics, Inc.
Verso Corporation
| | | Data Transparency – We believe in promoting visibility and providing accountability when it comes to DEI and will continue to invest in more reporting and greater transparency. | |
| • | | Targeted Education – We know education is key to leading inclusively and equitably, and we will continue to offer robust learning opportunities available to everyone in the organization. | |
33
27 | • | | Community Impact – We will continue partnering with our communities through outreach efforts, volunteerism, government sponsored initiatives and supplier diversity programs, to keep the dream of homeownership alive. | |
As part of our Diversity, Equity and Inclusion support, in 2023, we also created a supplier diversity program, including launching a supplier diversity web portal to ensure we maintain a robust and diverse vendor pipeline as part of our procurement efforts. We recognize supplier diversity as a business strategy that strengthens the local, national and broader global community while generating economic opportunity for disadvantaged communities. We appreciate the strategic benefits and value derived from robust supplier diversity initiatives and commit to their continuous improvement. In Our Communities Alongside government and non-profit housing organizations, in 2023, we regularly partnered with local communities to connect with homeowners to assist with their housing questions and provide helpful resources. We also encourage team members to volunteer their time and efforts to support their local communities through Company initiatives. As the country’s largest servicer, we are committed to working alongside other industry leaders to ensure we keep the dream of homeownership alive. We have continued to play an active role in industry and housing policy conversations focused on supporting homeowners as the country has come out of the COVID-19 pandemic. We are proud to participate in the U.S. Department of the Treasury Homeowner Assistance Fund (“HAF”) Program, which was designed to prevent mortgage delinquencies and defaults, foreclosures, loss of utilities or home energy services, and displacement of homeowners experiencing financial hardship after January 21, 2020. Through the HAF Program, in 2023, we helped approximately 22,000 customers get access to more than $360 million in funds. We are also a premier sponsor of our local United Way and Habitat for Humanity events. We also encourage team members to volunteer with the non-profit organization of their choice by providing all team members paid time off each year for volunteer activities. In 2023, our team came together to participate in about 90 volunteer events totaling more than 6,700 volunteer hours. Information Security Cyber Risk Management and Strategy Our cyber risk management and strategy has been incorporated into our compliance and risk management program across a number of verticals. For example, information security risk assessments are performed across our business processes, including, but not limited to, third-party services, vendors and systems that process sensitive data. We undergo external annual penetration assessments to evaluate susceptibility to attack, for example, through social engineering, application websites and system/network vulnerabilities. We aim to continuously evolve our information security program in response to the ever-changing landscape of best practices, industry-specific risks, company-specific risks, and potential threats. This evolution is also driven by validation tests in an effort to ensure our program remains robust and effective. In the wake of the October 2023 cybersecurity incident, we prioritized implementation of enhanced safeguards consistent with our incident response process and further fortifying our commitment to information security. We also have a process to evaluate third-party providers, which is designed to understand the potential risks and impact of threats to our supply chains as well as potential privacy risks associated with external data management. This process has multiple components and is designed to assess our providers performance across several domains, including data security, asset management, communications and operations management, access control, business continuity management, financial, and legal compliance. Considering the complexity and evolving nature of cybersecurity threats, we engage with a range of external experts, including cybersecurity assessors, consultants, and auditors, in evaluating and testing our risk management systems. These engagements allow us to leverage specialized knowledge and insights, including leading industry practices, to better inform our cybersecurity strategies and processes. Our collaboration with these third parties includes audits, threat assessments, and consultations to enhance our security measures. In addition, we undergo several compliance audits annually, which include a SOX compliance audit, and a SOC1 audit. Our approach to managing compliance-related risks includes maintaining a data loss prevention program, centralized compliance management, an identity management platform, ongoing Managed Security monitoring, threat and vulnerability monitoring, and information security risk insurance. 34
Governance Related to Cybersecurity Risks Our Board conducts several reviews throughout the year in an effort to ensure that our cyber strategy and risk management is appropriate and prudent. It is the responsibility of the Board to understand and oversee our strategic plans, the associated risks, and the steps that our senior management team is taking to manage and mitigate those risks. Principle responsibility in this domain is shared by our Chief Risk and Compliance Officer, who has approximately 20 years of leadership experience in the financial services sector with an extensive background in the mortgage industry, and our Chief Information Officer, who has approximately 20 years of experience leading technology and product engineering functions. Our Enterprise Risk Committee reviews and discusses cybersecurity, information security and data privacy risks at regular intervals. A quarterly Enterprise Risk Committee meeting is chaired by our Chief Risk and Compliance Officer and includes information security briefings led by the Chief Information Security Officer. We also hold quarterly Audit and Risk Committee meetings, during which our Board receives briefings on information security matters. Risks that are identified during these processes are reviewed by executive leadership and corrective action plans are established to address and manage the issues, as applicable and appropriate. We believe in a proactive approach to enterprise risk management. A major tenet of our cybersecurity program includes training to educate and inform team members on cyber hygiene and threat management as well as regular testing to check for understanding. We have invested in technology and dedicated internal resources to facilitate training for application developers, conduct tabletop exercises, run anti-phishing campaigns, and train on privacy regulations. These training activities, along with other key risk indicators, are tracked and reported to our Enterprise Risk Committee on a quarterly basis. 35
EXECUTIVE OFFICERS The following summarizes the business experience of our current executive officers other than Mr. Bray: | Eldridge Burns | BACKGROUND | Age 52
Michael Weinbach 
President Age: 50 | | Mr. Weinbach has more than 25 years in the financial services industry, with extensive experience in the mortgage industry. | | Professional Experience | | • Company’s President since February 2024 o Executive Vice President from January 2024 to February 2024 • Advisor for MSW Advisors and McKinsey & Company from October 2022 to December 2023 • CEO of Consumer Lending for Wells Fargo & Company from April 2020 to September 2022 o Member of the firm’s Operating Committee, responsible for leading more than 40,000 team members focused on credit cards, merchant services and home, auto, student and personal lending • CEO of Chase Home Lending for JPMorgan Chase from November 2003 to April 2020 • Prior leadership roles in consumer and business banking, mortgage servicing and auto finance, with oversight of sales, finance and operations |
| | | Kurt Johnson 
Executive Vice President &
Chief LegalFinancial Officer Age: 54 | | Mr. Johnson has more than 25 years of experience in the mortgage-banking industry. | | Mr. Burns has served as theProfessional Experience
| | • Company’s Executive Vice President & Chief LegalFinancial Officer since August 2020. Prior to joining the Company, he served as General Counsel of Topgolf International, Inc. from 2016 to August 2020. Previously, Mr. Burns served as Chief Legal Officer & General Counsel of Santander Consumer USA Inc. for more than ten years and asMarch 2023 o Executive Vice President & Chief Risk and Compliance Officer from April 2021 to March 2023 o Executive Vice President & Chief Credit and Risk Officer from February 2021 to April 2021 o Senior Corporate CounselVice President & Chief Credit Officer of Nationstar Mortgage LLC from July 2019 to February 2021 o Senior Vice President of Nationstar Mortgage LLC from November 2015 to July 2019 ◾ Led Project Titan, the Company’s initiative to enhance servicing technology • Senior leadership positions at OneWest Bank for Blockbuster, Inc.six years • Assisted FDIC in developing a streamline modification program--the template for nine years. Prior to joining Blockbuster, Mr. Burns was an associate at Vinson & Elkins LLP.the Home Affordable Modification Program (HAMP) |
36
| | | Carlos Pelayo INDUSTRY EXPERIENCE
Executive Vice President & Chief Legal Officer Age: 55 | | Mr. BurnsPelayo has more than 2520 years of experience in the legal field, and has extensive experience in financial services, regulatory compliance, litigation, capital markets as well as mergers and acquisitionstransactional work. |
Anthony Ebers | BACKGROUND | Age 55
Executive Vice President &
Chief Operating Officer
| Mr. Ebers has served as theProfessional Experience
| | • Company’s Executive Vice President & Chief OperatingLegal Officer since July 31, 2018. He has heldFebruary 2023 • Managing Director and Legal Executive for Merrill Lynch Wealth Management, a division of Bank of America, from December 2014 to February 2023 • Managing Director and General Counsel for Barclays’ investment-driven private banking business in the same position at Nationstar and Nationstar Mortgage LLC since April 2018, priorAmericas from May 2007 to which he served as Nationstar’s and Nationstar Mortgage LLC’s ExecutiveDecember 2014 • Senior Vice President, Originations from July 2015Legal for Lehman Brothers (prior to April 2018. Prior to joining the Company, Mr. Ebers served as the Division President, Originations for ServiceLink, a Black Knight company and national provider of transaction services to the mortgage and finance industries, from April 2015 to July 2015. From March 2009 to April 2015 Mr. Ebers held various leadership roles at OneWest Bank, most recently serving as EVP, Head of Mortgage Lending and Servicing. Prior to OneWest Bank, Mr. Ebers held various executive leadership roles at IndyMac Bancorp Inc. INDUSTRY EXPERIENCE
Mr. Ebers has held key leadership positions in mortgage lending, servicing and real estate transaction related services for more than 25 years. Additionally, throughout his career, Mr. Ebers has been a member of the Mortgage Bankers Association (MBA) Servicing Committee and served on multiple industry advisory boards.
|
Christopher Marshall | BACKGROUND | Age 61
Vice Chairman &
Chief Financial Officer
| Mr. Marshall has served as the Company’s Vice Chairman since January 2019 and as Chief Financial Officer since March 11, 2019. Prior to joining the Company, he served as Executive Chairman at Tax Guard Inc., which is the leading provider of federal tax payment data to banks and specialty lenders, prior to which he served as Co-Founder and Executive Vice President & Chief Financial Officer at Capital Bank Financial Corp. from October 2009 until its acquisition by First Horizon National Capital Corporation in December 2017. Previously, Mr. Marshall served as Chief Restructuring Officer of GMAC, Inc., now Ally Financial, Inc.,Barclays)
• Senior Associate for Davis Polk & Wardwell LLP from 2001 to May 2009 to October 2009; as an advisor to The Blackstone Group, L.P. from July 2008 to March 2009; and as Executive Vice President & Chief Financial Officer of Fifth Third Bancorp from 2006 to 2008. Prior to joining Fifth Third Bancorp, Mr. Marshall held several senior executive roles at Bank of America Corporation, including serving as Chief Financial Officer and Chief Operating Officer of the Global Consumer and Small Business Bank and was a member of that firm’s management operating committee. He also served in various senior-leadership roles at Honeywell International Inc., AlliedSignal Technical Services Corporation and TRW, Inc.2007 INDUSTRY EXPERIENCE
Mr. Marshall has held key leadership positions in the banking and finance industry• Judicial Law Clerk for the past 20 years.Honorable Jan E. Dubois, United States Judge for the Eastern District of Pennsylvania from 1999 to 2000
|
| Michael Rawls | BACKGROUND | Age 51
Michael Rawls 
Chief Executive Officer – Xome Age: 54 | | Mr. Rawls has served as Chief Executive Officer of the Company’s indirect wholly-owned subsidiary Xome Holdings LLC since January 2020. He served as the Company’s Executive Vice President, Servicing from July 2018 to January 2020, and held the same position at Nationstar and Nationstar’s wholly-owned subsidiary, Nationstar Mortgage LLC from June 2015 to January 2020. Prior to such time he served as the President of Champion Mortgage from 2014 to June 2015; as Nationstar’s Executive Vice President, Default from 2013 to 2014; as Nationstar’s Senior Vice President, Loss Mitigation from 2008 to 2013; and has held other key positions since joining Nationstar in 2000. INDUSTRY EXPERIENCE
Mr. Rawls has over 20more than 25 years of expertise in mortgage operations, with a concentrationconcentrating in loss mitigation, foreclosure, bankruptcy and real estate owned portfolios.
| | Professional Experience | | • Chief Executive Officer of Xome Holdings LLC, an indirect wholly-owned subsidiary of the Company since January 2020 • Company’s Executive Vice President, Servicing from July 2018 to January 2020 • Executive Vice President, Servicing of Nationstar and Nationstar Mortgage LLC from June 2015 to January 2020 • President of Champion Mortgage from 2014 to June 2015 • Executive Vice President, Default at Nationstar from 2013 to 2014 • Senior Vice President, Loss Mitigation at Nationstar from 2008 to 2013 • Various key positions at Nationstar from 2000 to 2008 |
37
COMPENSATION DISCUSSION AND ANALYSIS This Compensation Discussion and Analysis (“CD&A”) provides information regarding the executive compensation programs for the individuals that served as our Chief Executive Officer, Chief Financial Officer and our other named executive officers (“NEOs”) in 2023, as set forth below. | | | | | | Name | | Title | | | Jay Bray | | Chairman and Chief Executive Officer | | | Kurt Johnson | | Executive Vice President and Chief Financial Officer | | | Chris Marshall(1) | | Vice Chairman and President | | | Carlos Pelayo | | Executive Vice President and Chief Legal Officer | | | Michael Rawls | | Executive Vice President – CEO Xome | | | Jaime Gow(2) | | Former Executive Vice President and Chief Financial Officer |
This past year was one of unprecedented challenges – a pandemic, an economic crisis and a call for social justice. It was also a year that provided significant economic opportunity for our business.
| | (1) | Mr. Marshall announced his intention to retire in October 2023, and on February 1, 2024, Mike Weinbach became our President. | $307 Million
Net Income
($3.20 per diluted share) | 42.5%
Operating Return on Tangible
Common Equity | +17%
Tangible Book Value
(to $26.27 per share) |
| | (2) | Mr. Gow’s employment as Chief Financial Officer ended on March 6, 2023, and his employment with the Company ended on October 16, 2023. |
We responded to the pandemicThis CD&A provides discussion and navigated unprecedented market volatility, which is a testament to our people, our cultureanalysis of customer advocacy, and our scalable, digital and highly efficient platform. We worked with customers impacted by the pandemic and helped 364,000 homeowners enter into forbearance plans, which are designed to keep them in their homes, and by year-end we helped 186,000 customers exit forbearance and resume their monthly payments. We have an obligation to make a positive impact in our communities and focus on social justice activism through community giving and volunteerism, which we participated in during 2020 and will continue to participate in 2021. We recognize that as a company, we have an impact on the world in which we live and the people we interact with, and we want to ensure we are contributing to progress in diversity and inclusion.
Last year we made a commitment to you, our stockholders, to re-design our executive compensation program to more closely alignframework, including (a) elements of pay, with performance. In 2020,(b) 2023 performance of our NEOs and resulting incentive awards, (c) the re-designedprocess and rationale by which we determined these awards and (d) our compensation governance policies.
Executive Summary Over the course of the past several years, the Compensation Committee, Board and management team have substantially reoriented our compensation program complements our strategy,from a framework that was primarily cash-based and discretionary to a framework that directly aligns compensation with the critical driverachievement of stockholder value. Our strategy also forms the basis for a performance management system which includes how we define and measure success as well as the characteristics of the reward system – how management shares in the wealth they create for investors. As such, we rely heavily on an annual cash-based incentive program tied to our annualwell-defined financial and strategic objectives,goals and we rely on performance-based equity tied to TSR to align the interests of management and stockholders in growing the share price. Corporate Objective and Executive Compensation
Our overall corporate objective is to deliver, at a minimum, a fair return to stockholders that is commensurate with the risk of our business. Our critical measure of success is TSR. Our compensation program for senior executivesincreases equity-based compensation. We believe this better aligns the interests of management with those of stockholders and stockholders in growingprovides the value of our company without taking undo risks. At the same time, we recognize the competitive marketproper incentives for executive talent. Therefore,management to focus on long-term stockholder value. We will continue to ensure our compensation program is designed to balance three, at times competing, objectives – motivate and reward management for creating and executing a strategy that drives TSR, retains our talent and ensures that the cost of the program is reasonable.
meets this primary goal. Our approach is to provide our executives with a competitiveexecutive compensation program that is commensurate with the market for executive talent in our sector, and the size and complexityachieves this primary goal by awarding a substantial majority of our businesses. Our program consists of three components – salary, annual cash incentive and long-term equity. In combination, the three components should hold a significant portion of the total compensation opportunity at risk in that actual compensation earned is tied to achieving annual financial and business objectives and stockholder returns over time. Below are some highlights of our compensation program:
What We Do | | What We Don’t Do | | | | ✓ Align our executive pay with performance
✓ Annual “say on pay” advisory vote
✓ Set multiple challenging performance objectives
✓ Stock ownership guidelines for executive officers and directors
✓ Caps on director equity awards and fees
✓ Independent compensation consultant engaged by the Compensation Committee
✓ Annual review and approval of our compensation strategy
✓ Significant portion of executive compensation at risk based on corporate performance and TSR
✓ Double trigger equity acceleration default provision upon change of control
✓ Minimum equity award vesting periods for time-based restricted stock units
✓ Clawback of equity awards under specified circumstances
| | ✕ Tax gross-ups for change of control benefits
✕ Permit short sales, hedging, or pledging of stock ownership positions
✕ Strict benchmarking of compensation to a specific percentile of our peer group
✕ Excessive perquisites
| | | |
Overview of the 2020 Executive Compensation Program for our CEO, CFO and COO
The compensation program of our senior executive team has three components: salary, annual cash incentive award and performance equity award. Below is the total compensation awarded to our senior executive team for 2020 performance. Approximately 90% of the total compensation is in the form of (a) at-risk cash incentive awards based on both financial performance andvariable performance-based incentives. In making its final compensation decisions for 2023, the execution of strategic objectives and (b) performance-based equity of whichCompensation Committee considered the actual value ranges between 0% and 200% of the target grant based on TSR. The charts below illustrate the total direct compensation for our senior executive team in 2020.
In March 2021, the Committee awarded our senior executive team a special one-time award in recognition of the outstanding performance achieved in 2020following accomplishments during the pandemic. The special awards are over and above the awards that would be paid for the performance achieved in a year like 2020. The special awards are as follows: $2.5 million to our CEO,
Jay Bray; $2.75 million to our CFO, Chris Marshall; and $2.75 million to our COO, Tony Ebers. The award is split equally between cash and performance-based equity for our CEO and is split between $1.25 million in cash and $1.5 million in performance-based equity for our CFO and COO. All the equity awarded to our senior executive team is in the form of performance-based equity as described later in the CD&A.
The purpose of the special one-time award is to recognize two significant achievements during the pastfiscal year:
| 1.● | Outstanding leadership in managing the effects | Generated $654 million pretax income, $660 million of the COVID-19 pandemic in the workplace. We put the safetypretax operating income(1) and health of our employees first and foremost. The senior executive team crafted and executed a plan$500 million net income, equivalent to quickly move over 95% of our employees as practically as possible to work-from-home status within a matter of days. At the same time, the senior executive team was able to keep, and in some cases improve, productivity, maintain an engaged workforce and hold turnover to acceptable levels in the face of significant demand for origination and servicing personnel. We also received re-certification as a Great Place to Work.$7.30 per diluted share. |
| 2.● | Outstanding planning | Generated pretax servicing income of $882 million and executiongrew the servicing portfolio by 14.0% to $992 billion in UPB (4.6 million customers), which was a faster pace than our major peers. |
| ● | | Successfully reduced the number of our strategyservicing calls per loan from 1.6 to manage1.1 year-over-year, as a result of ongoing investments in process improvements. |
| ● | | Originated $12.6 billion in funded volume and generated $99 million in pretax originations income, which compares favorably to consistent quarterly losses for the economic uncertainty caused byoriginations industry throughout 2023, according to the pandemic. The senior executive team delivered truly exceptional financial performanceMortgage Bankers’ Association originations survey. |
| ● | | Achieved a refinance recapture rate of approximately 77% in 2020–actual Adjusted EBTthe Direct-to-Consumer channel that was more than three times the earnings budgetedindustry average. |
| ● | | Increased tangible book value per share(1) by 12%, from $56.72 at year-end 2022 to $63.67 at year-end 2023. |
| ● | | Achieved Great Place to Work certification for the year. We used $400 millionfifth consecutive year and was ranked #15 on the Best Workplaces in cashTexas list and among the Best Workplaces in Financial Services and Insurance by Great Place to redeem our senior notes, while at the same time refinanced the remaining $2.1 billion of senior notes, significantly lowering funding costsWork and improving the Company’s liquidity profile, leaving no maturities until 2027. During 2020, we repurchased 2.6 million shares of our common stock. The senior executive team negotiated additional capacity on our advance facilities and entered into a new financing facility for Ginnie Mae MSRs and advances, reducing the risk of a detrimental liquidity event and ensuring that Mr. Cooper Group would serve as a source of strength in the housing market even in an extremely severe downturn.Fortune. |
Stockholder Feedback38
| ● | | Acquired Home Point Capital, adding its $83 billion servicing portfolio in a transaction which was accretive to tangible book value and which was essentially self-funded through the assumption of $500 million in senior notes. |
| ● | | Acquired Rushmore Servicing and Roosevelt Management Company, enhancing our special servicing capabilities and establishing the foundation to launch our first MSR Fund. |
| ● | | Won a major new subservicing client with a portfolio of approximately $90 billion. |
| ● | | Continued to promote diversity, equity and inclusion through leadership development resulting in women in leadership roles stable at 41% and an increase in BIPOC leadership representation from 38% to 39% year-over-year. |
| ● | | Successfully advanced succession planning, including (a) promoting Kurt Johnson to Chief Financial Officer, (b) ensuring plans were in place when Chris Marshall announced his retirement, including compiling a list of candidates which allowed us to hire Mike Weinbach in early 2024 and (c) entering into employment agreements with both our CEO, Jay Bray, and then President, Chris Marshall. |
| (1) | Annex A includes a discussion and reconciliation of non-GAAP measures to the most directly comparable GAAP measures. |
Under our executive team’s leadership and Last Year’s Sayagainst the backdrop of an evolving mortgage market and interest rate environment, we have meaningfully and consistently outperformed peers over a three- and five-year period through thoughtful strategic decision-making and successful navigation of management transitions. Our operational focus on Pay Vote The re-design of the executive compensation program for 2020 takes into account the feedback we received fromgrowing our stockholdersServicing portfolio through accretive acquisitions and enhancing our capabilities and existing infrastructure, as well as an extensive analysisour continued investments to bolster efficiency and product roll-outs in Originations, has resulted in outsized shareholder returns when benchmarked against broader market constituencies.
