Leonard Cotton
About Leonard W. Cotton
Leonard W. Cotton, age 75, is BXMT’s lead independent director (since 2024) and has served on the board since 2014. He brings five decades in commercial real estate credit, including vice chairman of Centerline Capital Group (2006–2008), and chair/CEO roles at ARCap REIT and its predecessor REMICap, after beginning his career in real estate lending and workouts at Citibank in 1972. He holds an MBA in Finance from Columbia University and a BA in American History from Bowdoin College .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Centerline Capital Group | Vice Chairman | 2006–2008 | Executive leadership in CRE finance |
| ARCap REIT (and predecessor REMICap) | Chairman & CEO | 1995–2006 | Built leading CMBS subordinated bond investor |
| Harbour Realty Advisors | President & Partner | 1992–2002 | Special situations investing; property management |
| Citibank | Real Estate lending/workouts | Began 1972 | CRE lending and workouts |
| Commercial Real Estate Finance Council (CREFC) | Executive Committee; President | Exec Comm 2001–2010; President 2007–2008 | Industry leadership and standards |
| Real Estate Roundtable | Former Board Member | n/a | Policy and industry engagement |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Bowdoin College | Board of Trustees | Current | Non-profit governance |
| Maine Public Broadcasting Network | Board | Current | Non-profit governance |
| FundCore Institutional Income Trust Inc. (public unlisted mortgage REIT) | Independent Director | 2010–2012 | Prior public REIT board service |
Board Governance
- Independence: The board affirmatively determined Mr. Cotton is independent under NYSE standards; all board committees are fully independent .
- Lead Independent Director: Elected in 2024; responsibilities include presiding over executive sessions, serving as liaison to the CEO, calling meetings of independent directors, assisting in setting board agendas, and overseeing special projects .
- Committee Assignments: Audit (member), Compensation (member), and Investment Risk Management Committee (IRMC) Chair .
- Financial Expertise: Designated “audit committee financial expert” under SEC rules and with required NYSE accounting/financial expertise .
- Attendance: Each incumbent director attended at least 75% of board and applicable committee meetings in 2024; Board held 8 meetings; Audit 4; Compensation 4; Governance 2; IRMC 6 .
- IRMC Mandate (as Chair): Oversees Manager’s compliance with investment guidelines; approves proposed investments above $350 million and affiliate-involved investments ≥$175 million (unless pari passu at same level) .
Fixed Compensation
| Component | Amount | Timing/Notes |
|---|---|---|
| Annual cash retainer (non-employee directors) | $95,000 | Paid quarterly in arrears |
| Lead Independent Director fee | $30,000 per annum | Cotton received $6,311 for 10/16/2024–12/31/2024 partial year |
| Audit Committee member fee | $10,000 per annum | Member |
| Investment Risk Management Committee member fee | $7,500 per annum | Member and Chair of IRMC |
| 2024 Cash actually paid to Cotton | $118,811 | Includes partial LID fee + committee fees |
Notes: No meeting fees beyond the standard framework; directors reimbursed for travel expenses .
Performance Compensation
| Equity Element | Amount/Terms | Vesting/Settlement | Notes |
|---|---|---|---|
| Annual equity award (2024) | $115,000 in deferred stock units or restricted stock | Vests in full at next annual meeting; DSUs settle upon “separation from service” | Standard non-employee director equity |
| Unvested DSUs outstanding (12/31/2024) | 6,378 units | Vests at 2025 annual meeting | Applies to Cotton and other non-employee directors |
| 2025 annual equity (meeting on 6/27/2025) | 5,828 restricted shares (=$115,000 ÷ $19.73) | Vests at 2026 annual meeting | Granted in lieu of retainer/fees; post-transaction holdings 83,858 shares |
| Dividend equivalents on DSUs (4/15/2024) | 1,786 units credited | DSUs convert 1:1 to shares per plan | Based on $0.62 dividend and closing price mechanics; holdings after transaction 65,068 |
Performance metrics: Director equity is time-based; there are no performance-conditioned metrics for director pay. Hedging/short sales/derivatives/margin are prohibited by the firm’s Securities Trading Policy .
