John Rosenthal

About John Rosenthal

Executive Vice President and Chief Investment Officer (CIO) of Brighthouse Financial since August 2017; age 64 as of Feb 28, 2025 . Prior to BHF’s spin from MetLife, he served as EVP & CIO of Brighthouse Financial, Inc. at MetLife (Aug 2016–Aug 2017) and Senior Managing Director, Head of Global Portfolio Management (2011–Aug 2017) . Company TSR context during 2020–2024: value of a $100 initial investment in BHF was $92.29 (2020), $132.04 (2021), $130.69 (2022), $134.90 (2023), and $122.46 (2024) versus peer group TSR of $90.52, $123.73, $136.53, $142.87, and $171.87, respectively . 2024 operating scorecard included expense discipline ($820M), record sales (annuity ~$10.048B; life $120M), and normalized statutory loss of $(1.285)B, producing a 106% company STI factor for the year .

Past Roles

External Roles

• No public-company directorships disclosed for Rosenthal in BHF filings .

Fixed Compensation

2025 target structure (unchanged vs 2024): Base salary $575,000; Target STI 195% of base; Target LTI 250% of base; Target TDC $3,133,750 .

Performance Compensation

Short-Term Incentive (STI) – Design and 2024 Outcomes

Rosenthal’s 2024 STI payout was 102% of target, equating to $1,143,675 cash .

Design notes: 2024 STI metrics and weights were Corporate Expenses (40%), Sales (40%), Normalized Statutory Earnings (20%) .

Long-Term Incentive (LTI) – Design and 2024 Grants

• Mix: 60% PSUs, 40% RSUs (other NEOs); PSUs cliff vest after 3 years; RSUs vest ratably 1/3 per year .
• PSU metrics and weighting: Net Cash Flow to Holding Company (60%), Statutory Expense Ratio (40%) with ±10 percentage point rTSR modifier .

2022 PSU payout (for 2022–2024 performance) was 82% of target (Statutory Expense Ratio 94% payout; Net Cash Flow 64%) .

Multi‑Year Compensation (Reported)

Vesting/realization in 2024: 32,936 shares vested (RSUs/PSUs), value realized $1,520,326; no option exercises .

Equity Ownership & Alignment

• Beneficial ownership: 101,118 shares; less than 1% of shares outstanding; includes right to acquire 22,522 shares via options within 60 days .
• Stock ownership guideline: 3x base salary ($1,725,000) – status Achieved .
• Hedging/pledging: Prohibited by insider trading policy .
• Clawbacks: Mandatory recoupment on restatements per Nasdaq; broader misconduct metric-inaccuracy recoupment policy also in place .

Outstanding equity (12/31/24):

Note: RSU and PSU market values computed at $48.04 (12/31/24 close) in filing .

Nonqualified/deferred comp: Company contributions to Auxiliary Plan $135,200 for 2024; aggregate balance $1,314,716 at year‑end (no executive contributions) . “All Other Compensation” includes Savings Plan and Auxiliary Plan contributions; Rosenthal’s were $31,276 and $135,200, respectively, plus a $480 stipend .

Implications for selling pressure:

• RSU tranches vest around March 1 each year; 2025/2026/2027 will see scheduled vesting from 2023 and 2024 RSU grants, which can create periodic liquidity events; 2022 PSUs already paid at 82% in Q1’25 .

Employment Terms

• No individual employment agreement; severance governed by company plans .
• Rule of 65 met (age + years of service ≥ 65 with ≥5 years): upon voluntary termination after Rule of 65, equity continues to vest on schedule (non‑cause) .
• Severance Plan (non‑cause termination): lump sum = 1× (base salary + target STI), plus prorated current‑year target STI, 12 months of COBRA premiums, and outplacement; equity continues to vest on schedule .
• Change‑of‑Control (double‑trigger) plan: 2× (base salary + target STI), prorated current‑year target STI, 24 months COBRA, 12 months outplacement; if awards are not assumed/alternatives not provided at CoC, RSUs/PSUs vest at target immediately; if terminated after CoC, RSUs/PSUs vest at target on original schedule; options become exercisable .
• No excise tax gross‑ups on CoC; robust clawbacks; hedging/pledging prohibited .

Estimated potential payments (Trigger Date 12/31/24):

Performance & Track Record

• 2024 achievements (Investments): Managed Investments expenses below plan; delivered $11B of liabilities and $112M pre‑tax income in institutional spread margin business; grew FABN program; realized credit losses near target; supported reinsurance/LifePath Paycheck initiatives .
• Portfolio actions: In Q2’22, reduced below‑investment‑grade holdings by ~$500M (primarily single‑B), defensively repositioning amid macro uncertainty .
• Mortgage loan allocation: Exposure increased from ~16% to 20% of assets over 2022 (including ~$13.5B commercial M/L, $5B residential whole loans, $4B agricultural), as a relative‑value diversifier supporting spread products .
• Investment outsourcing: Uses ~a dozen external managers; IMA fees are the majority of the overall investment expense line (aggregate disclosed, not by manager) .

Compensation Structure Analysis

• Pay-for-performance alignment: For Rosenthal, 2024 target pay mix was highly at‑risk (STI 195% of salary, LTI 250% of salary), with STI tied to annual operating drivers and PSUs tied to multi‑year cash flow/expense efficiency plus rTSR .
• 2024 STI paid modestly above target (102%) despite a 0% payout on Normalized Statutory Earnings, reflecting over‑achievement on expenses/sales; signals emphasis on controllable operating levers amid statutory volatility .
• Long-term rigor: 2022 PSU cycle paid at 82% (below target), indicating multi‑year hurdles (Net Cash Flow/Expense Ratio) are not easily maximized; rTSR modifier adds external relative discipline from 2024 onward .
• Governance quality: Double‑trigger CoC, no option repricing, no excise gross‑ups, hard hedging/pledging bans, and robust clawbacks reduce governance risk .

Equity Ownership & Alignment (Supplemental)

Investment Implications

• Incentives prioritize expense control, distribution growth, and statutory cash generation (Net Cash Flow to Holdco), with new rTSR overlay—favorable for capital discipline and shareholder alignment in a volatile liability/hedging environment .
• Near-term insider supply risk is periodic around March 1 due to scheduled RSU vesting; 2022 PSUs paid in Q1’25 at 82%, and 2023/2024 PSU outcomes depend on 2023–2025/2024–2026 performance, respectively .
• Retention risk appears contained: Rule of 65 treatment (continued vesting) plus severance protections; CoC economics are meaningful (2× cash plus equity at target on double trigger), aligning incentives through transactions while limiting immediate single‑trigger windfalls .
• Governance posture (clawbacks; no pledging/hedging; no tax gross‑ups; no repricing) lowers compensation‑related red flags and supports investor confidence in pay practices .