| (1) | 1-Year TSR shown represents FY2023. |
| (2) | 3-Year TSR shown represents period from FY2021 – FY2023. |
| (3) | 5-Year TSR shown represents period from FY2019 – FY2023. |
As discussed further below, our Board and Compensation Committee have been actively focused on both short- and long-term succession planning. This culminated with our announcements that we entered into employment agreements with both our CEO, Jay Bray, and then President, Chris Marshall. The Board took these actions because it believes that continuity of leadership is critical to the compensation programs employed bysuccessful execution of our peersstrategy and driving long-term shareholder value. The employment agreement with Mr. Bray incentivizes him through a one-time equity award to both remain with the assistanceCompany and build on our positive momentum, execute on our strategy and unlock our next phase of the Compensation Committee’s independent compensation consultant. We received feedback from stockholders that: (a)growth. 2023 Say-On-Pay Vote and Stockholder Feedback At our compensation structure was too heavily weighted toward cash, (b) we had no performance-based equity and (c) our one-time equity retention bonuses in connection with the Merger and base salary increases were excessive relative to the Company’s weak share price performance. We announced our 2020 compensation program in last year’s proxy statement, and at the 20202023 Annual Meeting of Stockholders, approximately 72%98% of the votes cast on the advisory vote on executive compensationsay-on-pay proposal were voted in favor of our named2022 executive officers’ compensation. Thecompensation program. Following the vote, the Compensation Committee reviewed these results and will continue to review the annual stockholder votesenhance, and engage with stockholders on, our executive compensation programprogram. 39
Outreach to Stockholders Over the last few years, we have embarked on a robust stockholder outreach program. That feedback has served as a key input to compensation design and determine whetherstructural upgrades implemented since 2018. In 2023, we continued to make any changesproactively meet with our stockholders to discuss executive compensation and to provide our investors with an opportunity to provide management and the Compensation Committee with feedback. Our outreach included soliciting ten of our largest investors, representing approximately 50% of our outstanding shares. Three of our largest stockholders, representing approximately 33% of our outstanding shares, accepted our request. Our Compensation Committee Chairman and representatives from our investors relations and corporate governance teams participated in lightthese meetings. During these engagements, we discussed our leadership transition and succession planning efforts for the CEO and President roles, including the related compensation arrangements for Mr. Bray and Mr. Marshall. Stockholders were supportive of the results. Board’s actions, including the decision to enter into an employment agreement and grant Mr. Bray a performance-based one-time equity award to drive continued strong financial performance and to encourage him to remain with Mr. Cooper Group during a critical growth period. Stockholders did not express any concerns with the employment agreement and compensation arrangement with Mr. Marshall following his announcement to retire. Compensation Program Enhancements Throughout our discussions over the last few years, we heard broad support for our ongoing compensation programs, which were further enhanced through investor guidance. Specifically, investors expressed a preference for (a) using relative TSR as a performance metric versus absolute TSR and (b) eliminating the one-year vesting option, which rewards annual versus long-term performance. As a result, our 2023 performance share unit program (a) eliminates the one-year vesting period and provides for a three-year cliff vest and (b) utilizes two evenly weighted key performance metrics: Tangible Book Value and Relative TSR, which is measured against companies of the S&P 1500 Composite Financials index. Additionally, if the Company’s TSR is negative during the performance period, the relative TSR portion of the award is capped at target and can only be adjusted downward. We also heard from many investors a preference for a more quantitative and factor-based approach to setting executive incentive awards based on a broader range of strategic and financial metrics. As a result, in 2022, we re-designed our annual incentive plan framework to place more emphasis on quantitative performance by increasing the financial metrics scorecard weighting. We are committed to maintaining an active dialogue with stockholders to understand their perspectives on our executive compensation program and weprovide transparency into our practices. We plan to continue this dialogue. Stockholdersour outreach activities throughout the year and will continue to modify our compensation programs as necessary to ensure our practices are always welcomealigned with our long-term strategy and optimizing stockholder returns. Corporate Objective and Executive Compensation Our overall corporate objective is to communicate their views as described under “Communicationsdeliver a fair return to stockholders that is commensurate with the Board”risks of our business. We review our compensation programs and related governance provisions and practices to ensure our compensation programs are aligned to the interests of stockholders, provide for appropriate pay for performance alignment, contain risk mitigating features and do not promote unnecessary and excessive risk. For example, as discussed below, the strategic metrics in thisour annual cash incentive plan contain metrics to maintain regulatory compliance and manage risk. Our critical measure of success is stockholder return. Our compensation program for senior executives aligns the interests of management and stockholders in growing the value of our Company while managing risk. At the same time, we recognize the market for executive talent requires competitive remuneration. Our compensation program is designed to balance three objectives: | ● | | Motivate and reward management for creating and executing a strategy that drives stockholder return; |
| ● | | Attract, retain and motivate our executive level talent; and |
| ● | | Manage the cost of the program by aligning compensation with both Company and executive performance. |
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Below are some highlights of our compensation program: | | | | | | | | | What We Do | | | | What We Don’t Do | ✓ Align our executive pay with performance ✓ Annual “say-on-pay” advisory vote ✓ Set multiple challenging performance objectives ✓ Stock ownership guidelines for executive officers and directors ✓ Independent compensation consultant engaged by the Compensation Committee ✓ Annual review and approval of our compensation strategy ✓ Significant portion of executive compensation at risk ✓ Double trigger equity acceleration default provision upon change of control ✓ Minimum equity award vesting periods for time-based restricted stock units ✓ Clawback of incentive compensation under specified circumstances | | | | X Tax gross-ups for change of control benefits X Permit short sales, hedging, or pledging of stock ownership positions X Strict benchmarking of compensation to a specific percentile of our peer group X Excessive perquisites |
Overview of the 2023 Executive Compensation Program for our NEOs The compensation program for our NEOs has three components: base salary, annual cash incentive awards and equity awards (both time and performance-based). On average, approximately 80% of the NEOs’ target total compensation is in the form of variable awards, with the award value based on financial performance and the execution of strategic objectives. The chart below illustrates the principal pay elements of our compensation program and the rationale for their use. | | | | | | | | | | | | | | | | | | | | | | | | Long-term Equity Incentive Awards | | | | | | | | | Base Salary | | | | Annual Cash Incentive | | PSUs(1) | | RSUs(2) | | | | | | | Fixed | | | | Variable Pay (~80%) | | | | | | | Purpose of Pay Element | | ◾ Provide a fixed level of compensation to attract and retain executives | | | | ◾ Provide cash rewards for the attainment of short-term performance objectives ◾ The short-term objectives aim to improve the customer experience, maintain regulatory compliance, manage risk and strengthen employee commitment | | ◾ Holds executives accountable to long-term objectives and ensures their interests align with those of stockholders | | ◾ Retain and reward executives ◾ Align interests of the executives with those of stockholders | | | | | | | Timeframe | | N/A | | | | ◾ Annual | | ◾3-year performance period | | ◾3-year ratable vesting period | | | | | | | Performance Metrics | | N/A | | | | ◾ Metrics differ per executive and includes the ◾ following: o Adjusted EBT o Xome Adjusted EBT o Core functional expense o Strategic objectives | | ◾ Tangible Book Value (50%) ◾ Relative TSR measured against S&P Composite 1500 Financials index (50%) | | N/A |
| (1) | Messrs. Bray and Marshall received performance-based equity in 2023. |
| (2) | All of our NEOs received time-based equity in 2023. |
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2023 Total Target Compensation and Outcomes The Compensation Committee reviewed our target compensation pay levels to assess whether they remain aligned with current strategic and business objectives and best practices within our industry. To maintain competitiveness, and to ensure there is a proper pay-for-performance alignment, the Compensation Committee considered industry prevalent practice, scope of our NEOs’ responsibilities, individual performance, tenure and experience at their respective role, and internal pay equity when identifying target compensation figures. In 2023, the Compensation Committee (a) increased Mr. Johnson’s target total direct compensation in connection with his promotion to Chief Financial Officer in March and (b) as discussed further below, in connection with Mr. Marshall’s upcoming retirement adjusted the mix of Mr. Marshall’s annual cash bonus and equity awards, with a higher emphasis on incentive cash and time-based restricted stock units, to reflect his role and contributions and to incentivize him to remain through the successful transition to his successor. The table below outlines the target total compensation for the 2023 performance year on an annualized basis for each of our NEOs based on our four principal pay elements. The Compensation Committee determined the target total direct compensation, and that of each element, at the beginning of 2023. | | | | | | | | | | | | | | | | | | Executive | | | | Base Salary | | | | Target Annual EMIP | | | | Target Long-Term
Incentive (1) | | | | Target Total Direct
Compensation | | | | | | | | | | Jay Bray | | | | $1,000,000 | | | | $2,500,000 | | | | $7,250,000 | | | | $10,750,000 | | | | | | | | | | Kurt Johnson | | | | $ 500,000 | | | | $ 750,000 | | | | $ 750,000 | | | | $ 2,000,000 | | | | | | | | | | Chris Marshall | | | | $ 750,000 | | | | $2,875,000(2) | | | | $2,875,000(2) | | | | $ 6,500,000 | | | | | | | | | | Carlos Pelayo | | | | $ 430,000 | | | | $ 387,000 | | | | $ 387,000 | | | | $ 1,204,000 | | | | | | | | | | Michael Rawls | | | | $ 450,000 | | | | $1,080,000 | | | | $ 750,000 | | | | $ 2,280,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | Jaime Gow(3) | | | | $ 400,000 | | | | $ 360,000 | | | | $ 360,000 | | | | $ 1,120,000 |
| (1) | In 2023, Messrs. Bray and Marshall received performance-based equity awards. Each of our NEOs received time-based equity awards. |
| (2) | Target annual EMIP and target long-term incentive values are split 50/50 per Mr. Marshall’s Employment and Transition Agreement, as discussed below. |
| (3) | Mr. Gow’s final compensation was determined pursuant to his Transition and Separation Agreement as described below. |
At the conclusion of 2023, based on Company and individual performance, the annual EMIP payouts and the long-term incentive award grant values were determined. The long-term incentive awards were granted in March 2024, in recognition of 2023 performance, and will be included in next year’s proxy statement. The following table summarizes the pay components for the 2023 performance year for each NEO. The equity-based awards for the 2023 performance year will differ from the Summary Compensation Table below, which under SEC rules will show the equity-based award in the year in which they were granted. Therefore, the equity-based awards for the 2023 performance year will be reported in the Summary Compensation Table for 2024. The total compensation amount for Mr. Bray does not include the value driver award described below. | | | | | | | | | | | | Executive | | Base Salary ($) | | Annual Cash Incentive ($) | | RSUs ($) | | PSUs ($) | | Total Compensation ($) | | | | | | | Jay Bray | | 1,000,000 | | 4,625,000 | | 3,625,000 | | 3,625,000 | | 12,875,000 | | | | | | | Kurt Johnson | | 500,000 | | 1,230,000 | | 750,000 | | 750,000 | | 3,230,000 | | | | | | | Chris Marshall | | 750,000 | | 3,512,000 | | 2,107,500 | | 1,405,000 | | 7,774,500 | | | | | | | Carlos Pelayo | | 430,000 | | 553,656 | | 387,000 | | — | | 1,370,656 | | | | | | | Michael Rawls | | 450,000 | | 1,026,000 | | 850,000 | | — | | 2,326,000 |
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The graphs below outline our NEOs’ 2023 target pay mix: | | | | | | | | CEO Target Mix of Pay | | Average NEO Target Mix of Pay | | | | | | | |  | |  | | | | |
Base Salary The Compensation Committee sets base salaries considering the scope of each NEO’s responsibilities and market data on compensation levels necessary to recruit and retain executives with the appropriate skills and experience. The Compensation Committee reviews base salaries annually in connection with its performance evaluation process and adjusts salaries periodically based on the individual performance of each NEO and the overall performance of the Company. Periodic base salary adjustments are intended to ensure that the individual’s overall compensation remains competitive for the position and responsibilities. In determining base salary for our NEOs for 2023, the Compensation Committee considered the base salaries of our peer group and determined that no increase to base salary was appropriate for our NEOs at this time, except for Mr. Johnson, who received an increase in base salary to align him to market as a result of his promotion to Chief Financial Officer in March. Base Salary | | | | | | | | Executive | | 2022 | | 2023 | | % Increase | | | | | Jay Bray | | $1,000,000 | | $1,000,000 | | 0% | | | | | Kurt Johnson | | $ 400,000 | | $ 500,000 | | 25% | | | | | Chris Marshall | | $ 750,000 | | $ 750,000 | | 0% | | | | | Carlos Pelayo | | N/A | | $ 430,000 | | — | | | | | Michael Rawls | | $ 450,000 | | $ 450,000 | | 0% | | | | | Jaime Gow | | $ 400,000 | | $ 400,000 | | 0% |
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Executive Management Incentive Plan Awards Each of our NEOs participates in the Executive Management Incentive Program (EMIP), a formulaic annual cash incentive program intended to reward strong individual performance and the Company’s overall achievement of financial and strategic goals. For 2023, each of our NEOs was eligible to earn the following percentage of his respective base salary, with defined Threshold and Maximum performance receiving a 50% and 200% multiple of target payout respectively (with intermediate performance linearly interpolated): | | | | | | | | | | Executive | | EMIP Target % of Base Salary | |
| | EMIP Target Amount | |
| | | | | | Jay Bray | | 250% | | | | $2,500,000 | | | | | | | | Kurt Johnson | | 150% | | | | $ 750,000 | | | | | | | | Chris Marshall | | 200% | | | | $2,875,000(1) | | | | | | | | Carlos Pelayo | | 90% | | | | $ 387,000 | | | | | | | | Michael Rawls | | 240% | | | | $1,080,000 | | |
| (1) | Target annual EMIP and target long-term incentive values are split 50/50 upon payout per Mr. Marshall’s Employment and Transition Agreement, as discussed below. |
Goal Setting Process Financial and strategic objectives, which are used to determine incentive compensation, are set by the Compensation Committee at the beginning of the year based on a robust budgeting and planning process with the full Board. As part of this process, we use quantitative scorecards with metrics tailored for each NEO’s areas of responsibility. Targets are set based on internal financial and operating plans for the year as well as external market factors. In 2023, financial performance weighting of the scorecard was 70% and the remaining 30% was based on achievement of strategic objectives. Throughout the year, the Compensation Committee, along with management and the Board, reviews progress against these objectives on at least a quarterly basis to ensure progress against the Company’s goals and alignment around the implications on incentive compensation at year-end. The determination of year-end incentive compensation is based primarily on performance against these financial and strategic objectives set at the beginning of the year, based on identifiable and quantifiable measures deemed appropriate to measure progress. In determining appropriate awards for each NEO, the Compensation Committee may use its discretion to adjust the amount of any award based on a participant’s individual performance or other factors that the Compensation Committee deems relevant. During 2023, the Compensation Committee set a rigorous financial target for Adjusted EBT of $350 million, which was approximately $100 million above actual Adjusted EBT for FY 2022. Additionally, for 2023, the Compensation Committee removed the Tangible Book Value per share financial metric because it is a key financial measure used in our redesigned PSU program for 2023. In addition, the Compensation Committee evaluated the Company’s response to the previously disclosed cyber incident that occurred in the fourth quarter of 2023. The Compensation Committee considered the Company’s swift response, transparent communications and customer-centric approach in navigating this event when determining annual bonus payouts. Further, the Adjusted EBT performance achievement noted below includes business disruption expenses incurred and lost revenues as a result of the cyber incident. 44
Financial Objectives Financial metrics, weightings and results, which represented 70% of the 2023 scorecard, are presented in the tables below. | | | | | | | | | | | | | | | | Performance Metric | | Performance Target and Payout | | Performance
Achievement | | Performance
Payout | | Threshold 50% | | Target 100% | | Maximum 200% | Adjusted EBT(1) | | $245M | | $350M | | $437.5M | | $660M | | 200% | Xome Adjusted EBT(2) | | $21M | | $30M | | $37.5M | | $(0.22M) | | 0% | Corp. Finance Functional Expense | | ($28.19M) | | ($26.85M) | | ($20.13M) | | ($26.85M) | | 100% | Legal Functional Expense | | ($33.28M) | | ($31.70M) | | ($23.77M) | | ($30.82M) | | 111.1% |
| (1) | Adjusted EBT is a non-GAAP measure that begins with the GAAP pre-tax income of the total Company and excludes non-GAAP adjustment items. |
| (2) | Adjusted Xome EBT is a non-GAAP measure that begins with the GAAP pre-tax income of Xome and excludes non-GAAP adjustment items. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Performance
Payout | | | | Named Executive Officer Weighting | | Performance Metric | | | | Bray | | | | Marshall | | | | Johnson | | | | Pelayo | | | | Rawls | | | | | | | | | | | | | Adjusted EBT | | 200% | | | | 100% | | | | 100% | | | | 70% | | | | 70% | | | | 25% | | | | | | | | | | | | | Xome Adjusted EBT | | 0% | | | | | | | | | | | | | | | | | | | | 75% | | | | | | | | | | | | | Corp. Finance Functional Expense | | 100% | | | | | | | | | | | | 30% | | | | | | | | | | | | | | | | | | | | | Legal Functional Expense | | 111.1% | | | | | | | | | | | | | | | | 30% | | | | | | | | | | | | | | | | | Weighted Payout | | | | | | 200% | | | | 200% | | | | 170% | | | | 173.3% | | | | 50% | | | | | | | | | | | | | Financial Performance Weighting (as a % of overall EMIP) | | | | | | 70% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Financial Performance Payout | | | | | | 140% | | | | 140% | | | | 119% | | | | 121.3% | | | | 35% |
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Strategic Objectives The 2023 strategic metrics, representing 30% of the 2023 scorecard, were developed at the start of the year in conjunction with the Company’s annual strategic planning process, and are presented in the table below, as is a summary of the year’s results relative to these metrics. | | | | | | | | | | | | | | | Scorecard Category | | | | Measurements | | | | Overall Result | Employee Engagement Further Enhance Company Culture with Focus on Long-Term Inspired People Strategy | | | | Recertify as a Great Place to Work Increase diversity and inclusion GPTW score Decrease annual voluntary & regrettable turnover rate Enhanced DEI reporting and disclosures | | | | • Recertified as a Great Place to Work (GPTW). • GPTW Diversity & Inclusion scores were higher year-over-year. • Annual voluntary turnover decreased 40% year-over-year. • Xome voluntary turnover decreased 52% year-over-year despite market pressure. • Annual regrettable voluntary turnover decreased 35% year-over-year. • All Executive Vice Presidents were provided with detailed annual reporting covering promotions, hiring, and compensation. | Customer Drive More Customer Loyalty with More Intuitive and Easy-To-Use Solutions | | | | Recapture scores Net Promotor Scores Lower time to close through technology driven enhancements Improved self-service offerings | | | | • Refinance and purchase recapture scores were the highest in the Company’s history and were 4X compared to competitors with respect to refinance recapture. • Customer experience as measured by Net Promoter Score for and SQM scores for Servicing were in line with 2022. • The Lock-to-Fund rate improved by 5 days in 2023. • Enhancements to the IVR and Chat enabled more self-service options decreasing call volume by 20% despite an increase in portfolio size. | Long-Term Strategy Perfecting the Platform | | | | Establish MSR fund and launch fundraising efforts in second half of 2023 Develop and execute on a purchase strategy by year end Grow the portfolio towards goal of $1T in UPB by capitalizing on opportunities to acquire customers in bulk and through subservicing Make strategic investments in the servicing platform that will drive additional efficiencies | | | | • Successfully launched MSR fund and began fundraising. • Developed a sales modernization strategy with technology investments for cost reduction, scalability, and improved customer satisfaction planned for 2024. • Servicing exceeded $1T goal in Q1’24. • Servicing drove down the cost of service as compared to competitors (33% lower in cost compared to large bank competitors and 50% lower cost than med/small banks). • Xome’s automated valuation model is on par with, or exceeding, valuations offered by competitors, as measured by a third party. • Xome’s auction site average monthly unique visitors increased by 165% versus a goal of 30%. | Compliance Federal and State Regulatory Compliance Exam Issue Resolution | | | | No material or pattern of repeat findings and exam issues resolved at >= 85% validation rate performed by Internal Audit | | | | • 100% validation rate. • All state/federal exams received a rating of “1” or “2” (on a 5-point scale). | Governance Ready the Organization for Long-Term Success Through Succession Planning | | | | Continuously build and modify long-term succession plans for key roles across the organization including the CEO, CFO, COO | | | | • Successfully recruited and hired new President. Onboarded January 2024. • Entered into retention agreement with CEO. • Promoted Kurt Johnson to CFO and successfully recruited and hired Chief Risk & Compliance Officer |
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The Compensation Committee evaluated results against our strategic objectives and awarded a weighted strategic score of 150% and a strategic performance payout of 45% for all NEOs except Mr. Rawls, who received a weighted score of 200% and payout of 60% due to his exceptional performance leading Xome. The financial target for Xome was not achieved due to external factors, specifically an extremely low level of foreclosure sales driven by significant home price appreciation during the pandemic and new government programs following the pandemic that provide generous modification options to delinquent borrowers. Nonetheless, Mr. Rawls led Xome to a break-even performance with a 57% increase in sales powered by significant market share gains, and he far exceeded in the strategic measures noted above. Approved Annual Bonus Payouts At its February 2024 meeting, the Compensation Committee approved annual bonus payouts for the NEOs based on the scorecards and payout scale as shown in the table below. The Calculated EMIP Payout amounts below reflect the results of applying the quantitative payout percentages described above to the executives’ incentive targets according to the compensation scorecards. | | | | | | | | | | | | | | | | | | | | | | | Executive(1) | | Base Salary | | EMIP Target
% of Base Salary | | EMIP Target
Monetary Amount | | Financial
Performance
Score (% of
Target) | | Strategic
Score (%
of Target) | | Total EMIP
Score (% of Target) | | Final Payment | | | | | | | | | Jay Bray | | $1,000,000 | | 250% | | $2,500,000 | | 140% | | 45% | | 185% | | $4,625,000 | | | | | | | | | Kurt Johnson | | $ 500,000 | | 150% | | $ 750,000 | | 119% | | 45% | | 164% | | $1,230,000 | | | | | | | | | Chris Marshall(2) | | $ 750,000 | | 200% | | $2,875,000 | | 140% | | 45% | | 185% | | $3,512,000 | | | | | | | | | Carlos Pelayo | | $ 430,000 | | 90% | | $ 387,000 | | 121.3% | | 45% | | 166% | | $ 553,656 | | | | | | | | | Michael Rawls | | $ 450,000 | | 240% | | $1,080,000 | | 35% | | 60% | | 95% | | $1,026,000 |
| (1) | Mr. Gow received a target bonus award pursuant to his Transition and Separation Agreement as described below. |
| (2) | Under Mr. Marshall’s Employment and Transition Agreement, as described below, his total target direct compensation remained the same, however, the mix of cash and equity, and the form of equity, has changed. As a result, he received 185% of the original target EMIP (200% of base salary target, or $1,500,000), total incentive compensation ($7,025,000 = Actual EMIP of $2,775,000 + Target LTI of $4,250,000) is then divided equally between cash and stock (60% time vested and 40% performance vested awards). |
Long-Term Incentive Awards Incentive Plan The Compensation Committee grants equity awards, both time-based awards, in the form of Restricted Stock Units (“RSUs”) and performance-based awards, in the form of Performance Stock Units (“PSUs”), at the beginning of a fiscal year based on each executive’s contributions to our achievements throughout the prior year. Therefore the 2023 equity awards detailed below are in recognition of the 2022 performance year and do not directly align to the 2023 target long-term incentive values described above. Our performance-based awards are further aligned to our long-term performance through forward-looking performance goals that incentivize our senior executives to deliver accretive value to stockholders over the length of the performance period. Messrs. Bray and Marshall received 50% performance-based equity awards and 50% time-based equity awards. Messrs. Johnson, Pelayo and Rawls each received time-based equity awards. New PSU Plan Design for 2023 In March 2023, our Compensation Committee redesigned our PSU program to (a) eliminate the one-year vesting period and provide for a three-year performance period and cliff vest and (b) utilize two evenly weighted key performance metrics: Tangible Book Value and Relative TSR, which is measured against companies of the S&P Composite 1500 Financials index. TBV per share is a key financial measure for which we provide guidance and is useful to investors because it provides an estimate of realizable value of stockholder returns, excluding the impact of goodwill and intangible assets, over the long term. 47