Other Directorships & Interlocks
| Category | Detail |
|---|---|
| Current public company directorships | None disclosed |
| Prior public company boards | FundCore Institutional Income Trust Inc. (public unlisted mortgage REIT), Independent Director (2010–2012) |
| Compensation Committee interlocks | None; compensation committee members (incl. Cotton) had no relationships requiring Item 404 disclosure for 2024 |
Expertise & Qualifications
- Deep CRE credit/risk management: decades across lending, CMBS, special situations; brings unique insight to IRMC oversight .
- Audit-committee financial expert designation enhances financial reporting oversight .
- Board skills matrix: Cotton marked for Real Estate, Operations, Risk Management, Strategic, Investment, Financial/Banking .
- Education: MBA (Columbia), BA (Bowdoin) .
Equity Ownership
| Item | Amount | Date/Notes |
|---|---|---|
| Beneficial ownership (shares) | 76,426 (includes 59,136 shares obtainable upon conversion of vested stock units) | As of 4/14/2025; “<1%” of outstanding per proxy table |
| Unvested DSUs | 6,378 | As of 12/31/2024 |
| Shares after 2025 annual equity grant | 83,858 | After 6/27/2025 Form 4 award of 5,828 shares |
| Stock ownership guideline | 5x annual cash retainer within 5 years; all non-employee directors in compliance | Alignment policy and status |
| Hedging/pledging | Policy prohibits hedging, short sales, derivatives, and buying on margin | No pledging reported for Cotton in proxy ownership footnotes |
Insider Trades (recent, governance-relevant)
| Date | Type | Qty | Price | Post-Holdings | Security | Note |
|---|---|---|---|---|---|---|
| 6/27/2025 | A (award in lieu of retainer/fees) | 5,828 | $19.73 | 83,858 | Restricted Class A | Vests at 2026 annual meeting |
| 4/15/2024 | A (dividend equivalent DSUs) | 1,786 | n/a | 65,068 | Class A Common Stock Units | Based on $0.62 dividend and closing price per plan mechanics |
Governance Assessment
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Strengths
- Independent LID with deep CRE credit expertise; chairs IRMC that oversees investment guidelines and approves large/affiliate transactions—critical in an externally managed REIT structure .
- Recognized audit committee financial expert; supports oversight of financial reporting and internal controls .
- High alignment: equity retainer, DSUs/restricted stock, 5x ownership guideline compliance; hedging/margin prohibited .
- No compensation committee interlocks or related-person relationships requiring disclosure for Cotton .
-
Key risks/mitigants
- External management by a Blackstone affiliate and multiple affiliate service relationships create inherent conflict risk; however, IRMC (chaired by Cotton) and the audit committee review/approve guidelines and related-party transactions; detailed affiliate transaction disclosures and fee data are provided (e.g., management fees, BTIG, BSP, Gryphon, LNLS) .
- Board independence majority and LID structure help counterbalance the presence of Blackstone-affiliated directors .
-
Engagement and market signals
- Say-on-pay support of ~95% at 2024 annual meeting suggests broad investor acceptance of compensation practices in the externally managed model .
- Each director met the ≥75% attendance threshold; no attendance red flags .
-
RED FLAGS (none acute disclosed)
- No low attendance, no pledging, no Item 404 related-party transactions involving Cotton, and no compensation interlocks disclosed. Principal structural risk remains the external manager/affiliate ecosystem, which is actively overseen by IRMC and the audit committee -.
Director Compensation (reference)
| Year | Cash ($) | Equity ($) | Total ($) |
|---|---|---|---|
| 2024 | 118,811 | 115,000 | 233,811 |
| 2023 | 112,500 | 115,000 | 227,500 |
Additional Context
- Board and committee independence; separation of Chair/CEO; and presence of a dedicated IRMC contribute to governance robustness .
- Executive sessions of non-management directors held periodically, with LID presiding when present .
- Securities Trading Policy codifies strong anti-hedging/shorting and anti-margin expectations for directors and insiders .