The Compensation Committee’s decision to increase the vesting period from one year to three years and to change the PSU targets to Tangible Book Value and Relative TSR is intended to better align management’s incentives with long-term value creation, while enhancing retentive features and narrowing performance factors to elements that are more in management’s control given the volatility of macroeconomic factors impacting the mortgage market. Additionally, if the Company’s TSR is negative during the performance period, the relative TSR portion of the award is capped at target and can only be adjusted downward. Each PSU granted entitles the participant to receive one share of common stock upon settlement. | | | | | | | | | | | | | | | 2023 – 2025 LTI Award Design(1) | | | | | | Annualized Tangible Book Value Growth | | Relative TSR(2) | Weighting | | | | 50% | | 50% | | | | | Performance Targets | | | | | Threshold | | | | 5.0% | | 25th Percentile | Target | | | | 8.0% | | 51st Percentile | Maximum | | | | 12.0% | | 75th Percentile | | | | | Payout Percentages | | | | Shares awarded as a percent of Target shares | Below Threshold | | | | 0% | | 0% | Threshold | | | | 50% | | 50% | Target | | | | 100% | | 100% | Maximum | | | | 200% | | 200% |
| (1) | Intermediate performance will be linearly interpolated. |
| (2) | If Mr. Cooper’s TSR performance is negative over the three-year performance period, the maximum payout for the relative TSR portion of the award is 100%. |
2023 PSU Awards In March 2023, the Compensation Committee awarded PSUs to the senior executive team as follows, in recognition of 2022 performance. While the target number of PSUs are determined based on prior year performance, these vehicles contain forward looking performance criteria to further incentivize our executives to execute on our strategy and create value for stockholders. | | | Executive | | Value of PSUs | | | Jay Bray | | $3,625,000 | | | Chris Marshall | | $2,125,000 |
2021 PSUs: Final Performance Cycle Results After the initial performance period in March 2022, one-year TSR was 53.44%, and participants received 200% of target shares as follows: Mr. Bray: 84,330 vested shares and Mr. Marshall: 44,384 vested shares. At the end of the third-year performance period, the PSU grant was evaluated against three-year TSR, which was 136.88%, resulting in vesting of 200% of target shares. The number of shares that vested at the end of the initial period was deducted from the number of shares that vested at the end of the third-year period, resulting in the following awards: | | | Executive | | PSUs Vested | | | Jay Bray | | 168,666 | | | Chris Marshall | | 88,772 |
RSUs: The Compensation Committee grants time-based awards of RSUs to reward our executives for the contributions to our achievements throughout the year, to retain key talent and to align the interest of executives with our stockholders through stock ownership. Each RSU is equivalent in value to one share of our common stock and generally vests in one-third installments on each of the first three anniversaries of the award, provided the participant remains continuously employed with the Company during that time. In addition, upon death, disability 48
or a change-in-control of the Company and subsequent qualified termination within a specified window, unvested RSUs will vest. We believe that time-based vesting requirements provide an effective retention mechanism that complements other aspects of our compensation framework. Since the ultimate value of these awards depends on the market value of our common stock on the vesting date, time-based equity awards also serve to effectively align the interests of the participants with our stockholders. 2023 RSU Awards In February 2023, taking in to account our overall performance as well as the contributions of these executives during 2022, the Compensation Committee awarded RSUs as follows: | | | Executive | | Value of RSUs | | | Jay Bray | | $3,625,000 | | | Chris Marshall | | $2,125,000 | | | Kurt Johnson | | $ 600,000 | | | Carlos Pelayo | | $ 387,000 | | | Michael Rawls | | $ 850,000 | | | | | | Jaime Gow | | $ 360,000 |
Employment Agreements with our CEO and our Vice Chairman Our Board and Compensation Committee have been actively focused on both short- and long-term succession planning. One year ago, the Board set a strategic goal for management to make progress toward a long-term succession program for members of senior management, particularly given the likely near-term retirement of Chris Marshall. In response, we took actions in the latter part of 2023 to support management transitions and succession over the long term. This culminated with our announcements that we entered into employment agreements with both our CEO, Jay Bray, and then President, Chris Marshall. In October 2023, we announced the intention of Mr. Marshall to retire by year-end 2024. In the interest of ensuring a smooth and orderly transition to a successor, we entered into an employment and transition agreement with Mr. Marshall that covers his employment and compensation through the end of 2024. Under his employment agreement, Mr. Marshall’s total target direct compensation remains the same, but the mix of cash and equity, and form of equity, has changed, with a higher emphasis on incentive cash and time-based restricted stock units, to reflect his role and to incentivize him to remain through the transition to his successor. Details of Mr. Marshall’s compensation arrangement are as follows: | | | | | Total Target Incentive(1) | | $5,750,000 | | | Target Annual Incentive | | $2,875,000 | | | Target Long-Term Incentive | | $2,875,000 | | | • 60% in the form of RSUs: $1,725,000 • 40% in the form of PSUs: $1,150,000 | | |
| (1) | At least 50% of Mr. Marshall’s target incentive compensation will be paid in cash for 2023 and 2024. |
We also entered into a five-year employment agreement with our CEO, Jay Bray, to secure his leadership during a critical period of growth opportunity for the Company. Mr. Bray previously did not have an employment agreement and this agreement incentivizes Mr. Bray, including through a one-time equity award, to both remain with the Company and build on our positive momentum, execute on our strategy and unlock our next phase of growth. The agreement also includes a non-compete provision, which was not in place prior to the execution of this agreement. In granting a one-time equity award to Mr. Bray, the Compensation Committee considered the importance of his long-term leadership of the Company and our significant outperformance during his tenure, as well as the importance of his retention amid a highly competitive environment for executive leadership talent. The Compensation Committee recognized that Mr. Bray is now retirement 49
eligible, so his outstanding equity awards and any future awards granted under our normal long-term compensation program would continue to vest on their current schedule in the event he retired, giving them no retentive value. The value driver equity award requires significant value creation and for Mr. Bray to remain with the Company through lengthy vesting dates to earn payout. The award has a strong retention element as it requires Mr. Bray to continue to serve as our CEO or Chairman of the Board to be earned. Details of Mr. Bray’s one-time grant are as follows: | | | | Total Value-Driver Equity Award - $15M | | | | | PSUs - $9M (60%) | | | Number of PSUs earned are based on the following metrics: ● Tangible Book Value (50%) ● rTSR vs. Commercial & Residential Mortgage Finance Peers (50%) The PSUs vest over 3- and 5-year periods: ● 50% measured over 3-years ● 50% measured over 5-years | | Rigorous targets and outperformance required to earn PSUs ● Threshold, target and max hurdles each set significantly higher than respective hurdle in annual LTI plan ● Annualized Tangible Book Value growth target set at 14%; the target goal would represent an increase in Tangible Book Value of nearly $4.0 billion ● Above median relative TSR is required for the target number of rTSR PSUs to vest ● TSR must be positive as of the 3- and 5-year measurement periods for any PSUs of each duration to be earned | | RSUs - $6M (40%) | | | The RSUs will vest over 5 years, with 50% of RSUs vesting 3 years after the date of grant, and 50% 5 years after the date of grant |
This highly performance-based award ensures that Mr. Bray will only earn the full amount of the award if we create significant value for stockholders and Mr. Bray remains with the Company as CEO and/or Chairman through the entire performance and vesting period, which is five years. In selecting the PSU metrics, the Compensation Committee considered Mr. Bray’s current compensation level, similar awards granted within our industry, and the desire to provide for a compensation opportunity that would incentivize Mr. Bray to create significant stockholder value. The Compensation Committee selected the Commercial and Residential Mortgage Finance comparator group (GICS code 40201050) for rTSR because it felt a smaller comparator group with companies more closely aligned to the Company’s business focus and risk profile was more appropriate for the value driver equity award. The PSUs also require absolute stock price growth over the respective performance periods, or they will be forfeited. The Compensation Committee is committed to not granting Mr. Bray any future one-time awards during the five-year term of this award. | | | | | | | | | | | | | | | | Mr. Bray’s Value Driver Equity Award Design(1) | | | | | | Annualized Tangible Book Value Growth | | | | | Relative TSR | | | Weighting | | 50% | | | | | | 50% | | | | | | | | Performance Targets | | | | | | | | | | | | | | | | Threshold | | 10.0% | | | | | | 30th Percentile | | | | | | | | Target | | 14.0% | | | | | | 55th Percentile | | | | | | | | Maximum | | 18.0% | | | | | | 80th Percentile | | | | | | Payout Percentages | | Shares awarded as a percent of Target shares | | | | | | | | Threshold | | 0% | | | | | | 0% | | | | | | | | Target | | 100% | | | | | | 100% | | | | | | | | Maximum | | 200% | | | | | | 200% | | |
| (1) | Intermediate performance will be linearly interpolated. |
50
Process for Setting Executive Officer Compensation Role of Compensation Committee
The Compensation Committee administers our compensation plans, programs and policies relating to our named executive officers.NEOs. The Compensation Committee conducts periodic reviews, at least annually, and monitors our overall compensation strategy to ensure that executive compensation supports our business objectives. ItAs described above, financial and strategic objectives are set at the beginning of each year in conjunction with the Company’s budgeting and strategic planning process and are reviewed throughout the year and for purposes of setting compensation. The Compensation Committee also conducts an annual evaluation of our Chairman, President & Chief Executive Officer’sCEO’s performance. As part of this compensation setting process, the Compensation Committee, with assistance from its compensation advisor, reviews the compensation (includingdata including base salary, annual cash incentives, long-term incentives and other benefits)benefits of similarly-situatedsimilarly situated executive officers in our comparatorpeer group. Role of Named Executive Officers
Other thanNEOs in the Chairman, President & Chief Executive Officer and the Vice Chairman & Chief Financial Officer, our named executive officers do not, either individually or as a group, play a direct role in determining executive compensation. The Chairman, President & Chief Executive Officer advisesCompensation Process Our CEO provides the Compensation Committee from time to time ofwith his own evaluation of the job performance of the other named executive officersNEOs and together with the Vice Chairman & Chief Financial Officer, offers for consideration recommendations as to their compensation levels. The Compensation Committee considers these recommendations but makes all compensation decisions related to our executive officers.officers in its sole discretion. The other NEOs do not play a role in the compensation process. Role of Compensation Advisor
The Under its charter, the Compensation Committee has the authority under its charter, in its sole discretion, to engage the services of a compensation advisor or other advisors to assist the Compensation Committeeit in the performance of its duties. TheDuring 2023, the Compensation Committee retained Gressle & McGinleyKorn Ferry to serve as the Compensation Committee’sits independent compensation advisor on matters related to executive and board of director compensation for 2020.2023. The compensation advisor regularly attended Compensation Committee meetings and reported directly to the Compensation Committee on matters relating toCommittee. During 2023, the compensation of our executive officers and directors. The compensation advisor:
ReviewsReviewed our comparatorpeer group; ConductsConducted an analysis of compensation for our executive officers and directors; AssessesAssessed how compensation aligns with our philosophy and objectives; AssistsAssisted the Compensation Committee in the review of incentive plan design and related benefit programs; and ProvidesProvided the Compensation Committee with ongoing advice and counsel on market compensation and governance trends including their impact on our executive and director compensation programs. The Compensation Committee annually reviews and establishes the scope of the engagement of the compensation advisor, which is reflected in an engagement letter between the compensation advisor and the Compensation Committee.
Compensation Peer Group The Compensation Committee, with assistance from its compensation advisor, annually assesses market conditions through a review of compensation fromlevels within a group of comparatorpeer companies (the Comparator Group). The“Peer Group”), which the Compensation Committee reviewedreviews on an annual basis. In revising its peer group for 2023, the compositionCompensation Committee focused on (a) mortgage originators and mortgage servicers and (b) companies with an emphasis on technology and software capabilities to improve consumer experience that have (i) revenue and assets within a reasonable range of the Comparator Group to be used to calibrate our executive compensation program for 2020Company and did not make any changes from the previous year, except to remove Ellie Mae(ii) healthy financial growth on a one-year and add Rocket Companies, Inc. The Compensation Committee also uses additional peer benchmarking for certain compensation decisions.three-year basis. The Compensation Committee used findings from the compensation review to assess our named executive officers’NEOs’ pay position, our overall program design and program leverage relative to peers. The Compensation Committee does not target any particulara specific range of pay relative to pay of the ComparatorPeer Group. For 2023, our Peer Group was comprised of 12 organizations that consisted of: Mortgage industry-related peers, including loan originators and servicers, whose businesses are similar functionally to the Company’s and direct competitors for business and talent; FinTech organizations, whose focus on technology and innovation is similar to the Company’s focus on technology platforms; 51
Mortgage Real Estate Investment Trusts (“REITs”) including those with mortgage banking operations and/or exposure to mortgage-related fundamentals such as in market rates, home price appreciation and other related macroeconomic factors; and Banks & Specialty Finance who have strong lending and financial services products. | Company Name | Ticker | | | Company Name | Ticker | | Arbor Realty Trust | ABR | | Rocket Companies, Inc.RKT | Black Knight, Inc. | BKI | | Walker & Dunlop | WD | Chimera Investment | CIM | | Altisource Portfolio Solutions S.A. | ASPS | Ladder Capital Corp | LADR | | CoreLogic | CLGX | LendingClub Corporation | LC | | PennyMac Financial Services, Inc. | PFSI | LendingTree | TREE | | Redwood Trust Inc. | RWT | MFA Financial | MFA | | Ocwen | OCN | OneMain Holdings, Inc. | OMF | | Zillow Group | Z | Radian Group | RDN Mortgage Industry-Related Peers | | | |
Elements of our Executive Compensation Program
Our program consists of three principal elements:
Base salary;
Annual cash incentives; and
Long-term incentive awards.
Base Salary
Base salaries are set depending on the scope of each named executive officer’s respective responsibilities and what is necessary to recruit and retain skilled executives. Base salaries are reviewed annually in accordance with our named executive officer’s annual performance evaluation and may be modified from time to time in view of our named executive officer’s individual responsibilities, individual and company performance, and experience. Periodic base salary adjustments are intended to ensure that the individual’s base salary, in conjunction with the other compensation elements, remains competitive for the position and responsibilities.
In determining base salary for our named executive officers for 2020, the Compensation Committee considered our pay-for-performance culture, our philosophy to have low fixed and high performance-based compensation, and the performance of the given named executive officer. The Compensation Committee approved an increase in Mr. Marshall’s base salary based on a peer group analysis and an increase to Mr. Rawls’ base salary in connection with his promotion to CEO of Xome. The following table sets forth information regarding our named executive officers’ annual base salaries for 2020:
| Salary | | Executive | 2019 | 2020 | % Increase | | Jay Bray | $1,000,000 | $1,000,000 | 0% | | Chris Marshall | $700,000 | $750,000(1) | 7% | | Eldridge Burns | N/A | $500,000 | N/A | | Anthony Ebers | $750,000 | $750,000 | 0% | | Michael Rawls | $400,000 | $450,000 | 12.5% |
| (1) | Salary adjusted in March 2020 |
Annual Cash Incentive Awards
The annual bonus opportunity for each named executive officer is linked to achieving financial, operating and strategic objectives of the Company and is equally split between financial performance and qualitative factors that improve the customer experience, maintain regulatory compliance and risk management, strengthen employee commitment and support our analysts and investors. Individual performance and its impact on financial, strategic, business unit or individual objectives may also be considered. The Compensation Committee approves the amount of the annual bonus paid to each named executive officer based on application of any objective or subjective criteria that the Compensation Committee may select at any time prior to payment of the annual bonuses, including the corporate goals discussed below. The Compensation Committee may adjust awards in a non-uniform manner among the participants.
The 2020 corporate goals for our Named Executive Officers included goals related to:
| 1. | Financial Performance (50%) and |
| 2. | Strategic Objectives (50%) |
Financial Performance
Fifty percent of the annual cash incentive awards are based on actual financial performance against budgeted performance. For the CEO, CFO and COO, financial performance is measured by Adjusted Earnings Before Taxes (Adjusted EBT). 2020 results are as follows:
Adjusted EBT(1) | | | Performance: | | | | Target | | $327M | Results | | $1,154M |
| (1) | Adjusted EBT is a non-GAAP measure that begins with the GAAP pre-tax income of the total Company and excludes non-GAAP adjustment items. |
Thirty percent of Mr. Burn’s financial performance metric is based on Adjusted EBT described above and 20% is on Legal Core Functional Expenses. Twenty-five present of Mr. Rawls’ financial performance metric is based on Adjusted EBT and 25% is based on Xome Adjusted EBT. 2020 results for Xome Adjusted EBT and Legal Core Functional Expenses are as follows:
| | Xome Adjusted EBT(1) | Legal Core Functional Expense | | | Performance: | Performance: | | | | | | | Target | | | loanDepot, Inc. | | $57M | $32.3M | ResultsLDI | | $62M | $32.5M |
PennyMac Financial Services, Inc. | (1) | Adjusted Xome EBT is a non-GAAP measure that begins with the GAAP pre-tax income of Xome and excludes non-GAAP adjustment items. |
Strategic Performance
The Compensation Committee believes that our named executive officers’ performance goals should support and help achieve the Company’s strategic objectives. Strategic performance is weighted at 50% of the total payout. In assessing each named executive officer’s individual performance, the named executive officer’s annual performance goals, as well as challenges that the named executive officer faced over the course of the year, are considered. For each of the CEO, CFO and COO, the Compensation Committee does not assign a specific weighting to the strategic initiatives discussed below, and instead performs a holistic review of performance in the aggregate. For Messrs. Rawls and Ebers, the Compensation Committee does assign weightings for strategic initiatives.
Evaluating the CEO’s Strategic Performance
The CEO is responsible for the development and execution of our strategy, which is to improve and ultimately reinvent the customer experience in securing, re-financing and managing a home mortgage. Successful execution of our strategy will enable us to increase the number of customers we serve, grow our operating profits and provide, at a minimum, a fair return to investors. The critical drivers of our strategy are:
• continuous evolution of technology and product organizations to create a seamless and efficient customer experience;
• continuous improvement in the cost structure;
• strengthening the balance sheet through deleveraging and building liquidity;
• diligence in regulatory compliance; and
• sustaining a high-performance culture.
The evaluation of the CEO’s performance as it relates to strategic performance includes the following components:
Board Survey: The Compensation Committee conducts an annual survey to assess the CEO’s performance. The survey was developed from a review of academic and business literature on successful characteristics of CEOs as well as the Compensation Committee’s own knowledge and experience in managing a regulated financial services company. The survey covers six broad topics including:
Strategic Intent – the CEO’s performance in developing and executing a strategy to innovate, grow and create shareholder value and the CEO’s performance in developing the skills, processes, technologies, values and assets required to execute the strategy.
Operational Excellence – the CEO’s performance in developing and executing short- and long-term initiatives to meet the strategic objectives and the CEO’s management of the senior leadership team.
Risk Management – the CEO’s performance in developing effective oversight of business risks facing the Originations and Servicing segments and establishing processes to adequately inform risk management activities.
Leadership – the CEO’s performance in building and maintaining a culture of high performance, effective decision-making processes and succession planning.
Management of Capital Resources and Expenses – the CEO’s performance in meeting expense targets and in effectively deploying capital to provide an adequate return to stockholders.
Management of Key Constituents – effective engagement with other members of the Board and effective management of investors and analysts.
The survey results are shared with the CEO, serving as the basis for a constructive dialogue between the Board and CEO on both strategic and managerial issues. In 2020, the CEO scored above average on all survey components.
CEO Self-Assessment: The CEO reviews his own performance in light of the topics that are covered in the Board Survey.
Strategic Initiatives: The CEO, along with the other named executive officers, is evaluated against specific objectives that are agreed upon at the beginning of each year and described below.
Evaluating Other Named Executive Officers’ Strategic Performance
For each of the named executive officers other than the CEO, the CEO makes recommendations to the Compensation Committee, based on each named executive officer’s annual performance, and the Compensation Committee confirms a payout. At the Compensation Committee’s February 2021 meeting, the CEO evaluated the performance of the other named executive officers and presented the results of those evaluations to the Compensation Committee for consideration. The evaluations included an analysis of the named executives’ performance against their strategic and operational initiatives. The Committee concurred with the CEO’s recommendation for annual bonus payouts for Messrs. Marshall, Ebers, Rawls and Burns. Strategic initiatives for 2020 included the following:
Employee Engagement: (a) 20% weighting on becoming re-certified as a Great Place to Work (GPTW) with a survey target at 65-73% (actual results were re-certification and above target 82% survey results), (b) 20% weighting on GPTW channel survey score with survey target at 68%-73% (actual results were above target 79% survey results), (c) 50% weighting on annual voluntary turnover rate with a target of 17%-19% (actual results ranged between an 18%-20% turnover rate) and (d) 10% weighting on a diversity and inclusion GPTW survey score with survey target of same average score as last year (actual results were above target at improved score by 2 or more points). The Employee Engagement metric is weighted at 20% for Messrs. Burns and Rawls.
Customer: (a) 50% weighting was given to achieving a JD Powers quarterly ratings’ goal for our originations and servicing segments with a target of 2 out of 4 (actual results were Originations at target: 2 out of 4 and Servicing above target: 4 out of 4), (b) 25% of the weighting given for improving our JD Powers annual ratings in our Originations and Servicing segments with a target of improve ranking by 1 (actual results were Originations above target: improve ranking over 3 and Servicing at target: improved ranking by 2) and (c) 25% of the weighting on our digital presence to increase number of digital loans and paperless adoption with a target score of 2 out of 4 (actual results were above target: 4 out of 4). The Customer metric is weighted at 20% for Messrs. Burns and Rawls.
Compliance: (a) 70% weighting was given to federal and state regulatory compliance examination issue resolution with the target of no repeat federal and state regulatory compliance findings and issue resolution at a 85% or greater validation rate by internal audit (actual results were no repeat findings and above target 95% validation rate) and (b) 30% weighting was given to internal audit ratings with a target of no repeat findings and internal audit identified issues resolved at 85% or greater validation rate (actual results were no repeat findings and above target 100% validation rate). The Compliance metric is weighted at 10% for Messrs. Burns and Rawls.
Approved Annual Bonus Payouts
In determining the amount payable to each named executive officer, the Compensation Committee may, in its sole discretion, adjust the amount of any bonus otherwise payable to any participant based on a participant’s individual performance or any other objective or subjective factor that the Compensation Committee deems relevant. Following the completion of 2020, the Compensation Committee considered achievement under the 2020 corporate goals, the Company’s overall performance and the individual performance of each participant. In particular the Compensation Committee considered that the Company:
| ü | generated $307 million in net income, or $3.20 per diluted share |
| ü | increased stock price by 150% and generated an incremental $1.6 billion in shareholder value |
| ü | produced an operating return on tangible common equity of 42.5%, and grew tangible book value by 17% to $26.27 per share |
| ü | moved more than 95% of team members to work-from-home status within a matter of days |
| ü | retained cash, bolstered liquidity, and negotiated additional capacity on advance and warehouse lines |
| ü | helped 364,000 homeowners enter into forbearance plans and helped 186,000 exit forbearance and resume their monthly payments |
| ü | created digital self-service tools, rolled out within weeks of the pandemic, that provided a streamlined and positive customer experience |
| ü | generated $1.5 billion in pretax income in the Originations segment on $63 billion in new loans, both of which were new records |
| ü | sustained Servicing segment’s position as the largest nonbank servicer and #3 overall with 3.5 million customers and $626 billion of unpaid principal balance |
| ü | produced $433 million in revenues at Xome |
| ü | used $400 million in cash to redeem senior notes and refinanced the remaining $2.1 billion, lowering funding costs and improving liquidity profile, with no maturities until 2027 |
| ü | repurchased 2.6 million shares of common stock |
| ü | significantly reduced corporate expenses |
| ü | achieved certification as a Great Place to Work for the second consecutive year |
After consideration of the Company’s pay-for-performance culture and exceptional performance of the Company in 2020, the Compensation Committee approved the bonus amounts below. The following table shows for each named executive officer: (a) his target bonus, (b) maximum bonus opportunity and (c) final 2020 bonus amount approved by the Compensation Committee and paid to the named executive officer. In addition, due to the exceptional performance of the Company discussed above, the Committee approved an additional one-time special award for each of Messrs. Bray, Marshall and Ebers.
| Executive | | Target ($) | Maximum ($) | Approved Bonus ($) | | Jay Bray | Financial Metric Award | 1,250,000 | 1,750,000 | 1,750,000 | | | Strategic Award | 1,250,000 | 1,750,000 | 1,750,000 | | | Special One-time Award | — | — | 1,250,000 | | | Total | 2,500,000 | 3,500,000 | 4,750,000 | | | | | | | | Chris Marshall | Financial Metric Award | 750,000 | 1,125,000 | 1,125,000 | | | Strategic Award | 750,000 | 1,125,000 | 1,125,000 | | | Special One-time Award | — | — | 1,250,000 | | | Total | 1,500,000 | 2,250,000 | 3,500,000 | | | | | | | | Anthony Ebers | Financial Metric Award | 750,000 | 1,125,000 | 1,125,000 | | | Strategic Award | 750,000 | 1,125,000 | 1,125,000 | | | Special One-time Award | — | — | 1,250,000 | | | Total | 1,500,000 | 2,250,000 | 3,500,000 | | | | | | | | Eldridge Burns | Financial Metric Award | 225,000 | 375,000 | 118,050 | | | Strategic Award | 225,000 | 375,000 | 118,050 | | | Total | 450,000 | 750,000 | 236,100(1) | | | | | | | | Michael Rawls | Financial Metric Award | 540,000 | 900,000 | 810,000 | | | Strategic Award | 540,000 | 900,000 | 810,000 | | | Total | 1,080,000 | 1,800,000 | 1,620,000 |
| (1) | Pro-rated amount based on start date of August 10, 2020. |
Long-Term Incentive Awards
Incentive Plan
Our Omnibus Incentive Plan enables us to offer certain key employees, consultants and non-employee directors equity- and cash-based awards. It enhances our ability to attract, retain and reward these individuals, while strengthening the mutuality of interests between those individuals and our stockholders.
PSUs: Our performance equity program, which was developed for 2020, provides for an annual equity grant of performance shares. The number of shares that vest is based on achieving pre-established one-year and three-year financial targets. For 2020, the financial target is based on TSR. If the one-year and/or three-year target is exceeded, additional shares may vest; if performance is less than target, fewer shares vest; and, if performance is very weak, no shares vest.
There are two opportunities to vest in the shares. At the end of the first year following the grant, one-third of the total shares initially granted is set as the target. The actual number of shares that vest is based on the one-year TSR and can range between no shares and 200% of the target shares. At the end of the third year, the equity grant is evaluated against the three-year TSR. Any shares that vested at the end of the first year are deducted from the shares that vest at the end of the third year. However, if the shares that vested at the end of the first year exceeds the number that would have vested at the end of the third year, none of the shares that have vested are “clawed back.”
The terms of the performance equity are presented below:
| Performance Criteria | Total Shareholder Return | | | Initial Period | | Cumulative Period | | Below Threshold | Less than 5.5% | | Less than 17.4% | | Threshold | 5.5% | | 17.4% | | Target | 10.0% | | 33.1% | | Maximum | 14.5% | | 50.1% | | | | | | Award Opportunity
| Shares awarded as a percent of Target shares | | Below Threshold | 0% | | 0% | | Threshold | 50% | | 50% | | Target | 100% | | 100% | | Maximum | 200% | | 200% |
2020 PSU Awards
Our Compensation Committee grants PSU awards to our CEO, CFO and COO at its regularly-scheduled meeting during the first quarter of each year. In March 2020, the Compensation Committee approved awards of performance stock units, as follows:
Executive | | Monetary Value of PSUs ($)PFSI | | Jay Bray | | | Rocket Companies, Inc. | | 3,500,000RKT | | Radian Group Inc. | | RDN | | | | | UWM Holdings Corporation | | UWMC | | | | | | | | | FinTech Organizations | | | | | | | | Chris Marshall | | | Black Knight, Inc.(1) | | 1,500,000BKI | | Zillow Group, Inc. | | ZG | | | | | Mortgage REITs | | | | | | | | Anthony Ebers | | | Annaly Capital Management, Inc. | | 1,000,000NLY | | Rithm Capital Corp. | | RITM | | | | | Banks and Specialty Finance | | | |
After the completion of the one-year performance period, the Compensation Committee certified that one-year TSR was at 125%, resulting in one third of the target shares vesting at 200%. As a result, Mr. Bray earned 196,838 shares, Mr. Marshall earned 84,358 shares and Mr. Ebers earned 56,238 shares.
2021 PSU Awards
In March 2021, the Compensation Committee awarded PSUs to the senior executive team as follows:
Executive | | Monetary Value of PSUs ($) | Jay Bray | | 4,750,000 | | | | | | Chris Marshall | | | OneMain Holdings, Inc. | | 2,500,000 | | OMF | | Sofi Technologies, Inc. | | SOFI | | Anthony Ebers | | | Walker & Dunlop, Inc. | | 2,500,000 | | WD | | | | |
RSUs: Time-based awards of restricted stock units are granted to retain key talent and establish a common interest of the key executives with our stockholders through stock ownership. Each restricted stock unit is equivalent in value to one share of our common stock and generally vests in one-third installments on each of the first three anniversaries of the award, provided the participant remains continuously employed with us during that time. In addition, upon death, disability or a change in control of the Company, the unvested restricted stock units will vest. We believe that the time-based vesting requirements provide a strong retention mechanism. The ultimate value of the award, however, depends on the market value of our common stock on the vesting date, and accordingly time-based equity awards effectively align the interests of the participants with our stockholders. It is expected that time-based equity awards will continue to play a role in our compensation programs for our executive officers.
39(1) | Black Knight, Inc. was acquired by Intercontinental Exchange, Inc. in September 2023. |
Stock Ownership Guidelines 2020 RSU Awards
Our Compensation Committee grants RSU awards to our executive officers other than our CEO, CFO and COO at its regularly-scheduled meeting during the first quarter of each year. The Compensation Committee approved an award of restricted stock units to Mike Rawls in March 2020 and to Eldridge Burns in September 2020 as a sign-on equity award, as follows:
Executive | | Monetary Value of RSUs ($) | Eldridge Burns | | 250,000 | | | | Michael Rawls | | 1,000,000 | | | |
2021 RSU Awards
In March 2021, the Compensation Committee awarded RSUs as follows:
Executive | | Monetary Value of RSUs ($) | Eldridge Burns | | 450,000 | | | | Michael Rawls | | 1,000,000 | | | |
Stock Ownership Guidelines
Under ourhas adopted stock ownership guidelines, that were adopted by our Compensation Committee,under which each named executive officerNEO must own common shares of Mr. Cooper Groupour common stock with an aggregate market value of no less than the applicable multiple of the officer’s annual base salary for the immediately preceding year as follows:
| | | | | | | | Multiple of Annual Salary | | | Chief Executive Officer | | 5x | | Chief Financial Officer | President | | 3x | | | Chief OperatingFinancial Officer | | 3x | | | All Other Executive Officers | | 2x |
The Compensation Committee establishedselected these particular levels of stock ownership for our executive officers because we want to have thealign their interests of our executive officers aligned with the investment interests of our stockholders. The minimum share ownership requirement must be satisfied by no later than March 1, 2024, or the fifth anniversary of March 1, 2019 or the date an officer receives his or her first grant as an executive officer. AllAt the end of 2023, all executive officers are currently in compliance with theexceed these stock ownership guidelines.guidelines, with Mr. Bray having a multiple of approximately 85x his annual salary. Anti-Hedging and Pledging Policy Certain forms of hedging or monetization transactions allow a director or employee to lock in much of the value of his or her stock holdings often in exchange for all or part of the potential for upside appreciation in the stock. These transactions allow the director or employee to continue to own the covered securities, but without the full risks and rewards of ownership. When that occurs, the director or employee may no longer have the same objectives as our other stockholders. Therefore, under our insider trading program, our officers, directors and employees may not engage in any hedging or monetization transactions with respect to our securities, including, but not limited to, through the use of financial instruments such as exchange funds, prepaid variable forwards, equity swaps, puts, calls, collars, forwards and other derivative instruments, or through the establishment of a short position in the Company’s securities. Additionally, our officers, directors and employees are prohibited from margining Company securities or pledging Company securities as collateral for a loan. 52
Clawback Policy In 2023, the Board strengthened the alignment of senior managements’ interests to our financial performance with the adoption of a new standalone Incentive Compensation Clawback Policy that requires us to pursue recovery from any current or former Section 16 executive officer for any erroneously awarded incentive compensation during the prior three years that is based on performance measures that are the subject of a subsequent financial restatement. The clawback amount is the portion of incentive compensation that would not have been received if the restated financials had been used to calculate the compensation. Risk Considerations In developing and reviewing the Company’sour executive incentive programs, the Compensation Committee considers the business risks inherent in the design of compensation arrangements to ensure they do not induce executives to take unacceptable levels of business risk for the purpose of increasing their incentive plan awards. TheAt the request of our Compensation Committee, our Chief Risk & Compliance Officer reviewed the Company’s compensation programs and related governance provisions and practices and concluded that our compensation programs are aligned to the interests of stockholders, provide for appropriate pay for performance alignment, contain risk mitigating features and do not promote unnecessary and excessive risk. Based on this assessment, the Compensation Committee believes that the mix ofCompany’s compensation components used in the determination of our named executive officers’ compensation reflects the performance of the Companyprograms do not provide incentives for excessive risk-taking and, the performance of the individual employee and doestherefore, do not encourage our named executive officersemployees to take unreasonable risks relating to the business. Our named executive officers’ ownership interest in the Company aligns their interests with our long-term performanceCompany’s business, and discourages excessive risk taking. The Compensation Committee doesare not believe our compensation programs are reasonably likely to have a material adverse effect on the Company. Other Compensation Components All of our named executive officersNEOs are eligible to participate in our employee benefit plans, including medical, dental, life insurance and 401(k) plans. These plans are available to all employees and do not discriminate in favor of our named executive officers. While we do not view perquisites as a significant element of ourNEOs. Other compensation structure, we believe that limited perquisites facilitate the attraction and retention of superior management talent. The value of these benefits to our named executive officersNEOs is set forth in the Summary Compensation Table under the column “All Other Compensation.” For 2019, these perquisites2023, other compensation primarily related to contributions to a named executive officer’sNEO’s 401(k) plan account. Severance Terms in Employment Agreements and Offer Letters We have not entered into employment agreementsEmployment Agreements with our named executive officers. We have, however, entered intoMessrs. Bray and Marshall and offer letters with certain of our named executive officersother NEOs upon their hire or promotion. In 2020, theThe following offer lettersseverance provisions were in effect.effect during 2023. Mr. BrayUnder Mr. Bray’s Employment and Retention Agreement (the “Retention Agreement”), if Mr. Bray’s employment with us is terminated due to his death, disability or voluntary resignation, he (or his estate) is entitled to receive his accrued payments and benefits to which he is entitled (the “Accrued Obligations”). If we terminate Mr. Bray’s employment other than for Cause (as defined in the Retention Agreement) or if Mr. Bray terminates his employment for Good Reason (as defined in the Retention Agreement), Mr. Bray is entitled to (a) the Accrued Obligations, (b) if not previously paid prior to his termination date, his annual cash bonus under the EMIP for the fiscal year prior to the fiscal year in which the termination occurs, (c) an amount equal to twenty-four (24) months’ worth of his base salary paid in installments over two years, (d) an amount equal to (i) the greater of (1) the target annual incentive opportunity under the EMIP for the fiscal year in which the termination occurs or (2) the actual annual incentive payment earned for the immediately preceding fiscal year, plus (ii) his target annual incentive opportunity for the fiscal year in which the termination without Cause or resignation for Good Reason occurred, payable in a single cash lump sum payment, and (e) a single cash lump sum payment for COBRA benefits for a period of eighteen (18) months. Additionally, the Retention Agreement provides that if Mr. Bray’s employment is terminated other than for Cause or Mr. Bray terminates his employment for Good Reason, such termination shall be considered a “Retirement” for purposes of any outstanding equity awards to the extent the equity award contains a retirement provision. Notwithstanding anything to the contrary contained in the Omnibus Incentive Plan (or any successor or replacement plan thereto) or any award agreement granted thereunder other than the Value-Driver Retention and Performance Award, the Retention Agreement provides that Mr. Bray will be considered to have retired under the terms of all outstanding equity awards, irrespective of whether such award contemplates retirement and shall be (a) fully vested in all time-based awards, and (b) eligible for full vesting of all performance-based awards, based on actual performance. 53
Mr. Marshall Under Mr. Burns. Marshall’s Employment and Transition Agreement, if Mr. Burns’ offer letter provides that upon termination ofMarshall’s employment with us is terminated due to his death, disability or voluntary resignation, he (or his estate) is entitled to receive his accrued payments and benefits to which he is entitled (the “Accrued Obligations”). If we terminate Mr. Burns’Marshall’s employment by us without cause during the initial twelve months ofother than for Cause or Mr. Marshall terminates his employment for Good Reason (as defined in his offer letter) then he will receive severance benefits of 12 months base salary plus 100% ofshall be entitled to (a) his prior year’s bonus. Mr. Burns is also subject to non-competition and non-solicitation provisions for the 12-month period immediately following the date of termination of his employment with us. Mr. Ebers. Mr. Ebers’ offer letter provides that upon termination of Mr. Ebers’ employment by us without cause, he will receive severance benefits of (a) 12 months base salary plus a pro rata portion of his target bonus amountAccrued Obligations and (b) continuation of medicalthe “Severance” payments and benefits for up to 12 months. Mr. Ebers is also subject to non-competition and non-solicitation provisions for the 12-month period immediately following the date of termination ofdescribed in his employment with us.
Mr. Marshall. offer letter. Mr. Marshall’s offer letter provides that upon termination of Mr. Marshall’s employment by us without cause,Cause, or if he terminates his employment for good reason, during the initial twenty-four (24) months of his employmentGood Reason he will receive severance benefits of (a) 12 months base salary plus 100% of the higher of his target bonus or his prior year’s bonus, (b) continuation of medical benefits for up to 12 months and (c) accelerated vesting of the next tranche of restricted stock units scheduled to vest for each grant awarded.
Mr. PelayoMr. Marshall is also subject to non-competition and non-solicitation provisions for the 12-month period immediately following the date of termination of his employment with us. Mr. Rawls. Mr. Rawls’Pelayo’s offer letter provides that if his employment is terminated by us without cause,Cause (as defined in his offer letter), or if he terminates his employment for good reason,Good Reason (as defined in his offer letter), during the initial twenty-four (24)twelve (12) months of his employment, as CEO of Xome, he will be entitled to severance benefits of (a) 2412 months base salary plus 100% ofa pro-rated EMIP bonus paid at target and (b) the higher of his target bonus or his prior year’s bonus; (b) vestingcash value of the next tranche of restricted stock units scheduled to vest;vest.
Mr. GowOn March 6, 2023, we entered into a Transition and (c)Separation Agreement with Mr. Gow. Under the Separation Agreement, Mr. Gow was deemed to have been terminated without cause from the Company and was entitled to receive the following: (a) salary continuation payments of medical benefits for up to 24 months. Mr. Rawls is also subject to non-competition and non-solicitation provisions for the 24-month period immediately following the date of terminationtwelve months of his employment with us.current base salary paid out over 52 weeks and (b) a lump sum payment of $672,326 on or before March 1, 2024, consisting of (i) 100% of his target bonus and (ii) the next tranche of restricted stock units scheduled to vest for each grant awarded. See “Historical Executive Compensation Information—Potential Payments upon Termination or Change of Control” in this Proxy Statement for amounts paid to Mr. Gow in 2023. Tax and Accounting Implications COMPENSATION COMMITTEE REPORT
The Compensation Committee operates its compensation programs with the good faith intention of complying with Section 409A of the Board has reviewed and discussed the above “Compensation Discussion and Analysis”Code. We account for equity-based compensation with respect to our long-term equity incentive award programs in accordance with the Company’s management. Basedrequirements of FASB Accounting Standards Codification Topic 718, Compensation—Stock Compensation, or FASB ASC Topic 718. Certain incentive plans and agreements may entitle participants to receive payments in connection with a change in control that may result in excess parachute payments. Section 280G of the Code prohibits the Company from deducting the portion of the parachute payments constituting “excess parachute payments” and Section 4999 of the Code imposes on the payee a 20% excise tax on the excess parachute payments. For this reviewpurpose, parachute payments generally are defined as payments to specified persons that are contingent upon a change in control in an amount equal to or greater than three times the person’s base amount (i.e., the five-year average Form W-2 compensation). The excess parachute payments equal the portion of the parachute payments that exceeds one times the payee’s base amount. We are not obligated to pay any tax gross-ups with respect to the excise tax imposed on any person who received excess parachute payments. Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) generally prohibits public companies from taking a tax deduction for compensation paid in excess of $1,000,000 to certain executive officers. Prior to its amendment as implemented by the Tax Cuts and discussion,Jobs Act of 2017 (the “Tax Act”), Section 162(m) of the Code provided an exception from the compensation deduction limitations for compensation that was considered “qualified performance-based compensation” under the applicable regulations. The Tax Act’s amendment of Section 162(m) of the Code, among other things, eliminated, beginning in 2018, the exception to the compensation deduction limitations for “qualified performance-based compensation,” other than in limited circumstances. In order to maintain flexibility, the Compensation Committee recommendedretains the authority to the Boardauthorize compensation that the “Compensation Discussion and Analysis”may not be included in the Company’s 2021 Proxy Statement and the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. This report was submitted bydeductible if the Compensation Committee on March 25, 2021 and shall not be deemed to be “soliciting material” or to be “filed” withbelieves doing so is in the SEC or subject to Regulation 14A promulgated by the SEC or Section18best interests of the Exchange Act.Company.
54
COMPENSATION COMMITTEE REPORT Members of the Compensation Committee
as of March 25, 2021:
| | | The Compensation Committee of the Board has reviewed and discussed the above “Compensation Discussion and Analysis” with the Company’s management. Based on this review and discussion, the Compensation Committee recommended to the Board that the “Compensation Discussion and Analysis” be included in the Company’s 2024 Proxy Statement and the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. This report was submitted by the Compensation Committee on April 4, 2024 and shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A promulgated by the SEC or Section18 of the Exchange Act. | | | | | Members of the Compensation Committee: Tagar Olson, Chair Busy Burr Michael Malone |
Rob Gidel, Chair
Roy Guthrie
Michael Malone
Tagar Olson55
HISTORICAL EXECUTIVE COMPENSATION INFORMATION Summary Compensation Table The following table sets forth the annual compensation for our named executive officers serving at the end of 2020:NEOs for 2023: Name and Principal
Position | | Year | | Salary
($) | | Bonus
($) | | Stock
Awards
($)(1) | | Non-Equity
Incentive Plan
Compensation
($)(2) | | All Other
Compensation
($)(3) | | Total
($) | | | | | | | | | | | | | | | | | | Jay Bray | | 2020 | | 1,000,000 | | — | | 3,500,000 | | 4,750,000 | | 11,290 | | 9,261,290 | | Chairman, President & Chief Executive Officer | | 2019 | | 1,000,000 | | 1,683,509 | | 1,000,002 | | 3,500,000 | | 10,985 | | 7,194,496 | | | 2018 | | 672,116 | | 1,683,509 | | 18,502,451 | | 4,250,000 | | 11,000 | | 25,119,076 | | | | | | | | | | | | | | | | | | Christopher Marshall | | 2020 | | 738,462 | | — | | 1,500,000 | | 3,500,000 | | 8,550 | | 5,747,012 | | Vice Chairman & Chief Financial Officer | | 2019 | | 681,154 | | — | | 5,624,675 | | 2,625,000 | | 196,928 | | 9,127,757 | | | | | | | | | | | | | | | | | | Eldridge Burns | | 2020 | | 182,692(4) | | — | | 250,008 | | 236,100 | | — | | 668,800 | | Executive Vice President & Chief Legal Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Anthony Ebers | | 2020 | | 750,000 | | — | | 1,000,000 | | 3,500,000 | | 11,400 | | 5,261,400 | | Executive Vice President & Chief Operating Officer | | 2019 | | 750,000 | | 673,404 | | 500,008 | | 2,350,000 | | 11,021 | | 4,284,433 | | | 2018 | | 570,000 | | 673,404 | | 8,501,226 | | 1,500,000 | | 9,583 | | 11,254,213 | | | | | | | | | | | | | | | | | | Michael Rawls | | 2020 | | 448,077 | | — | | 1,000,009 | | 1,620,000 | | 11,725 | | 3,079,811 | | Executive Vice President & CEO Xome | | 2019 | | 400,000 | | 577,203 | | 500,008 | | 1,200,000 | | 11,417 | | 2,688,628 | | | 2018 | | 400,000 | | 577,203 | | 1,500,002 | | 1,050,000 | | 8,729 | | 3,535,934 |
| | | | | | | | | | | | | | | Name and Principal Position | | Year | | Salary
($) | | Bonus
($) | | Stock
Awards
($)(1) | | Non-Equity
Incentive Plan
Compensation
($)(2) | | All Other
Compensation
($)(3) | | Total
($) | | | | | | | | | Jay Bray | | 2023 | | 1,000,000 | | — | | 24,668,773 | | 4,625,000 | | 17,189 | | 30,310,962 | | | | | | | | | Chairman & Chief Executive Officer | | 2022 | | 1,000,000 | | — | | 7,250,173 | | 2,500,000 | | 12,200 | | 10,762,373 | | | | | | | | | | | 2021 | | 1,000,000 | | — | | 4,750,000 | | 3,000,000 | | 11,455 | | 8,761,455 | | | | | | | | | Kurt Johnson | | 2023 | | 478,846 | | — | | 600,015 | | 1,230,000 | | 14,549 | | 2,323,410 | | | | | | | | | Executive Vice President & Chief Financial Officer | | 2022 | | 385,577 | | — | | 500,015 | | 476,000 | | 12,200 | | 1,373,792 | | | | | | | | | Christopher Marshall | | 2023 | | 750,000 | | — | | 4,317,539 | | 3,512,500 | | 20,465 | | 8,600,504 | | | | | | | | | Vice Chairman & Former President | | 2022 | | 750,000 | | — | | 4,150,101 | | 1,500,000 | | 12,056 | | 6,412,157 | | | | | | | | | | | 2021 | | 750,000 | | — | | 2,500,004 | | 2,000,000 | | 10,506 | | 5,260,510 | | | | | | | | | Carlos Pelayo | | 2023 | | 353,923(4) | | 250,000(5) | | 637,066 | | 553,656 | | 13,405 | | 1,808,050 | | | | | | | | | Executive Vice President & Chief Legal Officer | | | | | | | | | | | | | | | | | | | | | | | Michael Rawls | | 2023 | | 450,000 | | | | 850,040 | | 1,026,000 | | 15,149 | | 2,341,189 | | | | | | | | | Executive Vice President & CEO Xome | | 2022 | | 450,000 | | — | | 1,158,060 | | 756,000 | | 12,362 | | 2,376,422 | | | | | | | | | | | 2021 | | 450,000 | | 792,000 | | 1,000,016 | | 1,260,000 | | 11,925 | | 3,513,941 | | | | | | | | | | | | | | | | | | | | | | | | Jaime Gow | | 2023 | | 332,308(4) | | — | | — | | — | | 81,491 | | 413,799 | | | | | | | | | Former Executive Vice President & Chief Financial Officer | | 2022 | | 400,000 | | — | | 300,050 | | 360,000 | | 12,200 | | 1,072,250 |
| (1) | The amounts reported in the Stock Awards column reflect the aggregate grant date fair value as computed in accordance with FASB ASC Topic 718, Compensation—Stock Compensation excluding the effect of estimated forfeitures during the applicable vesting periods, of RSUs or PSUs granted to our named executive officers.NEOs. The amount of the PSUs that vest is subject to the achievement of certain performance criteria at the end of a one-year and three-year performance period. Assumptions used for determining the value of the awards reported in these columns are set forth in our Annual Report on Form 10-K for the year ended December 31, 20202023 in Note 1415 to the Consolidated Financial Statements, “Stockholders’ Equity and Employee Benefit Plans.” See "Compensation“Compensation Discussion and Analysis – Long-Term Incentive Awards” and the Grants of Plan based Awards for 20202023 and the accompanying notes for information with respect to vesting of these awards. | |
| (2) | These amounts represent non-equity payments for annual bonus awards which were paid in the first quarter of 20212024 but represent awards with respect to the Company’s and individual performance in 2020.2023. | |
| (3) | RepresentsIncludes for 20202023 (a) for Mr. Bray, a contribution to his 401(k) Plan account of $11,290,$13,200, (b) for Mr. Johnson, a contribution to his 401(k) Plan account of $13,200, (c) for Mr. Marshall, a contribution to his 401(k) Plan account of $8,550, (c)$13,200, (d) for Mr. Ebers,Pelayo, a contribution to his 401(k) Plan account of $11,400, and (d)$12,138, (e) for Mr. Rawls, a contribution to his 401(k) Plan account of $11,725.$13,179 and (f) for Mr. Gow, a separation payment of $76,923. | |
| (4) | Represents actual salary paid to (a) Mr. BurnsPelayo based on his start date of August 10, 2020.February 21, 2023 and (b) Mr. Gow through October 16, 2023. | |
43(5) | Represents a sign-on award in connection with Mr. Pelayo joining the Company in February 2023. | |
56
Grants of Plan Based Awards for 2020 2023 The following table sets forth, for each of our named executive officers,NEOs, the grants of awards under any plan during the year 2020,2023, as described in further detail in the sections titled “Annual Cash Incentive Awards” and “Long-Term Incentive Awards:” | Name | | Grant Date | | Date of
Compensation
Committee
Approval | | Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards(1) | | Estimated Future Payouts Under
Equity Incentive Plan Awards(2) | | All Other
Stock
Awards:
Number
of
Shares of
Stock or
Units (#)(3) | | Grant
Date Fair
Value of
Stock
Awards
($)(4) | Threshold
($) | | Target
($) | | Maximum
($) | Threshold
($) | | Target
($) | | Maximum
($) | | Jay Bray | | | | | | | | | | | | | | | | | | | | | | Annual Bonus | | — | | — | | — | | 2,500,000 | | 3,500,000 | | — | | — | | — | | — | | — | | Incentive Plan-PSUs | | 3/13/2020 | | — | | — | | — | | — | | 1,750,000 | | 3,500,000 | | 7,000,000 | | — | | 3,500,000 | | Christopher Marshall | | | | | | | | | | | | | | | | | | | | | | Annual Bonus | | — | | — | | — | | 1,500,000 | | 2,250,000 | | — | | — | | — | | — | | — | | Incentive Plan-PSUs | | 3/13/2020 | | — | | — | | — | | — | | 750,000 | | 1,500,000 | | 3,000,000 | | — | | 1,500,000 | | Eldridge Burns | | | | | | | | | | | | | | | | | | | | | | Annual Bonus | | — | | — | | — | | 450,000 | | 750,000 | | — | | — | | — | | — | | — | | Incentive Plan-RSUs | | 9/1/2020 | | 7/29/2020 | | — | | — | | — | | — | | — | | — | | 13,643 | | 250,008 | | Anthony Ebers | | | | | | | | | | | | | | | | | | | | | | Annual Bonus | | — | | — | | — | | 1,500,000 | | 2,250,000 | | — | | — | | — | | — | | — | | Incentive Plan-PSUs | | 3/13/2020 | | — | | — | | — | | — | | 500,000 | | 1,000,000 | | 2,000,000 | | — | | 1,000,000 | | Michael Rawls | | | | | | | | | | | | | | | | | | | | | | Annual Bonus | | — | | — | | — | | 1,080,000 | | 1,800,000 | | — | | — | | — | | — | | — | | Incentive Plan-RSUs | | 3/13/2020 | | — | | — | | — | | — | | — | | — | | — | | 77,943 | | 1,000,009 |
| | | | | | | | | | | | | | | | | | | | | Name | | Grant Date | | | | Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards(1) | | Estimated Future Payouts Under
Equity Incentive Plan Awards(2) | | All Other
Stock
Awards:
Number
of
Shares of
Stock or
Units (#)(3) | | Grant Date
Fair Value
of Stock
Awards ($)(4) | | | Date of
Compensation
Committee
Approval | | Threshold
($) | | Target
($) | | Maximum
($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | | | | | | | | | | | | Jay Bray | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Annual Bonus | | — | | — | | 1,250,000 | | 2,500,000 | | 5,000,000 | | — | | — | | — | | — | | — | | | | | | | | | | | | Incentive Plan-RSUs | | 03/01/2023 | | 02/03/2023 | | — | | — | | — | | — | | — | | — | | 78,075 | | 3,625,022 | | | | | | | | | | | | Incentive Plan-PSUs | | 03/23/2023 | | 03/23/2023 | | — | | — | | — | | 41,581 | | 83,162 | | 166,324 | | — | | 3,740,211 | | | | | | | | | | | | Incentive Plan-RSUs | | 11/01/2023 | | 10/24/2023 | | — | | — | | — | | — | | — | | — | | 106,139 | | 6,129,527 | | | | | | | | | | | | Incentive Plan-PSUs | | 11/01/2023 | | 10/24/2023 | | — | | — | | — | | 79,604 | | 159,208 | | 318,416 | | — | | 11,174,013 | | | | | | | | | | | | Kurt Johnson | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Annual Bonus | | — | | — | | 375,000 | | 750,000 | | 1,500,000 | | — | | — | | — | | — | | — | | | | | | | | | | | | Incentive Plan-RSUs | | 03/01/2023 | | 02/03/2023 | | — | | — | | — | | — | | — | | — | | 12,923 | | 600,015 | | | | | | | | | | | | Christopher Marshall | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Annual Bonus | | — | | — | | 2,500,000 | | 2,875,000 | | 3,625,000 | | — | | — | | — | | — | | — | | | | | | | | | | | | Incentive Plan-RSUs | | 03/01/2023 | | 02/03/2023 | | — | | — | | — | | — | | — | | — | | 45,768 | | 2,125,008 | | | | | | | | | | | | Incentive Plan-PSUs | | 03/23/2023 | | 03/23/2023 | | — | | — | | — | | 24,375 | | 48,750 | | 97,500 | | — | | 2,192,531 | | | | | | | | | | | | Carlos Pelayo | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Annual Bonus | | — | | — | | 193,500 | | 387,000 | | 774,000 | | — | | — | | — | | — | | — | | | | | | | | | | | | Incentive Plan-RSUs | | 03/01/2023 | | 02/03/2023 | | — | | — | | — | | — | | — | | — | | 13,721 | | 637,066 | | | | | | | | | | | | Michael Rawls | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Annual Bonus | | — | | — | | 540,000 | | 1,080,000 | | 2,160,000 | | — | | — | | — | | — | | — | | | | | | | | | | | | Incentive Plan-RSUs | | 03/01/2023 | | 02/03/2023 | | — | | — | | — | | — | | — | | — | | 18,308 | | 850,040 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Jaime Gow | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Annual Bonus | | — | | — | | 180,000 | | 360,000 | | 720,000 | | — | | — | | — | | — | | — | | | | | | | | | | | | Incentive Plan-RSUs | | 03/01/2023 | | 02/03/2023 | | — | | — | | — | | — | | — | | — | | 7,754 | | 360,018 |
| (1) | The amounts reported in the Estimated Future Payouts Under Non-Equity Incentive Plan Awards column represent the potential payouts of awards under our annual bonus plan subject to the achievement of certain performance measures. The actual amount of the awards made to our named executive officersNEOs is included in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table. |
| (2) | The amounts reported in the Estimated Future Payouts Under Equity Incentive Plan Awards column represent the threshold, target and maximum number of shares issuable with respect to performance share units granted in March 2020.2023. The performance share units are settled in shares of common stock, in an amount from 0% to 200% of the number of units awarded, based 50% on the Company'sCompany’s annualized tangible book value and 50% on relative total stockholder return over a one-year and a three-year period commencing on MarchJanuary 1, 2020. (see "Compensation2023. (see “Compensation Discussion and Analysis – Long-Term Incentive Awards”). |
| (3) | Represents awards of time-based restricted stock units to Messrs. Burns and Rawls that vest in one-third installments on each of the first three anniversaries of the grant date of the award. |
| (4) | Represents the aggregate grant date fair value as computed in accordance with FASB ASC Topic 718, Compensation—Stock Compensation excluding the effect of estimated forfeitures during the applicable vesting periods, of RSUs or PSUs granted to our named executive officers.NEOs. The March 13, 20201, 2023 RSU award wasawards were valued at $12.83$46.43 per share. The November 1, 2023 RSU awards were valued at $56.53 per share. Fifty percent of the March 23, 2023 PSU awards were valued at $38.63 per share and the September 1, 2020 RSU grant wasfifty percent were valued at $18.325$51.32 per share. The RSUs are valued using the closing stock priceFifty percent of the last trading date prior to the grant. Each of theNovember 1, 2023 PSU awards waswere valued at $11.85$72.01 per share. The PSUs areshare and fifty percent were valued using the closing stock price of the last trading date prior to the grant and a Monte Carlo simulation model with a volatility of 35.1% and a risk-free rate of 0.85%.at $68.37 per share. Assumptions used for determining the value of the awards reported in these columns are set forth in our Annual Report on Form 10-K for the year ended December 31, 20202023 in Note 1415 to the Consolidated Financial Statements, “Stockholders’ Equity and Employee Benefit Plans.” |
57
Outstanding Equity Awards at Fiscal Year End The following table sets forth, for each of our named executive officers,NEOs, their outstanding equity awards as of December 31, 2020,2023, as described in greater detail in the in the section “Long-Term Incentive Awards:” | | | | | | | | | | | | | | Stock Awards | | Name | | Grant Date | | Number of Shares or Units of Stock that Have Not Vested (#) | | Market Value
of Shares or Units of Stock
that Have Not
Vested ($)(1) | | Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested (#) | | Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units or
other Rights That
Have Not
Vested ($)(1) | | | | | | | Jay Bray | | 12/01/2018 | | 234,585(2) | | 15,276,175 | | — | | — | | | | | | | | | 03/08/2021 | | — | | — | | 168,666(3) | | 10,983,530 | | | | | | | | | 03/01/2022 | | 45,928(4) | | 2,990,831 | | 129,562(5) | | 8,437,077 | | | | | | | | | 03/01/2023 | | 78,075(6) | | 5,084,244 | | — | | — | | | | | | | | | 03/23/2023 | | — | | — | | 166,324(7) | | 10,831,019 | | | | | | | | | 11/01/2023 | | 106,139(8) | | 6,911,772 | | — | | — | | | | | | | | | 11/01/2023 | | — | | — | | 159,208(9) | | 10,367,625 | | | | | | | Kurt Johnson | | 03/01/2021 | | 3,187(10) | | 207,537 | | — | | — | | | | | | | | | 03/01/2022 | | 6,562(11) | | 427,317 | | — | | — | | | | | | | | | 03/01/2023 | | 12,923(12) | | 841,546 | | — | | — | | | | | | | Christopher Marshall | | 05/01/2019 | | 107,239(13) | | 6,983,404 | | — | | — | | | | | | | | | 03/08/2021 | | — | | — | | 88,772(3) | | 5,780,833 | | | | | | | | | 03/01/2022 | | 26,245(14) | | 1,709,074 | | 74,282(5) | | 4,837,244 | | | | | | | | | 03/01/2023 | | 45,768(15) | | 2,980,412 | | — | | | | | | | | | | | 03/23/2023 | | — | | — | | 97,500(7) | | 6,349,200 | | | | | | | Carlos Pelayo | | 03/01/2023 | | 13,721(16) | | 893,511 | | — | | — | | | | | | | Michael Rawls | | 03/01/2021 | | 10,621(17) | | 691,640 | | — | | — | | | | | | | | | 03/01/2022 | | 15,198(18) | | 989,694 | | — | | — | | | | | | | | | 03/01/2023 | | 18,308(19) | | 1,192,217 | | — | | — | | | | | | | | | | | | | | | | | | Jaime Gow | | — | | — | | — | | — | | — |
| (1) | | Stock Awards | Name | | Grant
Date | | Number of Shares or
Units of Stock that
Have Not Vested (#) | | Market Value
of Shares
or Units of Stock
that
Have Not
Vested ($)(1) | | Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested (#) | | Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units or
other Rights That
Have Not
Vested ($)(1) | Jay Bray | | 3/1/2018 | | 20,669(2) | | 641,359 | | | | | | | 12/1/2018 | | 938,339(3) | | 29,116,659 | | | | | | | 3/1/2019 | | 48,492(4) | | 1,504,707 | | | | | | | 3/13/2020 | | | | | | 590,518(5) | | 18,323,774 | | | | | | | | | | | | | | | | | | | | | | | Christopher Marshall | | 3/1/2019 | | 48,492(4) | | 1,504,707 | | | | | | | 5/1/2019 | | 428,956(6) | | 13,310,505 | | | | | | | | | | | | | | | | | | 3/13/2020 | | | | | | 253,080(5) | | 7,853,072 | | | | | | | | | | | | Eldridge Burns | | 9/1/2020 | | 13,643(7) | | 423,342 | | | | | | | | | | | | | | | | Anthony Ebers | | 3/1/2018 | | 10,334(8) | | 320,664 | | | | | | | 12/1/2018 | | 428,956(6) | | 13,310,505 | | | | | | | 3/1/2019 | | 24,247(9) | | 752,384 | | | | | | | 3/13/2020 | | | | | | 168,720(5) | | 5,235,381 | | | | | | | | | | | | Michael Rawls | | 3/1/2018 | | 10,334(8) | | 320,664 | | | | | | | 12/1/2018 | | 44,651(10) | | 1,385,521 | | | | | | | 3/1/2019 | | 24,247(9) | | 752,384 | | | | | | | 3/13/2020 | | 77,943(11) | | 2,418,571 | | | | |
| (1) | Based on the closing market price of our common stock on December 31, 2020,29, 2023, which was $31.03.$65.12. |
| (2) | This award of restricted stock units is subject to vesting. 20,669 units vested on March 1, 2021. |
| (3) | This award of restricted stock units is subject to vesting. 234,585 units vested on March 1, 2021; 234,584 units will vest on March 1, 2022; 234,585 units will vest on March 1, 2023 and 234,585 units will vest on March 1, 2024. |
| (3) | (4) | This award of restricted stock units is subject to vesting. 24,209 units vested on March 1, 2021 and 24,283 units will vest on March 1, 2022. |
| (5) | Because the actual performance achieved for the TSR performance condition was above the maximum performance level on December 31,2020,31, 2023, the number of shares underlying the awards is based on maximum financial performance. On March 1, 2021,8, 2024, the Compensation Committee determined that one-yearthree-year performance was above the maximum performance level, and Mr. Bray earned 196,838168,666 shares and Mr. Marshall earned 84,358 shares and Mr. Ebers earned 56,23888,772 shares. |
| (4) | This award of restricted stock units is subject to vesting. 22,929 units vested on March 1, 2024, and 22,999 units will vest on March 1, 2025. |
| (5) | Because the actual performance achieved for the TSR performance condition was above the target performance condition on December 31, 2023, the number of shares underlying the awards is based on maximum financial performance. |
| (6) | This award of restricted stock units is subject to vesting. 25,998 units vested on March 1, 2024, 25,999 units will vest on March 1, 2025, and 26,078 units will vest on March 1, 2026. |
| (7) | Because the actual performance achieved for the Tangible Book Value and relative TSR performance conditions was above the target performance level on December 31, 2023, the number of shares underlying the awards is based on maximum financial performance. |
| (8) | This award of restricted stock units is subject to vesting. 53,069 units will vest on December 31, 2026, and 53,070 units will vest on December 31, 2028. |
| (9) | Because the actual performance achieved for the Tangible Book Value and relative TSR performance conditions was above the threshold performance level on December 31, 2023, the number of shares underlying the awards is based on target financial performance. |
| (10) | This award of restricted stock units is subject to vesting. 3,187 units vested on March 1, 2024. |
| (11) | This award of restricted stock units is subject to vesting. 3,276 units vested on March 1, 2024 and 3,286 units will vest on March 1, 2025. |
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| (12) | This award of restricted stock units is subject to vesting. 4,303 units vested on March 1, 2024, 4,303 units will vest on March 1, 2025 and 4,317 units will vest on March 1, 2026. |
| (13) | This award of restricted stock units is subject to vesting. 107,239 units vested on March 1, 2021; 107,239 units will vest on March 1, 2022; 107,239 units will vest on March 1, 2023 and 107,239 units will vest on March 1, 2024. |
| (14) | (7) | This award of restricted stock units is subject to vesting. 4,54313,103 units vested on March 1, 2024 and 13,142 units will vest on SeptemberMarch 1, 2021, 4,543 units will vest on September 1, 2022 and 4,557 units will vest on September 1, 2023.2025. |
| (15) | (8) | This award of restricted stock units is subject to vesting. 10,33415,240 units vested on March 1, 2021.2024, 15,241 units will vest on March 1, 2025, and 15,287 units will vest on March 1, 2026. |
| (16) | (9) | This award of restricted stock units is subject to vesting. 12,1054,568 units vested on March 1, 2021 and 12,1422024, 4,569 units will vest on March 1, 2022.2025, and 4,584 units will vest on March 1, 2026. |
| (17) | (10) | This award of restricted stock units is subject to vesting. 22,29210,621 units vested on March 1, 2021 and 22,359 units will vest on March 1, 2022.2024. |
| (18) | (11) | This award of restricted stock units is subject to vesting. 25,9817,587 units vested on March 13, 2021, 25,9811, 2024 and 7,611 units will vest on March 13, 2022 and 25,9811, 2025. |
| (19) | This award of restricted stock units is subject to vesting. 6,096 units vested on March 1, 2024, 6,097 units will vest on March 13, 2023.1, 2025 and 6,115 units will vest on March 1, 2026. |
Stock Vested for 2020 2023 The following table provides information on the vesting of shares of Mr. Cooper Group common stock for our other named executive officersNEOs in 2020:2023: | | | | | | | Stock Awards | | | | Stock Awards | | Name | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($) | | Name | | | | | Number of Shares Acquired on Vesting (#) | | | | Value Realized on Vesting ($)(1) | | | Jay Bray | | 170,507 | | 3,526,003 | Jay Bray | | | | | 651,194 | | | | 30,396,265 | | Kurt Johnson | | Kurt Johnson | | | | | 9,055 | | | | 421,413 | | | Christopher Marshall | | 82,810 | | 1,658,861 | | Eldridge Burns | | — | | — | | Anthony Ebers | | 79,154 | | 1,636,120 | Christopher Marshall | | | | | 289,063 | | | | 13,490,671 | | Carlos Pelayo | | Carlos Pelayo | | | | | — | | | | — | | | Michael Rawls | | 27,635 | | 564,101 | Michael Rawls | | | | | 44,206 | | | | 1,931,952 | | | | | | | | | | | | | Jaime Gow | | Jaime Gow | | | | | 6,687 | | | | 311,467 |
46(1) | Values calculated by multiplying the number of PSUs and RSUs, as applicable, that vested by the fair market value per share of our common stock on each vesting date. |
59
Potential Payments upon Termination or Change of Control The following table sets forth the valueWe have entered into contractual arrangements with certain our NEOs that provide for payments, acceleration of vesting or other benefits that would have been payable to our named executive officers upon the occurrence of various termination events assuming a termination of employment in certain circumstances. The discussion in the CD&A describes these contractual arrangements in greater detail. The table below estimates the value of payments and benefits that each NEO would have been entitled to receive had his employment terminated on December 31, 2020, given their compensation levels and, where applicable, Mr. Cooper Group’s closing stock price on that date.2023, under various hypothetical circumstances. Also, the table reflects potential payments related to a change-in-control and subsequent qualified termination within a specified window. The amounts shown in the table do not include payments and benefits, such as accrued salary and accrued vacation, to the extent that they are provided on a non-discriminatory basis to salaried employees generally upon termination of employment. If the termination of employment was due to disability, all salaried employees, including our named executive officers,NEOs, are entitled to receive a monthly long-term benefit of up to $25,000, which would begin six months following the determination of disability and continue until the person reaches the age of 65 years. The actual amounts to be paid can only be determined at the time of a named executive officer’sNEO’s separation from the Company or a change in controlcontrol. Mr. Gow is not included in the table below because his employment with us ended on October 16, 2023. Upon his departure, pursuant to his Transition and includeSeparation Agreement described above, his salary continuation payments of $400,000 paid out over 52 weeks began, and he received a lump sum payment of $672,326 on March 1, 2024, consisting of (a) 100% of his target bonus and (b) the accelerated vestingnext tranche of previously awarded but unvested equity awards.RSUs scheduled to vest for each grant awarded.
| Name | | Death
($) | | Disability
($) | | Termination
Without Cause
($) | | Change
in Control
($) | | | | | | | | | | | | Jay Bray | | | | | | | | | | Salary | | — | | — | | — | | — | | Annual Bonus | | — | | — | | — | | — | | Accelerated Vesting of RSUs | | 31,262,725(1) | | 31,262,725(1) | | — | | 31,262,725(1) | | Accelerated Vesting of PSUs | | 1,630,988(1) | | 1,630,98(1) | | — | | 12,215,890(1) | | Medical Coverage | | — | | — | | — | | — | | Life Insurance | | 500,000(2) | | — | | — | | — | | Total | | 33,393,713 | | 32,893,713 | | — | | 43,478,615 | | Christopher Marshall | | | | | | | | | | Salary | | — | | — | | 750,000(3) | | — | | Annual Bonus | | — | | — | | 2,625,000(4) | | — | | Accelerated Vesting of RSUs | | 14,815,211(1) | | 14,815,211(1) | | 4,078,800(1) | | 14,815,211(1) | | Accelerated Vesting of PSUs | | 698,985(1) | | 698,985(1) | | — | | 5,235,444(1) | | Medical Coverage | | — | | — | | 15,238(5) | | — | | Life Insurance | | 500,000(2) | | — | | — | | — | | Total | | 16,014,196 | | 15,514,196 | | 7,469,038 | | 20,050,655 | | Eldridge Burns | | | | | | | | | | Salary | | — | | — | | 500,000(3) | | — | | Annual Bonus | | — | | — | | — | | — | | Accelerated Vesting of RSUs | | 423,342(1) | | 423,342(1) | | — | | 423,342(1) | | Medical Coverage | | — | | — | | — | | — | | Life Insurance | | 500,000(2) | | — | | — | | — | | Total | | 923,342 | | 423,342 | | 500,000 | | 423,342 | | Anthony Ebers | | | | | | | | | | Salary | | — | | — | | 750,000(3) | | — | | Annual Bonus | | — | | — | | 1,500,000(4) | | — | | Accelerated Vesting of RSUs | | 14,383,553(1) | | 14,383,553(1) | | — | | 14,383,553(1) | | Accelerated Vesting of PSUs | | 465,985(1) | | 465,985(1) | | — | | 3,490,316(1) | | Medical Coverage | | — | | — | | 6,827(5) | | — | | Life Insurance | | 500,000(2) | | — | | — | | — | | Total | | 15,349,538 | | 14,849,538 | | 2,256,827 | | 17,873,869 | | Michael Rawls | | | | | | | | | | Salary | | — | | — | | 900,000(3) | | — | | Annual Bonus | | — | | — | | 1,200,000(4) | | — | | Accelerated Vesting of RSUs | | 4,877,140(1) | | 4,877,140(1) | | 2,193,387(1) | | 4,877,140(1) | | Medical Coverage | | — | | — | | 30,475(5) | | — | | Life Insurance | | 500,000(2) | | — | | — | | — | | Total | | 5,377,140 | | 4,877,140 | | 4,323,862 | | 4,877,140 |
| | | | | | | | | | | Name | | Death
($) | | Disability
($) | | Termination
Without Cause
($) | | Retirement
($) | | Change
in Control
($) | | | | | | | Jay Bray | | | | | | | | | | | Salary | | — | | — | | 2,000,000(1) | | — | | — | Annual Bonus | | — | | — | | 7,125,000(2) | | — | | — | Accelerated Vesting of RSUs | | 30,263,022(3) | | 30,263,022(3) | | 23,351,251(3) | | 23,351,251(3) | | 30,263,022(3) | Accelerated Vesting of PSUs | | 29,231,653(3) | | 29,231,653(3) | | 39,102,665(3) | | 39,102,665(3) | | 33,516,326(3) | Medical Coverage | | — | | — | | 20,703(5) | | — | | — | Life Insurance | | 2,500,000(4) | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | Total | | 61,994,675 | | 59,494,675 | | 71,599,619 | | 62,453,916 | | 63,779,349 | | | | | | | | | | | | | | | | | | Kurt Johnson | | | | | | | | | | | Salary | | — | | — | | — | | — | | — | Annual Bonus | | — | | — | | — | | — | | — | Accelerated Vesting of RSUs | | 1,476,401(3) | | 1,476,401(3) | | — | | — | | 1,476,401(3) | Medical Coverage | | — | | — | | — | | — | | — | Life Insurance | | 1,500,000(4) | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | Total | | 2,976,401 | | 1,476,401 | | — | | — | | 1,476,401 | | | | | | | | | | | | | | | | | | Christopher Marshall | | | | | | | | | | | Salary | | — | | — | | — | | — | | — | Annual Bonus | | — | | — | | 750,000(2) | | — | | — | Accelerated Vesting of RSUs | | 11,672,890(3) | | 11,672,890(3) | | 1,500,000(3) | | 9,963,816(3) | | 11,672,890(3) | Accelerated Vesting of PSUs | | 15,594,698(3) | | 15,594,698(3) | | 8,829,100(3) | | 21,467,619(3) | | 12,825,228(3) | Medical Coverage | | — | | — | | 8,350(5) | | — | | — | Life Insurance | | 2,000,000(4) | | — | | | | — | | — | | | | | | | | | | | | | | | | | | Total | | 29,267,589 | | 27,267,589 | | 11,087,450 | | 31,431,435 | | 24,498,118 | | | | | | | | | | | | | | | | | | Carlos Pelayo | | | | | | | | | | | Salary | | — | | — | | 430,000(1) | | — | | — | Annual Bonus | | — | | — | | 332,926(2) | | — | | — | Accelerated Vesting of RSUs | | 893,512(3) | | 893,512(3) | | 297,468(3) | | — | | 893,512(3) | Medical Coverage | | — | | — | | — | | — | | — | Life Insurance | | 1,360,000(4) | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | Total | | 2,253,512 | | 893,512 | | 1,060,394 | | — | | 893,512 | | | | | | | | | | | | | | | | | | Michael Rawls | | | | | | | | | | | Salary | | — | | — | | — | | — | | — | Annual Bonus | | — | | — | | — | | — | | — | Accelerated Vesting of RSUs | | 2,873,550(3) | | 2,873,550(1)(3) | | — | | — | | 2,873,550(3) | Medical Coverage | | — | | — | | — | | — | | — | Life Insurance | | 1,400,000(4) | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | Total | | 4,273,550 | | 2,873,550 | | — | | — | | 2,873,550 | | | | | | | | | | | |
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| (1) | Represents an amount equal to his base salary as of December 31, 2023. Pursuant to the Employment and Retention Agreement with Mr. Bray described above, upon a termination of employment by us without cause, or if he terminates his employment for good reason, he is entitled to twenty-four months of base salary. Pursuant to Employment & Transition Agreement with Mr. Marshall described above, upon a termination of employment by us without cause, or if he terminates his employment for good reason, he is entitled to twelve months of base salary. Pursuant to the offer letter described above with Mr. Pelyo, upon a termination of employment by us without cause, or if he terminates his employment for good reason, during the initial twelve months of employment with us, he is entitled to 12 months of base salary. |
(1)(2) | Pursuant to the Employment and Retention Agreement with Mr. Bray described above, upon a termination of employment by us without cause, or if he terminates his employment for good reason, he is entitled to an amount equal to an amount equal to (a) the greater of (i) the target bonus opportunity for the fiscal year in which the termination occurs or (ii) the actual annual incentive payment earned for the immediately preceding fiscal year, plus (b) his target bonus opportunity for the fiscal year in which the termination without cause or resignation for good reason occurred. Pursuant to Employment & Transition Agreement with Mr. Marshall described above, upon a termination of employment by us without cause, or if he terminates his employment for good reason, he is entitled to 100% of the higher of his target bonus or his prior year’s bonus. Pursuant to the offer letter described above with Mr. Pelayo, upon a termination of employment by us without cause, or if he terminates his employment for good reason, during the initial twelve months of his employment with us, he is entitled to a pro-rated bonus paid at target. |
| (3) | Pursuant to the award agreements granting each of Messrs. Bray Marshall, Ebers, and RawlsMarshall RSUs under our 2012 Incentive Compensation Plan, in the event our named executive officer’sNEO’s employment terminates as a result of his death or disability or in the event of a change in control, all unvested RSU awards shall immediately vest. Pursuant to the RSU award agreements granting each of Messrs. Bray, Johnson, Marshall, Ebers, BurnsPelayo and Rawls RSU awards under our 2019 Omnibus Incentive Plan, in the event our named executive officer’sNEO’s employment terminates as a result of his death or disability or prior to the first anniversary of a change in control, without cause or for good reason, all unvested RSU awards shall immediately vest. Pursuant to the PSU award agreements granting each of Messrs. Bray Marshall and EbersMarshall PSU awards under our 2019 Omnibus Incentive Plan, in the event our named executive officer’sNEO’s employment terminates (a) as a result of his death or disability, a pro-rated amount of PSUs shall immediately vest based on actual performance on the date of the death or disability and (b) without cause or for good reason prior to the first anniversary of a change in control, all unvested PSUs shall immediately vest based on actual performance through the date the change in control. Pursuant to the offer letterEmployment and Retention Agreement with Mr. Bray described above, with Mr. Marshall upon a termination of Mr. Marshall’s employment by us without cause, or if he terminates his employment for good reason, during the initial twenty-four monthsMr. Bray shall be (a) fully vested in all RSU awards, and (b) eligible for full vesting of all PSU awards, based on actual performance. Pursuant to Employment & Transition Agreement with Mr. Marshall described above, upon a termination of employment by us without cause, or if he terminates his employment for good reason, he is entitled to accelerated vesting of the next tranche of restricted stock units scheduled to vest for each grant awarded. Pursuant to the RSU award agreements granting each of Messrs. Bray and Marshall RSU awards under our Omnibus Incentive Plan, in the event our NEO’s employment terminates due to retirement, any unvested RSUs immediately vest on the date of termination and are delivered on the regular vesting schedule. Pursuant to the PSU award agreements granting each of Messrs. Bray and Marshall PSU awards under our Omnibus Incentive Plan, in the event our NEO’s employment terminates due to retirement, any unvested PSUs remain outstanding and eligible to vest in accordance with their terms. Pursuant to the offer letter with Mr. Pelayo described above, with Mr. Rawls, upon a termination of Mr. Rawls’ employment by us without cause, or if he terminates his employment for good reason during the initial twenty-fourtwelve months of his employment, as CEO of Xome, he is entitled to accelerated vestingthe cash value of the next tranche of restricted stock units scheduled to vest for each grant awarded. This is based on the closing market price of $31.03$65.12 on December 31, 2020.29, 2023. |
(2)(4) | All salaried employees are entitled to a death benefit of two times their annual salary up to $500,000. TheseRepresents payments would be made pursuant to our employee group term life insurance policies maintained by us.and our executive life insurance policies. |
(3)(5) | Represents an amount equal to his base salary as of December 31, 2020. Pursuant to the offer letterEmployment and Retention Agreement with Mr. Bray described above, with Mr. Marshall, upon a termination of Mr. Marshall’s employment by us without cause, or if he terminates his employment for good reason, during the initial twenty-four months of his employment, he is entitled to 12 monthsa single cash lump sum payment for COBRA benefits for a period of base salary; pursuanteighteen months. Pursuant to the offer letter described aboveEmployment & Transition Agreement with Mr. Burns upon termination of Mr. Burns’ employment by us without cause during the initial twelve months of his employment he is entitled to 12 months of base salary; pursuant to the offer letterMarshall described above, with Mr. Ebers, upon a termination without cause, Mr. Ebers is entitled to 12 months of base salary; and pursuant to the offer letter described above with Mr. Rawls upon termination of Mr. Rawls’ employment by us without cause, or if he terminates his employment for good reason, during the initial twenty-four months of his employment as CEO of Xome, he is entitled to 24 months of base salary. |
(4) | Pursuant to the offer letter described above with Mr. Marshall upon termination of Mr. Marshall’s employment by us without cause, or if he terminates his employment for good reason, during the initial twenty-four months of his employment, he is entitled to 100% of the higher of his target bonus or his prior year’s bonus; pursuant to the offer letter described above with Mr. Burns upon termination of Mr. Burns’ employment by us without cause during the initial twelve months of his employment he is entitled to 100% of his prior year’s bonus, pursuant to the offer letter described above with Mr. Ebers, upon a termination without cause, Mr. Ebers is entitled to a pro-rata bonus payment, at target, for the portion of the year he was employed by us; and pursuant to the offer letter described above with Mr. Rawls upon termination of Mr. Rawls’ employment by us without cause, or if he terminates his employment for good reason, during the initial twenty-four months of his employment as CEO of Xome he is entitled to 100% of the higher of his target bonus or his prior year’s bonus. |
(5) | Pursuant to the offer letter described above with Mr. Marshall upon termination of Mr. Marshall’s employment by us without cause, or if he terminates his employment for good reason, during the initial twenty-four months of his employment, he is entitled to up to 12 months of continued coverage under our medical plan; pursuant to the offer letter described above with respect to Mr. Ebers , upon a termination without cause, Mr. Ebers is entitled to up to 12 months of continued coverage under our medical plan; and pursuant to the offer letter described above with Mr. Rawls upon termination of Mr. Rawls’ employment by us without cause, or if he terminates his employment for good reason, during the initial twenty-four months of his employment as CEO of Xome, he is entitled to up to 24 months of continued coverage under our medical plan. |
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CEO Pay Ratio Under the SEC rules adopted pursuant to the Dodd-Frank Act of 2010, we calculated the total compensation paid to our median employee, as well as the ratio of the total compensation paid to the median employee as compared to the total compensation paid to our Chairman President & Chief Executive Officer. CEO. The pay ratio below is based on our Chairman President & Chief Executive Officer’s 2020CEO’s 2023 total annual compensation. Median employee total annual compensation | $55,874 | CEO total annual compensation | $9,261,290 | Ratio of CEO to median employee compensation | 166 to 1 |
The 2023 total annual compensation of our CEO was $30,310,962 and the median employee, excluding our CEO, was $52,165, resulting in a ratio of 581:1. We identifiedAs discussed in our CD&A, during 2023 Mr. Bray was granted a $15 million one-time highly-performance-based equity award to incentivize him to both remain with the Company and build on our positive momentum, execute on our strategy and unlock our next phase of growth. This one-time award is the primary reason this year’s pay ratio is significantly higher than last year’s.
To provide a more accurate assessment of Mr. Bray’s compensation for 2023 relative to our median employee, as a supplemental ratio, we excluded this one-time equity award, which results in total compensation of our CEO of $13,007,422 and a supplemental pay ratio of 249:1, which is comparable to last year’s pay ratio. We identified the median employee by examining the 2020 W-2 Box 3 social security reportableusing total cash compensation (salary, wages and foreign equivalent taxable income amountsbonus) as reflected in our payroll records for all individuals, excludingIndia and the Chairman, President & Chief Executive Officer,U.S., as reported to the Internal Revenue Service on Form W-2 for fiscal year 2023 for U.S. employees, who were employed by us on December 31, 2020.2023, the last day of our payroll year, excluding our Chairman & CEO. We included all employees, whether employed on a full-time, part-time, or seasonal basis. Our employee population as of December 31, 20202023 consisted of approximately 9,8006,800 individuals. We did not make any assumptions, adjustments, or estimates with respect to compensation and did not annualize the compensation for any full-time employees that were not employed by us for all of 2020.2023. With respect to the annual total compensation of our Chairman President & Chief Executive Officer,CEO, we used the amount reported in the “Total” column of our Summary Compensation Table above. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices. Therefore, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. 62
The SEC has adopted a rule requiring annual disclosure of pay versus performance which shows the relationship between executive compensation actually paid and the Company’s performance. The following pay versus performance disclosure is based on permitted methodology pursuant to the SEC guidance under Item 402(v) of RegulationS-K. Our CEO is the principal executive officer (“PEO”). The following table sets forth information concerning the compensation of our PEO and other NEOs for each of the fiscal years ending December 31, 2020, 2021, 2022 and 2023 and our financial performance for each such fiscal year: | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| |
Actually Paid to PEO (1,2,3) | |
| |
| | | | | |
| |
| | 2023 | | $30,310,962 | | $60,423,730 | | $3,097,390 | | $ 8,082,513 | | $521 | | $121 | | $ 500 | | $4,113 | | | | | | | | | | | 2022 | | $10,762,373 | | $10,654,884 | | $2,808,655 | | $ 2,810,727 | | $321 | | $111 | | $ 923 | | $3,929 | | | | | | | | | | | 2021 | | $ 8,761,455 | | $19,701,296 | | $3,359,019 | | $ 5,536,118 | | $333 | | $126 | | $1,454 | | $3,233 | | | | | | | | | | | 2020 | | $ 9,261,290 | | $40,893,899 | | $3,689,256 | | $12,707,838 | | $248 | | $ 96 | | $ 307 | | $2,353 |
49(1) | The PEO in each covered year is Jay Bray. The individuals comprising theNon-PEO NEOs for each covered year presented are listed below: |
| | | | | | | | 2020 | | 2021 | | 2022 | | 2023 | | Eldridge Burns | | Eldridge Burns | | Jaime Gow | | Jaime Gow | | Tony Ebers | | Tony Ebers | | Kurt Johnson | | Kurt Johnson | | Christopher Marshall | | Christopher Marshall | | Christopher Marshall | | Christopher Marshall | | Mike Rawls | | Mike Rawls | | Mike Rawls | | Carlos Pelayo | | | | | | | Mike Rawls |
| (2) | The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of RegulationS-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table total with certain adjustments as described in footnote 3 below. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total Amounts Reported in the Summary Compensation Table for Applicable FY | | $ | 9,261,290 | | | $ | 3,689,256 | | | $ | 8,761,455 | | | $ | 3,359,019 | | | $ | 10,762,373 | | | $ | 2,808,655 | | | $ | 30,310,962 | | | $ | 3,097,390 | | | | | | | | | | | | Deduction for Amounts Reported under the “Stock Awards” and “Option Awards” Columns in the Summary Compensation Table for Applicable FY | | $ | (3,500,000 | ) | | $ | (937,504 | ) | | $ | (4,750,000 | ) | | $ | (1,612,511 | ) | | $ | (7,250,173 | ) | | $ | (1,527,056 | ) | | $ | (24,668,773 | ) | | $ | (1,280,932 | ) | | | | | | | | | | | Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Remain Unvested as of Applicable FY End, determined as of Applicable FY End | | $ | 16,442,974 | | | $ | 3,646,734 | | | $ | 7,960,519 | | | $ | 2,036,075 | | | $ | 4,777,273 | | | $ | 1,069,909 | | | $ | 31,666,309 | | | $ | 2,543,572 | | | | | | | | | | | | Increase/deduction for Awards Granted during a Prior FY that were Outstanding and Unvested as of Applicable FY End, determined based on change in ASC 718 Fair Value from Prior FY End to Applicable FY End | | $ | 18,658,901 | | | $ | 6,298,140 | | | $ | 6,974,323 | | | $ | 1,453,292 | | | $ | (1,107,235 | ) | | $ | (163,698 | ) | | $ | 13,560,323 | | | $ | 2,618,154 | | | | | | | | | | | | Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Vested during Applicable FY, determined as of Vesting Date | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | | | | | | | | | | | | Increase/deduction for Awards Granted during a Prior FY that Vested During Applicable FY, determined based on change in ASC 718 Fair Value from Prior FY End to Vesting Date | | $ | 30,734 | | | $ | 11,212 | | | $ | 754,999 | | | $ | 300,243 | | | $ | 3,472,646 | | | $ | 622,917 | | | $ | 9,554,909 | | | $ | 1,104,329 | | | | | | | | | | | | Deduction of ASC 718 Fair Value of Awards Granted during a Prior FY that were Forfeited during Applicable FY, determined as of Prior FY End | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Increase based on Dividends or Other Earnings Paid during Applicable FY prior to Vesting Date | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | | | | | | | | | | | | Increase based on Incremental Fair Value of Options/SARs Modified during Applicable FY | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | | | | | | | | | | | | Deduction for Change in the Actuarial Present Values reported under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” Column of the Summary Compensation Table for Applicable FY | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | | | | | | | | | | | | Increase for Service Cost and, if applicable, Prior Service Cost for Pension Plans | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (4) | We selected the S&P Composite 1500 Financials Index as our peer group for purposes of this disclosure. This index is also utilized in (a) our Annual Reports on Form10-K in connection with the required performance graph and (b) our 2023 PSU plan to measure relative TSR. |
Relationship Between Pay and Performance The charts below reflect the CAP for the Company’s PEO and the average CAP for thenon-PEO NEOs, respectively, and their relation to TSR, net income and the Company’s selected measure, tangible book value. 64
As demonstrated in the tables above, the amount of CAP is generally aligned with (a) Company TSR, (b) Company net income and (c) tangible book value. In particular, CAP is aligned with Company TSR given that a significant portion of our executive’s compensation is in the form of equity. Further, the Company’s TSR consistently outperformed the S&P Composite 1500 Financials Index over the reporting period. The significant year-over-year change in the CAP for the Company’s PEO is due to the $15 millionone-time highly-performance-based equity award granted in 2023 as part of his employment and retention agreement and because of the significant appreciation of our stock price, which impacts all outstanding equity awards that are included in the CAP calculation. 2023 Performance Measures For fiscal year 2023, our Compensation Committee identified the performance measures listed below (listed in no particular order) as the most important in its compensation-setting process for our NEOs: | | | | | Financial Performance Measures | | | | Tangible Book Value | | Relative TSR | | Adjusted EBT |
The Compensation Committee identified tangible book value, relative TSR and Adjusted EBT as our “most important” measures that are tied to executive compensation outcomes. These measures are used in our incentive awards, which constitute the largest share of our NEOs’ pay. These measures influence payout decisions and impact the value of the Company, which in turn is reflected in the value of CAP for our PEO and NEOs. Refer to our Compensation Discussion and Analysis section above and AnnexA—Non-GAAP Measures for definitions ofnon-GAAP measures utilized herein. Equity Compensation Plan Information The following table sets forth information as of December 31, 2023, with respect to shares of common stock that may be issued under our Incentive Plan: | | | | | | | | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) | | Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights | | Number of Securities Available for Future Issuance Under Equity Compensation Plans (2) | | | | | Equity Compensation Plans approved by stockholders (3)(4) | | 2,631,141 | | — | | 11,620,308 | | | | | | Equity Compensation Plans not approved by stockholders | | — | | — | | — | | | | | | | | | | | | | | | | | Total | | 2,631,141 | | — | | 11,620,308 | | | | | | | |
| (1) | Includes shares of the Company’s common stock in the amount of (a) 1,043,522, which represents the maximum number of shares that may be issued upon the vesting of performance stock units granted under the Omnibus Incentive Plan if maximum performance goals are achieved for each performance cycle, (b) 1,419,480, which may be issued upon the vesting of restricted stock units granted under the Omnibus Incentive Plan, (c) 158,458, the receipt of which has been deferred by our independent directors and (d) 9,681, the receipt of which has been deferred due to the retirement of certain employees. |
| (2) | Represents shares underlying awards that have been granted under the terms of the Omnibus Incentive Plan. |
| (3) | Reflects securities available for issuance under the Omnibus Incentive Plan. Under the terms of the Omnibus Incentive Plan, any award, other than an option or stock appreciation right, will count as 2.0 shares against the remaining pool. |
| (4) | For additional information, please see Note 15 to the Consolidated Financial Statements, “Stockholders’ Equity and Employee Benefit Plans” in our Annual Report on Form10-K for the year ended December 31, 2023. |
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PROPOSAL 2: ADVISORY VOTE ON SAY ON PAY In accordance with Section 14A of the Exchange Act, we are providing stockholders with an opportunity to vote to approve, on an advisory (non-binding) basis, the compensation of our named executive officersNEOs as disclosed in this proxy statement in accordance with the rules of the SEC. The Compensation Committee regularly reviews the compensation programs for our named executive officersNEOs to ensure that they achieve the desired goals of aligning the interests of executive management with stockholders, attracting, retaining and motivating high-quality executive officers and creating long-term value. We urge you to read the Compensation Discussion and Analysis section of this proxy statement, which describes how the executive compensation program reflects our compensation philosophy and objectives and the decisions made by the Compensation Committee for 20202023 in detail. We are asking stockholders to indicate their support for the named executive officerNEO compensation described in this proxy statement. This proposal, commonly known as a “say on pay”“say-on-pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’NEOs’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of the named executive officersNEOs and the philosophy, policies and practices described in this proxy statement. Accordingly, the Board recommends that stockholders vote in favor of the following resolution: “RESOLVED, that the stockholders approve, on an advisory basis, the compensation of the Company’s named executive officers,NEOs, as disclosed in this proxy statement, including the Compensation Discussion and Analysis, the executive compensation tables and the related narrative.” Because your vote is advisory, it will not be binding upon the Board. However, the Board values stockholders’ opinions, and the Compensation Committee and the Board will take into account the outcome of the vote when considering future executive compensation decisions. THE BOARD RECOMMENDS A VOTE FOR THE ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION. Equity Compensation Plan Information
The following table sets forth information as of December 31, 2020, with respect to shares of common stock that may be issued under our Incentive Plan:66
Plan Category | | Number of Securities
to be Issued Upon
Exercise of
Outstanding Options,
Warrants, and Rights | | Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights | | Number of Securities
Available for Future
Issuance Under Equity
Compensation Plans | Equity Compensation Plans approved by stockholders(1) | | — | | — | | 17,906,422 | Equity Compensation Plans not approved by stockholders | | — | | — | | — | Total | | — | | — | | 17,906,422 |
(1) | For additional information, please see Note 14 to the Consolidated Financial Statements, “Stockholders Equity and Employee Benefit Plans” in our Annual Report on Form 10-K for the year ended December 31, 2020. |
AUDIT FUNCTION Report of the Audit & Risk Committee Management is responsible for our overall financial reporting process. Ernst & Young LLP is responsible for expressing opinions on the conformity of our audited consolidated financial statements with U.S. generally accepted accounting principles. The Audit & Risk Committee’s responsibility is to monitor and oversee these processes. The Audit & Risk Committee is also solely responsible for the selection and termination of our independent registered public accounting firm, including the approval of audit fees and any non-audit services provided by and fees paid to the independent registered public accounting firm. In this context, the Audit & Risk Committee: has met and held discussions with management of the Company, who represented to the Audit & Risk Committee that our audited consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles; has reviewed and discussed the audited consolidated financial statements and discussed with the independent registered public accounting firm the matters required to be discussed under the applicable standards adopted by the Public Company Accounting Oversight Board; has received the written disclosures and the letter from the independent registered public accounting firm required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit & Risk Committee concerning independence and discussed with the independent registered public accounting firm its independence; and participated in the certification process relating to the filing of certain reports pursuant to the Exchange Act. Based on the review and discussions referred to above, the Audit & Risk Committee recommended to the Board of Directors that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 20202023 for filing with the SEC. This report was submitted by the Audit & Risk Committee and shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A promulgated by the SEC or Section 18 of the Exchange Act. | Members of the Audit & Risk Committee:Committee | | | Roy Guthrie, Chair | Robert Gidel | Michael MaloneDaniela Jorge | | Steven Scheiwe |
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PROPOSAL 3: RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS The Audit & Risk Committee has appointed Ernst & Young LLP (E&Y)(“E&Y”) as the independent registered public accounting firm to audit our consolidated financial statements for the year ending December 31, 2021.2023. The Board is asking stockholders to ratify this appointment. Although SEC regulations and NASDAQ listing requirements require our independent registered public accounting firm to be engaged, retained and supervised by the Audit & Risk Committee, the Board considers the selection of an independent registered public accounting firm to be an important matter to stockholders and a key corporate governance issue. If the appointment of E&Y is not ratified, the matter of the appointment of the independent registered public accounting firm will be re-considered by the Audit & Risk Committee. We anticipate that a representative of E&Y will attend the annual meeting, will be available to respond to appropriate questions and will have an opportunity to make a statement. THE BOARD RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. Independent Registered Public Accounting Firm Fees The following table presents fees for professional services rendered by E&Y for each of the last two fiscal years: | | | | | 2023 | | | | | | 2022 | | | | | 2020 | | | 2019 | | Audit Fees(1) | $ | 6,052,785 | | $ | 6,382,050 | Audit Fees(1) | | Audit Fees(1) | | Audit Fees(1) | | | $ | 5,929,300 | | | | | | | $ | 4,941,113 | | | | Audit-Related Fees(2) | | 615,000 | | | 695,000 | Audit-Related Fees(2) | | Audit-Related Fees(2) | | Audit-Related Fees(2) | | | | 833,250 | | | | | | | | 821,000 | | | | Tax Fees(3) | | 635,604 | | | 425,000 | Tax Fees(3) | | Tax Fees(3) | | Tax Fees(3) | | | | 1,198,661 | | | | | | | | 1,077,637 | | | | All Other Fees(4) | | 4,325 | | | 7,200 | | Total Fees | $ | 7,307,714 | | $ | 7,509,250 | All Other Fees(4) | | All Other Fees(4) | | All Other Fees(4) | | | | 3,838 | | | | | | | | 2,132 | | | | | | | | | | | | | Total | | Total | | Total | | Total | | | $ | 7,965,049 | | | | | | | $ | 6,841,882 | | | | | | | | | | | |
| (1) | Audit fees include fees related to the annual integrated audits of our consolidated financial statements, including internal control over financial reporting, the reviews of our interim consolidated financial statements related to our quarterly reports on Form 10-Q and other services that generally only the independent registered public accountant can provide such as the issuance of comfort letters and consents.consents | |
| (2) | Audit-related fees generally include fees related to the performance of other attest engagements under professional auditing standards, including internal control-related engagements, Regulation AB and other servicer compliance-related engagements and the audit of an employee benefit plan. | |
| (3) | Tax fees relate to the performance of tax compliance services, in 2020, including the preparation, review and filing of tax returns and consulting services in 2020 and 2019 for various matters, including an assessment of certain capitalizable expenses in 2019.federal and state tax credits. | |
| (4) | This amount relates to the subscription to E&Y’s web-based accounting and auditing research library. | |
Audit & Risk Committee’s Pre-Approval Policies and Procedures The Audit & Risk Committee must approve any service to be performed by our independent registered public accounting firm in advance of the service being performed. The Audit & Risk Committee approved in advance the services performed in 20202023 and 2022 by our independent registered public accounting firms. firm. 68
BENEFICIAL OWNERSHIP Security Ownership of Certain Beneficial Owners The following table shows, as of March 25, 2024, the beneficial ownership of shares of Mr. Cooper Group common stock by: (a) each director, (b) our NEOs for 2023, (c) all of our directors and executive officers as a group and (d) each stockholder known to us to beneficially own more than 5% of Mr. Cooper Group common stock. Beneficial ownership means that the individual has or shares voting power or investment power with respect to the shares of Mr. Cooper Group common stock or the individual has the right to acquire the shares within 60 days of March 25, 2024. | | | | | | | | | Name | | Shares beneficially owned(1) | | | % of shares outstanding | | | | | Directors and NEOs | | | | | | | | | | | | Jay Bray(2) | | | 1,053,561 | | | | 1.61% | | Busy Burr(3) | | | 33,309 | | | | * | | Roy Guthrie(3) | | | 69,001 | | | | * | | Daniela Jorge(3) | | | 5,702 | | | | * | | Michael Malone(3) | | | 116,391 | | | | * | | Shveta Mujumdar(3) | | | 22,244 | | | | * | | Tagar Olson(3) | | | 21,810 | | | | * | | Steven Scheiwe(3)(4) | | | 79,903 | | | | * | | Jaime Gow | | | — | | | | * | | Kurt Johnson | | | 47,501 | | | | * | | Christopher Marshall | | | 747,286 | | | | 1.15% | | Carlos Pelayo | | | 2,915 | | | | | | Michael Rawls | | | 52,875 | | | | * | | All directors and executive officers as a group (12 persons)(5) | | | 1,522,212 | | | | 2.33% | | | | | 5% Stockholders | | | | | | | | | | | | BlackRock, Inc.
50 Hudson Yards
New York, NY 10001 | | | 11,227,682(6) | | | | 17.21% | | | | | The Vanguard Group
100 Vanguard Boulevard
Malvern, PA 19355 | | | 7,626,038(7) | | | | 11.69% | |
| * | Indicates less than one percent. |
| (1) | Includes with respect to each of the following NEOs, directors and all executive officers and directors as a group, restricted stock units which vest within 60 days of March 25, 2024: | |
| | | | | | Name | | | | Restricted
Stock Units | | | | Directors and NEOs | | | | | | | | Jay Bray | | | | — | | | | Busy Burr | | | | 2,559 | | | | Roy Guthrie | | | | 2,559 | | | | Daniela Jorge | | | | 2,559 | | | | Michael Malone | | | | 2,559 | | | | Shveta Mujumdar | | | | 2,559 | | | | Tagar Olson | | | | 2,559 | | | | Steven Scheiwe | | | | 2,559 | | | | Kurt Johnson | | | | — | | | | Carlos Pelayo | | | | — | | | | Michael Rawls | | | | — | | | | Michael Weinbach | | | | — | | | | | | | | | All directors and executive officers as a group(12 persons) | | | | 17,913 |
| (2) | Includes 359,631 shares held in the name of the Jesse K. Bray Living Trust, under which Mr. Bray is the trustee. | |
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| (3) | Total includes shares for which no voting or investment power currently exists, the receipt of which has been deferred by (a) Ms. Burr in the amount of 15,357 shares, (b) Mr. Guthrie in the amount of 52,030 shares, (c) Ms. Jorge in the amount of 3,143 shares, (d) Mr. Malone in the amount of 52,030 shares, (e) Ms. Mujumdar in the amount of 5,073 shares, (f) Mr. Olson in the amount of 21,810 shares and (g) Mr. Scheiwe in the amount of 21,810 shares, who could obtain their respective deferred shares within 60 days of March 25, 2024 under certain circumstances. | |
| (4) | Includes 32,803 shares held in the name of the Scheiwe Family Living Trust, under which Mr. Scheiwe is a trustee. | |
| (5) | Includes 17,000 shares for Michael Weinbach and excludes (a) Jaime Gow, who ceased being an executive officer on March 6, 2023, and (b) Christopher Marshall who ceased being an executive officer on January 31, 2024. | |
| (6) | Based on a Schedule 13G/A filed with the SEC on January 22, 2024, by BlackRock, Inc. According to the filing, the beneficial owner has indicated that it has sole voting power to vote 11,035,651 shares and sole dispositive power with respect to 11,227,682 shares. These stockholders have indicated that the aggregate amount beneficially owned by each reporting person is 11,227,682 shares. | |
| (7) | Based on a Schedule 13G/A filed with the SEC on February 14, 2024, by The Vanguard Group. According to the filing, the beneficial owner has indicated that it has no sole voting power, shared voting power to vote 56,133 shares, sole dispositive power with respect to 7,497,836 shares and shared dispositive power with respect to 128,202 shares. These stockholders have indicated that the aggregate amount beneficially owned by each reporting person is 7,626,038 shares. | |
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CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS Relationship with KKR
Investment Agreement
On January 30, 2014, we entered into an Investment Agreement with KKR Fund Holdings L.P. (KKR Fund). Pursuant to the investment agreement, we sold to KKR Fund 1,000,000 shares of Series A Convertible Preferred Stock having the terms, rights, obligations and preferences contained in our certificate of incorporation for a purchase price equal to $11,072,192. On February 12, 2018, in connection with the transactions contemplated by the Merger, we amended our agreement with KKR Fund, and immediately thereafter KKR Fund contributed the Series A Convertible Preferred Stock to KKR Wand Holdings Corporation (Wand Holdings), our largest stockholder and a KKR affiliate.
The Series A Convertible Preferred Stock has rights substantially similar to those associated with our common stock, with the exception of a liquidation preference, conversion rights and customary anti-dilution protections. The Series A Convertible Preferred Stock has a liquidation preference equal to the greater of (a) $10.00 per 1,000,000 shares of Series A Convertible Preferred Stock plus declared but unpaid dividends on any such shares and (b) the amount that the holder of the Series A Convertible Preferred Stock would be entitled to if such holder participated with the holders of shares of our common stock then outstanding, pro rata as a single class based on the number of outstanding shares of our common stock on an as-converted basis held by each holder as of immediately prior to a liquidation, in the distribution of all of our remaining assets and funds available for distribution to our stockholders. The Series A Convertible Preferred Stock is convertible at a conversion price of $13.20 per share (subject to anti-dilution adjustment) into shares of our common stock either at the option of the holder or automatically upon transfer by Wand Holdings to a non-affiliated party. Further, Wand Holdings, as the holder of the Series A Convertible Preferred Stock, has received other rights pursuant to the investor rights agreement described below.
Investor Rights Agreement
On January 30, 2014, we entered into the investor rights agreement with KKR Fund. On February 12, 2018, KKR Fund assigned its rights under the investor rights agreement to Wand Holdings. Wand Holdings’ rights as a holder of the Series A Convertible Preferred Stock, and the rights of any subsequent holder that is an affiliate of Wand Holdings, are governed by the investor rights agreement. Pursuant to the investor rights agreement, for so long as Wand Holdings owns, in the aggregate, at least 50% of the Series A Convertible Preferred Stock issued as of January 30, 2014 (or the underlying common stock), Wand Holdings has the right to appoint two of the nine directors that currently comprise our board. Currently, Messrs. Harrington and Olson are the Wand Holding designees to our Board.
In the event that any stockholder or group of stockholders other than Wand Holdings calls a stockholder meeting or seeks to nominate nominees to our board of directors, then Wand Holdings shall not be restricted from calling a stockholder meeting in order to nominate directors as an alternative to the nominees nominated by such stockholder or group, provided that Wand Holdings shall not nominate or propose a number of directors to our board of directors that is greater than the number of directors nominated or proposed by such stockholder or group.
The investor rights agreement also provides Wand Holdings with registration rights, including three long form demand registration rights, unlimited short form demand registration rights and customary piggyback registration rights with respect to common stock (and common stock underlying the Series A Convertible Preferred Stock), subject to certain minimum thresholds, customary blackout periods and lockups of 180 days. We filed a resale registration statement on Form S-3, as amended that was declared effective on November 25, 2015, which, among other things, registered for resale the common stock underlying the Series A Convertible Preferred Stock.
The investor rights agreement also provides that to the extent that we undertake any capital markets issuances, we will engage KKR Capital Markets LLC (KCM) to assist us in such issuances on customary commercial terms reasonably
acceptable to us. In 2020, KCM participated in our three senior unsecured notes offerings and received fees and expense reimbursements of $1,725,000 in the aggregate.
For as long as Wand Holdings beneficially owns any shares of our common stock or Series A Convertible Preferred Stock, we have agreed to provide customary Rule 144A information rights, to provide Wand Holdings with regular audited and unaudited financial statements and to allow Wand Holdings or its representatives to inspect our books and records.
Related-Party Transaction Policy The Board recognizes the importance of avoiding conflicts of interest between us and our employees, directors and affiliates of our employees and directors and any person who is the beneficial owner or more than 5% of Mr. Cooper Group voting securities (each, a related party)“related party”). Our Code of Business Conduct and Ethics requires directors and executive officers, including their affiliates, to avoid any activity, interest or relationship that would create, or might appear to others to create, a conflict of interest with us. Accordingly, our Board has adopted a written policy regarding the approval of any related-party transaction, which is any transaction or series of transactions involving us or any of our consolidated subsidiaries and a related party where the aggregate amount involved will or may be expected to exceed $120,000 and the related party has a direct or indirect material interest. In addition, under our policy, the provision of mortgage origination and mortgage servicing to our directors, executive offices and their immediate family members is not considered a related-party transaction, provided that the transaction is (a) on substantially the same terms for comparable services provided to non-affiliates or (b) pursuant to companyCompany policy or programs. Pursuant to this policy and our related procedures, directors (including director nominees), executive officers and employees are required to report to our legal department any related-party transactions or circumstances that may create or appear to create a conflict between the personal interests of the individual and the interests of the Company. These transactions are then reported to the NCG Committee. The disinterested members of the NCG Committee who do not have material direct or indirect interests evaluates each related-party transaction to determine if the transaction is fair, reasonable and within Company policy and whether it should be ratified and approved. Additionally, the NCG Committee may determine that the Board should approve or ratify any related-party transaction. If the chairman of the NCG Committee determines that it is not practicable or desirable for the Company to wait until the next regularly-scheduled meeting of the NCG Committee, the chairman may approve or ratify related-party transactions and report to the full NCG Committee at its next regularly-scheduled committee meeting any approvals or ratifications made by the chairman. In addition, we also make inquiries of management personnel and, as appropriate, third parties and other resources for purposes of identifying related-party transactions. The NCG Committee considers various factors, including the benefit of the transaction to the Company, the terms of the transaction and whether they are at arm’s-length and in the ordinary course of the Company’s business, the direct or indirect nature of the related-person’s interest in the transaction, the size and expected term of the transaction and other facts and circumstances that bear on the materiality of the related-party transaction under applicable law and listing standards. BENEFICIAL OWNERSHIP
Security Ownership of Certain Beneficial Owners
The following table shows, as of March 16, 2021, the beneficial ownership of shares of Mr. Cooper Group common stock by: (a) each director; (b) our named executive officers for 2020; (c) all of our directors and executive officers as a group and (d) each stockholder known to us to beneficially own more than 5% of Mr. Cooper Group common stock. Beneficial ownership means that the individual has or shares voting power or investment power with respect to the shares of Mr. Cooper Group common stock or the individual has the right to acquire the shares within 60 days of March 16, 2021.
| | | | | | | Name | | Shares beneficially owned(1) | | % of shares outstanding | | | | | | | | Named Executive Officers and Directors | | | | | | Jay Bray | | 910,493 | | 1.0 | | Busy Burr(3) | | 27,485 | | * | | Robert Gidel(2) | | 70,001 | | * | | Roy Guthrie(3) | | 54,096 | | * | | Christopher Harrington | | — | | * | | Michael Malone(3) | | 101,486 | | * | | Shveta Mujumdar(3) | | 15,520 | | * | | Tagar Olson(3) | | 13,286 | | * | | Steven Scheiwe(3)(4) | | 71,379 | | * | | Eldridge Burns | | — | | * | | Anthony Ebers | | 201,414 | | * | | Chris Marshall | | 387,549 | | * | | Michael Rawls | | 111,053 | | * | All directors and executive officers as a group (13 persons) | | 1,963,762 | | 2.17 |
5% Stockholders | | Stock Class | | Shares beneficially owned | | % of Class Owned | BlackRock, Inc.
55 East 52nd Street
New York, NY 10055
| | Common | | 10,678,240(5) | | 11.78 | | | | | | | | Leon G. Cooperman
St. Andrews Country Club
7118 Melrose Castle Lane
Boca Raton, FL 33496
| | Common | | 5,054,000(6) | | 5.58(6) | | KKR Fund Holdings L.P.
c/o Kohlberg Kravis & Roberts & Co. L.P.
9 West 57th Street, Suite 4200
New York, NY 10019 | | Series A Convertible Preferred | | 1,000,000(7) | | 100.00 | | Common | | 15,612,046(7) | 17.07 |
* | Indicates less than one percent. |
(1) | Includes with respect to each of the following named executive officers, directors, and all executive officers and directors as a group, the following (a) shares of unvested restricted stock for which the indicated beneficial owners have voting but no investment power and (b) restricted stock units which vest within 60 days of March 16, 2021: |
| Name | | Restricted Stock | | Restricted Stock Units | | Named Executive Officers and Directors | | | | | | Jay Bray | | — | | — | | Busy Burr | | — | | 13,286 | | Robert Gidel | | — | | 6,905 | | Roy Guthrie | | — | | 6,905 | | Christopher Harrington | | — | | — | | Michael Malone | | — | | 6,905 | | Shveta Mujumdar | | — | | 15,520 | | Tagar Olson | | — | | 13,286 | | Steven Scheiwe | | 2,073 | | 13,286 | | Eldridge Burns | | — | | — | | Anthony Ebers | | — | | — | | Chris Marshall | | — | | — | | Michael Rawls | | — | | — | All directors and executive officers as a group (13 persons) | | 2,073 | | 76,093 |
(2) | Shares are held in the name of Liberty Partners, LLC. |
(3) | Total includes shares for which no voting or investment power currently exists, the receipt of which has been deferred by (a) Ms. Burr in the amount of 13,286 shares, (b) Mr. Guthrie in the amount of 37,125 shares, (c) Mr. Malone in the amount of 37,125 shares, (d) Ms. Mujumdar in the amount of 15,520 shares, (e) Mr. Olson in the amount of 13,286 shares and (f) Mr. Scheiwe in the amount of 13,286 shares, who could obtain their respective deferred shares within 60 days of March 16, 2021 under certain circumstances. |
(4) | Includes 32,803 shares held in the name of the Scheiwe Family Living Trust, under which Mr. Scheiwe is a trustee. |
(5) | Based on a Schedule 13G/A filed with the SEC on January 27, 2021 by BlackRock, Inc. According to the filing, the beneficial owner has indicated that it has sole voting power to vote 10,531,815 shares and sole dispositive power with respect to 10,678,240 shares. These stockholders have indicated that the aggregate amount beneficially owned by each reporting person is 10,678,240 shares. |
(6) | Based on a Schedule 13G filed with the SEC on March 5, 2021, by Leon G. Cooperman. According to the filing, the beneficial owner has indicated that he has sole voting power and sole dispositive power in respect of 5,054,000 shares. Subsequent to the March 16, 2021 record date determination, Mr. Cooperman disposed of 805,000 shares and now holds 4.69% of our common stock. |
(7) | Based on a Schedule 13D/A filed with the SEC on November 20, 2020 by KKR Wand Investors Corporation (KKR Wand Investors), beneficial owner of 13,006,776 shares of the Company’s common stock, on behalf of itself and KKR Wand Holdings Corporation (KKR Wand Holdings) beneficial owner of 2,605,270 shares of the Company’s common stock, KKR Group Partnership L.P. (KKR Group Partnership), KKR Wand Investors L.P. (KKR Wand LP), KKR Wand GP LLC (KKR Wand GP), KKR Fund Holdings L.P. (KKR Fund Holdings LP), KKR Group Holdings Corp. (KKR Group Holdings), KKR & Co. Inc. (KKR & Co.), KKR Management LLC (KKR Management), Henry R. Kravis (Mr. Kravis), George R. Roberts (Mr. Roberts), Christopher J. Harrington (Mr. Harrington), Jeffrey Livingston (Mr. Livingston) and Simon Greene (Mr. Greene, and collectively with the other persons and entities listed in this paragraph, the KKR Reporting Persons). On September 21, 2020, Mr. Livingston resigned as a director of KKR Wand Holdings and KKR Wand Investors and does not beneficially own any shares of the Company’s common stock, and on November 18, 2020, Mr. Greene was appointed as a director of each of KKR Wand Holdings and KKR Wand Investors. According to the Schedule 13D/A, each of Mr. Harrington and Mr. Greene (as the sole directors and holders of voting stock of KKR Wand Holdings and KKR Wand Investors) may be deemed to be the beneficial owner of the securities owned directly by KKR Wand Holdings and KKR Wand Investors. Messrs. Harrington and Greene are executives of KKR and/or one or more of its affiliates. KKR Group Partnership, an affiliate of KKR, owns 100% of the economic interest in KKR Wand Holdings and may be deemed to have shared beneficial ownership over the securities held by KKR Wand Holdings. KKR Wand LP owns 100% of the economic interest in KKR Wand Investors. KKR Wand GP is the general partner of KKR Wand LP and is a wholly owned subsidiary of KKR Group Partnership. KKR Group Partnership may be deemed to have shared beneficial ownership over the securities held by KKR Wand Holdings and KKR Wand Investors. | | | | KKR Group Holdings (as a general partner of KKR Group Partnership), KKR & Co. (as the sole shareholder of KKR Group Holdings), KKR Management (as the controlling shareholder of KKR & Co.), and Messrs. Henry R. Kravis and George R. Roberts (as the designated members of KKR Management), may be deemed to have shared beneficial ownership of the securities beneficially owned directly by KKR Wand Holdings and KKR Wand Investors, and each disclaims beneficial ownership of the securities. Each of Messrs. Joseph Y. Bae, William J. Janetschek, Scott C. Nuttall and David J. Sorkin is a director of KKR Group Holdings, and each of Messrs. Bae, Janetschek, Kravis, Nuttall, Roberts and Sorkin is an executive officer of KKR Group Holdings and KKR & Co. The address of the principal business office of KKR Wand Holdings, KKR Wand Investors, KKR Wand LP, KKR Wand GP, KKR Group Partnership, KKR Group Holdings, KKR & Co. Inc., KKR Management, Messrs. Harrington, Kravis, Livingston and Greene is c/o Kohlberg Kravis Roberts & Co. L.P., 9 West 57th Street, Suite 4200, New York, New York 10019. The address of the principal business office of Mr. Roberts is c/o Kohlberg Kravis Roberts & Co. L.P., 2800 Sand Hill Road, Suite 200, Menlo Park, CA 94025. According to the Schedule 13D/A, the KKR Reporting Persons beneficially own an aggregate of 15,612,046 shares of the Company’s common stock, which represent, in the aggregate, approximately,17% of the outstanding shares of the Company’s common stock, and have shared voting power and shared dispositive power with respect to 15,612,046 shares of the Company’s common stock. The 15,612,046 shares of the Company’s common stock consist of 1,000,000 shares of the Company’s Series A preferred stock held directly by Wand Holdings convertible into 838,802 shares of the Company’s common stock, the foregoing being based on 90,622,806 shares of the Company’s common stock outstanding as of March 16, 2021 and assumes that all 838,802 shares underlying the Company’s Series A preferred stock have been converted or exercised, as applicable, and are outstanding. |
OTHER MATTERS The Board knows of no other matters to be brought before the 20212024 Annual Meeting of Stockholders. If matters other than the ones listed in this proxy statement properly come before the 20212024 Annual Meeting of Stockholders or any adjournment or postponement thereof, the persons named in the proxy will vote the shares represented by the proxy according to their judgment. Delinquent Section 16(a) Reports STOCKHOLDER PROPOSALSSection 16(a) of the Securities Exchange Act of 1934 requires the Company’s directors and executive officers and persons who own more than ten percent of a registered class of the Company’s equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Based on our records and other information, we believe that in 2023, all Section 16(a) filing requirements applicable to our officers, directors and greater than ten-percent beneficial owners were properly met, except that one Form 4 for each of Mr. Bray and Mr. Rawls was filed late due to an inadvertent administrative error.
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Stockholder Proposals Stockholder Proxy Proposal Deadline Pursuant to Rule 14a-8 of the Exchange Act, stockholder proposals will need to be received by us not later than November 30, 2021, in orderDecember 12, 2024, to be eligible for inclusion in our proxy statement and form of proxy with respect to the 20222025 Annual Meeting of Stockholders. Stockholder proposals must be sent to us at Mr. Cooper Group Inc., 8950 Cypress Waters Boulevard, Coppell, Texas 75019, Attention: Corporate Secretary. Stockholder Business – Annual Meeting Stockholders who wish to introduce an item of business at an annual meeting of stockholders may do so in accordance with our Bylaw procedures. A stockholder desiring to bring a proper subject of business before the 20222025 Annual Meeting of Stockholders, without inclusion of such proposal in the proxy statement, must provide a written notice timely received by us not sooner than November 30, 2021,December 12, 2024, but not later than December 30, 2021,January 11, 2025, at our principal executive offices. Any notice of intent to introduce an item of business at an annual meeting of stockholders must, among other things, contain the name and address of the stockholder and a representation that the stockholder is a holder of record and that the stockholder intends to appear in person or by proxy at the meeting. A complete listing of the other requirements the advance notice must meet is found in Section 2.13 of our Bylaws. A complete copy of our Bylaws may be found on our website at www.mrcoopergroup.com or by writing to Mr. Cooper Group Inc., 8950 Cypress Waters Boulevard, Coppell, Texas 75019, Attention: Corporate Secretary. In addition to satisfying the foregoing requirements under our Bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act, which must be postmarked and mailed to our principal executive offices or electronically transmitted to secretary@mrcooper.com no later than March 24, 2025. The chairman of the annual meeting may refuse to allow the transaction of any business not presented in compliance with the foregoing procedures. 72
GENERAL INFORMATION ABOUT
THE ANNUAL MEETING AND VOTING What is the purpose of this proxy statement? The purpose of this proxy statement is to provide information regarding matters to be voted on at our 20212024 Annual Meeting of Stockholders. Additionally, it contains certain information that the SEC and NASDAQ require us to provide to our stockholders. This proxy statement is also the document used by our Board to solicit proxies to be used at the annual meeting. Proxies are solicited to give all stockholders of record an opportunity to vote on the matters to be presented at the annual meeting, even if they cannot attend the annual meeting. When and where will the 20212024 Annual Meeting of Stockholders be held? The annual meeting will be held on May 13, 202123, 2024, at the Four Points by Sheraton – Dallas/Fort Worth Airport North, 1580 Point West Blvd., Coppell, TX 75019 at 9:00 a.m., central time. What will be voted on and how many votes are required to elect directors and adopt other proposals? | | | Proposal | | Votes Required | | Election of Directors | | Majority of the votes present in person or by proxy entitled to vote | | | | Say on PaySay-on-Pay Vote | | Affirmative vote of a majority of Mr. Cooper Group common stock present in person or by proxy entitled to vote | | | | Ratification of Ernst & Young LLP as our independent auditors for 20212024 | | Affirmative vote of a majority of Mr. Cooper Group common stock present in person or by proxy entitled to vote |
We also will consider any other business that may properly come before the annual meeting. Who may vote at the annual meeting? All stockholders who owned Mr. Cooper Group common stock and Series A Convertible Preferred Stock (collectively, the Company Stock) at the close of business on the record date of March 16, 2021,25, 2024, may attend and vote at the annual meeting. Are Proxy Materials available via the Internet? Under rules adopted by the SEC, we primarily furnish proxy materials to our stockholders on the Internet, rather than mailing paper copies of the materials (including our 20202023 Annual Report to each stockholder. If you received a notice regarding the availability of proxy materials (the Notice)“Notice”) by mail or electronic mail, you will not receive a paper copy of these proxy materials unless you request one. Instead, the Notice will instruct you on how you may vote your shares. The Notice will also instruct you on how you may access your proxy card to vote over the Internet. If you received a Notice by mail or electronic mail and would like to receive a paper copy of our proxy materials, free of charge, please follow the instructions included in the Notice. How do I vote? You can vote either in person at the annual meeting or by proxy whether or not you attend the annual meeting. To vote by proxy: By internet | • | | Go to the website www.proxyvote.comwww.proxypush.com/COOP and follow the instructions, 24 hours a day, seven days a week. | |
You will need the control number included on your proxy card to vote online. 73
By telephone From a touch-tone telephone, dial 1-800-690-6903 and follow the recorded instructions, 24 hours a day, seven days a week.
| • | | From a touch-tone telephone, dial 866-395-4184 and follow the recorded instructions, 24 hours a day, seven days a week. | |
You will need the 16-digit control number included on your proxy card in order to vote by telephone. By mail Mark your selections on the proxy card that accompanies this proxy statement. Date and sign your name exactly as it appears on your proxy card. Mail the proxy card in the enclosed postage-paid envelope provided to you. To vote by proxy, you must properly complete and return the enclosed proxy card in a timely manner. If you vote by proxy, your shares will be voted as you indicate on the card. If you sign your proxy card but do not specify how you want your shares voted, they will be voted as the Board recommends. Can I change my vote or revoke my proxy? Yes. Whether you have voted by Internet, telephone or mail, if you are a stockholder of record, you may change your vote and revoke your proxy by: sending a written statement to that effect to our Corporate Secretary, provided such statement is received no later than May 12, 2021;
| • | | sending a written statement to that effect to our Corporate Secretary, provided such statement is received no later than May 22, 2024; | |
voting again by Internet or telephone at a later time before the closing of those voting facilities at 11:59 p.m., Eastern time, on May 12, 2021;facilities; submitting a properly signed proxy card with a later date that is received no later than May 12, 2021;22, 2024; or attending the annual meeting, revoking your proxy and voting. If you hold shares in street name, you may submit new voting instructions by contacting your bank, broker or other nominee. You may also change your vote or revoke your proxy at the annual meeting if you obtain a signed proxy from the record holder (broker, bank or other nominee) giving you the right to vote the shares. How many votes do I have? You will have one vote for each share of Mr. Cooper Group common stock which you owned at the close of business on March 16, 2021,25, 2024, the record date for the annual meeting. Each share of Series A Convertible Preferred Stock outstanding as of the record date will be entitled to .838802424 votes. How many shares of Company Stock are eligible to vote at the annual meeting? At the close of business on March 16, 2021,25, 2024, the record date of the annual meeting, there was a total of 90,622,80665,255,434 shares of Mr. Cooper Group common stock and 1,000,000 shares of our Series A Convertible Preferred Stock outstanding and eligible to vote at the annual meeting. How many shares must be present to hold the annual meeting? The presence, in person or by proxy, of the holders of at least a majority in voting power of the outstanding shares of the Company Stock, voting together as a single class, entitled to vote at the meeting is necessary to constitute a quorum. Shares are counted as present at the annual meeting if stockholders are present in person or a proxy card has been properly submitted by or on behalf of stockholders. Votes to abstain, referred to as “abstentions,” and broker non-votes are counted for purposes of determining the presence of a quorum. What if I hold my shares in a brokerage account? If you hold your shares in a brokerage account, the shares are said to be held in “street name.” In this case your broker will send you a package, including a voter instruction card which will ask you how you want your shares to be voted. If you give your broker instructions, the broker will vote your shares as you direct. If you do not give your broker instructions (these shares are often referred to as broker non-votes) and the proposal involves a “routine” matter, then NASDAQ rules provide brokers with discretionary power to vote your shares. However, if a proposal involves a “non-routine”“non-routine” matter, then brokers are not permitted to vote your shares without instructions from you. 74
What is a Broker Non-Vote? A “broker non-vote” occurs when your broker submits a proxy for the meeting with respect to the ratification of the appointment of independent registered public accounting firm but does not vote on non-discretionary matters because you did not provide voting instructions on these matters. Please instruct your broker so your vote can be counted. If I abstain, what happens to my vote? If you choose to abstain in voting on the Election of Directors, your abstention will have no effect, as the required vote is calculated through the following calculation: votes FOR divided by the sum of votes FOR plus votes AGAINST. If you choose to abstain in voting on any other matter, your abstention will be counted as a vote AGAINST the proposal, as the required vote is calculated through the following calculation: votes FOR divided by the sum of votes FOR plus votes AGAINST plus votes ABSTAINING. How do I attend the annual meeting? If you plan to attend the meeting in person, please RSVP via email to secretary@mrcooper.com with RSVP as the subject line no later than 5:00 p.m. central time on May 12, 2021.22, 2024. Admission to the annual meeting is limited to Mr. Cooper Group stockholders or their proxy holders. In order to be admitted to the annual meeting, each stockholder will be asked to present proof of stock ownership and valid government-issued photo identification, such as a driver’s license. Proof of stock ownership may consist of the proxy card, or if shares are held in the name of a broker, bank or other nominee, an account statement or letter from the nominee indicating that you beneficially owned shares of Mr. Cooper Group common stock at the close of business on March 16, 2021,25, 2024, the record date for the annual meeting. Who will pay for the cost of this proxy solicitation? We will pay the cost of soliciting proxies. Proxies may be solicited on our behalf by directors, officers or employees (for no additional compensation) in person or by telephone, electronic transmission and facsimile transmission. Brokers and other nominees will be requested to solicit proxies or authorizations from beneficial owners and will be reimbursed for their reasonable expenses. How do I obtain more information about Mr. Cooper Group We file annual, quarterly and current reports, proxy statements and other information with the SEC which is available on the website maintained by the SEC at www.sec.gov. Such information will also be furnished upon written request to Mr. Cooper Group Inc., at 8950 Cypress Waters Boulevard, Coppell, Texas 75019, Attention: Corporate Secretary, and can also be accessed through our website. We will furnish without charge to each person whose proxy is being solicited, upon oral or written request of any such person, a copy of our Annual Report on Form 10-K for the year ended December 31, 2020,2023, as filed with the SEC, excluding the exhibits, by first class mail or other equally prompt means within one business day of receipt of such request. Request for copies of such report should be directed to our Corporate Secretary at the above address or at 469-549-2000. What is “householding”? The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy materials with respect to two or more stockholders sharing the same address. This process which is commonly referred to as “householding,” potentially provides extra convenience for stockholders and cost savings for companies. We and some brokers household proxy materials, delivering a single copy of the proxy materials to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Stockholders who participate in householding will continue to receive separate proxy or voting instruction cards. 75
Once a stockholder receives notice from his or her broker or us that they will be householding materials to his or her address, householding will continue until the stockholder revokes the consent. If you are not eligible for householding, but you and other stockholders of record with whom you share an address currently receive multiple copies of the proxy materials, or if you hold stock in more than one account, and in either case you wish to receive only a single copy of each of these documents for your household, please send your request to Mr. Cooper Group Inc. at 8950 Cypress Waters Boulevard, Coppell, Texas 75019, Attention: Corporate Secretary. You may also make written or oral requests by contacting us at this address or calling 469-549-2000 if you participate in householding and wish to receive a separate copy of these documents (in which case we will promptly deliver a separate copy to you), or if, at any time, you no longer wish to participate in householding. You should notify your broker if the shares are held in a brokerage account or us if you hold registered shares. We can be notified by sending a written request to the above address. 76
ANNEX A – NON-GAAP MEASURES We provide certain non-GAAP financial measures in this proxy statement that are not in accordance with, or alternatives for, generally accepted accounting principles in the United States. The Company utilizes non-GAAP financial measures as the measures provide additional information to assist investors in understanding and assessing our business segments’ ongoing performance and financial results, as well as assessing our prospects for future performance. This annex includes additional information regarding these measures. Adjusted operating financial measures facilitate a meaningful analysis and allow more accurate comparisons of our ongoing business operations because they exclude items that may not be indicative of or are unrelated to the Company’s and our business segments’ core operating performance and are better measures for assessing trends in our underlying businesses. These notable items are consistent with how management views our businesses. Pretax operating income in the servicing segment eliminates the effects of mark-to-market adjustments which primarily reflects unrealized gains or losses based on the changes in fair value measurements of MSRs and their related financing liabilities for which a fair value accounting election was made. These adjustments, which can be highly volatile and material due to changes in credit markets, are not necessarily reflective of the gains and losses that will ultimately be realized by the Company. Pretax operating income in the servicing segment also eliminated a $2 million accounting item and $3 million for intangible amortization in 2023. Operating return on tangible common equity is a non-GAAP financial measure that is computed by dividing adjusted net income (operating income) by average tangible common equity (also known as tangible book value). Tangible common equity equals total stockholders’ equity less goodwill and intangible assets. The annual average is calculated by taking the quarterly averages of beginning and ending period. Management believes that operating return on tangible common equity is a useful financial measure because it measures the performance of a business consistently and enables investors and others to assess the Company’s use of equity. Tangible book valueis a non-GAAP financial measure that is defined as stockholders’ equity less goodwill and intangible assets. Tangible book value per share is calculated by dividing tangible book value by the number of common shares outstanding. Management believes tangible book value and tangible book value per share are useful metrics to investors because they provide a more accurate measure of the realizable value of stockholder returns, excluding the impact of goodwill and intangible assets. The following tables reconcile (a) GAAP return on common equity to operating return on tangible common equity (b) GAAP book value and GAAP book value per share to tangible book value and tangible book value per share, respectively and (c) GAAP pretax income to pretax operating income in the servicing segment. 77
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | | | | | | $ mm’s | | 2023 | | | | Pretax income | | $ | 654 | | | | Income tax expense | | | (154 | ) | | | | Net income | | $ | 500 | | | | Return on common equity (ROCE)(1) | | | 12.1 | % | | | Average book value(2) | | $ | 4,135 | | | | Pretax income | | $ | 654 | | Other mark-to-market | | | (18 | ) | Accounting items / other | | | 17 | | Intangible amortization | | | 7 | | | | Pretax operating income | | $ | 660 | | Income tax expense(3) | | | (160 | ) | | | Operating income | | $ | 500 | | Operating return on tangible common equity (ROTCE) | | | 12.5 | % | | | Average tangible book value | | $ | 3,987 | | | | Servicing pretax income | | $ | 882 | | | | Other mark-to-market | | | (18 | ) | | | Accounting items / other | | | 2 | | | | Intangible amortization | | | 3 | | Servicing pretax operating income | | $ | 869 | |
| (1) | ROCE is computed by dividing earnings by the average of quarterly BV averages |
| (2) | Average of quarterly BV averages of $4,022 for 1Q’23, $4,033 for 2Q’23, $4,192 for 3Q’23, and $4,293 for 4Q’23 |
| (3) | Assumes GAAP tax-rate of 24.2% and does not give credit to cash flow benefits of the DTA |
| | | | | | | | | | | | | | $ mm’s, except per share amounts | | December 31, 2022 | | | December 31, 2023 | | | Y/Y
Change | | | | | | | | | | | | | | | | | | | | Stockholders’ equity (BV) | | | $4,057 | | | | $4,282 | | | | | | Goodwill | | | (120 | ) | | | (141 | ) | | | | | | | | | Intangible assets | | | (8 | ) | | | (28 | ) | | | | | | | | | | Tangible book value (TBV) | | | $3,929 | | | | $4,113 | | | | | | Ending shares of common stock outstanding (mm’s) | | | 69.3 | | | | 64.6 | | | | | | | | | | BV/share | | | $58.57 | | | | $66.29 | | | | 13% | | | | | | TBV/share | | | $56.72 | | | | $63.67 | | | | 12% | |
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Mr. CooperGroup
| 63 | |  P.O. BOX 8016, CARY, NC 27512-9903 | |  | | | Scan QR for digital voting |
| | | | | Mr. Cooper Group Inc. 
For Shareholders of record as of March 25, 2024 Thursday, May 23, 2024 9:00 AM, Local Time Four Points by Sheraton - Dallas/Fort Worth Airport North 1580 Point West Blvd, Coppell, TX 75019 YOUR VOTE IS IMPORTANT! | | 
| | Internet: www.proxypush.com/COOP • Cast your vote online • Have your Proxy Card ready • Follow the simple instructions to record your vote Phone: 1-866-395-4184 • Use any touch-tone telephone • Have your Proxy Card ready • Follow the simple recorded instructions Mail: • Mark, sign and date your Proxy Card • Fold and return your Proxy Card in the postage-paid envelope provided |
This proxy is being solicited on behalf of the Board of Directors The undersigned hereby appoints Jay Bray and Beth Gormley (the “Named Proxies”), and each or either of them, as the true and lawful attorneys of the undersigned, with full power of substitution and revocation, and authorizes them, and each of them, to vote all the shares of capital stock of Mr. Cooper Group Inc. which the undersigned is entitled to vote at said meeting and any adjournment thereof upon the matters specified and upon such other matters as may be properly brought before the meeting or any adjournment thereof, conferring authority upon such true and lawful attorneys to vote in their discretion on such other matters as may properly come before the meeting and revoking any proxy heretofore given. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, SHARES WILL BE VOTED IDENTICAL TO THE BOARD OF DIRECTORS RECOMMENDATION. This proxy, when properly executed, will be voted in the manner directed herein. In their discretion, the Named Proxies are authorized to vote upon such other matters that may properly come before the meeting or any adjournment or postponement thereof. You are encouraged to specify your choice by marking the appropriate box (SEE REVERSE SIDE) but you need not mark any box if you wish to vote in accordance with the Board of Directors’ recommendation. The Named Proxies cannot vote your shares unless you sign (on the reverse side) and return this card. PLEASE BE SURE TO SIGN AND DATE THIS PROXY CARD AND MARK ON THE REVERSE SIDE Copyright © 2024 BetaNXT, Inc. or its affiliates. All Rights Reserved
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| | Mr. Cooper Group Inc. Annual Meeting of Shareholders |
| | | | | | Please make your marks like this: | |  | | |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE: FOR ON PROPOSALS 1, 2 AND 3 | | | | | | | | | | | | | PROPOSAL | | YOUR VOTE | | BOARD OF DIRECTORS RECOMMENDS | | 1. | | Election of Directors | | FOR | | AGAINST | | ABSTAIN | |  | | | 1.01 Jay Bray | | ☐ | | ☐ | | ☐ | | FOR | | | | | | | | | | | | | | 1.02 Busy Burr | | ☐ | | ☐ | | ☐ | | FOR | | | | | | | | | | | | | | 1.03 Roy Guthrie | | ☐ | | ☐ | | ☐ | | FOR | | | | | | | | | | | | | | 1.04 Daniela Jorge | | ☐ | | ☐ | | ☐ | | FOR | | | | | | | | | | | | | | 1.05 Michael Malone | | ☐ | | ☐ | | ☐ | | FOR | | | | | | | | | | | | | | 1.06 Shveta Mujumdar | | ☐ | | ☐ | | ☐ | | FOR | | | | | | | | | | | | | | 1.07 Tagar Olson | | ☐ | | ☐ | | ☐ | | FOR | | | | | | | | | | | | | | 1.08 Steven Scheiwe | | ☐ | | ☐ | | ☐ | | FOR | | | | | | | | | | | | | | | | FOR | | AGAINST | | ABSTAIN | | | | 2. | | To conduct an advisory vote on named executive officer compensation; | | ☐ | | ☐ | | ☐ | | FOR | | | | | | | | | | | | | 3. | | To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2024; and | | ☐ | | ☐ | | ☐ | | FOR | | | | | | | | | | | | | 4. | | The transaction of such other business as may properly come before the meeting. | | | | | | | | |
If you plan to attend the meeting, you must email your RSVP to secretary@mrcooper.com. Authorized Signatures - Must be completed for your instructions to be executed. Please sign exactly as your name(s) appears on your account. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy/Vote Form. | | | | | | | | | | Signature (and Title if applicable) | | Date | | | | Signature (if held jointly) | | Date |
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